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China New Media Reports Third Quarter Fiscal Year 2012 Financial Results

May 16, 2012

DALIAN, China, May 16, 2012 /PRNewswire-Asia/ — China New Media Corp. (OTCBB: CMDI) (the “Company”), China’s fast-growing advertising media company who owns or operates an outdoor media network located in Dalian, Shenyang, Tianjin, Beijing, Shanghai, and New York City, today announced its financial results for the third quarter of fiscal year 2012 ended March 31, 2012.

Mr. James Wang, Chairman and Chief Executive Officer of China New Media, stated, “During the third quarter of fiscal year 2012, we still see a tougher macro economic environment. Advertisers in certain cyclical industries, such as real estate, have tightened their advertising budgets since the second half of 2011. Facing this unfavorable economic conditions, we are working diligently to strengthen our position in the market – continue to focus on our expansion strategy of adding more advertising platforms geographically, at the same time, focus more on sales, marketing and promotional efforts, and provided more value-added services in order to maintain existing customers and add new customers in our new markets. For each new market we have developed our own sales team to sell existing advertising platforms and develop new advertising platforms. The investment required to build greater future sales resulted in decrease in overall gross profit margins and profitability during the quarter. However, we believe over the long term there will be greater leverage in this model and we strongly believe that it is the best plan of action for the value of the Company and our shareholders.”

Mr. Wang continued, “During the third quarter of fiscal year 2012, one of the most significant breakthroughs in our company history is the acquisition of the operation right of the 684 square-foot LED screen located at No.1 Times Square in New York City, USA. It’s the first step for our company to expand our media platform and sales network directly to overseas market. We are confident that we will have a margin recovery as the new market gains sales momentum.”

Summary Financials for 2012 Fiscal Third Quarter Ended March 31, 2012:

           Fiscal Third Quarter Financials (USD)
            ------------------------------------
    Three months ended March
     31,                               2012           2011  CHANGE
    ------------------------           ----           ----  ------
    Revenue                    $4.1 million   $5.4 million          -24.6%
    -------                    ------------   ------------          -----
    Gross Profit               $1.3 million   $3.1 million          -57.9%
    ------------               ------------   ------------          -----
    Gross Profit Margin                31.6%          56.6%         -44.1%
    -------------------                ----           ----          -----
    Net Income*                   $(442,000) $1,.4 million         -131.8%
    ----------                    ---------  -------------         ------
    EPS**                            $(0.02)         $0.05         -131.8%
    ----                             ------          -----         ------
    * Attributable to China New Media Corp.
    ** Based on 27.6 million shares outstanding
    -------------------------------------------

Financial Results for the 2012 Fiscal Third Quarter Ended March 31, 2012

Revenue for the 2012 fiscal third quarter ended March 31, 2012 totaled $4,071,427 a decrease of 24.6% compared to $5,402,726 for the same period in fiscal 2011. The decline in revenue was primarily attributable to a decrease in contracting demand from advertisers under unfavorable macro economic conditions. Advertisers from certain industries, such as real estate, have significantly decreased their advertising budget in the third quarter of fiscal year 2012. However, since we maintained our expansion strategy of getting more advertising platforms at desired locations, we believe we can have a revenue recovery once we further develop our new market.

Revenue generated from the outdoor billboard advertising platform increased 7% compared with same quarter last year and accounted for 49.5% of total revenue during the 2012 fiscal third quarter. The billboard advertising platform has presented a significant growth opportunity with gross profit margin of 33.0% during the 2012 fiscal third quarter. The outdoor billboard platform is established in Dalian, Shenyang, Tianjin, Beijing, Shanghai and New York City, and going forward the Company will continue to establish its presence in these markets.

    Fiscal 2012 Third Quarter Revenue Breakdown by Advertising Platform (USD)
    ------------------------------------------------------------------------
    Period ended
     March 31,                            2012          2011            CHANGE
    ------------                          ----          ----            ------
    Street Fixture
     and Display
     Network                      $1.1 million  $1.8 million                   -36.6%
    % of Sales                            28.2%         33.5%
    Gross Profit
     Margin %                            32.3%         61.5%
    ------------                          ----          ----
    City Transit
     System Display
     Network                      $0.6 million  $1.1 million                   -46.4%
    % of Sales                            13.8%         19.4%
    Gross Profit
     Margin %                            28.5%         41.2%
    ------------                          ----          ----
    Outdoor
     Billboards                   $2.0 million  $1.9 million                    +7.0%
    % of Sales                            49.5%         34.9%
    Gross Profit
     Margin %                              33%         52.2%
    ------------                           ---          ----
    City Navigator                $0.3 million  $0.5 million                   -37.8%
    % of Sales                             8.0%          9.6%
    Gross Profit
     Margin %                            30.1%         71.1%
    ------------                          ----          ----
    Other Services
     Income                      $0.02 million  $0.1 million                   -86.3%
    % of Sales                             0.5%          2.5%
    Gross Profit
     Margin %                           -39.3%         11.0%
    ------------                         -----          ----
    Total Sales                   $4.1 million  $5.4 million                   -24.6%
    -----------                   ------------  ------------                   -----

