WEB NEWS Comments & Business Outlook
MEDIAN GROUP INC
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2016 AND 2015
(UNAUDITED)
Three Months Ended
31 March
2016 2015
Notes US$ US$
Net revenue 20,897 -
Cost of revenue (13,618) -
Gross profit 7,279 -
Operating expenses:
Administration expenses (141,048) (7,155)
Selling and distribution expenses - -
Total operating expenses (141,048) (7,155)
Operating loss from continuing operations (133,769) (7,155)
Other income / (expenses)
Other income 465 -
Finance charges (80) -
Interest expenses (40,000) (40,000)
Loss from continuing operations (173,384) (47,155)
Discontinued operations, net of tax 6 - (1,293,660)
Net loss (173,384) (1,340,815)
Less: Net loss attributable to non-controlling interests (26,135) (476,067)
Net loss attributable to Median Group Inc. (147,249) (864,748)
Net loss per share attributable to Median Group Inc. shareholders – Basic and diluted
Continuing operations (0.00) (0.00)
Discontinued operations (0.00) (0.00)
(0.00) (0.00)
Basic and diluted weighted average number of common shares * 11,307,232,960 11,307,232,960
Comments & Business Outlook
April 6, 2016
LETTER TO SHAREHOLDER
MEDIAN GROUP INC. (“MGI”) continues to transform its operations in 2014 and 2015. Through a long and rigorous effort, the Company has successfully consolidate and streamline our business and build a strong foundation to set the stage for an exciting future.
This year is a significant year for us. After the successful restructuring of the Company, a new entity with a new set of business focus has emerged, where there will be a great emphasis on mobile digital business.
MGI serves as a confirmation of our commitment to bring more values to our shareholders, employees, customers and strategic partners. MGI through its Malaysian subsidiary, NAIM INDAH MOBILE COMMUNICATIONS SDN BHD (NIMC), shall focus on the business of providing mobile digital service under the MVNO platform across South East Asian countries.
NIMC is poised to be the first MVNO that specifically catered for these markets, operating as a digital service provider (DSP). A digital service provider applies the principles of Internet service delivery, meaning its delivery architecture is integrated, seamless, intelligent, automated, simple and in real time.
Towards Becoming A Digital Service Provider
The decision to become a DSP rests solely on providing the needs of a new generation of consumers. There has been a great shift in consumers’ behaviors. The way purchases are made, the types of media consumed, the way information are obtained and the way trust and relationships are built. These have created new rules of consumer engagement where mobile platform is highly utlized, allowing consumers to communicate, transact and gain almost instantaneous feedback and response. E-commerce now is evolving into M-Commerce (mobile-commerce) and into S-Commerce (social-commerce) allowing customers to instantly transact and share.
We must seize the opportunity to build our business model around this market segment through our offerings with three main differentiators:
§ An advanced set of products and services that will disrupt the market landscape
§ A customer engagement model that is currently not offered by others
§ A technology superiority and scalability that will support future growth.
The first challenge to become a digital service provider involves a change in the mindset and culture; we need to view ourselves not as a communication service provider but as a genuine digital competitor. We need to shift away from serving as a channel and toward creating a platform, and the way for us to capitalize on the opportunities in the digital services domain and its associated revenue is to build our business as a digital service provider.
Our journey towards becoming a DSP has progressed well over the past 3 months where we are building a solid eco-system that will enable us to offer attractive and disruptive services to the market.
Key Business Focus: White label MVNOs
NIMC white label MVNO program allows corporations and organizations to offer more than just prepaid and postpaid mobile services, including voice, data, SMS and mobile broadband at a minimum set-up cost upfront. With the white-label program, NIMC is helping companies grow their revenue and profits by expanding their reach and exposure.
NIMC builds, operates and manages mobile digital services and enables corporations to give access to their own resellers to a full platform for activation, billing and subscriber lifecycle management, customer care, and management support without spending anything on software development.
