10-Q 1 v132849_10q.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
FORM 10-Q
 
 
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarter ended September 30, 2008

-OR-

¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from                  to
 
Commission File Number 333-64804
 
 
ASIA GLOBAL HOLDINGS CORP.
(Exact Name of small business issuer as specified in Its charter)
 
NEVADA
(State or other jurisdiction of
incorporation or organization)
 
75-3026459
(I.R.S. Employer Identification No.)
 
Unit 601B, 6th Floor, Tower 1
833 Cheung Sha Wan Road
Kowloon, Hong Kong
(Address of principal executive offices)
 
(Zip code)

Issuer’s telephone number, including area code: (213) 243-1505

 
(Former name, former address or former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes√      No ¨ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨     Accelerated filer ¨      Non-accelerated filer ¨      Smaller reporting company √
 
Indicate by check mark whether the registrant is a shell company (as defined in Rue 12b-2of the Exchange Act).
Yes ¨  No √

The number of shares outstanding of each of the Registrant’s classes of common stock, as of November 17, 2008 was 133,262,000 shares, all of one class of $0.001 par value Common Stock.
 
 
ASIA GLOBAL HOLDINGS CORP.
FORM 10-Q
Quarter Ended September 30, 2008
TABLE OF CONTENTS

     
Page
       
 
PART I— FINANCIAL INFORMATION
    
       
Item 1
Financial Statements
 
 F-1
       
 
Unaudited Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007
 
F-2
       
 
Unaudited Consolidated Statements of Operations for the Nine Months Ended September 30, 2008 and 2007
 
F-3
       
 
Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2008 and 2007
 
F-4
       
 
Unaudited Consolidated Statements of Changes in Stockholder Equity Ended September 30, 2008
 
F-5
       
 
Notes to Unaudited Condensed Consolidated Financial Statements Ended September 30, 2008
 
F-6 – F-19
       
Item 2
Managements Discussion and Analysis of Financial Condition and Results of Operation
 
4
       
Item 3
Quantitative and Qualitative Disclosures About Market Risk
 
14
       
Item 4T
Controls and Procedures
 
15
       
 
PART II—OTHER INFORMATION 
    
       
Item 1
Legal Proceedings
 
15
       
Item 1A
Risk Factors
 
15
       
Item 2
Unregistered Sales of Equity Securities and Use of Proceeds
 
25
       
Item 3
Defaults Upon Senior Securities
 
25
       
Item 4
Submission of Matters to a Vote of Security Holders
 
25
       
Item 5
Other Information
 
25
       
Item 6
Exhibits  
  
25
       
 
SIGNATURES
  
26
 
Page 2 of 49
 
SPECIAL NOTE ON FORWARD LOOKING STATEMENTS
 
This Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 2 of Part I of this report include forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by forward-looking statements.
 
In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "proposed," "intended," or "continue" or the negative of these terms or other comparable terminology. You should read statements that contain these words carefully, because they discuss our expectations about our future operating results or our future financial condition or state other "forward-looking" information. There may be events in the future that we are not able to accurately predict or control. Before you invest in our securities, you should be aware that the occurrence of any of the events described in this Annual Report could substantially harm our business, results of operations and financial condition, and that upon the occurrence of any of these events, the trading price of our securities could decline and you could lose all or part of your investment. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, growth rates, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this Quarterly Report to conform these statements to actual results.
 
Page 3 of 49
 
PART 1.  FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
 
ASIA GLOBAL HOLDINGS CORP.

INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

   
Page
     
Condensed Consolidated Balance Sheets as
of September 30, 2008 and December 31, 2007
  
F-2
     
Condensed Consolidated Statements of Operations And Comprehensive Income
(Loss) for the three and nine months ended September 30, 2008 and 2007
  
F-3
     
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 2008 and 2007
  
F-4
     
Condensed Consolidated Statement of Stockholders’ Equity
for the nine months ended September 30, 2008
  
F-5
     
Notes to Condensed Consolidated Financial Statements
  
F-6 to F-19
 
F-1
 
ASIA GLOBAL HOLDINGS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2008 AND DECEMBER 31, 2007
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)

     
September 30, 2008
  
December 31, 2007
  
  
  
(Unaudited)
  
(Audited)
  
ASSETS
          
Current assets:
            
Cash and cash equivalents
  
$
146,497
  
$
846,907
  
Restricted cash
    
543,409
    
558,104
  
Accounts receivable, trade
    
4,852,879
    
2,953,719
  
Amounts due from a related party
    
39,675
    
530,706
  
Income tax credit
    
254,180
    
-
  
Prepayments and other current assets
    
182,266
    
87,115
  
Total current assets
    
6,018,906
    
4,976,551
  
               
Property, plant and equipment, net
    
154,226
    
161,034
  
Intangible assets, net
    
681,879
    
210,674
  
               
TOTAL ASSETS
  
$
6,855,011
  
$
5,348,259
  
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
              
Current liabilities:
              
Bank overdraft, secured
  
$
213,411
  
$
163,056
  
Secured bank loan - current portion
    
181,698
    
784,600
  
Obligation under capital lease - current portion
    
130,220
    
146,416
  
Letters of credit
    
577,244
    
484,006
  
Accounts payable and accrued liabilities
    
747,830
    
838,239
  
Income tax payable
    
10,283
    
435,768
  
Amount due to a related party
    
-
    
106,208
  
Total current liabilities
    
1,860,686
    
2,958,293
  
               
Long-term liabilities:
              
Secured bank loan
    
-
    
6,410
  
Obligation under capital lease
    
-
    
92,262
  
Deferred tax liabilities
    
132,091
    
132,091
  
Total long-term liabilities
    
132,091
    
230,763
  
               
Total liabilities
    
1,992,777
    
3,189,056
  
               
Commitment and contingencies
              
               
Stockholders’ equity:
              
Series A, convertible preferred stock, $0.001 par value; 500,000 shares authorized; 400,000 shares and 400,000 shares issued and outstanding shares as of September 30, 2008 and December 31, 2007
    
400
    
400
  
Common stock, $0.001 par value; 300,000,000 shares authorized; 133,362,000 and 129,862,000 shares issued and outstanding as of September 30, 2008 and December 31, 2007
    
133,362
    
129,862
  
To be issued: 0 shares and 2,000,000 shares as of September 30, 2008 and December 31, 2007
    
-
    
414,000
  
Additional paid-in capital
    
17,941,022
    
17,406,772
  
Accumulated other comprehensive (loss) income
    
(8,084
)
  
6,258
  
Accumulated deficit
    
(13,204,466
)
  
(15,798,089
)
Total stockholders’ equity
    
4,862,234
    
2,159,203
  
               
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
  
$
6,855,011
  
$
5,348,259
  
 
See accompanying notes to condensed consolidated financial statements.
 
F-2
 
ASIA GLOBAL HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited)
 
     
Three months ended September 30,
  
Nine months ended September 30,
  
   
2008
  
2007
  
2008
  
2007
  
                       
Revenues, net
  
$
4,872,180
  
$
3,843,631
  
$
9,234,465
  
$
6,861,823
  
                           
Cost of revenue
    
2,313,634
    
1,107,095
    
3,974,407
    
2,131,005
  
                           
Gross profit
    
2,558,546
    
2,736,536
    
5,260,058
    
4,730,818
  
                           
OPERATING EXPENSES:
                          
Sales and marketing
    
1,536,202
    
379,838
    
2,063,825
    
737,660
  
Consulting and professional fee
    
23,249
    
2,279,962
    
138,028
    
5,243,543
  
Depreciation and amortization
    
67,712
    
47,141
    
142,865
    
121,288
  
Stock based compensation to executive
    
-
    
56,713
    
123,750
    
260,877
  
General and administrative
    
200,055
    
251,834
    
542,810
    
1,130,692
  
Total operating expenses
    
1,827,218
    
3,015,488
    
3,011,278
    
7,494,060
  
                           
INCOME (LOSS) FROM OPERATIONS
    
731,328
    
(278,952
)
  
2,248,780
    
(2,763,242
)
                           
Other income (expense):
                          
Other income
    
1,055
    
5,249
    
18,166
    
12,607
  
Interest expense
    
(18,466
)
  
(22,875
)
  
(71,921
)
  
(51,501
)
     
(17,411
)
  
(17,626
)
  
(53,755
)
  
(38,894
)
INCOME (LOSS) BEFORE INCOME TAXES AND MINORITY INTEREST
    
713,917
    
(296,578
)
  
2,195,025
    
(2,802,136
)
                           
Income tax benefit (expenses)
    
111,941
    
(314,257
)
  
578,847
    
(472,885
)
                           
INCOME (LOSS) FROM CONTINUING OPERATIONS
    
825,858
    
(610,835
)
  
2,773,872
    
(3,275,021
)
                           
Loss from discontinued operations
    
-
    
(347,408
)
  
(180,249
)
  
(703,346
)
Minority interest
    
-
    
(9,206
)
  
-
    
281,338
  
                           
NET INCOME (LOSS)
  
$
825,858
  
$
(967,449
)
$
2,593,623
  
$
(3,697,029
)
                           
Other comprehensive (loss) income:
                          
- Foreign currency translation (loss) gain
    
(1,162
)
  
(196
)
  
(14,342
)
  
2,212
  
                           
COMPREHENSIVE INCOME (LOSS)
  
$
824,696
  
$
(967,645
)
$
2,579,281
  
$
(3,694,817
)
                           
Basic weighted average number of shares
   
133,362,000
    
93,584,222
    
131,521,259
    
82,909,222
  
Diluted weighted average number of shares
   
213,362,000
    
93,584,222
    
211,521,259
    
82,909,222
  
                           
Per share information:
                          
From continuing operation– Basic
  
$
0.01
  
$
(0.01
)
$
0.02
  
$
(0.04
)
From continuing operation– Diluted
  
$
0.00
  
$
(0.01
)
$
0.01
  
$
(0.04
)
                           
From discontinued operation– Basic
  
$
0.00
  
$
(0.00
)
$
(0.00
)
$
(0.00
)
From discontinued operation– Diluted
  
$
0.00
  
$
(0.00
)
$
(0.00
)
$
(0.00
)
                           
Net income (loss) per share – Basic
  
$
0.01
  
$
(0.01
)
$
0.02
  
$
(0.04
)
Net income (loss) per share – Diluted
  
$
0.00
  
$
(0.01
)
$
0.01
  
$
(0.04
)
 
See accompanying notes to condensed consolidated financial statements.
 
F-3
 
ASIA GLOBAL HOLDINGS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008 AND 2007
(Currency expressed in United States Dollars (“US$”))
(Unaudited)
     
Nine months ended September 30,
  
   
2008
  
2007
  
Cash flows from operating activities:
           
Income (loss) from continuing operations
  
$
2,773,872
  
$
(3,275,021
)
Adjustments to reconcile income (loss) from continuing operations to net cash (used in) provided by operating activities:
              
Stock-based compensation to executives, non-cash
    
123,750
    
260,877
  
Common stock issued for services, non-cash
    
-
    
4,982,325
  
Depreciation and amortization
    
142,865
    
121,288
  
Change in operating assets and liabilities:
              
Accounts receivable, trade
    
(1,899,160
)
  
(1,173,596
)
Inventories
    
-
    
(910
)
Prepayments and other current assets
    
(135,604
)
  
(79
)
Accounts payables and accrued liabilities
    
(42,631
)
  
917,278
  
Income tax credit
    
(254,180
)
  
-
  
Income tax payable
    
(425,485
)
  
451,591
  
Amount due to a related party
    
(106,208
)
  
74,291
  
Net cash (used in) provided by operating activities
    
177,219
    
2,358,044
  
Net cash used in discontinued operations
    
(182,417
)
  
(1,560,622
)
               
Cash flows from investing activities:
              
Increase in restricted cash
    
14,695
    
(266,497
)
Expenditure on intangible assets
    
(585,077
)
  
-
  
Purchase of property, plant and equipment
    
(26,433
)
  
(887,251
)
Net cash used in investing activities
    
(596,815
)
  
(1,153,748
)
Net cash used in discontinued operations
    
-
    
(107,940
)
               
Cash flows from financing activities:
              
Repayment of (advance from) amount due from related parties
    
492,655
    
(118,142
)
Net increase (decrease) in bank overdraft
    
50,355
    
91,967
  
Advances (repayment) under letters of credit
    
93,238
    
443,654
  
Drawdown of bank loan
    
115,385
    
134,704
  
Repayment of bank loan
    
(724,697
)
  
(437,930
)
Issue of promissory note
    
-
    
370,000
  
Repayment of capital lease
    
(108,458
)
  
-
  
Net cash provided by (used in) financing activities
    
(81,522
)
  
484,253
  
Net cash used in discontinued operations
    
(1,624
)
  
17,237
  
               
Effect of exchange rate change on cash and cash equivalents
    
(15,251
)
  
2,212
  
               
NET CHANGE IN CASH AND CASH EQUIVALENTS 
    
(700,410
)
  
39,436
  
               
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
846,907
    
22,514
  
               
CASH AND CASH EQUIVALENTS, END OF PERIOD
  
$
146,497
  
$
61,950
  
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
              
Cash paid for income taxes
  
$
100,818
  
$
21,294
  
Cash paid for interest expenses
  
$
71,921
  
$
51,540
  
               
SUPPLEMENTAL DISCLOSURE OF NON-CASH TRANSACTIONS: 
              
Amounts due from minority shareholders in relation to unsettled investment cost of a subsidiary
  
$
-
  
$
820,000
  
 
See accompanying notes to condensed consolidated financial statements.
 
