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UNITED STATES FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly three month period ended September 30, 2009 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from [ ] to [ ] -------------------------------------------------------------------- CHINA MEDIA GROUP CORPORATION Texas 7310 32-0034926 ----------------------- ------------------------ ---------------------- (State or other jurisdiction of incorporation or organization) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer Identification No.) 1403 Wan Chai Commercial Center, 204 Johnston Road, Wanchai, Hong Kong ----- --------------------------------------------------------------------- ---------------- (Address of Company's principal executive offices) (Zip Code) +011 852 3171 1208 (ext.222) Not Applicable Indicate
by check whether the Registrant (1) has filed all reports required to be filed by Section
13 or 15 (d) of the Securities Exchange Act of 1934 during the past 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 [ x ] No [ ] Indicate by check
mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to
Rule 405 of Regulation S-T (?32.405 of this chapter) during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such files). Yes [ x ] No [ ] Indicate
by check whether the Registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer or a smaller reporting company. See the definitions of "large
accelerated filer," "accelerated filer" and "small reporting
company" in Rule 12b-2 of the Exchange Act. (check one) Large Accelerated Filer [ ] Accelerated
Filer[ ] Non-Accelerated Filer [ ] Smaller Reporting Company [ x ] Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [ ] No[ x ] The
number of common equity shares outstanding as of October 31, 2009 was 534,132,450 shares
of Common Stock, no par value. FORWARD-LOOKING
STATEMENTS This
quarterly report contains forward-looking statements as that term is defined in the
Private Securities Litigation Reform Act of 1995. These statements relate to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "will",
"should", "expects", "plans", "anticipates",
"believes", "estimates", "predicts", "potential"
or "continue" or the negative of these terms or other comparable terminology.
These statements are only predictions and involve known and unknown risks, uncertainties
and other factors, including the risks in the section entitled "Risk Factors",
that may cause our or our industry's 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 these forward-looking statements. Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance or
achievements. Except as required by applicable law, including the securities laws of the
United States, we do not intend to update any of the forward-looking statements to conform
these statements to actual results. Our
financial statements are stated in United States Dollars and are prepared in accordance
with United States Generally Accepted Accounting Principles. In this quarterly report,
unless otherwise specified, all dollar amounts are expressed in United States Dollars. As used
in this quarterly report, the terms "we", "us", "our",
"CHMD", and "the Company" mean China Media Group Corporation and its
subsidiaries unless otherwise indicated. PART I China Media Group Corporation Condensed
Consolidated Balance Sheets as of September 30, 2009 and December 31, 2008 CHINA
MEDIA GROUP CORPORATION CONSOLIDATED
BALANCE SHEETS AS OF
SEPTEMBER 30, 2009 AND DECEMBER 31, 2008 September 30, 2009 December 31, 2008 (Unaudited) (Audited) Notes ----------------- --------------------- US$ US$ 19,561 67,764 35,323 5,807 8 132,665 132,737 9 271,094 91,227 --------------------- --------------------- 458,643 297,535 10 30,469 39,851 11 138,000 138,000 6,791,676 6,791,676 --------------------- --------------------- 6,960,145 6,969,527 --------------------- --------------------- 7,418,788 7,267,062 ============= ============= - 430 12 626,198 466,403 13 - - 14 99,645 - 15 1,101,137 1,118,674 396,528 16,528 --------------------- --------------------- 2,223,508 1,602,035 --------------------- --------------------- 16 2,000,000 2,099,645 156,221 168,230 6 7,428,902 7,428,902 1,735,702 1,660,183 17 - - 43,304 43,265 (6,168,849) (5,735,198) --------------------- --------------------- 3,039,059 3,397,152 --------------------- --------------------- 7,418,788 7,267,062 ============ ============
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ x ]
[ ]
Commission File Number: 000-50431
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
-------------------------------------------------
(Company's Telephone Number, Including Area Code)
(Former Name, Former Address and Former
Fiscal Year if Changed Since Last Report)
Item 1.
Condensed
Consolidated Financial Statements
Condensed Consolidated Financial Statements
September 30, 2009
(Unaudited)
(Expressed In United States Dollars)
Condensed Consolidated Statements of Operations for the nine months period ended September
30, 2009 and September 30, 2008
Condensed Consolidated Statements of Stockholders' Equity for the years ended December 31,
2008 and 2007, and for the nine months period ended September 30, 2009
Condensed Consolidated Statements of Cash Flows for the nine months periods ended
September 30, 2009 and 2008
Notes to Condensed Consolidated Financial Statements
ASSETS
Current Assets:
Cash and cash
equivalents
Accounts
receivables
Loans to unrelated
parties
Prepayments,
deposit and other receivables
Total current
assets
Non-current
assets
Property and
equipments, net
Advance payment
for distribution rights
Goodwill
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current
liabilities:
Accounts payable
Other payables and
accruals
Convertible
debentures
Short term debt
Due to officer and
directors
Due to a
shareholder
Total current
liabilities
Long-term debt
Minority
interest
Stockholders'
equity:
Common stock, no
par value, 85,000,000,000 shares authorized, 534,132,450 (2008: 534,132,450) shares issued
and outstanding
Additional
paid-in-capital
Shares issued for
prepaid consulting services
Comprehensive
income
Accumulated
deficits
Total
stockholders' equity
F-3
CHINA MEDIA GROUP CORPORATION |
CONSOLIDATED STATEMENTS OF OPERATIONS |
FOR THE THREE MONTHS AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2009 AND 2008 |
Three months periods |
Nine months periods |
||||||||||||||||
Ended September 30 |
Ended September 30 |
||||||||||||||||
---------------------------------------- |
----------------------------------------- |
||||||||||||||||
2009 |
2008 |
2009 |
2008 |
||||||||||||||
----------------- |
----------------- |