Businesses can now compete on a more even playing field by offering a virtual 24×7 online retail store with full service customer care. NIMC helps minimize operating costs by implementing strategic web based marketing initiatives, utilizing automated processes such as ordering, payment and collection, and inventory management, plus expands MVNO reach up to nationwide market opportunities through e-commerce.
NIMC’s first white label customer is the National Co-operatives Organization (ANGKASA) targeting the co-operative sectors. NIMC is currently negotiating with at least 4 other corporations as potential clients under the white label program.
We know that success in the wireless business depends on a strong and flexible back office that integrates new and innovative solutions. The solutions that count are those that allow the white label MVNOs to position it in such a way that the customer receives a seamless white label experience.
Our Mission Critical System
The current traditional billing, Next Generation Intelligent Network (NGIN) and Business Support System (BSS) running today have limited capabilities in serving today’s consumers’ demand. Most operators (MNOs and MVNOs) struggle to fulfil the demand of current consumers and find it very hard to cater for future business trend and unpredictable cost for the future changes. This is simply because the current back-end billing and BSS were not designed for 4G and beyond.
The system is required to provide a real-time unified charging across all services and devices, and payment methods with differentiated service offerings with a quick time-to-market advantage to allow NIMC to quickly capitalize and execute on market opportunities. CCBBSS platform combines payment methods, with ‘on demand’ payments for some services and recurring subscription models for others.
· Online charging system (OCS) is the central system that governs all subscribers’ charging and rating. It is a system that allows an operator to charge their customers, in real time, based on event or session service usage.
· Policy & Charging Rules Function (PCRF) , a software component designated in real-time to determine policy rules that accesses subscriber databases and other specialized functions, such as a charging system PCRF supports the creation of rules and then automatically making policy decisions for each subscriber active on the network
· Business Support Systems (BSS) are the components that we use to run its business operations towards customers. Together with operations support systems (OSS), these are used to support various end-to-end telecommunication services. BSS and OSS have their own data and service responsibilities.
· Enterprise Resource Planning (ERP) is a system that handles all essential business functions such as accounting, HR, sales, marketing, service, warehousing, and more. The SAP B1 system provides a complete visibility and better control help us run our end-to-end business processes professionally.
We are now at the final stage of negotiating the purchase of these systems from the respective solution provider. We expect to complete the deployment of these systems by the end of Q2.
Access Agreement with a Host Operator
We have submitted an official application request for network access to a host mobile network operator (MNO) in middle February. Since then, we have gone through several rounds of negotiations for both technical and commercial elements. All the technical matters have been given a preliminary clearance for the next round of detailed scoping and implementation.
As for the commercial negotiation, we are currently negotiating on the wholesale rates with the MNO.
The MNO has given its commitment and assurance that agreement shall be concluded within 120 days from the date of submission. This is due to the involvement of many parties within the organization, ranging from technical, legal, financial and board of directors. With this in mind, we anticipate that the agreement will be signed in May 2016.
Moving Forward
Moving forward, we will continue to strive in executing our roadmap for growth which encompasses five key areas namely, strengthening our talents and resources, expanding our product range, widening our geographical reach, improving customers’ journey and experience and enhancing our internal process.
The positive results from these areas would create a stable platform for the Group to spread its wings regionally and globally to unveil the vast potential of the digital services market segment. Talks and negotiations are ongoing with several mobile network enablers and operators in the South East Asian region. This would promulgate further the Group’s vision and commitment in becoming a regional mobile service operator with an assortment of deliverables that would satisfy the ravishing appetite of the customers. Being in a competitive industry where customers’ satisfaction is uncompromising, we are continuously ensuring that customers’ experience would be the fundamental element in all facets of our operation.
Technology is the staple food of today’s consumers, which is ever changing, we will be investing our resources into R&D, talent enhancement, product innovation, and technology adoption in our delivery processes. This will enable us to be more efficient in providing an unmatched customers’ experience, which will translate into a faster and higher subscribers’ acquisition. We will continue to jointly work closely with mobile enablers to penetrate new markets and opportunities this year and beyond.
ANDREW HWAN LEE
President / Chief Executive Officer
Median Group Inc.