F-4
 
ASIA GLOBAL HOLDING CORP.
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2008
(Currency expressed in United States Dollars (“US$”), except for number of shares)
(Unaudited) 

     
Series A, Convertible
Preferred Stock
  
Common stock
  
Common stock to be issued
  
       Additional
paid-in capital
  
Accumulated
other
comprehensive
(loss) income
  
Accumulated
deficit
  
Total
stockholders’
equity
  
   
No. of shares
  
Amount
  
No. of shares
  
Amount
  
No. of shares
  
Amount
  
                                           
Balance as of January 1, 2008
    
400,000
  
$
400
    
129,862,000
  
$
129,862
    
2,000,000
  
$
414,000
  
$
17,406,772
  
$
6,258
  
$
(15,798,089
)
$
2,159,203
  
                                                               
Bonus shares issued to an executive, non-cash
    
-
    
-
    
2,000,000
    
2,000
    
(2,000,000
)
  
(414,000
)
  
412,000
    
-
    
-
    
-
  
                                                               
Stock based compensation to executives, non-cash
    
-
    
-
    
1,500,000
    
1,500
    
-
    
-
    
122,250
    
-
    
-
    
123,750
  
                                                               
Net income for the period
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
2,593,623
    
2,593,623
  
                                                               
Foreign currency translation adjustment
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
(14,342
)
  
-
    
(14,342
)
                                                               
Balance as of September 30, 2008
    
400,000
  
$
400
    
133,362,000
  
$
133,362
    
-
  
$
-
  
$
17,941,022
  
$
(8,084
)
$
(13,204,466
)
$
4,862,234
  
 
See accompanying notes to condensed consolidated financial statements.
 
F-5
 
ASIA GLOBAL HOLDINGS CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2008
(Currency expressed in United States Dollars (“US$”))
(Unaudited)

NOTE - 1 BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by management in accordance with both accounting principles generally accepted in the United States (“GAAP”), and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

In the opinion of management, the consolidated balance sheet as of December 31, 2007 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the period ended September 30, 2008 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2008 or for any future period.

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2007.
 
NOTE - 2 ORGANIZATION AND BUSINESS BACKGROUND

Asia Global Holdings Corp. (the “Company” or “AAGH”) was incorporated in the State of Nevada on February 1, 2002 as Longbow Mining Inc. On May 12, 2004, Longbow Mining Inc. changed its name to BonusAmerica Worldwide Corporation. On June 6, 2006, the Company changed its name to Asia Global Holdings Corp. AAGH is focused on building businesses in the People’s Republic of China (“PRC”) and other emerging regions and markets in Asia and worldwide. The Company has subsidiaries participating in media and advertising, marketing services and internet commerce. During 2007, AAGH entered the television entertainment market, where we plan to sell advertising slots that air during the broadcast of “Who Wants To Be A Millionaire?” TV show in the PRC. The head-quarters of AAGH are located in Hong Kong and the Company also has offices in the United States of America (“United States”) and the PRC.

In February 2008, the Board of the Company decided to discontinue the production of new episodes for “Who Wants To Be a Millionaire?” TV show due to the poor performance of the sales and distribution team.

In June 2008, the Company established a new branch office in Labuan, Malaysia for the business expansion in Asia Pacific region.
 
F-6
 
Details of the Company’s subsidiaries and affiliate are described below:

Name
  
Place of incorporation
and kind of 
legal entity
  
Principal activities
and place of operation
  
Particulars of issued/
registered share
capital
  
Effective
interest
held
  
                   
Sino Trade-Intelligent Development Corp., Limited
(“Sino Trade”)
  
Hong Kong, a limited liability company
  
Publishing & information service and advertisement in Hong Kong
  
5,000,000 issued shares of HK$1 each
  
100
 %
                   
Idea Asia Limited
(“Idea Asia”)
  
Hong Kong, a limited liability company
  
Investment holding in Hong Kong
  
10,000 issued shares of HK$1 each
  
100
 % 
                   
China Media Power Limited (“CMP”)
  
Hong Kong, a limited liability company
  
TV entertainment in the PRC
  
16,000,000 issued share of HK$1 each
  
60
 %
                   
Wah Mau Corporate Planning Development Co., Ltd (“Wah Mau”)
  
The PRC, a limited liability company
  
Development of corporate images and business promotion in the PRC
  
RMB1,000,000
  
100
 %
                   
DYKN Corporation
  
Malaysia, a limited liability company
 
Publishing & information service and advertisement in Malaysia
  
10,000 issued shares of US$1 each
  
100
 %

Asia Global Holdings Corp. and its subsidiaries and affiliate are hereinafter referred to as (the “Company”).
 
NOTE - 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

l
Use of estimates

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the period reported. Actual results may differ from these estimates.

l
Basis of consolidation

The condensed consolidated financial statements include the financial statements of AAGH, its wholly-owned and majority-owned subsidiaries including variable interest entities ("VIEs") for which the Company is the primary beneficiary. All significant inter-company balances and transactions within the Company have been eliminated.

The Company has adopted the Financial Accounting Standards Board ("FASB") Interpretation No. 46R, “Consolidation of Variable Interest Entities”, an Interpretation of Accounting Research Bulletin No. 51 ("FIN 46R"). FIN 46R requires a Variable Interest Entity (VIE) to be consolidated by a company if that company is subject to a majority of the risk of loss for the VIE or is entitled to receive a majority of the VIE’s residual returns. VIEs are those entities in which the Company, through contractual arrangements, bears the risks of, and enjoys the rewards normally associated with ownership of the entities, and therefore the company is the primary beneficiary of these entities. The results of variable interest entities established during the year are included in the consolidated income statements from the effective date.

F-7

l
Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

l
Accounts receivable

Accounts receivable, principally trade, are generally due 90 days and are stated at the invoiced amount. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon payment history and the customer’s current creditworthiness, as determined by a review of their current credit information. The Company continuously monitors aging reports, collections and payments from customers, and a provision for estimated credit losses is maintained based upon the Company’s historical experience and any specific customer collection issues that have been identified. The Company writes off accounts receivable when they become uncollectible. As of September 30, 2008, the Company has determined that no allowance for doubtful accounts is required.

l
Property, plant and equipment, net

Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational, generally ranging from 3 to 7 years. Expenditure for maintenance and repairs is expensed as incurred.

Depreciation expense for the three months ended September 30, 2008 and 2007 were $11,984 and $20,688 respectively. Depreciation expense for the nine months ended September 30, 2008 and 2007 were $34,151 and $41,867, respectively.

l
Intangible assets

Intangible assets consist of costs paid to acquire personal customer information for use in its advertising and database rental activities. For the period ended September 30, 2008, the Company has acquired the new customer database for operating use. As of September 30, 2008, the gross carrying value was $1,736,755, accumulated amortization was $1,054,876 and the net carrying value was $681,879. The Company amortizes the cost of these assets over a period of three to five years.

Amortization expense totaled $55,728 and $26,473 for the three months ended September 30, 2008 and 2007. Amortization expense totaled $108,714 and $79,421 for the nine months ended September 30, 2008 and 2007.

l
Impairment of long-lived assets

In accordance with Statement of Financial Accounting Standard ("SFAS") No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company reviews its long-lived assets, including property, plant and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amounts of the assets may not be fully recoverable. If the total of the expected undiscounted future net cash flows is less than the carrying amount of the asset, a loss is recognized for the difference between the fair value and carrying amount of the asset. There has been no impairment as of September 30, 2008.

l
Revenue recognition

In accordance with the SEC’s Staff Accounting Bulletin No. 104, “Revenue Recognition”, the Company recognizes revenue when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the selling price is fixed or determinable and collectibility is reasonably assured.

F-8

(a) Database rental

Revenues from database rentals are recorded at the time the services are provided. The Company entered into sale-through agreements with 9 (2007: 6) distributors located in Hong Kong and China which in turn will be responsible to recruit new members and take orders from the existing members of TradeDragon.com. The members can enjoy the following services from the Company (a) advertising placement on the business directories and trade publications that are produced by Sino Trade, (b) internet direct marketing services by the means of traditional mail and emails distribution, (c) membership to TradeDragon.com webpage in which the members exhibit their products and services and search for their buyers or suppliers through search engine marketing tool and international trade portal.

According to the sale-through agreement, each of the distributors is committed to a fixed fee of $256,000 per quarter, and the distributor will sign separate contracts with the members. Hence, the Company takes orders directly from the distributors and will services are considered rendered to the distributors but not the members.

(b) TV Broadcasting

Revenues from TV broadcasting service are recognized in the period when television episodes are aired by the TV station and collection is probable.

l
Income taxes

The Company accounts for income tax using SFAS No. 109 “Accounting for Income Taxes”, which requires the asset and liability approach for financial accounting and reporting for income taxes. Under this approach, deferred income taxes are provided for the estimated future tax effects attributable to temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases, and for the expected future tax benefits from loss carry-forwards and provisions, if any. Deferred tax assets and liabilities are measured using the enacted tax rates expected in the years of recovery or reversal and the effect from a change in tax rates is recognized in the statements of operations in the period of enactment. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that some portion of, or all of the deferred tax assets will not be realized.

The Company also adopts the provisions of the Financial Accounting Standards Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” ("FIN 48"). FIN 48 prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transitions. The adoption of FIN 48 did not have a significant impact on the Company’s consolidated financial statements.

In connection with the adoption of FIN 48, the Company analyzed the filing positions in all of the federal, state and foreign jurisdictions where the Company and its subsidiaries are required to file income tax returns, as well as all open tax years in these jurisdictions. The Company adopted the policy of recognizing interest and penalties, if any, related to unrecognized tax positions as income tax expense. The Company did not have any unrecognized tax positions or benefits and there was no effect on the financial condition or results of operations for the period ended September 30, 2008. The Company’s tax returns remain open subject to examination by major tax jurisdictions.

The Company conducts its major businesses in Hong Kong and Malaysia and is subject to tax jurisdiction in various countries. As a result of its business activities, the Company files tax returns that are subject to examination by the local and foreign tax authorities.

F-9

l
Net income (loss) per share

The Company calculates net income (loss) per share in accordance with SFAS No. 128,“Earnings per Share.” Basic income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period. Diluted income (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

l
Comprehensive income (loss)

SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

l
Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

The reporting currency of the Company is United States dollar ("US$"). The functional currency of the Company's subsidiary operating in Hong Kong is Hong Kong Dollars ("HK$") and its financial records are maintained and its statutory financial statements are prepared in HK$. The functional currency of the Company's subsidiary established in the PRC is Renminbi Yuan ("RMB") and its financial records are maintained and its financial statements are prepared in RMB.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with SFAS No. 52, “Foreign Currency Translation”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

l
Stock-based compensation

The Company adopts SFAS No. 123 (revised 2004), “Share-Based Payment“, using the fair value method on January 1, 2006, which requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors, including employee stock options and shares issued through its employee stock purchase plan, based on estimated fair values.

l
Related parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

l
Segment reporting

SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in the financial statements.

F-10

In the first quarter of 2008, the Company discontinued its operation in TV entertainment business. Hence, the Company operates one reportable segment in media and advertising business for the three and nine months ended September 30, 2008.

l
Fair value of financial instruments

The Company values its financial instruments as required by SFAS No. 107, “Disclosures about Fair Value of Financial Instruments”. The estimated fair value amounts have been determined by the Company, using available market information and appropriate valuation methodologies. The estimates presented herein are not necessarily indicative of amounts that the Company could realize in a current market exchange.

The Company’s financial instruments primarily consist of cash and cash equivalents, restricted cash, accounts receivable, prepayments and other current assets, bank overdraft, secured bank loan, obligation under capital lease, letters of credit, accounts payable and accrued liabilities, income tax payable and amounts due from related parties.

As of the balance sheet dates, the estimated fair values of the financial instruments were not materially different from their carrying values as presented due to the short term maturities of these instruments and that the interest rates on the borrowings approximate those that would have been available for loans of similar remaining maturity and risk profile at respective period ends.

l
Recently issued accounting standards

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations" ("SFAS No. 141R"). SFAS No. 141R will change the accounting for business combinations. Under SFAS No. 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions. SFAS No. 141R will change the accounting treatment and disclosure for certain specific items in a business combination. SFAS No. 141R applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Accordingly, any business combinations the Company engages in will be recorded and disclosed following existing GAAP until January 1, 2009. The Company expects SFAS No. 141R will have an impact on accounting for business combinations once adopted but the effect is dependent upon acquisitions at that time. The Company is still assessing the impact of this pronouncement.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements—An Amendment of ARB No. 51, or SFAS No. 160" ("SFAS No. 160"). SFAS No. 160 establishes new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. The Company believes that SFAS 160 should not have a material impact on the consolidated financial position or results of operations.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities" ("SFAS No. 161"). SFAS No. 161 requires companies with derivative instruments to disclose information that should enable financial-statement users to understand how and why a company uses derivative instruments, how derivative instruments and related hedged items are accounted for under FASB Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities" and how derivative instruments and related hedged items affect a company's financial position, financial performance and cash flows. SFAS No. 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption of this statement is not expected to have a material effect on the Company's future financial position or results of operations.

F-11

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No. 162”). This statement identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in the United States. This statement is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board amendments to AU Section 411, “The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles”. The Company does not expect the adoption of SFAS No. 162 to have a material effect on the financial condition or results of operations of the Company.

In May 2008, the FASB issued SFAS No. 163, "Accounting for Financial Guarantee Insurance Contracts—an interpretation of FASB Statement No. 60" ("SFAS No. 163"). SFAS No. 163 interprets Statement 60 and amends existing accounting pronouncements to clarify their application to the financial guarantee insurance contracts included within the scope of that Statement. SFAS No. 163 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and all interim periods within those fiscal years. As such, the Company is required to adopt these provisions at the beginning of the fiscal year ended December 31, 2009. The Company is currently evaluating the impact of SFAS No. 163 on its financial statements but does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

Also in May 2008, the FASB issued FSP APB 14-1, "Accounting for Convertible Debt Instruments that may be Settled in Cash upon Conversion (Including Partial Cash Settlement)" ("FSP APB 14-1"). FSP APB 14-1 applies to convertible debt securities that, upon conversion, may be settled by the issuer fully or partially in cash. FSP APB 14-1 specifies that issuers of such instruments should separately account for the liability and equity components in a manner that will reflect the entity's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP APB 14-1 is effective for financial statements issued for fiscal years after December 15, 2008, and must be applied on a retrospective basis. Early adoption is not permitted. The Company does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

In June 2008, the FASB issued FASB Staff Position ("FSP") EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1"). FSP EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting, and therefore need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No. 128, Earnings per Share. Under the guidance of FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings-per-share pursuant to the two-class method. FSP EITF 03-6-1 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and all prior-period earnings per share data presented shall be adjusted retrospectively. Early application is not permitted. The Company does not expect it to have an effect on the Company's financial position, results of operations or cash flows.