----------------- |
--------------- |
||||||||||||||
US$ |
US$ |
US$ |
US$ |
||||||||||||||
Net revenue | 37,309 |
26,314 |
79,065 |
77,715 |
|||||||||||||
Cost of revenue | (16,457) |
(11,811) |
(53,254) |
(39,771) |
|||||||||||||
----------------- |
----------------- |
---------------- |
--------------- |
||||||||||||||
Gross profit | 20,852 |
14,503 |
25,811 |
37,944 |
|||||||||||||
Operating expenses: | |||||||||||||||||
Impairment of goodwill | - |
1,000,000 |
- |
1,000,000 |
|||||||||||||
Selling, general and administrative expenses | 116,186 |
253,725 |
343,022 |
869,715 |
|||||||||||||
----------------- |
----------------- |
--------------- |
--------------- |
||||||||||||||
Loss from operations before other expense | (95,334) |
(1,239,222) |
(317,211) |
(1,831,771) |
|||||||||||||
Other income / (expenses) | |||||||||||||||||
Interest income | - |
- |
- |
37 |
|||||||||||||
Interest expenses | (42,291) |
(41,723) |
(128,449) |
(147,626) |
|||||||||||||
----------------- |
----------------- |
----------------- |
-------------- |
||||||||||||||
Net loss before minority interests | (137,825) |
(1,280,945) |
(445,660) |
(1,979,360) |
|||||||||||||
Minority interest | 3,758 |
4,192 |
12,009 |
15,912 |
|||||||||||||
----------------- |
----------------- |
----------------- |
-------------- |
||||||||||||||
Net loss | (134,067) |
(1,276,753) |
(433,651) |
(1,963,448) |
|||||||||||||
----------------- |
----------------- |
----------------- |
-------------- |
||||||||||||||
Other comprehensive income | |||||||||||||||||
Foreign currency translation gain | 274 |
459 |
39 |
26,405 |
|||||||||||||
----------------- |
----------------- |
----------------- |
-------------- |
||||||||||||||
Comprehensive loss | (133,793) |
(1,276,294) |
(433,612) |
(1,937,043) |
|||||||||||||
========== | ========== | ========== | ========== | ||||||||||||||
Basic and diluted loss per common share | (0.00) |
(0.00) |
(0.00) |
(0.00) |
|||||||||||||
========== | ========== | ========== | ========== | ||||||||||||||
Basic and diluted weighted average number of common shares * | 534,132,450 |
530,762,885 |
534,132,450 |
526,329,914 |
|||||||||||||
========== | ========== | ========== | ========== |
||||||||||||||
* |
Weighted average number of shares used to compute basic and diluted loss per share for the three months ended September 30, 2009 and 2008 are the same since the effect of dilutive securities are anti-dilutive. |
The accompanying notes are an integral part of these consolidated financial statements.
F-4
CHINA MEDIA GROUP CORPORATION |
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY |
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007 |
AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 |
Additional |
Total |
|||||||||
Common stock | paid-in |
Comprehensive |
Prepaid |
Accumulated |
stockholders' |
|||||
Shares |
Amount |
capital |
income |
Expenses |
Deficit |
equity |
||||
----------------------- |
----------------- |
--------------------- |
---------------------- |
-------------------- |
--------------------- |
---------------------- |
||||
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|||||
Balance at January 1, 2007 | 361,274,145 |
776,670 |
576,936 |
- |
(55,375) |
(1,854,257) |
(556,026) |
|||
Issuance of shares for staff | 11,731,542 |
312,232 |
116,337 |
- |
- |
- |
428,569 |
|||
Issuance of shares for share investment | 3,518,518 |
190,000 |
- |
- |
- |
- |
190,000 |
|||
Issuance of shares for acquisition of subsidiary | 125,000,000 |
6,000,000 |
- |
- |
- |
- |
6,000,000 |
|||
Issuance of shares for services | 17,476,666 |
85,000 |
603,420 |
- |
(238,026) |
- |
450,394 |
|||
Exercise of warrants | 500,000 |
15,000 |
- |
- |
- |
- |
15,000 |
|||
Sell shares under ELOC Agreement | 2,000,000 |
50,000 |
- |
- |
- |
- |
50,000 |
|||
Issuance of warrants | - |
- |
15,590 |
- |
- |
- |
15,590 |
|||
Options granted | - |
- |
62,208 |
- |
- |
- |
62,208 |
|||
Issuance of convertible debenture | 75,000 |
- |
- |
- |
75,000 |
|||||
Comprehensive income | - |
- |
- |
20,766 |
- |
- |
20,766 |
|||
Net loss | - |
- |
- |
- |
- |
(1,728,032) |
(1,728,032) |
|||
---------------- |
---------- |
-------------- |
--------------- |
------------- |
-------------- |
--------------- |
||||
Balance at December 31, 2007 and January 1, 2008 | 521,500,871 |
7,428,902 |
1,449,491 |
20,766 |
(293,401) |
(3,582,289) |
5,023,469 |
|||
Amortization of issuance of shares for services expenses | - |
- |
- |
- |
293,401 |
- |
293,401 |
|||
Amortization of options granted | - |
- |
100,692 |
- |
- |
- |
100,692 |
|||
Issuance of shares for extension of repayment of debenture | 2,631,579 |
- |
50,000 |
- |
- |
- |
50,000 |
|||
Issuance of shares for termination of ELOC Agreement | 10,000,000 |
- |
60,000 |
- |
- |
- |
60,000 |
|||
Comprehensive income | - |
- |
- |
22,499 |
- |
- |
22,499 |
|||
Net loss | - |
- |
- |
- |
- |
(2,152,909) |
(2,152,909) |
|||
---------------- |
----------- |
-------------- |
--------------- |
------------- |
-------------- |
--------------- |
||||
Balance at December 31, 2008 | 534,132,450 |
7,428,902 |
1,660,183 |
43,265 |
- |
(5,735,198) |
3,397,152 |
|||
---------------- |
----------- |
-------------- |
--------------- |
------------- |
-------------- |
--------------- |
||||
Amortization of options granted | - |
- |
75,519 |
- |
- |
- |
75,519 |
|||
Comprehensive income | - |
- |
- |
39 |
- |
- |
39 |
|||
Net loss | - |
- |
- |
- |
- |
(433,651) |
(433,651) |
|||
---------------- |
----------- |
-------------- |
--------------- |
------------- |
-------------- |
--------------- |
||||
Balance at September 30, 2009 | 534,132,450 |
7,428,902 |
1,735,702 |
43,304 |
- |
(6,168,849) |
3,039,059 |
|||
========= |
======= |
======== |
========= |
======== |
======== |
========= |
F-5
CHINA MEDIA GROUP CORPORATION |
|||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 |
|||||
Nine months period ended September 30 |
|||||
------------------------------------------- |
|||||
2009 |
2008 |
||||
----------------- |
----------------- |
||||
US$ |
US$ |
||||
Cash flows from operating activities: | |||||
Net Loss | (433,651) |
(1,963,448) |
|||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation | 9,382 |
9,152 |
|||
Minority interest | (12,009) |
(15,912) |
|||
Impairment on goodwill | - |
1,000,000 |
|||
Common stock issuance for termination of ELOC agreement | - |
60,000 |
|||
Common stock issuance for services | - |
274,733 |
|||
Common stock issuance for extension of repayment of convertible debentures | - |
50,000 |
|||
Option expenses for employee compensation | 75,519 |
75,519 |
|||
Amortization of convertible debenture | - |