Disclaimer Statement
A number of statements contained in this Report are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Certain written statements in this press release constitute "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Words or phrases such as "should result," "are expected to," "we anticipate,” "we estimate," "we project," "we intend," or similar expressions are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include demand for our services, product development, our ability to maintain acceptable margins and control costs, the impact of federal, state and local regulatory requirements on our business, the impact of competition and the uncertainty of economic conditions in general, including the timely development and market acceptance of products, competitive market conditions, successful integration of acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses, and other factors. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made, and we undertake no obligation to publicly update these statements based on events that may occur after the date of this document.
* For more information, please visit www.mediangroupinc.com
Comments & Business Outlook
MEDIAN GROUP INC
(Formerly Clixster Mobile Group Inc.)
(Formerly China Media Group Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013
(UNAUDITED)
Three Months Ended
31 March
2014 2013
Notes US$ US$
(Restated)
Net revenue - -
Cost of revenue - -
Gross profit - -
Operating expenses:
Administration expenses (7,798) (14,929)
Selling and distribution expenses - -
Total operating expenses (7,798) (14,929)
Operating loss from continuing operations (7,798) (14,929)
Other income / (expenses)
Other income 400,050 -
Gain on disposal of subsidiaries 420,362 -
Interest expenses (26,667) (40,777)
Gain/(Loss) from continuing operations 785,947 (55,706)
Discontinued operations, net of tax 6 (518,737) (392,339)
Net income/(loss) 267,210 (448,045)
Less: Net loss attributable to non-controlling interests (190,895) (116,840)
Net income/(loss) attributable to Median Group Inc. 458,105 (331,205)
Net loss per share attributable to Median Group Inc. shareholders - Basic and diluted
Continuing operations (0.00) (0.00)
Discontinued operations (0.00) (0.00)
(0.00) (0.00)
Basic and diluted weighted average number of common shares * 7,796,100,742 1,113,623,296
Comments & Business Outlook
Item 1.01. Entry into a Material Definitive Agreement.
The company and the Clixster brand sold were engaged in the distribution of prepaid mobile services under its MVNO platform.
In a move to enter into the pre/post-paid mobile services, on December 11, 2015 MGI agreed to subscribe and hold a 51% interest in Naim Indah Mobile Communication Sdn. Bhd. (“NIMC”), a company engaged in providing mobile communication services through MVNO platform. NIMC has a registered capital of RM2,000,001 (or about USD480,000*) of which the Company is required to subscribe RM1,000,001 (or about USD240,000*) for its 51% interests.
NIMC has an exclusive business partnership agreement (“Exclusive Agreement”) with MyAngkasa Holdings Sdn. Bhd. (“Myangkasa”), a wholly owned company of the National Cooperative Malaysia Bhd and known as Angkatan Koperasi Kebangsaan Malaysia Berhad (“Angkasa”). MyAngkasa is the business development and Sales/Marketing entity of Angkasa which is the representative of 12,000 cooperatives with 7.4 million active members in Malaysia. MyAngkasa owns and operates a network of payment terminals that offer services and products to subscribers and customers for the purchase of prepaid top-ups, postpaid ticketing, online transaction services, registration, loyalty point programs and bill payment collections via internet banking, mobile banking, mobile payment and electronic data capture (EDC) terminals. Under this contract, both parties agree to implement the brand “MyAngkasa” mobile telecommunications program based on NIMC’s Mobile Virtual Network Aggregator (MVNA) platform that includes the provision of mobile telecommunication services to co-operative and members of the co-operatives under Angkasa as registered Pre/Post-Paid subscribers of NIMC services.