Also in June 2008, the FASB ratified EITF No. 07-5, "Determining Whether an Instrument (or an Embedded Feature) is Indexed to an Entity's Own Stock" ("EITF 07-5"). EITF 07-5 provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. EITF 07-5 is effective for financial statements issued for fiscal years beginning after December 15, 2008. Early application is not permitted. The Company is assessing the potential impact of this EITF 07-5 on the financial condition and results of operations and does not expect it to have an effect on the Company's financial position, results of operations or cash flows.
 
NOTE - 4 DISCONTINUED OPERATIONS

On February 15, 2008, the Board of the Company decided to suspend the production of new episodes for “Who Wants To Be a Millionaire?” TV show due to the poor performance of the sales and distribution team.

On February 25, 2008, its subsidiary, China Media Power Limited (“CMP”) decided to discontinue the “Who Wants To Be a Millionaire?” TV show and will consummate the business restructuring plan. The Company considered that no additional charges associated with the business restructuring would be anticipated.

F-12

Loss from discontinued operations was reported as $180,249 and $703,346 for the nine months ended September 30, 2008 and 2007, respectively. Prior period financial statements for the period ended September 30, 2007 have been restated to present the operation in “Who Wants To Be a Millionaire?” TV show as a discontinued operation.

In conjunction with the discontinuance of operations, the Company recognized a loss $180,249 for the nine months ended September 30, 2008 to write down the carrying amounts of the related assets. The assets and liabilities of the discontinued operations as of September 30, 2008 consisted of the following:

     
September 30, 2008
  
December 31, 2007
  
       
(Audited)
  
Assets of discontinued operation:
            
Cash and cash equivalents
  
$
287
  
$
4,378
  
Accounts receivable
    
78,137
    
78,137
  
Prepayments and other current assets
    
6,401
    
46,863
  
Amount due from a related party
    
39,677
    
38,053
  
Intangible assets, net
    
5,157
    
5,157
  
               
Total assets
  
$
129,659
  
$
172,588
  
               
Liabilities of discontinued operation:
              
Accounts payable and accrued liabilities
    
123,896
    
171,675
  
Amount due to a related party
    
885,153
    
705,203
  
               
Total liabilities
  
$
1,009,049
  
$
876,878
  

NOTE - 5 VARIABLE INTEREST ENTITY

Effective June 2008, the Company established a branch office (the “Branch”) in Labuan, Malaysia for the purpose of managing and liaison of the sales arrangements with new customers in Asia Pacific to meet with the business expansion plan. A branch office is registered as an offshore company under the Labuan Offshore Financial Services Authority in Malaysia and is owned by Mr. Michael Mak, Chief Executive Officer on behalf of the Company. Pursuant to FIN 46R, the Branch is considered as a variable interest entity, of which the Company is the primary beneficiary. Accordingly, the result of the Branch is included in the accompanying financial statements.
 
NOTE - 6 AMOUNTS DUE FROM A RELATED PARTY

As of September 30, 2008, amounts due from a related party represented temporary advances to an employee, a director of subsidiary of $39,675, which was unsecured, interest free and repayable on demand.
 
NOTE - 7 PREPAYMENTS AND OTHER CURRENT ASSETS

Prepayments and other current assets consisted of the following:

     
September 30, 2008
  
December 31, 2007
  
       
(Audited)
  
             
Utility deposits
  
$
26,856
  
$
47,333
  
Prepaid expenses
    
123,200
    
21,197
  
Deposit for investment
    
16,983
    
16,983
  
Other prepayments and receivables
   
15,227
    
1,602
  
               
   
$
182,266
  
$
87,115
  
 
F-13

The prepaid expenses relate to advertising and promotional costs, which are expected to be expensed in the next twelve months.

NOTE - 8 INDEBTEDNESS

(a) Bank loans

The Company’s subsidiary operating in Hong Kong is committed under certain secured bank term loans bearing interest at the rates ranging from 4.5% per annum to 11.24% per annum, payable in monthly installments, due fully and no later than February 2009. As of September 30, 2008, total amounts outstanding under bank loans were $181,698.

(b) Letters of credit

The Company’s subsidiary operating in Hong Kong is committed under certain letters of credit and other trust receipt loans issued by DBS Bank (Hong Kong) Ltd and the Hongkong and Shanghai Banking Corporation Limited, independent financial institutions in Hong Kong, totaling $577,244 expiring through December 10, 2008.
 
NOTE - 9 OBLIGATION UNDER CAPITAL LEASE

The Company purchased part of its studio equipment and financed these equipment with a capital lease arrangement with Dah Sing Bank Limited, an independent financial institution in Hong Kong, with an interest rate of 9.83% per annum, due July 30, 2009 and repayable $13,615 principal and interest monthly.

The obligation under the capital lease is as follows:

     
September 30, 2008
  
December 31, 2007
  
        
(Audited)
  
             
Capital lease
  
$
130,220
  
$
238,678
  
Less: current portion
    
(130,220
)
  
(146,416
)
               
 
   $ -  
$
92,262
  

Future payments as of September 30, 2008 on the equipment lease are as follows:

Years ending September 30:
       
2009
  
$
136,154
  
Less: interest expense
    
(5,934
)
         
Present value of net minimum obligation
  
$
130,220
  

The Company’s studio equipment is held under capital lease and the related depreciation is included in depreciation expense.

F-14

NOTE - 10 INCOME TAXES

For the period ended September 30, 2008 and 2007, the local (“the United States”) and foreign components of income from continuing operations before income taxes and minority interest were comprised of the following:

     
Nine months ended September 30,
  
   
2008
  
2007
  
           
Local
  
$
(223,584
)
$
(5,405,263
)
Foreign
    
2,418,609
    
2,603,127
  
               
Income (loss) before income taxes and minority interest
  
$
2,195,025
  
$
(2,802,136
)

The provision for (benefit from) income taxes from continuing operations consisted of the following:

      
Nine months ended September 30,
  
   
2008
  
2007
  
Current:
            
Local
  
$
-
  
$
-
  
Foreign
    
(578,847
)
  
472,885
  
               
Deferred:
              
Local
    
-
    
-
  
Foreign
    
-
    
-
  
               
(Benefit from) provision for income taxes
  
$
(578,847
)
$
472,885
  

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries and branches that operate in various countries: United States, Hong Kong, Malaysia and the PRC that are subject to tax in the jurisdictions in which they operate, as follows:

The United States

AAGH is registered in the State of Nevada and is subjected to United States tax law.

As of September 30, 2008, the United States operation had $18,006,642 cumulative net operating losses available for federal tax purposes, which are available to offset future taxable income. The net operating loss carryforwards begin to expire in 2029. The Company has provided for a full valuation allowance of $6,122,258 for future tax benefits from net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

Hong Kong

As of September 30, 2008 and December 31, 2007, the Hong Kong profits tax rate was 16.5% and 17.5%, respectively. For the nine months ended September 30, 2008, no provision for Hong Kong profits tax has been made as the Company’s subsidiaries operating in Hong Kong incurred an operating loss of $822,323. For the nine months ended September 30, 2007, the Company provided $472,885 for the Hong Kong profits tax based on its operating income.

During the period ended September 30, 2008, the Company filed the 2007 tax return and was cleared in July 2008. Accordingly, the Company recognized $512,225 of income tax benefits from the over-provision in prior years.

F-15

Malaysia

AAGH’s consolidated affiliate is registered under the Labuan Offshore Financial Services Authority, Malaysia and subject to Malaysian Income Tax Law at a preferential rate of 3% of net income or a fixed sum of $5,876 (equivalent to Ringgit Malaysian 20,000). For the period ended September 30, 2008, the affiliate generated $3,039,054 from continuing operation before income taxes and provided for $4,407 of income tax expense.

The PRC

AAGH’s subsidiary operating in the PRC is subject to the Corporate Income Tax Law of the PRC (the “New CIT Law”) at a statutory rate of 25% on the subsidiary's assessable profits, based on existing PRC tax legislation, interpretations and practices in respect thereof. The subsidiary was exempted from the Corporate Income Law because it generated an operating loss for the nine months ended September 30, 2008.


Deferred tax assets:
       
Net operating loss carryforwards from:
       
U.S.
  
$
6,122,258
  
Hong Kong
    
105,230
  
The PRC
    
265,657
  
     
6,493,145
  
Deferred tax liabilities:
        
Depreciation
    
(132,091
)
         
Less: valuation allowance
    
(6,493,145
)
         
Net deferred tax liabilities
  
$
(132,091
)

As of September 30, 2008, the aggregate cumulative tax losses of $20,327,556 are available to be carried forward indefinitely to offset future taxable income, if unutilized. The deferred tax assets consists mainly of tax losses from differing tax regimes and for which a full valuation allowance has been provided, as the management believes it is more likely than not that these assets will not be realized in the future.

The Company adopted the provisions of FIN 48 on January 1, 2007. This interpretation prescribes a recognition threshold and measurement attribute for the tax positions taken, or expected to be taken, on a tax return. The Company files tax returns in the various tax jurisdictions in which its subsidiaries or branch operates, principally the United States, Hong Kong and Malaysia, as follows:

l
United States, its tax years 2005 to 2007 returns remain open by examination by IRS
l
Hong Kong, 2007 tax returns have been filed and cleared in the second quarter of 2008. The Company recognized $512,225 of income tax benefits from the over-provision in prior years.
l
Malaysia, 2007 returns have been filed and are in the normal process.
 
NOTE - 11 NET INCOME (LOSS) PER SHARE

Basic income (loss) per share is computed by dividing net income (loss) by the weighted average number of the common stock outstanding during the period. Diluted income (loss) per share is computed by dividing net income (loss) by the weighted average number of the common stock outstanding and dilutive potential common stock outstanding during the period.
 
F-16
 
The following is a reconciliation of the number of shares used in the calculation of basic and diluted net income (loss) per share for the three and nine months ended September 30, 2008 and 2007:

   
Three months ended September 30,
  
Nine months ended September 30,
  
   
2008
  
2007
  
2008
  
2007
  
Basis and diluted income (loss) per share calculation
                      
                       
Numerator:
                      
Net income (loss) in computing basic and diluted net income per share
  
$
825,858
  
$
(967,449
)
$
2,593,623
  
$
(3,697,029
)
                           
Denominator:
                          
Weighted average ordinary shares outstanding – Basic
    
133,362,000
    
93,584,222
    
131,521,259
    
82,909,222
  
Dilutive effect of convertible preferred stock
    
80,000,000
    
-
    
80,000,000
    
-
  
Weighted average ordinary shares outstanding – Diluted
    
213,362,000
    
93,584,222
    
211,521,259
    
82,909,222
  
                           
Basic income (loss) per share
  
$
0.01
  
$
(0.01
)
$
0.02
  
$
(0.04
)
                           
Diluted income (loss) per share
  
$
0.00
  
$
(0.01
)
$
0.01
  
$
(0.04
)
 
NOTE - 12 CAPITAL TRANSACTION

On May 22, 2008, the Company issued 2,000,000 shares of its common stock to Mr. Michael Mak, Chief Executive Director to compensate as signing bonus under the employment agreement dated August 18, 2006. The fair value of the common stock signing bonus totaled $414,000 and was recognized ratably over the one-year service period through August 17, 2007, under the employment agreement. The fair value was based on the quoted market value at $0.207 per share of the Company’s common stock as of the date of the employment agreement. For the period ended September 30, 2007, the Company recognized $260,877 of stock based compensation expense to the statement of operation.

At the same day of May 22, 2008, the Company approved and issued 1,000,000 shares and 500,000 shares of its common stock to Mr. John Leper, a director of the Company and Mr. Ng Hing, a director of the subsidiary as remuneration compensation for their services. The fair value of these stock issuances was determined using the fair value of the Company’s common stock on the grant date, at a market quoted price of $0.0825 per share. The Company recognized $123,750 to the statements of operations for the nine months ended September 30, 2008.

As of September 30, 2008, the number of authorized and outstanding shares of the Company’s common stock was 300,000,000 shares and 133,362,000 shares, respectively.

NOTE - 13 CONCENTRATIONS OF RISK

The Company is exposed to the followings concentrations of risk:

(a) Major customers

As of September 30, 2008, the Company had six customers that each accounted for more than 10% of trade receivables and the Company had seven customers each accounted for more than 10% of revenues for the period ended September 30, 2008. If the Company was unable to obtain other customers, the Company's business, operating results and financial condition would be materially adversely affected.

F-17

(b) Major vendors

As of September 30, 2008, the Company had two vendors that each accounted for more than 10% of trade payables. If these vendors were unavailable to provide services in a timely manner and the Company was unable to find alternative vendors, the Company's business, operating results and financial condition could be materially adversely affected.

(c) Credit risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and trade accounts receivable. The Company performs ongoing credit evaluations of its customers’ financial condition, but does not require collateral to support such receivables.

(d) Interest rate risk

As the Company has no significant interest-bearing assets, the Company’s income and operating cash flows are substantially independent of changes in market interest rates.

The Company’s interest-rate risk arises from short-term and long-term borrowings. Borrowings issued at variable rates expose the Company to cash flow interest-rate risk. Borrowings issued at fixed rates expose the Company to fair value interest-rate risk. Company policy is to maintain approximately all of its borrowings in fixed rate instruments. As of September 30, 2008, all of borrowings were at fixed rates.

(e) Exchange rate risk

The reporting currency of the Company is US$, to date the majority of the revenues and costs are denominated in RMB and a significant portion of the assets and liabilities are denominated in RMB. As a result, the Company is exposed to foreign exchange risk as its revenues and results of operations may be affected by fluctuations in the exchange rate between US$ and RMB. If RMB depreciates against US$, the value of RMB revenues and assets as expressed in US$ financial statements will decline. The Company does not hold any derivative or other financial instruments that expose to substantial market risk.
 