17,742 |
|||
Changes in assets and liabilities: | |||||
Prepaid expenses, deposit and other receivables | (179,867) |
(7,386) |
|||
Account receivable | (29,516) |
(14,396) |
|||
Loan receivable | 72 |
- |
|||
Accounts payable and accrued expenses | 159,365 |
26,038 |
|||
Short term debt | 99,645 |
5,070 |
|||
Long term debt | (99,645) |
||||
Due to related parties | (17,537) |
364,369 |
|||
Due to a shareholder | 380,000 |
137,759 |
|||
------------------ |
------------------ |
||||
Net cash (used in) / generated from operating activities | (48,242) |
19,240 |
|||
Cash flows from investing activities: | |||||
Purchase of property and equipment | - |
(3,385) |
|||
------------------ |
------------------ |
||||
Net cash used in investing activities | - |
(3,385) |
|||
Cash flows from financing activities: | |||||
Repayment of convertible debenture | - |
(125,000) |
|||
------------------ |
------------------ |
||||
Net cash used in financing activities | - |
(125,000) |
|||
------------------ |
------------------ |
Net decrease in cash and cash equivalents | (48,242) |
(109,145) |
|||
Effect of exchange rate changes on cash and cash equivalents | 39 |
26,405 |
|||
Cash and cash equivalents, beginning | 67,764 |
107,903 |
|||
------------------ |
------------------ |
||||
Cash and cash equivalents, ending | 19,561 |
25,163 |
|||
=========== |
=========== |
||||
Supplemental disclosure of cash flow information: | |||||
Interest paid | 128,449 |
147,626 |
|||
=========== |
=========== |
||||
Income taxes paid | - |
- |
|||
=========== |
=========== |
||||
The accompanying notes are an integral part of these consolidated financial statements. |
CHINA MEDIA GROUP CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 |
ORGANIZATION |
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F-7
Net Income (Loss) per Share |
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Leasehold improvements |
5 years |
Furniture, fixture and equipment |
5 years |
Intangible Assets |
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The Company evaluates intangible assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets, other long-lived assets and, goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss. |
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Income taxes |
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The Company accounts for income taxes under ASC 740 "Income Taxes" which codified SFAS 109, "Accounting for Income Taxes." Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. |
F-8
Stock-based compensation |
ASC 718 "Compensation - Stock Compensation" codified SFAS No. 123 prescribes accounting and reporting standards for all stock-based payments award to employees, including employee stock options, restricted stock, employee stock purchase plans and stock appreciation rights. , may be classified as either equity or liabilities. The Company should determine if a present obligation to settle the share-based payment transaction in cash or other assets exists. A present obligation to settle in cash or other assets exists if: (a) the option to settle by issuing equity instruments lacks commercial substance or (b) the present obligation is implied because of an entity's past practices or stated policies. If a present obligation exists, the transaction should be recognized as a liability; otherwise, the transaction should be recognized as equity. |
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50 "Equity - Based Payments to Non-Employees" which codified SFAS 123 and the Emerging Issues Task Force consensus in Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or Services". Measurement of share-based payment transactions with non-employees shall be based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction should be determined at the earlier of performance commitment date or performance completion date. |
Employees' benefits and pension obligations |
Mandatory contributions of five percent of gross salary payments, subject to certain minimum and maximum levels, are made to defined contribution Mandatory Provident Fund schemes ("MPF schemes") pursuant to the laws of Hong Kong. These contributions are charged to expense in the same period as the related salary cost. Total contributions made by the Company to the MPF schemes were $2,159 and 3,057 for the year December 31, 2008 and 2007, respectively and $542 for the nine months ended September 30, 2009. |
Issuance of shares for service |
The Company accounts for the issuance of equity instruments to acquire goods and services based on the fair value of the goods and services or the fair value of the equity instrument at the time of issuance, whichever is more reliably measurable. |
Revenue Recognition |
The Company recognizes its revenue in accordance with the Securities and Exchange Commissions ("SEC") Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB 104"). Revenue is recognized upon shipment, provided that evidence of an arrangement exists, title and risk of loss have passed to the customer, fees are fixed or determinable and collection of the related receivable is reasonably assured. Revenue is recorded net of estimated product returns, which is based upon the Company's return policy, sales agreements, management estimates of potential future product returns related to current period revenue, current economic trends, changes in customer composition and historical experience. |
Foreign Currency Translation |
The accounts of the Company's Hong Kong and China subsidiaries are maintained, in the Hong Kong dollars (HK) and Chinese Renminbi, respectively. Such financial statements are translated into U.S. Dollars (USD) in accordance with ASC 830 "Foreign Currency Translation" which codified Statement of Financial Accounts Standards ("SFAS") No. 52, "Foreign Currency Translation," with the respective currency as the functional currency. According to the Statement, all assets and liabilities were translated at the exchange rate on the balance sheet date, stockholder's equity are translated at the historical rates and statement of operations items are translated at the weighted average exchange rate for the year. The resulting translation adjustments are reported under other comprehensive income in accordance with SFAS No. 130, "Reporting Comprehensive Income. As of September 30, 2009, the comprehensive income was $43,304, and $43,265 in 2008, differences were immaterial. |
F-9
Recent Pronouncements |
Recently Implemented Standards |