Cost of sales for the 2012 fiscal third quarter ended March 31, 2012 totaled $2.8 million or 68.4% of revenue, an increase of 18.8% compared to $2.3 million or 43.4% of revenue for the 2011 fiscal third quarter ended March 31, 2011. The increase in cost of revenue was primarily attributable to increased depreciation of advertising equipment, labor and raw material cost.

Gross profit for the 2012 fiscal third quarter ended March 31, 2012 totaled $1.29 million, a decrease of 57.9% compared to $3.1 million for the 2011 fiscal third quarter ended March 31, 2011. The decrease in gross profit was primarily due to decrease in revenue while an increased cost of revenue. Gross profit margin was 31.6% and 56.6% for the 2012 and 2011 fiscal third quarters ended March 31, 2012 and 2011, respectively. The decrease in our gross profit margin during the third quarter of 2012 was primarily due to (i) decrease in revenue caused by certain cyclical industries; (ii) increased cost of revenue which was mainly caused by increased depreciation expense of advertising equipment and increased labor and raw material cost. As a result, our gross profit margin was lower than the level we normally would expect. We intend to increase our sales effort to improve the utilization rate of our new platforms in the coming quarters to improve our gross profit margin.

Selling, general and administrative expenses consist primarily of sales personnel salaries, sales representative commissions, rent expenses and related administrative expenses totaling $1.4 million for the 2012 fiscal third quarter as compared to $1.0 million for the 2011 fiscal third quarter. This increase was due to salary increase, an increased sales effort from the Company to address the more competitive overall advertising market and to accommodate its geographic expansion of its media platforms, higher maintenance, professional fees and other expenses related to the growth of the business.

Net loss attributable to China New Media Corp. for the three months ended March 31, 2012 was $442,000 as compared to income $1.4 million for the three months ended March 31, 2011. The decrease was due to decreased revenue compared to same period last year with an increase in cost of revenues and selling, general and administrative expenses. Basic and diluted earnings per share for the 2012 fiscal third quarter ended March 31, 2012 was -$0.02 based on 27.6 million basic and diluted shares versus basic and diluted earnings per share of $0.05 for the 2011 fiscal third quarter ended March 31, 2011 based on 27.6 million basic and diluted shares outstanding.

Summary Financials for Nine Months of Fiscal 2012 Ended March 31, 2012:

       Fiscal 2012 Nine-Month Results (USD) (unaudited)
       -----------------------------------------------
    Nine months ended March
     31,                                2012           2011  CHANGE
    -----------------------             ----           ----  ------
    Revenue                    $13.7 million  $14.6 million          -6.1%
    -------                    -------------  -------------          ----
    Gross Profit                $6.5 million   $8.3 million         -21.5%
    ------------                ------------   ------------         -----
    Gross Profit Margin                 47.4%          56.7%        -16.4%
    -------------------                 ----           ----         -----
    Net Income*                 $1.0 million   $3.7 million         -72.1%
    ----------                  ------------   ------------         -----
    EPS**                              $0.04          $0.14         -72.1%
    ----                               -----          -----         -----
    * Attributable to China New Media Corp.
    ** Based on 27.6 million shares outstanding
    -------------------------------------------

Financial Results for the Nine Months FY 2012 Ended March 31, 2012

Revenue for the nine months FY 2012 ended March 31, 2012 totaled $13.7 million, dropped 6.1% compared to $14.6 million for the same period in fiscal 2011 under current unfavorable macro economic conditions. The Company plans to spend more effort on sales, marketing and promotion in order to generate sales from existing and new customers, and continue focusing on expanding outdoor advertising network at more desirable locations for the various outdoor advertising platforms.