NOTE - 14 COMMITMENT AND CONTINGENCIES

(a) Litigation
 
The Company is subject to a limited number of claims and actions that arise in the ordinary course of business. The litigation process is inherently uncertain, and it is possible that the resolution of the Company exists and future litigation may adversely affect the Company. Management is unaware of any matters that may have a material impact on the Company's financial position, results of operations, or cash flows.

(b) Operating leases

The subsidiaries operating in Hong Kong was committed under various non-cancelable operating leases with a term of 2 years with fixed monthly rentals, due June 15, 2010. Total rent expenses for the nine months ended September 30, 2008 and 2007 was $68,217 and $52,452.

Future minimum rental payments due under a non-cancelable operating lease are as follows:

Year ending September 30:
       
2009
  
$
87,410
  
2010
    
52,961
  
         
Total
  
$
140,371
  
 
F-18
 
NOTE - 15 COMPARATIVE FIGURES

Certain amounts in the prior periods presented have been reclassified to conform to the current period financial statement presentation.

F-19

ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION

The following review concerns the three and nine months ended September 30, 2008 and 2007, which should be read in conjunction with the audited consolidated financial statements and notes thereto presented in the Form 10-K.

Forward Looking Statements

The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements involve risks and uncertainties, including statements regarding our capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expect", "plan", "intend", "anticipate", "believe", "estimate", "predict", "potential" or "continue", the negative of such terms or other comparable terminology. Actual events or results may differ materially. We disclaim any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Overview and Future Plan of Operations

In the first nine months of 2008 our year-on-year revenues grew 35% to $9,234,465 with net income of $2,593,623. During the period we saw continued success in our Media and Advertising business as a result of our proven-successful partnership programs with established advertising agencies in China through which we sell our media products. During the first half of the year we completely revamped our TV Entertainment business strategy and greatly expanded our TV show catalogue to include over 200 program formats for which we have the exclusive distribution rights in China. Having expanded our programming catalog by mid year we were able to open up a number of new negotiations with multinational brand advertisers and PRC TV broadcasters. We expect to begin seeing our first round of new sponsorship deals resulting from our new strategy and expanded programming catalog. All business related to TV Entertainment is now conducted through our Idea Asia subsidiary. We discontinued all operations of our China Media Power (CMP) subsidiary in the previous quarter.

During this quarter we opened a new office in Shanghai to meet sales and distribution demand for our TV entertainment distribution businesses in China and to serve as a new sales hub for our Media and Advertising business. Idea Asia and Sino Trade will staff the new offices.

Also during this quarter we made the decision to postpone the development and launch of our planned online consumer coupon portal for consumers in China in order to keep our resources and efforts focused on our operating businesses. Particularly with our TV Entertainment business being so close to showing results we plan to keep our resources focused.

In June 2008 we moved our headquarter offices in Hong Kong to Unit 601B, 6th Floor, Tower 1, Cheung Sha Wan Plaza, 833 Cheung Sha Wan Road, Kowloon, Hong Kong. The new location provides us with more office space to accommodate additional personnel we anticipate will be required as a result of the growing demands on our business in both our Media & Advertising and TV Entertainment segments.

On March 1, 2008 Hing Ng was replaced as a director of our Sino Trade subsidiary by Hin Lee Kwong who became a director on that same date.

In June 2008, the Company established a new branch office in Labuan, Malaysia for the business expansion in Asia Pacific region.

On October 29, 2008, the Company accepted the resignation of Michael Mak as the Company's Chief Executive Officer, Chief Financial Officer and as a Director, prior to the acceptance of Mr. Mak's resignation, the Board of Directors appointed John Leper, Chairman of the Board of Directors, Chief Executive Officer and Chief Financial Officer. The Board also appointed Hin Lee Kwong as Secretary and as a Director.

Michael Mak will continue as a Director of Sino Trade-Intelligent Development Corp Ltd. (“Sino Trade”), a wholly-owned subsidiary of AAGH. Hin Lee Kwong will also continue to serve as a Director of Sino Trade and retain his responsibility for its overall strategy and administration.
 
Page 4 of 49
 
AAGH and Mr. Mak mutually agreed to cancel 150,000 shares of the Company’s preferred stock currently held by Mr. Mak even though he will continue as a Director of Sino Trade.

Updated Idea Asia TV Show Format Catalog
Below is a list of TV show formats and their Licensors included in the Idea Asia portfolio. The show title is listed first followed by the format licensor — Show title/Licensor

Singing Bee/Zeal Entertainment
In February 2008 Idea Asia signed a contract with Zeal Entertainment for the exclusive right of presenting the TV show "Singing Bee" in China. Zeal Entertainment ( http://www.zealentertainment.co.uk ) is an independent formats and events distributor and is a subsidiary of the Digital Rights Group, UK 's largest independent TV distributor. Zeal licenses formats, programs and event rights internationally and handles a range of successful properties, including "Singing Bee", "Miss World", "This Is Your Life", "Under Construction", and "The European Poker Tour." "Singing Bee" is a musical game show where contestants have to "sing in" the blanks to song lyrics when the music stops, it has been licensed to more than 30 territories worldwide, including the US, Australia, Europe and South America.

Blackjack Bowling/Sony Pictures Television International
In March 2008 Idea Asia entered into an option agreement with Sony Pictures Television International (SPTI) giving Idea Asia the first opportunity to license the TV game show format "Blackjack Bowling" from SPTI to adapt and produce a local version of the format in China. "Blackjack Bowling" is the only show of its kind that combines two of the world's favorite pastimes — blackjack and bowling — just as the two simple elements of the roulette wheel and hangman were combined to create Wheel of Fortune. "Blackjack Bowling's" format is flexible and can be played in either a 30-minute or 60-minute format.

Silent Library/2waytraffic
In February 2008 signed a contract with 2waytraffic for the exclusive right of presenting the TV show "Silent Library" in China. 2waytraffic is listed on the AIM of the London Stock Exchange and is a leading international developer and exploiter of interactive entertainment content for television, mobile and digital platforms with an unrivaled catalog of over 200 high quality entertainment formats including "Who Wants To Be A Millionaire?", "Brainiest", "Mr & Mrs", "Take It Or Leave It", "You Are What You Eat", and "That's The Question". "Silent Library" was created by Japanese comedian Hitoshi Matsumoto in 2001 as part of NTV's, hugely popular variety show, "Downtown no Gaki no Tsukai ya Arahende". "Silent Library" takes place in a library setting where a team of players perform pranks and punishments on each other whilst having to remain as silent as possible. No matter how unpleasant the challenge is, the contestant isn't allowed to yelp or shout or make any noise no matter how funny it is, his friends mustn't laugh.

You Are What You Eat/2waytraffic
In February 2008 Idea Asia signed a contract with 2waytraffic for the exclusive right of presenting the TV show “You Are What You Eat” in China. “You Are What You Eat” is the factual entertainment format which takes an uncompromising look at the people whose eating habits are threatening to send them to an early grave, and then shows them the way to change. Each week a renowned nutritionist takes an up-close — and sometimes very personal — look at the contributor and the effect their appalling diet is having on their body, before transforming the way they eat and feel in just eight weeks. The contributor is put through a series of sometimes shocking tests including tongue profiling, colonic irrigation and blood, urine and stool analysis which, coupled with the nutritionist's no-nonsense, 'tough love' approach make for graphic, but fascinatingly entertaining, viewing!

Small Talk/FremantleMedia
In February of 2008 Idea Asia signed a contract with FremantleMedia to exclusively represent the TV show “Small Talk in China”. FremantleMedia is one of the largest international creators and producers of entertainment brands in the world with leading prime time drama, serial drama, entertainment and factual entertainment programming in over 40 countries worldwide. FremantleMedia is at the forefront of developing cross- platform media experiences through its FMX operation, which is successfully developing new entertainment brands and concepts specifically for mobile, broadband, games consoles and Internet Protocol Television (IPTV). FremantleMedia is a subsidiary of RTL Group, Europe 's largest television and radio broadcast company, which is 90% owned by Bertelsmann AG, an integrated media and entertainment company that commands leading positions in the world's media markets.
 
Page 5 of 49
“Small Talk” is a game show which is hugely successful around the world, starring little people, played by big people and enjoyed by viewers of all ages. Children aged between six and eight from various schools are taped prior to the studio recording, giving their answers and opinions to questions about life in general; the questions range from 'How long is a woman pregnant for before giving birth?' to 'What is a toupee?'. The answers are, in turn, hilarious, charming and bizarre! The studio centerpiece is a video wall of nine screens, with three contestants trying to predict how the children will respond to the questions. Aired in over 15 countries, “Small Talk” has garnered rating successes all around the world.

50-50/2waytraffic
In February 2008 Idea Asia signed a contract with 2waytraffic for the exclusive right of presenting the TV show “50-50” in China . “50-50” is the ultimate quiz show which extends the 50-50 Lifeline from “Who Wants To Be A Millionaire?” into a new format. Everything is about making a straight choice between two possibilities and contestants win the chance to fill in a blank check with the amount they think they deserve to win. 50-50 can run weekly or daily, and is versatile enough to play in any timeslot. Answering questions individually but ultimately working as a team, contestants must select an answer from two possible options before the question is passed over to their partner who must decide whether they agree or disagree. If they agree, the original answer is locked in, but if they disagree, they overrule their partner's answer and the other option is locked in instead. After two nail-biting rounds throughout which the stakes rise and the game-play gets trickier, the couple reaches the climax of the game.

Battle of the Choirs/Absolutely Independent
In July 2008 Idea Asia entered into an agreement with Netherlands based Absolutely Independent for the exclusive right of presenting the TV show ‘Battle of the Choirs’ in China. Sit back. Turn up the volume on your TV. Be engulfed by the massive wave of singing: more than 30 voices, all battling for the title of the nation's Best Choir. Let yourself be swept away by the wall of choirs, each with its own story, in this enchanting TV show which will guarantee goose bumps from the vocal power!

Challenge Me/Absolutely Independent
In July 2008 Idea Asia entered into an agreement with Netherlands based Absolutely Independent for the exclusive right of presenting the TV show ‘Challenge Me’ in China. Challenges, record setting, and bets are timeless and always exciting to watch. In the show ‘Challenge me’ people participate in challenges which they believe to be unique. We all sometimes think: “I can do that, and maybe even better.” That’s exactly what this show is about. Challenges and bets are won, records are broken. Do you think that you can make a unique effort no one else can make? If so, sign up and seize a place in the show! Watch the performances, follow the people while they are preparing their act. Hear the expectations. Share the challengers’ excitement or disappointment.

Crisis/Absolutely Independent
In July 2008 Idea Asia entered into an agreement with Netherlands based Absolutely Independent for the exclusive right of presenting the TV show ‘Crisis’ in China. Crisis shows viewers how people in authority respond in times of crisis by placing them in a fake reality crisis situation that evolves during the course of the program. How do the contestants respond to a hostage situation threatening to go out of hand, or an announced suicide attack in a public place? Catastrophes like September 11, the crisis in the Middle East and various natural disasters have made it very clear that the people in power who need to respond to these situations are put under incredible pressure.

The Singing Office/Absolutely Independent
In July 2008 Idea Asia entered into an agreement with Netherlands based Absolutely Independent for the exclusive right of presenting the TV show ‘The Singing Office’ in China. Every office has hidden talents! Two hosts visit two companies. They surprise the employees, from the office assistant to the mail room and the director, on a search for singing talent. Ten talents per company are selected; two will be put in the spotlight. One company will compete against the other singing, dancing and performing in many ways. Colleagues become fans, hierarchy fades and team spirit grows while nerves get jumpy during the repetitions and rehearsals building to the final grand finale show! Will they hit the high note? Will they remember that dance step? Will the strong voice be strong or hoarse on show night?
 
Beat The Host!/SevenOne International 
 
In September 2008 Idea Asia entered into an agreement with Germany based SevenOne International for the exclusive right of presenting the TV show ‘Beat The Host’ in China. The innovative show employs a stimulating competitive element - the audience vs. the host. During the show, a selected contestant will duel the host (who is often a well-known star) in various areas including skills, sports, knowledge, daring and in some cases sheer luck. If the host wins, the prize money goes into the jackpot. If the contestant wins, he/she will take the cash home.

Page 6 of 49
 
Complete Catalog/ Sparks Network
In October 2008 Idea Asia entered into an agreement with Sparks Network, a global distribution, development and network company which holds one of the world's strongest catalogues of TV formats. The Sparks Network members represent some of the most skilled developers and producers in the world of television. Sparks Network offers the broadcasters of the world a strong catalogue of proven formats from producers with operations in some 50 countries. Through the Sparks Network member in each territory, the world's broadcasters get a respected production partner with a working relationship with the creator of the format. Idea Asia is the exclusive Sparks Network member for China and Hong Kong.

Going Forward

Going forward the Company plans to continue our proven-successful agency partnership programs with established advertising agencies in China to grow the Media and Advertising segment of our business. Also we plan to develop a new stream of revenue from our TV entertainment business as the new distribution strategy began in February of this year gains traction. We also plan to continue to seek new opportunities in China TV entertainment. We expect to continue this course of business through the remainder of 2008 and into 2009.

Media & Advertising going forward. In this segment we had very solid financial performance in the first nine months of 2008. Our strategy of selling through agents has been consistently working very well. Given this we plan to continue to seek new agents through whom we can continue this growth process. Additionally we plan to add more product offerings for the agent network to sell. We expect reasonable growth in this segment.

We now have an office in Shanghai where we will expand our sales effort for our media and advertising business. From this same office we will also expand our TV entertainment sales and distribution efforts. We see the new Shanghai operation as a start to what will become a very synergistic sales and distribution hub for all of the AAGH businesses.

This quarter we decided to postpone our plans to launch an online China-based consumer coupon service. This allows us to keep our resources focused on our existing businesses. We will revisit this decision in the future, most likely after our TV entertainment business is generating revenue. When we decide to move forward on this business we plan to build upon our past experience in the online coupon business (in the US) with a number of enhancements to address the unique and explosive consumer market in China. We believe an online business segment can compliment the AAGH family of media, advertising and entertainment businesses allowing for more channels of opportunity for our advertising clients in the PRC.