ASC 105, Generally Accepted Accounting Principles ("ASC 105") (formerly Statement of Financial Accounting Standards No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles a replacement of FASB Statement No. 162) reorganized by topic existing accounting and reporting guidance issued by the Financial Accounting Standards Board ("FASB") into a single source of authoritative generally accepted accounting principles ("GAAP") to be applied by nongovernmental entities. All guidance contained in the Accounting Standards Codification ("ASC") carries an equal level of authority. Rules and interpretive releases of the Securities and Exchange Commission ("SEC") under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Accordingly, all other accounting literature will be deemed "non-authoritative". ASC 105 is effective on a prospective basis for financial statements issued for interim and annual periods ending after September 15, 2009. The Company has implemented the guidance included in ASC 105 as of July 1, 2009. The implementation of this guidance changed the Company's references to GAAP authoritative guidance but did not impact the Company's financial position or results of operations. |
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ASC 810, Consolidation ("ASC 810") includes new guidance issued by the FASB in December 2007 governing the accounting for and reporting of noncontrolling interests (previously referred to as minority interests). This guidance established reporting requirements which include, among other things, that noncontrolling interests be reflected as a separate component of equity, not as a liability. It also requires that the interests of the parent and the noncontrolling interest be clearly identifiable. Additionally, increases and decreases in a parent's ownership interest that leave control intact shall be reflected as equity transactions, rather than step acquisitions or dilution gains or losses. This guidance also requires changes to the presentation of information in the financial statements and provides for additional disclosure requirements. ASC 810 was effective for fiscal years beginning on or after December 15, 2008. The Company implemented this guidance as of January 1, 2009. The effect of implementing this guidance was not material to the Company's financial position or results of operations. |
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F-11
Recently Issued Standards |
In August 2009, the FASB issued ASC Update No. 2009-05, Fair Value Measurements and Disclosures (Topic 820): Measuring Liabilities at Fair Value ("ASC Update No. 2009-05"). This update amends ASC 820, Fair Value Measurements and Disclosures and provides further guidance on measuring the fair value of a liability. The guidance establishes the types of valuation techniques to be used to value a liability when a quoted market price in an active market for the identical liability is not available, such as the use of an identical or similar liability when traded as an asset. The guidance also further clarifies that a quoted price in an active market for the identical liability at the measurement date and the quoted price for the identical liability when traded as an asset in an active market when no adjustments to the quoted price of the asset are required are both Level 1 fair value measurements. If adjustments are required to be applied to the quoted price, it results in a level 2 or 3 fair value measurement. The guidance provided in the update is effective for the first reporting period (including interim periods) beginning after issuance. The Company does not expect that the implementation of ASC Update No. 2009-05 will have a material effect on its financial position or results of operations. |
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Reclassifications |
Certain comparative amounts have been reclassified to conform to the current period's presentation. |
F-12
NOTE 3 |
UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN |
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Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursuing additional funding and potential merger or acquisition candidates and strategic partners, which would enhance stockholders' investment. Management believes that the above actions will allow the Company to continue operations through the next fiscal year. |
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US$ |
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Cash | 26,671 |
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Current assets | 416,378 |
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Current liabilities | (30,008) |
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Property, plant and equipment | 7,471 |
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Goodwill | 7,791,676 |
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Long-term loan | (2,000,000) |
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Minority interest (50%) | (212,188) |
|||
Purchase price | 6,000,000 |
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F-13
NOTE 5 |
STOCKHOLDERS' EQUITY |
Common Stock |
|
In March 2006, the Company issued 833,333 shares of common stock for $250,000. |
In November and December 2006, the Company issued a total of 3,000,000 shares of common stock for services valued at a total of $69,000. |
In December 2006, the Company issued 12,500,000 shares of common stock as a commitment fee under an Equity Line of Credit Agreement. |
In December 2006, the Company entered into an agreement to issued 4,342,464 shares of common stock for accrued services for $158,500. These shares were issued on January 3, 2007. |
|
In March 2007, the Company entered into an agreement to acquire 100% of Good World Investments Limited for a consideration of $6,000,000, which was settled by the issuance of 125,000,000 common stock in the Company. In May 2007, the Company issued a total of 2,667,095 unrestricted shares of Common Stock to its staff and consultants in accordance with the Form S8 registration statements filed on March 8, 2007. In June 2007, the Company issued 1,230,000 shares of common stock for services valued at $60,550. In July 2007, the Company distributed S8 stocks of 800,000 shares of common stock to its employees and consultant for their services valued at $34,000. Between August and October 2007, the Company issued a total of 10,846,666 shares of common stock for promotional and consulting services valued at a total of $406,870. In October 2007, the Company issued 500,000 and 2,000,000 shares of common stock in relation to the exercise of 500,000 warrant shares at $0.030 per share for a total of $15,000 and sold $50,000 commons stock, respectively, under the ELOC Agreement. In November 2007, the Company issued 2,500,000 shares of common stock for services valued at $90,000. In November and December 2007, the Company issued a total of 2,344,205 unrestricted shares of Common Stock to its staff and consultants in accordance with the Form S8 registration statements filed on March 8, 2007. In December 2007, the Company issued 2,777,778 restricted shares of common stock for accrued services of $100,000. In January 2008, the Company issued 2,631,579 shares of common stock pursuant to a Second Amendment Agreement to extend the repayment of the $50,000 Convertible Debenture to March 28, 2008. On August 3, 2008 the Company issued 10,000,000 shares of Common Stock pursuant to a Letter Agreement to terminate the ELOC Agreement. |