The Exclusive Agreement has a fix term of 5 years ending in August 2020 and subject to renewal by mutual consent. Pursuant to this agreement, MyAngkasa agrees to use NIMC’s services under the trade name of “Median Mobile” products to co-operatives and members of the co-operatives under Angkasa and to exclusively appoint NIMC as the official mobile telecommunication services based on MVNA platform to Angkasa members. Myangkasa agrees to undertake to deliver certain number of subscribers for pre/post-paid services (“Targeted Subscribers”) for each year. In return, NIMC agrees to a profit share scheme whereby Myangkasa will receive RM100,000 (or about USD24,000*) for the first financial year of the contract, and for each financial year thereafter the higher of RM500,000 (or about USD120,000*) and a set percentage of NIMC’s net annual profit after tax, less any unapplied accumulative losses brought forward from previous years. If the Targeted Subscribers are not achieved for any each then the set percentage to be applied will be the pro-rate of the actual subscribers to the Targeted Subscribers for that year.
The Company’s management believes these transactions afford the Company the opportunity to focus on pre/post-paid telecom services under its own MVNO/MVNA platform.
The License Agreement and the Share Purchase Agreement is attached hereto as Exhibit 10.1 and 10.2, respectively.
*Exchange rate RM1.00 = USD0.24 on December 15, 2015.
Comments & Business Outlook
Item 5.03 Amendments to Articles of Incorporation or Bylaws
changing its name to Median Group Inc . effective October 7, 2015. The Company filed a Certificate of Amendment to the Certificate of Incorporation with the Texas Secretary of State implementing a change in the Company's name.
Comments & Business Outlook
CLIXSTER MOBILE GROUP INC
(Formerly China Media Group Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2013 AND 2012 (Restated)
2013 2012
Notes US$ US$
Net revenue 145,495 -
Cost of revenue (95,462) -
Gross profit 50,033 -
Operating expenses:
Administration expenses (95,847) (55,319)
Selling and distribution expenses (3,788) -
Total operating expenses (99,635) (55,319)
Loss from operations (49,602) (55,319)
Other income / (expenses)
Write off of option liability 236,504 -
Interest expenses (163,101) (48)
Profit / (loss) from continuing operations 23,801 (55,367)
Discontinued operations, net of tax (139,257) (7,135,114)
Loss before uncontrolled interest (115,456) (7,190,481)
Uncontrolled interest - 36
Net loss for the year (115,456) (7,190,445)
Other comprehensive income
Foreign currency translation gain 32,039 64,885
Comprehensive loss (83,417) (7,125,560)
Basic and diluted loss per common share 0.00 (0.01)
Basic and diluted weighted average number of common shares * 1,113,623,296 871,924,365
Management Discussion and Analysis
Revenues
For the year ended December 31, 2013, the Group has realized revenue of $145,495 and a cost of revenue of $95,462, achieving a gross profit of $50,033 from its continuing operations and there was no revenue, costs of sales and gross profit in 2012 from the continuing operations. For the year ended December 31, 2013, the Group has realized revenue of $135,220 and a cost of revenue of $90,925 achieving a gross profit of $44,295 from its business operations held for sale (Note 6). For the year ended December 31, 2012, Group has realized revenue of $2,449,489 and a cost of revenue of $1,557,672 achieving a gross profit of $891,815 from its business operations held for sale (Note 6).
Comments & Business Outlook
CLIXSTER MOBILE GROUP INC
(Formerly China Media Group Corporation)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2013 AND 2012
(UNAUDITED)
Three Months Ended
Nine Months Ended
2013 2012 2013 2012
Note US$ US$ US$ US$
Net revenue 27,711 - 125,227 -
Cost of revenue (16,904) - (81,544) -
Gross profit 10,807 - 43,683 -
Operating expenses:
Administration expenses (10,255) (6,535) (36,661) (13,254)
Selling and distribution expenses (943) - (2,868) -
Total operating expenses (11,198) (6,535) (39,529) (13,254)
(Loss) / Profit from operations (391) (6,535) 4,154 (13,254)
Other income / (expenses)
Write off of option liability 236,504 - 236,504 -
Interest expenses (40,750) - (122,352) -
Profit / (loss) from continuing operations 195,363 (6,535) 118,306 (13,254)
Discontinued operations, net of tax (12,331) 89,893 (139,179) 297,051
Profit / (loss) before uncontrolled interest 183,032 83,358 (20,873) 283,797
Uncontrolled interest - - - -
Net profit / (loss) 183,032 83,358 (20,873) 283,797
Other comprehensive income
Foreign currency translation gain 11,118 75,230 29,265 67,095
Comprehensive profit 194,150 158,588 8,392 350,892
Basic and diluted profit per common share 0.00 0.00 0.00 0.00
Basic and diluted weighted average number of common shares * 1,113,623,296 1,113,623,296 1,113,623,296 789,627,116
Management Discussion and Analysis
Revenue
For the three months period ended September 30, 2013, the Group has realized revenue of $27,711 and a cost of revenue of $16,904, achieving a gross profit of $10,807 from its continuing operations and there was no revenue, costs of sales and gross profit in 2012 from the continuing operations. For the three month period ended September 30, 2013, the Group had no revenue, cost of sales and gross profits from its business operations held for sale (Note 6). For the three months ended September 30, 2012, Group has realized revenue of $578,218 and a cost of revenue of $306,832 achieving a gross profit of $271,386 from its business operations held for sale.