TV Entertainment going forward. We plan to proceed in a revenue conscious manner to further development our TV entertainment business. With an industry veteran now directing this segment, management believes the Company is on a good course to capitalize on the emerging TV entertainment business in China. While the Company plans to continue to identify and acquire successful TV programs/formats from content providers, we have now built a large enough catalog to met the needs of just about any advertiser or broadcaster in the China market. Beginning this quarter we moved our focus from catalog building to advertising sponsorship sales and distribution.

Having established ourselves as a provider of top quality international program formats, we have now opened negotiations with a number of multinational brand advertisers and TV broadcasters in China. We are still very early into our new strategy, having only begun in February, yet we are already seeing very encouraging response that we believe will eventually generate the revenue and profits we expect from the PRC market where the demand for quality programming is far out running the supply. Our catalog of TV formats is growing rapidly because the major international format owners know the China market is very difficult to enter and even more difficult to maintain; they are wise enough to know that expansion into China requires a long term commitment and on-the-ground experience that only Idea Asia can offer.

Results of Operations for the Three and Nine Months Ended September 30, 2008 and September 30, 2007

During the three and nine month periods ended September 30, 2008 we experienced net income of $825,858 on revenue of $4,872,180 and $2,593,623 on revenue of $9,234,465 respectively. We expect to continue to improve our income position over the next 12 months as we plan to continue growing our profitable advertising sales business in China and we expect continued improvement in our TV entertainment business. During the three and nine months periods ended September 30, 2008, we generated all of our revenue from our Media & Advertising division. Over the next twelve months, we plan to devote the majority of our resources to expanding and further developing our Media and Advertising segment and our TV Entertainment segment.

Page 7 of 49

 The following tables set forth our revenues by each operational division for the three and nine month periods ended September 30, 2008 and 2007:
  
   
2008
  
2007
  
Variance
  
%
  
Jan - Sep 2008
                     
Media & Advertising
  
$
9,234,465
  
$
6,861,759
  
$
2,372,706
    
35
%
TV Entertainment
  
$
0
 
$
0
 
$
0
    
0
  
Asia Global Corporate
  
$
0
 
$
64
 
$
-64
    
-100
%
July-Sep 2008
                          
Media & Advertising
  
$
4,872,180
  
$
3,843,631
  
$
1,028,549
    
27
%
TV Entertainment
  
$
0
 
$
0
 
$
0
    
0
  
Asia Global Corporate
  
$
0
 
$
0
 
$
0
    
0
%
 
Revenue – Media & Advertising

During the three and nine month periods ended September 30, 2008, our revenues from the Media & Advertising segment were $4,872,180 and $9,234,465 respectively, compared to the 2007 figures of $3,843,631 and $6,861,759. Hence we experienced an increase of revenue of 27% and 35% respectively from the comparable three and nine month periods ended September 30, 2007. The increases are primarily attributable to improved sales through our partnerships with established advertising agencies in China. Management believes increased advertising and promotion in this segment along with sales force improvement through experience contributed to the sales increase.

Revenue – TV Entertainment

During the three and nine months ended September 30, 2008, there was no revenue for the TV Entertainment segment. In February 2008 we completely revamped our TV entertainment segment strategy. Rather than relying on one TV show as a revenue generator as was our original strategy, we have now built a large portfolio of licensed TV shows which we will produced based on market demand. Since February of this year we have built a portfolio of over two hundred TV shows. During this quarter we opened up a number of sponsorship negotiations with multinational brand advertisers and broadcasters. We expect to begin realizing revenue from this segment as we close advertising and distribution deals and shows begin to air. Revenue from this segment will be derived from distribution licensing fees, revenue-sharing based on advertising fees collected for ads that air within the shows, and show sponsorship fees.
 
Cost of Sales (from continuing operations)    
                     
   
 2008
  
 2007
  
Variance
   %  
Jan - Sep 2008
                    
Media & Advertising
  
$
3,947,993
  
$
2,131,005
  
$
1,816,988
    
85
%
TV Entertainment
  
$
26,414
 
$
0
  
$
26,414
    
0
%
Asia Global Corporate
  
$
0
  
$
0
  
$
0
    
0
%
Discontinued operation
  
$
46,202
  
$
297,715
  
$
-251,513
    
-84
%
July-Sep 2008
                          
Media & Advertising
  
$
2,313,634
  
$
1,107,095
  
$
1,206,539
    
109
%
TV Entertainment
  
$
0
 
$
0
  
$
0
    
0
%
Asia Global Corporate
  
$
0
  
$
0
  
$
0
    
0
%
Discontinued operation
  
$
0
  
$
297,714
  
$
-297,714
    
-100
%
 
For the three months ended September 30, 2008 cost of sales totaled $2,313,634 representing 47% of our total revenue of $4,872,180 as compared to $1,107,095, 29% of total revenue of $3,843,631 for the three months ended September 30, 2007. The increase in cost of sales as a percentage of sales for the three months ended September 30, 2008 is attributable to increases in printing costs and costs of direct marketing in our Media and Advertising segment.

For the nine months ended September 30, 2008 cost of sales was $4,020,609 (including discontinued operations), representing almost 43.5% of our total revenue of $9,234,465 as compared to $2,428,720 (including discontinued operations), 35% of total revenue of $6,861,759 for the nine months ended September 30, 2007. Again, the increase in cost of sales as a percentage of sales for the nine months ended September 30, 2008 is attributable to increases in printing costs and costs of direct marketing in our Media and Advertising segment, and a licensing fee incurred by our TV Entertainment segment.

Page 8 of 49

Cost of Sales – Media & Advertising

For the three month period ended September 30, 2008 cost of sales for our Media & Advertising segment was $2,313,634 representing 47.5% of our total segment revenue of $4,872,180 as compared to $1,107,095, or 29% of our total segment revenue of $3,843,631 for the three months ended September 30, 2007. The increased cost of sales as a percentage of revenue is attributable to increased printing costs related to the production of directories and trade publications for this segment and increased costs related to direct marketing.

For the nine month period ended September 30, 2008 cost of sales for our Media & Advertising segment was $3,947,993 representing 43% of our total segment revenue of $9,234,465 as compared to $2,131,005 or 31% of our total segment revenue of $6,861,759 for the nine months ended September 30, 2007. The increased cost of sales as a percentage of revenue is attributable to increased printing costs related to the production of directories and trade publications for this segment and increased costs related to direct marketing.

Cost of Sales – TV Entertainment

For the three month and nine month periods ended September 30, 2008 cost of sales for the TV Entertainment segment was $0. Since the revamping of our TV entertainment business strategy in February of this year we have changed our production and licensing policies to limit advance payments for licensing and production. While we will still incur advance licensing fees and production costs from time to time we now limit this type exposure greatly.

Cost of Sales – Discontinued Operations

For the three month and nine month periods ended September 30, 2008 cost of sales attributable to the discontinued operations of CMP were $0 and $46,202 respectively and $297,715 for the three and nine month periods in 2007. All abovementioned costs represent final TV production costs associated with CMP.
 
Selling, General and Administrative Expenses (from continuing operations)      
                      
   
 2008
  
 2007
  
Variance
  
%
  
Jan - Sep 2008
                     
Media & Advertising
  
$
2,533,602
  
$
1,976,111
  
$
557,491
    
28
%
TV Entertainment
  
$
112,240
 
$
0
 
$
112,240
    
0
%
Asia Global Corporate
  
$
222,571
  
$
5,396,661
  
$
-5,174,090
    
-96
%
Discontinued operation
  
$
134,047
  
$
403,115
  
$
-269,068
    
-67
%
July-Sep 2008
                          
Media & Advertising
  
$
1,666,556
  
$
636,825
  
$
1,029,731
    
162
%
TV Entertainment
  
$
59,004
  
$
0
  
$
59,004
    
0
%
Asia Global Corporate
  
$
33,946
  
$
2,331,522
  
$
-2,297,576
    
-99
%
Discontinued operation
  
$
0
  
$
47,961
  
$
-47,961
    
-100
%
 
For the three months ended September 30, 2008 selling, general and administrative expenses decreased $1,256,802 or 42% to $1,759,506 from $3,016,308 for the three months ended September 30, 2007. The decrease in expenses during the three months ended September 30, 2008 was primarily attributable to decrease in non-cash consulting expenses related to expansion into the TV market in China in our Asia Global Corporate segment with some offset from increased employment costs in our TV Entertainment segment.

For the nine months ended September 30, 2008 selling, general and administrative expenses decreased $4,773,427 or 61% to $3,002,460 from $7,775,887 for the nine months ended September 30, 2007. The overall decrease in expenses during the nine months ended September 30, 2008 is primarily attributable to lowered costs resulting from discontinuing operations of CMP and a decrease in non-cash consulting expenses related to expansion into the TV market in China in our Asia Global Corporate segment.

Selling, General and Administrative Expenses – Media & Advertising

During the three months ended September 30, 2008, our selling, general and administrative expenses for our Media & Advertising segment totaled $1,666,556. Compared to the 2007 figure of $636,825 for the three months ended September 30, 2007 we experienced a 162% increase of $1,029,731 attributable to increased advertising and promotion expenses some of the promotion expenses are attributable to one-off events and therefore do not represent ongoing expenses.

Page 9 of 49

During the nine months ended September 30, 2008, our selling, general and administrative expenses for our Media & Advertising segment totaled $2,533,602. Compared to the 2007 figure of $1,976,111 for the nine months ended September 30, 2007 we experienced a 28% increase of $557,491 attributable to increased promotion expenses primarily in the third quarter.

Selling, General and Administrative Expenses – TV Entertainment

During the three and nine month periods ended September 30, 2008, our selling, general and administrative expenses for our TV Entertainment segment were $59,004 and $112,240, compared to $0 for the same periods the previous year. Expenses and the increase in this segment are attributable primarily to employment costs and travel costs related to promotion.

Selling, General and Administrative Expenses – Asia Global Corporate

During the three months ended September 30, 2008 our selling, general and administrative expenses related to our Asia Global Corporate segment were $33,946. For the same period during 2007 our expenses for this segment totaled $2,331,522 primarily attributed share-based compensation.
 
During the nine months ended September 30, 2008, our selling, general and administrative expenses for our Asia Global Corporate segment were $222,571 with $123,750 attributable to share based compensation. For the same period during 2007 our expenses for this segment totaled $5,396,661. The higher expenses in 2007 were primarily attributable to non-cash stock-based professional fees related to business expansion into China.

Selling, General and Administrative Expenses – Discontinued Operations

During the three and nine month periods ended September 30, 2008 our selling and general administrative expenses for discontinued operations were $0 and $134,047 respectively compared to $47,961 and $403,115 respectively for same periods in 2007. Lowered expenses for both periods are attributable to the winding down of production and marketing expenses related to CMP.
 
Depreciation, Amortization of Intangible Assets, and Impairment Loss of Property, Plant and Equipment
            
             
   
 2008
  
 2007
  
Depreciation
  
$
34,151
  
$
41,867
  
Amortization of intangible assets
  
$
108,714
  
$
79,421
  
 
  
$
142,865
  
$
121,288
  
 
During the nine month periods ended September 30, 2008 and 2007 we experienced non-cash expenditures of $142,865 and $121,288 respectively from depreciation of fixed assets and amortization of intangible assets.
 
Other Income (Expense)

Total other income for both periods presented was immaterial and consisted of the following:

   
2008
  
2007
  
Other income
  
 
  
 
  
Fixed asset rental income
  
$
0
  
$
0
  
Interest income
  
$
5,345
  
$
12,607
  
Miscellaneous other income
  
$
12,821
 
$
0
  
 
  
$
18,166
  
$
12,607
  
 
          
Interest expense
  
$
71,921
  
$
51,501
  
 
          
Total other expenses
  
$
-53,755
  
$
-38,894
  
 
Page 10 of 49

Net Income/Loss
 
 2008
  
 2007
  
Variance
  
%
  
Media & Advertising
  
$
3,136,514
 
$
2,130,242
 
$
1,006,272
    
47
%
TV Entertainment
  
$
(139,058
)
$
-
 
$
(139,058
)
  
0
%
Asia Global Corporate
  
$
(223,584
)
$
(5,405,263
)
$
5,181,679
    
-96
%
Discontinued operation
  
$
(180,249
)
$
(422,008
)
$
241,759
    
-57
%
July-Sep 2008
    
2008
    
2007
    
Variance
    
%
  
Media & Advertising
  
$
919,283
 
$
1,722,894
  
$
(803,611
)
  
-47
%
TV Entertainment
  
$
(59,245
)
$
0
 
$
(59,245
)
  
0
%
Asia Global Corporate
  
$
(34,180
)
$
(2,333,729
)
$
2,299,549
    
-99
%
Discontinued operation
  
$
-
 
$
-356,614
  
$
356,614
    
-100
%
 
For the three months ended September 30, 2008 we experienced a net income of $825,858 compared to a net loss of $967,449 for the same period in 2007. The increase in profitability is primarily attributed to increased sales and profits from our Media and Advertising segment.
 
For the nine months ended September 30, 2008 we experienced a net profit of $2,593,623 compared to net loss of $3,677,029 for the same period in 2007. The improvement in profitability is attributable to increased sales and net income from our Media and Advertising segment, recognition of $578,847 of income tax benefits due to over-provision in prior years and the reduction in non-cash charges related to professional fees for business expansion into China which during the same period of the previous year which totaled $5,243,543.

Net Income – Media & Advertising

During the three and nine month periods ended September 30, 2008, our net income totals from the Media & Advertising segment were $919,283 and $3,136,514 respectively, compared to the 2007 figures of $1,722,894 and $2,130,242. Hence we experienced a 47% decrease for the three month period a 47% increase respectively from the comparable three and nine month periods ended September 30, 2007. The overall increase for the nine month period is primarily attributable to expanding and improving our sales force through our partnerships with established advertising agencies in China. The decrease in profitability in the three month period is attributable to increases in cost of sales and selling costs in this segment, some of which are attributable to one-off events and therefore do not represent ongoing expenses.