F-14
Warrants |
In February 2006, the Company issued stock warrants for 1,666,666 shares of common stock to Central Star Holdings Limited. The warrants expired on February 21, 2008 and have an exercise price of $0.30 per share. The Company booked expense of $80,000. On February 21, 2008, these warrants lapsed. |
The Company issued stock warrants for 31,250,000 shares of common stock to Tailor-Made Capital Limited ("TMC"), as part of the Equity Line of Credit Agreement between TMC and the Company, in which TMC was to invest up to $2,500,000 to purchase the Company's common stock. The warrants expire on or about May 12, 2009. The warrants have an exercise price for 15,625,000 shares of common stock at $0.030 per share and the other 15,625,000 shares of common stock at $0.036 per share. The Company recorded expense of $311,508. In 2007, 500,000 warrant shares were exercised at an exercise price of $0.030 per share for a total of $15,000. There was no warrants exercise in the first half of 2009 to May 12, 2009 when all the remaining stock warrants expired. |
The Company also issued 138,889 stock warrants as part of commission in relation to the Equity Line of Credit Agreement above. These warrants have an exercise price of $0.036 per share and expired on May 12, 2009. |
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The Company adopted ASC 718 "Compensation - Stock Compensation" codified SFAS No. 123 (Revised 2004), Share Based Payment ("SFAS No. 123R"), under the modified-prospective transition method on April 1, 2006. SFAS No. 123R requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value. |
F-15
2002 Stock Option Plan Effective on October 11, 2002, the Company adopted the 2002 Stock Option Plan (the "2002 Plan") allowing for the awarding of options to acquire shares of common stock. This plan provides for the grant of incentive stock options to key employees and directors. Options issued under this plan will expire over a maximum term of ten years from the date of grant. |
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|
Options outstanding |
|
Outstanding, December 31, 2008 | 29,800,000 |
Granted during the period | - |
Forfeited/lapsed during the period | - |
Exercised during the period | - |
------------------------------ |
|
Outstanding, September 30, 2009 | 29,800,000 |
=================== |
Following is a summary of the status of options outstanding at September 30, 2009: |
||||||||
Outstanding Options |
Exercisable Options |
|||||||
------------------------------------ |
---------------------------------------------------------------------- |
|||||||
Grant |
Exercise |
Number |
Average Remaining |
Average Exercise Price |
Number |
Intrinsic Price |
||
12/23/2006 |
$0.0365 |
17,500,000 |
0.23 |
$0.0365 |
17,500,000 |
$0.00 |
||
5/18/2007 |
$0.0380 |
12,300,000 |
0.63 |
$0.0380 |
12,300,000 |
$0.00 |
The assumptions used in calculating the fair value of options granted using the Black-Scholes option pricing model are as follows: |
i) The outstanding 17,500,000 stock options granted on December 23, 2006: |
|||||
Grant date: | 12/23/2006 |
||||
Risk-free interest rate |
4.63% |
||||
Expected life of the options | 3.00 years |
||||
Expected volatility | 95% |
||||
Expected dividend yield | 0 |
ii) The outstanding 12,300,000 stock options granted on May 18, 2007: |
|||||
Grant date: | 5/18/2007 |
||||
Risk-free interest rate |
4.63% |
||||
Expected life of the options | 3.00 years |
||||
Expected volatility | 139% |
||||
Expected dividend yield | 0 |
F-16
2007 Stock Incentive Plan |
On February 19, 2007, the Company adopted the 2007 Stock Incentive Plan (the "2007 Plan") allowing for the awarding of options to acquire shares of common stock. This plan provides for the grant of incentive stock options to key employees, directors and consultants. Options issued under this plan will expire over a maximum term of ten years from the date of grant. The Company had not issued any stock options under this scheme. |
During the year 2007, the Company had issued a total of 5,811,300 shares to its staff and consultants for their service provided. No shares were issued under the registration statement on Form S-8 during the year 2008 and for the nine months ended September 30, 2009. As at September 30, 2009 there were 32,588,700 shares available underlying stock options under the 2007 Stock Incentive Plan. As of September 30, 2009, there were no outstanding stock options to purchase shares of our Common Stock under the 2007 Stock Incentive Plan. |
Warrants |
Following is a summary of the warrant activity in the third quarter of 2009: |
|
Outstanding, December 31, 2008 | 31,277,776 |
Granted during the period | - |
Forfeited during the period | - |
Exercised during the period | - |
Expired during the period - May 2009 | (31,277,776) |
------------------------ |
|
Outstanding, September 30, 2009 | 0 |
============== |
Details of the warrants are specified in Note 7 (b), (c), (d), (h) and (o). |
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F-17
NOTE 7 |
STOCK PURCHASE AGREEMENTS |
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Within one month of signing the agreement, one million shares of the Company; |
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Within one month of receiving the prototype devices, one million shares of the Company; |
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Within one month of receiving the product from commercial production, two million shares of the Company; and |
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A royalty payment of 100,000 shares of the Company for every 5,000 devices sold for the next 3 years. |
As of December 31, 2006, the Company has only issued one million shares in respect of this agreement. |
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F-18