Comments & Business Outlook
Item 1.01 Entry into a Material Definitive Agreement
On January 15, 2014, China Media Group Corporation ("CMG" or the "Company") sold its 100% interests in its subsidiaries Good World Investments Limited; Ateam Resources Sdn. Bhd.; Beijng Ren Ren Health Promotion Limited; and Ren Ren Media Group Limited to KR Global Ventures Sdn Bhd
The Companies sold were engaged in the trading of electronic products, light appliances and advertising businesses.
The Company's management believes this transaction affords the Company the opportunity to streamline its trading operation and focus its Product Services, while removing debt from the corporate books.
Comments & Business Outlook
CHINA MEDIA GROUP CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (Restated)
2012 2011
US$ US$
Net revenue
- Agency income from related parties 227,793 228,948
- Sale of goods from third parties 2,221,694 4,070,700
2,449,487 4,299,648
Cost of revenue
- Related parties (1,543,509) (2,745,012)
- Non related parties (14,163) (59,907)
(1,557,672) (2,804,919)
Gross profit 891,815 1,494,729
Operating expenses:
Administration expenses (1,662,311) (916,944)
Selling and distribution expenses (27,213) (48,942)
Impairment on goodwill (6,323,061) -
(Loss)/income from operations (7,120,770) 528,843
Other income / (expenses)
Gain on foreign exchange 16,317 -
Gain on disposal of fixed assets - 11,364
Other income 61,030 16,599
Interest income 264 738
Interest expenses (147,322) (73,919)
(Loss)/income before taxation (7,190,481) 483,625
Taxation - (127,947)
Net (loss)/income before non-controlling interest (7,190,481) 355,678
Non-controlling interest 36 -
Net (loss)/income (7,190,445) 355,678
Other comprehensive income:
Foreign currency translation gain 64,885 (51,442)
Comprehensive (loss) income (7,125,560) 304,236
Basic and diluted (loss) income per common share (0.01) 0.00
Basic and diluted weighted average number of common shares * 871,924,365 558,779,837
Acquisition Activity
As announced in the Form 8K filed on October 29, 2013, China Media Group Corporation ("CMG" or the “Company”) ("Purchaser") and Samata Ventures Sdn Bhd and Clixster Sdn. Bhd. (jointly referred to as the "Vendors") entered into a conditional conditional Sale and Purchase Agreement ("SP Agreement") for the Purchaser to acquire 63.2% equity interests in Clixster Mobile Sdn Bhd (“Clixster Mobile”) from the Vendors.
On November 25, 2013, the parties to the SP Agreement entered into a supplemental agreement to extend the long stop date for in the SP Agreement from November 30, 2013 to December 23, 2013.