Net Loss – TV Entertainment
 
During the three and nine month periods ended September 30, 2008 we experience losses of $59,245 and $139,058 respectively. Under new management and strategy our TV Entertainment division was completely revamped starting in February. The net losses are attributable to basic operating expenses and TV show format options acquired. We expect to profit from this segment when the TV shows for which we’ve acquired PRC production and distribution rights begin airing and reach distribution levels sufficient to generate revenues above our operating overhead for the segment. Under our new strategy implemented in February 2008 our operating costs will remain low relative to distribution potential. This is in contrast to the strategy of our now discontinued CMP subsidiary wherein we incurred very high upfront costs related to production, licensing and promotion.

Net Loss – Asia Global Corporate
 
During the three months ended September 30, 2008 we experienced a net loss of $34,180 from our Asia Global Corporate operations, compared to a net loss of $2,333,729 for the same period in 2007. Losses in this segment are primarily attributable to non-cash stock-based compensation for professional services rendered and basic operating expenses such as legal and accounting fees.

During the nine months ended September 30, 2008 we experienced a net loss of $223,584 from our Asia Global Corporate operations attributable to basic operations of this segment, compared to a net loss of $5,405,263 for the same period in 2007 primarily attributable to non-cash stock-based compensation for professional services rendered.

Net Loss – Discontinued Operations

During the three months ended September 30, 2008 we experienced no further net loss from discontinued operations related to our discontinued CMP subsidiary, compared to a net loss of $356,614 for the same period in 2007 also attributable to discontinued CMP operations.

Page 11 of 49

During the nine months ended September 30, 2008 we experienced a net loss of $180,249 from discontinued operations primarily related to our discontinued CMP subsidiary, compared to a net loss of $422,088 for the same period in 2007 also attributable to discontinued CMP operations.

Trends, Events, and Uncertainties

Demand for our services and products will be dependent on, among other things, market acceptance of our concept and general economic conditions, which are cyclical in nature. Our business operations may be adversely affected by our competitors and prolonged recessionary periods. We are in the process of seeking additional financing to accelerate our business plan. There is no assurance additional financing will be available, or if available, that it will be available on reasonable terms. Even if we do obtain such financing, there is no assurance that we will be able to generate profitable operations.

Liquidity and Capital Resources for the Nine Months Ended September 30, 2008 and 2007

Cash flows from operating activities

For the nine months ended September 30, 2008 we experienced negative net cash flows provided by continuing operations in the amount of $177,219. We had $2,773,872 net income from continuing operations plus non-cash stock-based compensation of $123,750 and depreciation and amortization of $142,865 offset mainly by adjustments and changes including accounts receivable of $1,899,160, an income tax credit of $254,180 and income tax payable of $425,485.

For the nine months ended September 30, 2007 we experienced positive net cash flows provided by continuing operations in the amount of $2,358,044. We had net loss of $3,275,021 from continuing operations plus common stock issued for services of $4,982,325, non-cash stock-based compensation to executives of $260,877, a decrease in accounts payable of $917,278 and a tax benefit of 451,591 offset by an increase in accounts receivable of $1,173,596.

Cash flows from investing activities
 
Net cash used for investing activities from continuing operation for the nine months ended September 30, 2008 was $596,815 primarily representing enhancements of IT infrastructure and leasehold improvements of $611,510 offset by a $14,695 increase in restricted cash.

For the nine month period ended September 30, 2007 net cash used in investing activities was 1,153,748 including a decrease in restricted cash of 266,497 and property and equipments purchases of $887,251.

Cash flows from financing activities

Net cash used in financing activities from continuing operation for the nine months ended September 30, 2008 was $81,522 mainly representing repayments of $833,155 offset by increases in advances from banks and repayments from related parties totaling $751,633.

Net cash provided by financing activities from continuing operation for the nine month period ended September 30, 2007 was $484,253 mainly representing proceeds from an issuance of promissory notes in the amount of $370,000, advances under letter of credit of $443,654 and a drawn-down from banks of $134,704 offset by repayments of $556,072.

Liquidity

Our growth plans may require additional funding from outside sources. We intend to pursue discussions with existing shareholders, third party financing sources and potential lenders to ensure access to funds as required. Our future liquidity will depend on our revenue growth and our ability to sell our products and services at positive gross margins and control our operating expenses. Over the coming twelve months, we expect to spend approximately $2,800,000 for operating expenses assuming revenue growth and no significant change in marketing or product development strategies. We expect to meet these capital needs from sales revenues and, to the extent we do not have sufficient revenues, from our existing cash reserves or other external sources of financing.

Page 12 of 49

The accompanying consolidated financial statements contemplate continuation of the Company as a going concern. However, substantial doubt to continue as a going concern is raised and realization of a major portion of the assets in the accompanying consolidated balance sheet is dependent upon the continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements and the success of its future operations.

Management believes the Company has the ability to continue as a going concern because the Company has cash and cash equivalents of $146,497 and restricted cash of $543,409 totaling $689,906. The Company has $794,871 available for use under its current line of credit facility of which $793,863 is being utilized. Moreover the Company generates positive cash flow from operating activities. The aforementioned should satisfy cash requirements over the next 12 month.

Management took steps to reduce operating costs and moved a significant portion of its U.S. operations to China during 2006 to benefit from lower overhead costs and further capitalize on the growth potential and success. We still continued to enjoy these benefits in and expect the same in for the rest of the year and during 2009. Management plans to continue reviewing all aspects of its business and making adjustments as needed to those considered unprofitable. Therefore, for at least the next twelve months, the Company can continue to operate as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amount and classification of liabilities or any other adjustment that might be necessary should the Company be unable to continue as a going concern.

On a long-term basis, our liquidity will be dependent on establishing profitable operations, receipt of revenues, additional infusions of capital and additional financing. If necessary, we may raise capital through an equity or debt offering. The funds raised from this offering will be used to develop and execute our business plan. However, there can be no assurance that we will be able to obtain additional equity or debt financing in the future, if at all. If we are unable to raise additional capital, our growth potential will be adversely affected.

Critical Accounting Policies

The financial statements are prepared in accordance with accounting principles generally accepted in the U.S., which requires us to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying financial statements and related footnotes. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. We do not believe there is a great likelihood that materially different amounts would be reported related to the accounting policies described below. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates.

Accounts receivable and provision for bad debts

Accounts receivable, net of provision for bad debts, are presented at net realizable value. The Company periodically records a provision for bad debts based on management’s judgment resulting from an evaluation of the collectibility of accounts receivable by assessing, among other factors, our customer’s willingness or ability to pay, repayment history, general economic conditions, and the ongoing relationship with our customers. The total amount of this provision is determined by first identifying the receivables of customers that are considered to be a higher credit risk based on their current overdue accounts, difficulties in collecting from these customers in the past, and their overall financial condition. For each of these customers, the Company estimates the extent to which the customer will be able to meet its financial obligations and records a provision that reduces our trade receivable for that customer to the amount that is reasonably believed will be collected. Additional provisions may be required in the future if the financial condition of our customers or general economic conditions deteriorate, thereby reducing net earnings.

Impairment of long-lived assets

We review property, plant and equipment and purchased intangible assets for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. Our asset impairment review assesses the fair value of the assets based on the future cash flows the assets are expected to generate. An impairment loss is recognized when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset (if any) are less than the carrying value of the asset. When an impairment is identified, the carrying amount of the asset is reduced to its estimated fair value. Deterioration of our business in a geographic region or within a business segment in the future could also lead to impairment adjustments as such issues are identified. The accounting effect of an impairment loss would be a charge to earnings, thereby reducing our net earnings.  

Page 13 of 49

Accounting for stock-based compensation

The Company adopted SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123(R)"), from January 1, 2006, which requires the measurement and recognition of compensation expense for all share-based awards made to employees and directors, including employee stock options and shares issued through its employee stock purchase plan, based on estimated fair values..  

Income taxes

The Company adopted the provisions of the Financial Accounting Standards Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosures and transitions. The adoption of FIN 48 did not have a significant impact on the Company’s consolidated financial statements.
 
Employees 

As of September 30, 2008, we had approximately 51 full-time employees employed in Greater China. From time to time we employ independent contractors to support our production, engineering, marketing, and sales departments

Website Access to our SEC Reports

Our Internet website address is www.asiaglobalholdings.com. Through our Internet website, we will make available, free of charge, the following reports as soon as reasonably practicable after electronically filing them with, or furnishing them to, the SEC: our Annual Reports on Form 10-K; our Quarterly Reports on Form 10-Q; our Current Reports on Form 8-K; and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our Proxy Statements for our Annual Stockholder Meetings are also available through our Internet website. Our Internet website and the information contained therein or connected thereto are not intended to be incorporated into this Annual Report on Form 10-K.
 
You may also obtain copies of our reports without charge by writing to:

Attn: Investor Relations
Asia Global Holdings Corp
Unit 601B, 6th Floor, Tower 1
833 Cheung Sha Wan Road, Kowloon, Hong Kong
Attn: Investor Relations

The public may also read and copy any materials filed with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or through the SEC website at www.sec.gov. The Public Reference Room may be contact at (800) SEC-0330. You may also access our other reports via that link to the SEC website.

ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Interest Rate Risk

We are exposed to interest rate risk primarily with respect to our short-term bank loans. Although the interest rates are fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal. A hypothetical 1.0% increase in the annual interest rates for all of our credit facilities at $791,423 would decrease net income before provision for income taxes by approximately $5,935 for the nine months ended September 30, 2008. Management monitors the banks’ interest rates in conjunction with our cash requirements to determine the appropriate level of debt balances relative to other sources of funds. We have not entered into any hedging transactions in an effort to reduce our exposure to interest rate risk.

Page 14 of 49

Foreign Exchange Risk

While our reporting currency is the U.S. Dollar, all of our consolidated revenues and consolidated costs and expenses are denominated in Renminbi. All of our assets are denominated in RMB except for cash. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected by fluctuations in the exchange rate between U.S. Dollars and RMB. If the RMB depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. Dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.
 
Inflation
 
Inflationary factors such as increases in the cost of our product and overhead costs may adversely affect our operating results. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability to maintain current levels of gross margin and selling, general and administrative expenses as a percentage of net revenues if the selling prices of our products do not increase with these increased costs.

ITEM 4T.
CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

Based on an evaluation under the supervision and with the participation of management, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures as defined in Section 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended ("Exchange Act") were effective as of June 30, 2008 to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2008, which were identified in connection with management's evaluation required by paragraph (d) of rules 13a-15 and 15d-15 under the Exchange Act, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.
LEGAL PROCEEDINGS

We are not involved in any material pending legal proceedings at this time, and management is not aware of any contemplated proceeding by any governmental authority.

ITEM 1A.
RISK FACTORS

Risks Related to the Company

You should not place undue reliance on our financial guidance, nor should you rely on our quarterly or annual operating results as an indication of our future performance because our results of operations are subject to significant fluctuations.

We may experience significant fluctuations in our quarterly or annual operating results due to a variety of factors, many of which are outside of our control. Significant fluctuations in our operating results could be caused by any of the factors identified in this section, including but not limited to our ability to retain existing customers, attract new customers at a steady rate and maintain user satisfaction; the announcement or introduction of new or enhanced services, content and products by us or our competitors; significant news events that increase traffic to our websites; technical difficulties, system downtime or Internet failures; demand for advertising space from advertisers; seasonality of the advertising market; the amount and timing of operating costs and capital expenditures relating to expansion of our business, operations and infrastructure; governmental regulation; seasonal trends in Internet use; a shortfall in our revenues relative to our forecasts and a decline in our operating results due to our inability to adjust our spending quickly; and general economic conditions and economic conditions specific to the Internet, electronic commerce and the Greater China market. As a result of these and other factors, you should not place undue reliance on our financial guidance, nor should you rely on quarter-to-quarter comparisons of our operating results as indicators of likely future performance. Our quarterly revenue and earnings per share guidance is our best estimate at the time we provide guidance. Our operating results may be below our expectations or the expectations of public market analysts and investors in one or more future quarters. If that occurs, the price of our ordinary shares could decline and you could lose part or all of your investment.

Page 15 of 49

We may not be able to successfully upgrade and integrate our existing products and technology.

Our ability to compete depends, in part, on our success at upgrading and integrating our existing products and technology. From time to time we upgrade and issue new releases of our existing technology to integrate new functionalities and respond to industry developments. We may experience bugs, delays, difficulties or increased costs that could hinder or prevent the successful design, integration, development, introduction or marketing of new releases of our technology. In addition, we must ensure that performance levels of our technology remain steady when we release new versions to our customers. Any material delays in introducing a new release or performance problems could cause us to lose customers and cause our revenue to decline.

Our international operations face legal and cultural challenges and subject us to additional risks. We have operations in a number of international markets, including Asia, United States, Europe and Canada, and we currently derive approximately all of our revenue from non-U.S. markets. To date, we have limited experience in marketing, selling and distributing our solutions internationally. Our international operations are subject to other risks, including:

o changes in regulatory requirements;

o reduced protection for intellectual property rights in some countries;

o potentially adverse tax consequences and restrictions on cash flow resulting from, among other things:

o local statutory liquidity requirements for businesses operating in certain foreign countries;

o the need to maintain cash balances to meet short-term capital requirements;

o operations in foreign countries with higher tax rates than the United States;

o the inability to utilize certain foreign tax credits; and

o the inability to utilize some or all of our losses generated in one or more foreign countries;

o general import/export restrictions relating to encryption technology and/or privacy matters;

o difficulties and costs of staffing and managing foreign operations;

o local law requirements governing employment contracts, which may impose, among other things, minimum notice periods and minimum severance payments for involuntary terminations;

o political and economic instability;

o fluctuations in currency exchange rates; and

o seasonal reductions in business activity during the summer months in Europe and certain other parts of the world.

Any or all of these risks could affect our business outside of the United States and negatively impact our results of operations.