h) On March 27, 2007, the Company issued 208,333 stock warrants as part of commission in relation to the issuance of $75,000 Convertible Debenture to TMC in respect of the Debenture Purchase Agreement. These warrants had an exercise price of $0.036 per share and were expired on May 12, 2009. |
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F-19
s) On November 28, 2007, the Company entered into an agreement with a third party consultant to provide promotional works for the Company and, in return, the Company issued 2,500,000 shares of Common Stock as compensation fee. The term of this agreement is for a period of 3 months commencing on December 3, 2007. The services were valued at fair market value of the common stock issued for $90,000, of which $61,000 was prepaid service expense at December 31, 2007. |
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Loans to unrelated parties amounted to $132,665 in 2009 (December 31, 2008: $132,737). The loans are unsecured, interest free and repayable on or before December 31, 2010. |
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Prepayments, deposits and other receivables are summarized as follows: |
As of September 30, 2009 |
As of December 31, 2008 |
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----------------------- |
----------------------- |
|||
US$ |
US$ |
|||
Rental deposits | 5,961 |
5,961 |
||
Utility and other deposits | 504 |
777 |
||
Advance to suppliers | 204,534 |
78,279 |
||
Other receivable | 60,095 |
6,210 |
||
----------------------- |
----------------------- |
|||
271,094 |
91,227 |
|||
============== | ============= |
F-20
NOTE 10 |
PROPERTY AND EQUIPMENT, NET |
Property and equipment is summarized as follows: |
As of September 30, 2009 |
As of December 31, 2008 |
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---------------------- |
---------------------- |
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Cost | US$ |
US$ |
||
Furniture, fixture and equipment | 6,035 |
6,945 |
||
Computers | 8,058 |
8,058 |
||
Automobile | 47,951 |
47,951 |
||
----------------------- |
----------------------- |
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62,044 |
62,954 |
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Accumulated depreciation | (31,575) |
(23,103) |
||
----------------------- |
----------------------- |
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30,469 |
39,851 |
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============== | ============== | |||
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F-21
NOTE 12 |
OTHER PAYABLES AND ACCRUALS |
Other payables and accruals are summarized as follows: |
As of September 30, 2009 |
As of December 31, 2008 |
|||
------------------- |
--------------- |
|||
US$ |
US$ |
|||
Accrued salaries and wages | 33,027 |
130,263 |
||
Accrued interest | 8,304 |
830 |
||
Accrued accounting, legal and consulting fee | 138,153 |
83,048 |
||
Accrued office and related expenses | 15,294 |
11,329 |
||
Accrued audit fee | 40,000 |
40,000 |
||
Accrued others | 15,662 |
21,170 |
||
Other payables | 347,108 |
160,113 |
||
Deposit from customers | 19,650 |
19,650 |
||
------------------- |
------------------- |
|||
626,198 |
466,403 |
|||
=========== | ========= |
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On March 28, 2007, the Company issued US$75,000 Convertible Debenture pursuant to the DPA and as at December 31, 2007 a total of US$125,000 Convertible Debentures were issued and outstanding. |
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F-22
NOTE 15 |
DUE TO OFFICERS AND DIRECTORS |
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As of September 30, 2009 |
As of December 31, 2008 |
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-------------------------- |
-------------------------- |
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US$ |
US$ |
|||
Shareholder Loan | 2,000,000 |
2,000,000 |
||
Other Loan | - |
99,645 |
||
--------------------------- |
--------------------------- |
|||
2,000,000 |
2,099,645 |
|||
================ | ============== |
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|
|
As of September 30, 2009 |
As of December 31, 2008 |
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-------------------------- |
-------------------------- |
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US$ |
US$ |
|||
Balance at January 1 | - |
293,401 |
||
Issue of shares for service during period/year | - |
- |
||
Less: service expensed during period/year | - |
(293,401) |
||
--------------------------- |
--------------------------- |
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Balance at September 30/December 31 | - |
- |
||
================ | ================ | |||
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On November 25 2005, a subsidiary of the Company signed a loan agreement with its major shareholder, Central High Limited for a loan of $2,000,000. This long term shareholder loan is unsecured and repayable on November 25, 2010, and bears no interest for the first two years until November 25, 2007 and thereafter 8% per annum. The accrued interest for 2008 was $160,000 (2007: $16,444) and $120,000 for the nine months period ended September 30, 2009. On July 1, 2009, the Group entered into a consulting agreement with Mr. Cheng Pheng Loi, the CEO of the Company. According to the agreement, Mr Loi will receive a consulting fee of USD3,000 per month and this agreement is cancelable by either party by giving 30 days notice. |
F-23
NOTE 19 |
SEGMENT REPORTING |
For management purposes, the Group currently organized into three operating units - advertising, telecommunication devices, and other services. Turnover represents the net amounts received and receivable for goods sold or services provided by the Group during the period. These units are the basis on which the Group reports its primary segment information. Segment information about these businesses is presented below. |
Advertising |
Telecommunication Device |
Other Services |
Consolidated |
|||||||||
------------------------- |
----------------------- |
------------------------ |
------------------------------- |
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For the nine months ended September 30 |
For the nine months ended September 30 |
For the nine months ended September 30 |
For the nine months |
|||||||||
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
2009 |
2008 |
|||||
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
US$ |
|||||
Turnover | 49,498 |
67,609 |
29,567 |
5,137 |
- |
4,969 |
79,065 |
77,715 |
||||
======== |
======= |
======= |
======= |
======= |
======= |
========= |