Acquisition Activity
Acquisition
The Acquisition. On March 15, 2012, Good World Investments Limited, China Media Group Corporation, a Texas corporation ("CMG") and ECE Technologies Sdn. Bhd. entered into a sales and purchase agreement for Good World to acquire 100% equity interests in A-Team Resources Sdn. Bhd., a privately held Malaysian corporation ("ATeam") that is in the consumer electronics and light appliances businesses. On June 8, 2012, the Acquisition Agreement (the "Acquisition") closed; and ATeam became a wholly-owned subsidiary of CMG. Immediately after the transaction closed, ECE transferred 200,000,000 shares in the Company to independent third parties, and ECE then held 358,779,837 shares representing about 31.62% equity interests in the Company.
Acquisition Activity
On March 15, 2012 , China Media Group Corporation ("CMG"), Good World Investments Limited ("Purchaser"), a wholly owned subsidiary of CMG, ECE Holdings Sdn. Bhd. (the "Vendor") and A-Team Resources Sdn. Bhd. ("ATeam") entered into a conditional Sale and Purchase Agreement ("SP Agreement") for the Purchaser to acquire 100% equity interest in ATeam from the Vendor. The purchase consideration is the issuance of 558,779,837 shares at a price of USD0.0036 per share in CMG which represents approximately 51% of the enlarge share capital of CMG to the Vendor.
This SP Agreement is conditional upon the satisfactory due diligence determined at the Purchaser's sole discretion on or before the 18 April 2012 (the "Long Stop Date"). If the Purchaser is not satisfied with the due diligence on or before the Long Stop Date, then the SP Agreement will be cancelled with no effect.
If the purchase of ATeam and the CMG issued in accordance with the SP Agreement, then the Vendor shall be the controlling shareholder. As such, the Company will publish the financial statements of ATeam within 4 days of closing the acquisition of ATeam in accordance with the SEC rules and regulations.
ATeam, a company incorporated in Malaysia, is principally engaged in the trading of consumer electronic products.
The management believes this transaction shall expand the business units of the Company and is for the best interest of the Company.
Comments & Business Outlook
On December 22, 2010, the Company's subsidiary company, China Integrated Media Corporation Limited, a public company incorporated in Australia ("CIMC"), entered into an arrangement to lease 400 advertising sign boards in Kuala Lumpur, Malaysia for a lease term of 6 years from World Class Media Sdn. Bhd. for a total consideration of AUD515,000, which shall be settled by the issuance of i) a AUD15,000 promissory note payable in 30 days, and ii) 2,500,000 shares in CIMC .
World Class, a Malaysia incorporated company, is engaged in the outdoor media business in Malaysia and has a 10,000 sign board concession in various schools granted by the Ministry of Education in Malaysia.
CHMD has not yet generated revenues and has over 500,00,000 shares outstanding.
Comments & Business Outlook
Due to the recent global economic recession, Companies have been more cautious in their discretionary spending. We believe that the China advertising market has rebounded with the continued growth of its economy. We will look to re-launch the outdoor advertising markets and to raise the adequate capital to roll out the Beijing Ren Ren outdoor project. In October 2010, we acquired 69% interests in China Integrated Media Corporation Limited ("CIMC"), a public company in Australia that operates in digital signage media and China's television media, having the rights to three TV channels on an IPTV platform. This acquisition will open up the television sector to the Group. In November 2010, CIMC acquired a digital signage solutions company, Touche Adaptive Systems Pty. Limited ("Touche") to utilize Touche's technology for other markets such as China and Malaysia. In conjunction with this acquisition, the Group reorganized its outdoor sign business by transferring our subsidiary company Premier Multimedia Sdn. Bhd. under CIMC thereby consolidating all the board business into the CIMC group. CIMC will then be able to develop and focus on the board business for the Group. We will also explore other markets in the Asia region for any synergistic business opportunities.
The Company is not profitable and has 544,132,450 shares outstanding .
Liquidity Requirements
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. We have cash and cash equivalents of $19,572 as of September 30, 2010; a decrease from the previous period end of December 31, 2009. In the opinion of management, these funds will not satisfy our working capital requirements to operate at our current level of activity for the next twelve months. To effectuate our business plan, during the next twelve months, we must arrange for adequate funding to implement our plans of increasing our advertising offerings and promote our advertising services, through cooperation agreements and otherwise.