Page 16 of 49

Our future revenues and results of operations may be difficult to forecast and results in prior periods may not be indicative of future results.

At times in the past and in certain segments, our revenues have fluctuated on a quarterly and annual basis as well as grown significantly and has decreased significantly. Accurate predictions of future revenues are difficult because of the rapid changes in the markets in which we operate.

Our results of operations have fluctuated and may continue to fluctuate significantly in the future as a result of a variety of factors, many of which are beyond our control. These factors include:

o the addition of new clients or the loss of existing clients;

o changes in fees paid by advertisers or other clients;

o changes in the amount of royalties payable by us to owners of websites or the imposition of new charges or fees by website owners;

o the demand by advertisers and web-publishers for our advertising solutions;

o the introduction of new Internet marketing services by us or our competitors;

o variations in the levels of capital or operating expenditures and other costs relating to the maintenance or expansion of our operations, including personnel costs;

o seasonality;

o changes in results of operations brought about by newly acquired businesses or new joint ventures, which may be exceedingly difficult to predict due to management's lack of history with such businesses or joint ventures;

o changes in governmental regulation of the Internet; and

o general economic conditions.

Our future revenues and results of operations may be difficult to forecast due to the above factors and the time we may need to adequately respond to any changes in them. Our profit margins may suffer if we are unable to pass some of the costs on to our customers. In addition, our expense levels are based in large part on our investment plans and estimates of future revenues. Any increased expenses may precede or may not be followed by increased revenues, as we may be unable to, or may elect not to, adjust spending in a timely manner to compensate for any unexpected revenue shortfall. As a result, we believe that period-to-period and year-to-year comparisons of our results of operations may not be meaningful.

Changes in general economic conditions could have a material impact on our business.

Our results of operations could be impacted by changes in overall economic conditions that impact consumer spending within China and the United States. Future economic conditions affecting disposable income such as employment levels, consumer confidence, business conditions, stock market volatility, weather conditions, acts of terrorism, threats of war, and interest and tax rates could reduce consumer spending or cause consumers to shift their spending away from our products. If the economic conditions and performance of the retail and media environment worsen, we may experience material adverse impacts on our business, operating results and financial condition.

Acquisitions may harm our financial results.

Acquisitions have been part of our growth and may continue to be part of our growth in the future. Our acquisitions may be of entire companies, certain assets of companies, controlling interests in companies or of minority interests in companies where we intend to invest as part of a strategic alliance. If we are not successful in integrating companies that we acquire or are not able to generate adequate sales from the acquired entities, our business could be materially and adversely affected.

Page 17 of 49

Disputes concerning media content and intellectual property may adversely affect us.

Most of our media content is subject to arrangements with third parties pursuant to which we have licensed certain rights to use and distribute media content owned by third parties or have licensed to third parties certain rights to use and distribute media content that we own. In addition, we have a number of agreements with third parties concerning the use of our media content and intellectual property, including agreements regarding royalties, distribution, duplication, etc. Allegations that we do not have rights to use media content and other disputes arising from such arrangements can be costly and may have a material adverse impact on our results.

Third parties that are engaged by the Company may have legal action brought against them which could adversely affect us or may result in legal action against the Company.

We work with several third parties in our TV Entertainment and Media & Advertising segments. Such agreements could result in legal action being brought against a third party which we have no control over and could result in the Company being brought into such legal action. Such litigation may impose a heavy financial burden on the Company.

Television production budgets may increase, and television production spending may exceed such budgets.
 
Our future television budgets may continue to increase due to factors including, but not limited to, (1) escalation in compensation rates of people required to work on our current projects, (2) number of personnel required to work on our current projects, (3) equipment needs, (4) the enhancement of existing, or the development of new, proprietary technology and (5) the expansion of our facilities to accommodate the growth of the television and media segment. Under the Format Option Agreements for TV shows, we will finance all or a portion of the budget for production and sale of the show. Due to production exigencies, which are often difficult to predict, it is not uncommon for television production spending to exceed television production budgets, and our current projects may not be completed within the budgeted amounts. In addition, when production of each film is completed, we may incur significant carrying costs associated with transitioning personnel on creative and development teams from one project to another. These carrying costs increase overall production budgets and could have a material adverse effect on our results of operations and financial condition.

We have an obligation to finance production costs.
 
We financed the production of Who Wants to Be A Millionaire?, and we may partially finance or fully finance other related products to be developed and produced. If our television and related products do not generate proceeds sufficient to more than offset our share of the production costs, our business, operating results and financial condition will be materially adversely affected.

In order for our television and related products to be successful, we must develop appealing creative content.
 
The success of each television production developed and produced by us depends in large part upon our ability to develop and produce engaging content and formats that will appeal to a broad audience. Traditionally, this process has been extremely difficult. While we have enjoyed success with our television productions, there can be no assurance that similar levels of success will be achieved by our subsequent productions, including the current and future TV show formats included in our Idea Asia catalogue and our other future projects.

Work stoppages could adversely impact our operations.
 
Although none of our employees are represented by a labor union, it is common for television directors, producers, production staff and actors at television production companies to belong to a union. There can be no assurance that our employees will not join or form a labor union or that we, for certain purposes, will not be required to become a union signatory. We may be directly or indirectly dependent upon certain union members, and work stoppages or strikes organized by such unions could have a material adverse impact on our business, financial condition or results of operations. If a work stoppage occurs, it could delay the completion of our television productions and have a material adverse effect on our business operating results or financial condition.

Page 18 of 49

If we lost any key personnel, our business will be adversely affected.
 
Our success depends, to a significant extent, upon our senior management and key sales and technical personnel, particularly our Chief Executive Officer, who is also our interim Chief Financial Officer. The competition for experienced and talented executives, senior managers and technical and sales personnel has become intense in our industry. The loss of the services of one or more of these persons, other similarly positioned members of management or other key personnel could materially and adversely affect our ability to develop our business.
 
In order to continue to operate efficiently and to grow our business, we will need to attract and retain qualified personnel and manage our costs, which we may be unable to do.
 
Our success depends on our ability to attract and retain qualified technical, sales and marketing, customer support, financial and accounting, and managerial personnel. We may expand our total workforce and will need to continue to attract qualified personnel in order to grow our business successfully. Additionally, as our business has escalated, we have increased our reliance on contractors and outside firms for development. We may not be able to attract, integrate and retain the numbers and types of candidates that we desire, and we may not be able to retain our contractors and outside firms and may not be able to replace them. Even if we are successful in attracting new staff, we may not be able to increase revenue quickly enough to offset the costs of the additional personnel. Any of these contingencies could cause our business to suffer.
 
We have experienced in the past, and may continue to experience in the future, particular difficulty in hiring and retaining qualified staff. Competition for staff is very high, and training is difficult because the required skill set is complex and there is no industry standard. If we are unable to attract, train and retain qualified search staff, we may not remain competitive and could lose business and our customers, which could have an adverse effect on revenue.

Our operations are vulnerable to natural disasters and other events, including terrorist attacks, because we have limited backup systems.
 
We have limited backup systems and have experienced system failures and electrical outages from time to time in the past, which have disrupted our operations. We have a limited disaster recovery plan in the event of damage from fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins and similar events. Our operations are dependent on our ability to protect our computer systems against these unexpected adverse events. If any of the foregoing occurs, we may experience a complete system shutdown. Any business interruption insurance that we carry is unlikely to be sufficient to compensate us for loss of business in the event of a significant catastrophe.
 
In addition, interruptions in our services could result from the failure of our telecommunications providers to provide the necessary data communications capacity in the time frame we require. Our TradeDragon technology resides on computer systems located in our data centers housed by us in Hong Kong. These systems' continuing and uninterrupted performance is critical to our success, as a substantial portion of the revenue depend on the continuing availability of these systems. Despite precautions that we have taken, unanticipated problems affecting our systems have from time to time in the past caused, and in the future could cause, interruptions in the delivery of our solutions. Our business, results of operations and financial condition could be materially and adversely affected by any damage or failure that interrupts or delays our operations. To improve the performance and to prevent disruption of our services, we may have to make substantial investments to deploy additional servers or one or more copies of our Web sites to mirror our online resources. Although we believe we carry property insurance with adequate coverage limits, our coverage may not be adequate to compensate us for all losses, particularly with respect to loss of business and reputation that may occur.
 
In addition, terrorist acts or acts of war may cause damage to our employees, facilities, clients, our clients' customers and vendors, which could significantly impact our revenues, costs and expenses and financial position. The potential for future terrorist attacks, the national and international responses to terrorist attacks or perceived threats to national security, and other acts of war or hostility have created many economic and political uncertainties that could adversely affect our business and results of operations in ways that cannot be presently predicted. We are predominantly uninsured for losses and interruptions caused by terrorist acts and acts of war.

Page 19 of 49

Our network operations may be vulnerable to hacking, viruses and other disruptions, which may make our products and services less attractive and reliable.
 
Internet usage could decline if any well-publicized compromise of security occurs. "Hacking" involves efforts to gain unauthorized access to information or systems or to cause intentional malfunctions or loss or corruption of data, software, hardware or other computer equipment. Hackers have made many attempts to breach the security of our network operations, with minimal disruption to date. If hackers are successful in the future, they could misappropriate proprietary information, which could lead to litigation against us, or cause substantial disruptions in our service. We may be required to expend capital and other resources to protect our Web site against hackers. Any measures we may take may not be effective. In addition, the inadvertent transmission of computer viruses could expose us to a material risk of loss or litigation and possible liability, as well as materially damage our reputation and decrease our user traffic.

We depend on proprietary rights and we face the risk of infringement.
 
Our success and ability to compete are substantially dependent on our internally developed technologies and trademarks, which we protect through a combination of copyright, trade secret and trademark law. Patent applications and trademark applications we submit may not be approved. Even if they are approved, such patents or trademarks may be successfully challenged by others or invalidated. If our trademark registrations are not approved because third parties own such trademarks, our use of such trademarks will be restricted unless we enter into arrangements with such third parties that may be unavailable on commercially reasonable terms.
 
We generally enter into confidentiality or license agreements with our employees, consultants and corporate partners, and generally control access to and distribution of our technologies, documentation and other proprietary information. Despite our efforts to protect our proprietary rights from unauthorized use or disclosure, parties may attempt to disclose, obtain or use our solutions or technologies. The steps we have taken may not prevent misappropriation of our solutions or technologies, particularly in many foreign countries in which we operate, where laws or law enforcement practices may not protect our proprietary rights as fully as in the United States.
 
We have, from time to time, been, and may in the future be, subject to claims of alleged infringement of the trademarks and other intellectual property rights of third parties by us or by customers who employ our advertising solutions. We may be required, or may elect, to indemnify these parties against such claims. Such claims and any resultant litigation could subject us to significant liability for damages and could result in the invalidation of our proprietary rights. In addition, even if we prevail, such litigation could be time-consuming and expensive to defend, and could result in the diversion of our time and attention, any of which could materially and adversely affect our business, results of operations and financial condition. Any claims or litigation from third parties may also result in limitations on our ability to use the trademarks and other intellectual property subject to such claims or litigation unless we enter into arrangements with the third parties responsible for such claims or litigation, which may be unavailable on commercially reasonable terms, if at all.
 
Future currency fluctuations and restrictions on currency exchange may adversely affect our business, including limiting our ability to convert Chinese renminbi into foreign currencies and, if Chinese renminbi were to decline in value, reducing our revenues in U.S. dollar terms.
 
Our reporting currency is the U.S. dollar and our operations in China and Hong Kong use their respective local currencies as their functional currencies. The majority of our revenues derived and expenses incurred are in currencies other than the U.S. dollar. We are subject to the effects of exchange rate fluctuations with respect to any of these currencies. We can offer no assurance that these will be stable against the U.S. dollar or any other foreign currency.
 
The income statements of our international operations are translated into U.S. dollars at the average exchange rates in each applicable period. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenues, operating expenses and net income for our international operations. Similarly, to the extent the U.S. dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions results in increased revenues, operating expenses and net income for our international operations. We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into U.S. dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries' financial statements into U.S. dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income. In addition, we have certain assets and liabilities that are denominated in currencies other than the relevant entity's functional currency. Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss. We have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future. The availability and effectiveness of any hedging transactions may be limited and we may not be able to successfully hedge our exchange rate risks.

Page 20 of 49
 
Changes to existing accounting pronouncements, including SFAS 123R, or taxation rules or practices may adversely affect our reported results of operations or how we conduct our business.
 
A change in accounting pronouncements or taxation rules or practices can have a significant effect on our reported results and may even affect our reporting of transactions completed before the change is effective. Pursuant to SEC rules, we are required to implement the Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R") starting in the first quarter of 2006. SFAS 123R requires us to measure compensation costs for all share-based compensation (including stock options and our employee stock purchase plan, as currently constructed) at fair value and take compensation charges equal to that value. The method that we use to determine the fair value of stock options is based upon, among other things, the volatility of our ordinary shares. The price of our ordinary shares has historically been volatile. Therefore, the requirement to measure compensation costs for all share-based compensation under SFAS 123R could negatively affect our profitability and the trading price of our ordinary shares. SFAS 123R and the impact of expensing on our reported results could also limit our ability to continue to use stock options as an incentive and retention tool, which could, in turn, hurt our ability to recruit employees and retain existing employees. Other new accounting pronouncements or taxation rules and varying interpretations of accounting pronouncements or taxation practice have occurred and may occur in the future. This change to existing rules, future changes, if any, or the questioning of current practices may adversely affect our reported financial results or the way we conduct our business.
 
While we believe that we currently have adequate internal control procedures in place, we are still exposed to potential risks from recent legislation requiring companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act of 2002.
 
While we believe that we currently have adequate internal control procedures in place, we are still exposed to potential risks from recent legislation requiring companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act of 2002. Under the supervision and with the participation of our management, we have evaluated our internal controls systems in order to allow management to report on our internal controls, as required by Section 404 of the Sarbanes-Oxley Act. We have performed the system and process evaluation and testing required in an effort to comply with the management certification requirements of Section 404. As a result, we have incurred additional expenses and a diversion of management's time. If we are not able to continue to meet the requirements of Section 404 in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities, such as the SEC or the Nasdaq National Market. Any such action could adversely affect our financial results and the market price of our ordinary shares.
 