========= |
|||||
Segment results | (14,931) |
(1,012,809) |
201 |
(1,973) |
- |
(1,031) |
(14,730) |
(1,015,813) |
||||
======== |
======= |
======= |
======= |
======= |
======= |
|||||||
Unallocated corporate income | -- |
37 |
||||||||||
Unallocated corporate expenses | (290,784) |
(800,046) |
||||||||||
-------------- |
-------------- |
|||||||||||
Loss from operations | (305, 202) |
(1,815,822) |
||||||||||
Finance costs | (128,449) |
(147,626) |
||||||||||
Loss for the period | (433,651) |
(1,963,448) |
||||||||||
========= |
========= |
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As at September 30, 2009 |
As at September 30,2008 |
|||||||||||
ASSETS | ||||||||||||
Segment assets | 6,853,664 |
6,843,926 |
346,338 |
221,242 |
- |
- |
7,200,002 |
7,065,168 |
||||
Unallocated corporate assets | 218,786 |
412,898 |
||||||||||
-------------- |
-------------- |
|||||||||||
Consolidated total assets | 7,418,788 |
7,478,066 |
||||||||||
========= |
========= |
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LIABILITIES | ||||||||||||
Segment liabilities | 156,221 |
171,892 |
- |
10,718 |
- |
- |
156,221 |
182,610 |
||||
Unallocated corporate liabilities | 4,223,508 |
3,748,778 |
||||||||||
-------------- |
-------------- |
|||||||||||
Consolidated total liabilities | 4,379,729 |
3,931,388 |
||||||||||
========= |
========= |
|||||||||||
Depreciation of fixed assets | 8,562 |
8,528 |
990 |
757 |
- |
- |
9,552 |
9,285 |
||||
Impairment of goodwill | - |
1,000,000 |
- |
- |
- |
- |
- |
1,000,000 |
||||
======= |
======= |
======= |
======= |
======= |
======= |
========= |
========= |
The Group's customers are principally located in Hong Kong. |
F-24
NOTE 20 |
COMMITMENTS AND CONTINGENCIES |
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F-25
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations. |
Forward Looking Statements |
THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS. |
Critical Accounting Policy and Estimates |
|
2
Overview |
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In September 2005, the Company refocused the efforts in advertising and media in the emerging China market where global companies are rushing into China to try to grab and hold the attention of its 1.3 billion citizens. Our objective is to be a new age media company through the use of new technologies and devices combined with traditional media of TV, Newspapers, Magazines, Billboards and Internet to reach today's mobile society. The Company will initially focus on two main business units being "Advertising" and "Telecommunications and Mobile Computing" and "Product Services." |
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We plan to offer advertising services in China. These advertising services would be across all media thus we will offer our customers selective advertising on specific media for nationwide campaign. China's advertising industry is still young and fragmented. We aim to differ from other advertisers so that we can provide nationwide campaigns across all media spectrum. To this end, we will work to secure strategic ad placements in key cities in China so that our customers will have the ability to launch nationwide campaigns. |
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3
Telecommunications Unit In January 2006, the Company announced the establishment of the Telecommunications and Mobile Computing Division to focus on the new media advertising where we would take advantage of new convergent devices for telecommunications advertising. The business of selling advertising through telecommunications media and devices is still at an early stage as we are developing strategies to effectively enter the market. |
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We have commenced a Products Services Unit to build brands recognition and to take advantage of our contacts networks, distribution channel and trading partners. We will leverage off our advertising platform to develop our own brands name for select products. This will uniquely position our Product Services for brand awareness as well as develop a long term business unit that will serve both consumers and industries markets. In this quarter under review, no revenue was derived from this business unit. |
4
Plan of operations OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS. We hope to generate additional revenues in the next twelve months by engaging business operations through internal growth and through strategic acquisitions and cooperative advertising agreements, as described more fully under "Overview" above. |
|
On or about December 7, 2006, the Company entered into an Equity Line of Credit Arrangement ("ELOC") with a private equity firm that will purchase up to US$2.5 million of our Common Stock under certain conditions after we have successfully registered the Registration Statement with the SEC. On the same date, the Company entered into a Debenture Purchase Agreement with the same party a $125,000 convertible debenture under certain conditions. Details of both financing arrangements can be found on the Company's filing on the SEC website. The Company intended to use this funding to for working capital and to aggressively roll out its business plans. At the date of this report, the Company has draw down US$50,000 on the Equity Line of Credit but has received $125,000 under the Debenture Purchase Agreement. Furthermore the private equity firm has exercised US$15,000 in warrants. In April 2008, the Company repaid the $125,000 Convertible Debenture. In August 2008, the Company terminated the ELOC agreement except for the stock warrants issued pursuant to the ELOC Agreement. On May 12, 2009 all the remaining 30,750,000 unexercised stock warrants in respect of the ELOC Arrangement expired. |
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5
Results of operation. |
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For the three months period ended September 30, 2009, the Group has realized revenue of $37,309 and a cost of revenue of $16,457, achieving a gross loss of $20,852. For the three months period ended September 30, 2008, the Group has realized revenue of $26,314 and a cost of revenue of $11,811 achieving a gross profit of $14,503. We hope to generate additional revenues when we begin to receive contracts from clients or through acquisitions. Depending upon the availability of operating capital, we intend to expand our operations in the next 12 months. |