Specifically, we hope to accomplish the steps listed below to implement our business plan. We estimate that we will require approximately $2,000,000 to commence operations as envisioned below during the next twelve months. The figures and steps outlined below are estimates only, and our actual progress and cost may vary from these estimates and is subject to our ability to obtain adequate funding. Such additional capital may be raised through public or private equity financing, borrowings, or other sources, such as contributions from our officers and directors. If we are unable to obtain funds necessary to implement our business plan, we may revise or scale back our business plan.
Our subsidiary, China Integrated Media Corporation Limited, will consider raising funds by equity financing through an IPO in Australia in early 2011. Such plans are still at a preliminary stage and further announcements will be made once we have a detailed plan going forward.
Deal Flow
On September 20, 2010, China Media Group Corporation ("CMG") filed a current report
Form 8-K with the SEC to announce that CMG, Good World Investments Limited ("GWIL"), a wholly owned subsidiary of CMG, and Tidewell Limited ("Tidewell") entered into a Sale and Purchase Agreement ("SP Agreement") for GWIL to acquire 100% equity interest in Jademan International Limited ("Jademan") from Tidewell for a total purchase consideration of US$250,000, of which US$50,000 shall be paid by the issuance of a 6% per annum interest bearing promissory note and the remaining balance of US
$200,000 shall be paid by the issuance of 10,000,000 shares in CMG.
Acquisition Activity
On September 24, 2009, Good World Investments Limited, a wholly owned subsidiary of China Media Group Corporation, subscribed for 51% in the shares of Premium Multimedia Sdn. Bhd. for a total subscription price of RM5,100. PM is a company incorporated in Malaysia and is intended to be engaged in the business of outdoor media and advertising . At the date of the subscription, the Company has received the right to 19 outdoor billboards in Kuala Lumpur of which 9 has been built, but has not commenced sale of these advertising boards.
Source: SEC Form 8K (September 30, 2009)
Comments & Business Outlook
We remain confident about the prospect for our business in 2009 despite the challenging global economic environment. In the first quarter of 2009 , we have obtained the exclusive provincial-level rights to distribute Nianlianping, which is widely used to prevent surgical adhesions, in Guangdong province, and believe that the addition of exclusive distribution rights products such as these will help improve our margins going forward.
'We believe that the strength and experience of our management team, our exciting new self-branded pharmaceutical products, which include a new herbal tea and 'BeThin,' our weight loss product, combined with our strategy of obtaining more national exclusive distribution rights to pharmaceutical products and further improving our core business, will enable us to perform well this year and expand our overall market share. We are strongly committed to increasing value for our shareholders in 2009 and beyond and look forward to reporting many quarters of positive performance.'
Source: PR Newswire (May 13, 2009)
Research
The company has been able to grow revenues and net income rapidly over the past three years. However, EPS growth has been less robust, due to dilutive events that have resulted in an increase in the amount of shares outstanding. On a positive note it does not seem that the company will have to raise more capital unless they were to make an acquisition:
Comments & Business Outlook
Recently issued guidance: 2008 we expect to see continued solid growth in sales, along with improving margins as we leverage our expanded distribution footprint, expand sales of higher margin exclusive products, and see a growing contribution from sales of our proprietary medical formulations,' said Mr. Yang. 'We are very encouraged by the contribution of our R&D partnerships to building a strong new product pipeline, and expect to report significant clinical milestones over the course of 2008. We are also focused on moving our novel ADTZ product into commercialization this year, and expect to obtain our production permit for the treatment of animal feed and begin trial sales in 2008. If we are successful, this would set us up to begin recognizing meaningful revenues from ADTZ in 2009 and could be an important driver for the Company's future growth. Finally, China Medicine continues to evaluate opportunities to acquire a pharmaceutical manufacturing facility to strengthen our competitive position and achieve vertical integration for our proprietary products, while enhancing our overall profitability", concluded Mr. Yang. 25-35% , gross margins in the range of 30-35% , and approximately 20-22% growth in net income for the full year of 2008.