Our stock price has been historically volatile and may continue to be volatile, which may make it more difficult for you to resell shares when you want at prices you find attractive.
 
The trading price of our ordinary shares has been and may continue to be subject to considerable daily fluctuations. During the twelve months ended December 31, 2007, the closing sale prices of our ordinary shares on the Over-the-Counter Bulletin Board ranged from $0.335 to $0.04 per share and the closing sale price on November 14, 2008 was $0.03 per share. Our stock price may fluctuate in response to a number of events and factors, such as quarterly variations in operating results, announcements of technological innovations or new products and media properties by us or our competitors, changes in financial estimates and recommendations by securities analysts, the operating and stock price performance of other companies that investors may deem comparable, new governmental restrictions or regulations and news reports relating to trends in our markets. In addition, the stock market in general, and the market prices for China-related and Internet-related companies in particular, have experienced extreme volatility that often has been unrelated to the operating performance of such companies. These broad market and industry fluctuations may adversely affect the price of our ordinary shares, regardless of our operating performance.

Page 21 of 49
 
We may be classified as a passive foreign investment company, which could result in adverse U.S. tax consequences to U.S. investors.
 
Based upon the nature of our income and assets, we may be classified as a passive foreign investment company, or PFIC, by the United States Internal Revenue Service for U.S. federal income tax purposes. This characterization could result in adverse U.S. tax consequences to you. For example, if we are a PFIC, our U.S. investors will become subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to more burdensome reporting requirements. The determination of whether or not we are a PFIC is made on an annual basis, and those determinations depend on the composition of our income and assets, including goodwill, from time to time. Although in the past we have operated our business and in the future we intend to operate our business so as to minimize the risk of PFIC treatment, you should be aware that certain factors that could affect our classification as PFIC are out of our control. For example, the calculation of assets for purposes of the PFIC rules depends in large part upon the amount of our goodwill, which in turn is based, in part, on the then market value of our shares, which is subject to change. Similarly, the composition of our income and assets is affected by the extent to which we spend the cash we have raised on acquisitions and capital expenditures. In addition, the relevant authorities in this area are not clear and so we operate with less than clear guidance in our effort to minimize the risk of PFIC treatment. Therefore, we cannot be sure whether we are not and will not be a PFIC for the current or any future taxable year. In the event we are determined to be a PFIC, our stock may become less attractive to U.S. investors, thus negatively impacting the price of our stock.
 
We have a single shareholder who can substantially influence the outcome of all matters voted upon by our shareholders and whose interests may not be aligned with yours.
 
Michael Mak, our former Chief Executive Officer, beneficially holds the majority shareholder vote. As a result, Mr. Mak is able to substantially influence all matters requiring the approval of our shareholders, including the election of directors and the approval of significant corporate transactions such as acquisitions. This concentration of ownership could delay, defer or prevent a change in control or otherwise impede a merger or other business combination that the Board of Directors or other shareholders may view favorably.
 
We must rely on the Chinese government to develop China's Internet infrastructure and, if it does not develop this infrastructure, our ability to grow our business could be hindered.
 
The Chinese government's interconnecting, national networks connect to the Internet through government-owned international gateways, which are the only channels through which a domestic Chinese user can connect to the international Internet network. We rely on this backbone and China Telecom and China Netcom to provide data communications capacity primarily through local telecommunications lines. Although the Chinese government has announced plans to aggressively develop the national information infrastructure, we cannot assure you that this infrastructure will be developed. In addition, we have no guarantee that we will have access to alternative networks and services in the event of any disruption or failure. If the necessary infrastructure standards or protocols or complementary products, services or facilities are not developed by the Chinese government, the growth of our business could be hindered.
 
We may be adversely affected by complexity, uncertainties and changes in PRC regulation of Internet business and companies, including limitations on our ability to own key assets such as our website.
 
The Chinese government heavily regulates its Internet sector including the legality of foreign investment in the Chinese Internet sector, the existence and enforcement of content restrictions on the Internet and the licensing and permit requirements for companies in the Internet industry. Because these laws, regulations and legal requirements with regard to the Internet are relatively new and evolving, their interpretation and enforcement involve significant uncertainty. In addition, the Chinese legal system is a civil law system in which decided legal cases may be cited for reference but have little precedential value. As a result, in many cases it is difficult to determine what actions or omissions may result in liability. Issues, risks and uncertainties relating to China's government regulation of the Chinese Internet sector include the following:
 
o We only have contractual control over our website in China; we do not own it due to the restriction of foreign investment in businesses providing value-added telecommunication services, including computer information services, online promotional advertising or electronic mail box services.
 
o In addition, uncertainties relating to the regulation of the Internet business in China, including evolving licensing practices, give rise to the risk that permits, licenses or operations at some of our companies may be subject to challenge, which may be disruptive to our business, or subject us to sanctions, requirements to increase capital or other conditions or enforcement, or compromise enforceability of related contractual arrangements, or have other harmful effects on us.

Page 22 of 49
 
o On December 11, 2001, the day China formally joined the World Trade Organization, the PRC State Council promulgated the FITE Regulations, which became effective on January 1, 2002. The FITE Regulations stipulate that the foreign party to a foreign-invested telecommunications enterprise can hold an equity share in such foreign-invested telecommunications enterprise that provides basic telecom services or value-added telecom services, ultimately not to exceed 49% or 50%, respectively. The Administrative Measures for Telecommunications Business Operating License were promulgated by the Chinese Ministry of Information Industry (MII) on December 26, 2001 and came into effect on January 14, 2002 to supplement the FITE Regulations. However, there are still uncertainties regarding the interpretation and application of the FITE Regulations.
 
o The numerous and often vague restrictions on acceptable content in China subject us to potential civil and criminal liability, temporary blockage of our website or complete cessation of our website. For example, the State Secrecy Bureau, which is directly responsible for the protection of state secrets of all Chinese government and Chinese Communist Party organizations, is authorized to block any website it deems to be leaking state secrets or failing to meet the relevant regulations relating to the protection of state secrets in the distribution of online information.
 
o Because the definition and interpretation of prohibited content are in many cases vague and subjective, it is not always possible to determine or predict what and how content might be prohibited under existing restrictions or restrictions that might be imposed in the future. For example, in January 2005, the Chinese State Administration of Radio, Film & Television ("SARFT"), which regulates radio and television stations in China, issued a notice prohibiting commercials for value-added services related to "fortune-telling" from airing on radio and television stations, effective in February 2005. This notice could also lead to further actions by other Chinese government authorities to prohibit the sale of such fortune-telling related value-added services, which could have a material adverse effect on our financial position, results of operations, or cash flows. SARFT or other Chinese government authorities may prohibit the marketing of other advertising services via a channel we depend on to generate revenues, which could also have a material adverse effect on our financial position, results of operations or cash flows.
 
o Certain Chinese governmental authorities have stated publicly that they are in the process of preparing new laws and regulations that will govern Internet activities. The areas of regulation currently include online advertising, online news reporting, online publishing, and the provision of industry-specific (e.g., drug-related) information over the Internet. Other aspects of our online operations may be subject to regulation in the future. Our operations may not be consistent with these new regulations when they are put into effect and, as a result, we could be subject to severe penalties as discussed above.
 
o The governing body of China's mobile industry, from time to time issues policies that regulate the business practices relating to advertising. We cannot predict the timing or substance of such regulations. Such regulations may have a negative impact on our business.

The interpretation and application of existing Chinese laws, regulations and policies, the stated positions of the MII and possible new laws, regulations or policies have created substantial uncertainties regarding the legality of existing and future foreign investments in, and the businesses and activities of, Internet businesses in China, including our business.

We may be exposed to infringement claims by third parties, which, if successful, could cause us to pay significant damage awards.

Third parties may initiate litigation against us alleging infringement of their proprietary rights. In the event of a successful claim of infringement and our failure or inability to develop non-infringing technology or license the infringed or similar technology on a timely basis, our business could be harmed. In addition, even if we are able to license the infringed or similar technology, license fees could be substantial and may adversely affect our results of operations.

Our failure to compete successfully may hinder our growth.

The markets for Internet advertising and related products and services are intensely competitive and such competition is expected to increase. Our failure to compete successfully may hinder our growth. We believe that our ability to compete depends upon many factors both within and beyond our control, including:
 
o the development of new online advertising media and methods;

Page 23 of 49
 
o the timing and market acceptance of new products and enhancements of existing services developed by us and our competitors;
 
o the ability to attract and retain qualified personnel;
 
o changing demands regarding customer service and support;
 
o shifts in sales and marketing efforts by us and our competitors; and
 
o the ease of use, performance, price and reliability of our services and products.
 

Changes in laws and standards relating to data collection and use practices and the privacy of internet users, or related litigation, could harm our business.

The U.S. federal and various state governments have recently proposed limitations on the collection and use of information regarding Internet users. In 2004 and 2005, the U.S. Congress proposed several new pieces of legislation that would limit the use of technologies deemed to be "spyware", which some bills have defined to include cookies, Web beacons and javascript, which are required by our products and services. The effectiveness of our advertising products and services could be significantly limited by federal and state regulations limiting the collection or use of information regarding Internet users. Since many of the proposed federal and state laws or regulations are being developed, we cannot yet determine the impact these regulations may have on our business. In addition, growing public concern about privacy and the collection, distribution and use of personal information has led to self-regulation of these practices by the Internet advertising and direct marketing industry, and to increased federal and state regulation. Lastly, a number of civil actions have been brought by federal and state authorities against companies alleged to have distributed "spyware" without the proper consent of users. The Network Advertising Initiative has developed self-regulatory principles for online preference marketing. We are also subject to various federal and state regulations concerning the collection, distribution and use of personal information. These laws include the Children's Online Privacy Protection Act and state laws that limit or preclude the use of voter registration and drivers license information, as well as other laws that govern the collection and use of consumer credit information. While we monitor legislative initiatives, in the event that more onerous federal or state laws or regulations are enacted or applied to us or to our clients, our business, financial condition and results of operations could be materially and adversely affected.

Privacy concerns may prevent us from collecting user data.

Growing concerns about the use of cookies and data collection may limit our ability to develop user profiles. Web sites typically place small files of information, commonly known as "cookies," on a user's hard drive, generally without the user's knowledge or consent. Cookie information is passed to the Web site through the Internet user's browser software. Our software technology enables the use of cookies and other non-personally-identifying information to deliver targeted advertising and to limit the frequency with which an advertisement is shown to a user. Most currently available Internet browsers allow users to modify their browser settings to prevent cookies from being stored on their hard drive, and Microsoft Corporation changed the design and instrumentation of its Web browser to give users the option to accept or reject third-party cookies. A small minority of users are currently choosing to prevent certain cookies. Users can also delete cookies from their hard drive or modify them at any time. Some Internet commentators and privacy advocates have suggested limiting or eliminating the use of cookies. Any reduction or limitation in the use of cookies or increase in the number of users blocking cookies could limit the effectiveness of our sales and marketing efforts and impair our profiling and targeting capabilities. Such changes also could adversely affect our ability to determine the reach of advertising campaigns sold and delivered by us and the frequency with which users of sites see the same advertisement.

Page 24 of 49

If the use or effectiveness of cookies is limited, we would likely have to switch to other technology that would allow us to gather demographic and behavioral information. While such technology currently exists, it is substantially less effective than cookies. Replacement of cookies could require significant engineering time and resources, might not be completed in time to avoid negative consequences to our business, financial condition or results of operations, and might not be commercially feasible.

We face risks associated with technological changes.

The Internet and Internet advertising markets are characterized by rapidly changing technologies, evolving industry standards, frequent new product and service introductions and changing customer demands. Our future success will depend on our ability to adapt to rapidly changing technologies and to enhance existing solutions and develop and introduce a variety of new solutions to address our customers' changing demands. We may experience difficulties that could delay or prevent the successful design, development, introduction or marketing of our services. In addition, our new services or enhancements must meet the requirements of our current and prospective customers and must achieve significant market acceptance. Material delays in introducing new services and enhancements may cause customers to forego purchases of our services and purchase those of our competitors.

In addition, the development of commercial software and technology that blocks, eliminates or otherwise screens out Internet advertising may reduce the value of advertising inventory services and the benefits of our services to our customers. We cannot guarantee that a new commercial software or technology, for end-users or enterprises, will not be capable of eliminating a portion or all of the advertisement formats, including email, banners, pop-ups, pop-unders and other formats, that we utilize through the Internet or that we currently deliver through our services. To the extent that our customers refuse to pay for advertisements that are blocked, or if the use of blocking software exceeds our expectations, our business, results of operations and financial condition may be materially and adversely affected.

ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3.
DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 

None.

ITEM 5.
OTHER INFORMATION

On October 30, 2008, the Company filed with the Commission a Form 8-K stating that Michal Mak had resigned as Chief Executive Officer, Chief Financial Officer and as a member of the Board of Directors. Furthermore, the Board of Directors appointing John Leper as Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors as well as appointed Hin Lee Kwong as a member of the Board of Directors.

ITEM 6.
EXHIBITS

INDEX TO EXHIBITS
OF
ASIA GLOBAL HOLDINGS CORP.

31.1
  
Rule 13a-14 (a)/15d-14 (a) Certification of Chief Executive Officer
     
31.2
  
Rule 13a-14 (a)/15d-14 (a) Certification of Chief Financial Officer
     
32.1
  
Section 1350 Certification of Chief Executive Officer
     
32.2
  
Section 1350 Certification of Chief Financial Officer

Page 25 of 49

SIGNATURES
 
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 
ASIA GLOBAL HOLDINGS CORP.
   
   
 
/s/ John Leper
Dated: November 18, 2008
John Leper, Chief Executive Officer
(Principal executive officer)
   
 
 
/s/ John Leper
Dated: November 18, 2008
John Leper, Chief Financial Officer
(Principal financial officer) 
 
Page 26 of 49