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For the three month period ended September 30, 2009, our gross profit was $20,852 and our total operating expenses were $116,186, all of which were selling, general and administrative expenses. We also had $42,491 in interest expenses, and loss attributable to minority interests of $3,758, so that the net loss to our shareholders for the three months period ended September 30, 2009 was $134,067. This is in comparison to the same period ended September 30, 2008, where our gross profit was $14,503 and our total operating expenses were $253,725, all of which were selling, general and administrative expenses. We also had $41,723 in interest expenses, $1,000,000 in impairment on goodwill and loss attributable to minority interests of $4,192, so that the net loss to our shareholders for the three months period ended September 30, 2008 was $1,276,753. |
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|
At present the Company does not have sufficient cash resources to provide for all general corporate operations in the foreseeable future. The Company will be required to raise additional capital in order to continue to operate in fiscal 2009. |
6
Going Concern |
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7
Item 3. | Quantitative and Qualitative Disclosure About Market Risk. |
Quantitative and Qualitative Disclosures about Market Risk: |
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Item 4. |
Controls and Procedures. |
Evaluation of Disclosure Controls and Procedures: |
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Changes in Internal Controls over Financial Reporting: |
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8
PART II - OTHER INFORMATION |
Item 1. |
Legal Proceedings |
None. |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
None. |
Item 3. |
Defaults Upon Senior Securities |
None. |
Item 4. |
Submissions of Matters to a Vote of Security Holders |
None. |
Item 5. |
Other Information |
None. |
9
Item 6. | Exhibits |
|
Description of Exhibit |
2.1 |
Non-Blinding Stock Purchase Agreement with Dongguan Zhishixin Advertising Limited to acquire 52.3% controlling interests in Zhishixin. (1) |
2.2 |
Stock Purchase Agreement with Central Star Holdings Limited. (2) |
2.3 |
Sales and Purchase Agreement to purchase the entire share capital of Good World Investments Limited. (3) |
3.1 |
Articles of Incorporation (4) |
3.1.1 |
Certificate of Amendment to Articles of Incorporation (5) |
3.1.2 |
Certificate of Amendment to Articles of Incorporation, as amended.(13) |
3.2 |
Bylaws (4) |
4.1 |
Consultancy Agreement between China Media Group Corporation and Waterville Investment Research, Inc. (6) |
4.2 |
Consultancy Agreement between China Media Group Corporation and Uptick Limited. (7) |
4.3 |
Executive Services Agreement between China Media Group Corporation and Con Unerkov (8) |
4.4 |
Executive Services Agreement between China Media Group Corporation and Alex Ho (8) |
4.5 |
Warrants to Purchase Common Stock (9)(10) |
10.1 |
ELOC Arrangement with Tailor-Made Capital Ltd. (9) |
10.2 |
Debenture Purchase Agreement with Tailor-Made Capital Ltd.(9). |
10.3 |
2002 Stock Option Plan (11) |
10.4 |
2007 Stock Incentive Plan (12) |
10.5 |
Second Amendment Agreement (14) |
10.6 |
Termination Letter Agreement (15) |
31* |
Certifications as required by Rule 13a-14(a)/15d-14(a). |
32* |
Certifications as required by 18 U.S.C. Section 1350. |
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|
1. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 7, 2006. |
2. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 16, 2006. |
3. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on March 15, 2007. |
4. |
Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003. |
5. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 3, 2005. |
6. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on November 28, 2006. |
7. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on December 4, 2006. |
8. |
Incorporated by reference to our Annual Report on Form 10-KSB/A as filed with the SEC on August 11, 2006. |
9. |
Incorporated by reference to our Current Report on Form 8-K/A as filed with the SEC on March 8, 2007. |
10. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 16, 2006. |
11. |
Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003. |
12. |
Incorporated by reference to our Registration Statement on Form S8 as filed with the SEC on March 8, 2007. |
13. |
Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on March 16, 2007. |
14. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on January 8, 2008. |
15. |
Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on August 7, 2008. |
* Filed herewith. |
10
SIGNATURES |
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 34, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. |
China Media Group Corporation |
|
a Texas corporation | |
/s/ Cheng Pheng Loi | |
--------------------------------------- | |
Cheng Pheng Loi | |
Chief Executive
Officer Principal executive officer |
|
China Media Group Corporation | |
a Texas corporation | |
/s/ Con Unerkov | |
--------------------------------------- | |
Con Unerkov | |
Chief Financial
Officer Principal executive officer |
|
In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
By: |
/s/ Cheng Pheng Loi |
November 18, 2009 |
-------------------------------------------- | ||
Cheng Pheng Loi |
Its: | Principal executive officer | |
President, director |
11
Exhibit 31.1 |
Rule 13a-14(a)/15d-14(a) |
Certification
of Chief Executive Officer of the Company |
I, Cheng Pheng Loi, certify that: |
1. I have reviewed this quarterly report on Form 10-Q of China Media Group Corporation; |
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Date: November 18, 2009 |
/s/ Cheng Pheng Loi |
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Cheng Pheng Loi |
Chief Executive Officer |
Exhibit 31.2 |
Rule 13a-14(a)/15d-14(a) |
Certification
of Chief Financial Officer of the Company |
I, Con Unerkov, certify that: |
1. I have reviewed this quarterly report on Form 10-Q of China Media Group Corporation; |
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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Date: November 18, 2009 |
/s/ Con Unerkov |
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Con Unerkov |
Chief Financial Officer |
Exhibit 32.1 |
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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Cheng Pheng Loi |
Chief Executive Officer |
November 18, 2009 |
Exhibit 32.2 |
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
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Con Unerkov |
Chief Financial Officer |
November 18, 2009 |
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