    Fiscal 2012 Nine Months Revenue Breakdown by Advertising Platform (USD)
    ----------------------------------------------------------------------
    Period ended
     March 31,                            2012           2011            CHANGE
    ------------                          ----           ----            ------
    Street Fixture
     and Display
     Network                       $3.6million   $4.9 million                   -25.9%
    % of Sales                            26.6%          33.7%
    Gross Profit
     Margin %                            50.5%          61.8%
    ------------                          ----           ----
    City Transit
     System Display
     Network                      $2.2 million   $2.9 million                   -21.9%
    % of Sales                            16.3%          19.6%
    Gross Profit
     Margin %                            49.0%          47.5%
    ------------                          ----           ----
    Outdoor
     Billboards                   $6.3 million   $5.0 million                   +26.5%
    % of Sales                            45.8%          34.0%
    Gross Profit
     Margin %                            44.5%          58.4%
    ------------                          ----           ----
    City Navigator                $1.2 million   $1.2 million                    +0.4%
    % of Sales                             9.1%           8.5%
    Gross Profit
     Margin %                            58.1%          69.1%
    ------------                          ----           ----
    Other Services
     Income                       $0.3 million   $0.6 million                   -50.9%
    % of Sales                             2.1%           4.1%
    Gross Profit
     Margin %                            14.9%          19.1%
    ------------                          ----           ----
    Total Sales                  $13.7 million  $14.6 million                    -6.1%
    -----------                  -------------  -------------                    ----

Cost of sales for the nine months ended March 31, 2012 totaled $7.2 million or 52.6% of revenue, an increase of 21.5% compared to $6.3 million or 43.3% of revenue for the nine months ended March 31, 2011, mainly attributable to increased depreciation of advertising equipment, labor and raw material cost.

Gross profit for the nine months ended March 31, 2012 totaled $6.5million, a decrease of 21.5% compared to $8.3 million for the same period the prior year. Gross profit margin was 47.4% and 56.7% for the nine months ended March 31, 2012 and 2011, respectively. The decrease in gross profit margin was mainly due to the decrease in revenue while an increase in cost of revenue, especially with an increased depreciation of advertising equipment, and the increase of labor and raw material cost.

Selling, general and administrative expenses totaled $3.9 million for the nine months of fiscal 2012 as compared to $2.7 million for the same period in fiscal 2011. This increase was due to an increased sales effort from the Company to accommodate its geographic expansion of its media platforms and tougher macro economic conditions, higher maintenance, professional fees and other expenses related to the growth of the business.

Net income attributable to China New Media Corp. for the nine months ended March 31, 2012 was $1.0 million, a decrease of 72.1%, as compared to $3.7 million for the same period ended March 31, 2011. Basic and diluted earnings per share for the nine months ended March 31, 2012 was $0.04 based on 27.6 million basic and diluted shares versus basic and diluted earnings per share of $0.14 and $0.13 for the nine months ended March 31, 2011 based on 27.6 million basic and 28.2 million diluted shares outstanding.

Liquidity and Capital Resources

As of March 31, 2012, China New Media had approximately $1.1 million in cash and cash equivalents. As of March 31, 2012, total current assets and total assets were $9.4 million and $41.8 million, respectively. During the same period, total current liabilities and total liabilities were $20.4 million and $20.9million respectively. Shareholder’s equity totaled 20.9 million, or a fully diluted book value of $0.76 per share, as of March 31, 2012.

Conference Call Details:

    Date:                  Thursday, May 17, 2012
    Time:                  8:30 a.m. Eastern
    U.S. Dial-In:          (877) 941-4775
    International Dial-In: (480) 629-9761
    Live Webcast:          http://public.viavid.com/index.php?id=100574
                           --------------------------------------------

It is recommended that participants dial in approximately 10 minutes prior to the start of the 8:30 a.m. Eastern call. A telephonic replay of the conference call may be accessed approximately two hours after the call through May 31, 2012. Please dial 877-870-5176 for U.S. and 858-384-5517 for international callers and entering the access code, 4540184.

There will also be a simultaneous live webcast and archived recording of the conference call available by clicking on the following link, http://public.viavid.com/index.php?id=100574.

About China New Media Corp.

Founded in September 2000, Dalian Vastitude Media Group Co., Ltd., now known as China New Media Corp., is headquartered in Dalian, the commercial center of Northeastern China. The company owns and operates the city’s largest outdoor media network encompassing over 800 bus shelters furnished with billboards and displays; 130 taxi stops with displays; and 22 large-size billboards, majority of which are large-size LED displays at major traffic conjunctions. The company also furnishes more than 400 buses with advertising posters and 35 metro-trains throughout Dalian Metro Lines. China New Media provides comprehensive adverting services from art design to ad publishing, from daily maintenance to technical upgrading. Launched in Dalian in 2009, China New Media’s proprietary LED multimedia display network, City Navigator®, is one of the country’s first web-based outdoor advertising networks. For more information, please visit www.gywj.cn.

Forward-Looking Statements

This press release may contain certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are “forward-looking statements”, including statements regarding the Company’s ability to meet its obligations under its various contracts; the timeliness of payments and other economic benefits the Company expects to receive under such contracts; and the Company’s ability to maintain its customer relationships and to maintain its ability to pursue its commercial objectives. In addition, the Company’s operations are conducted in the PRC and, accordingly, are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe such as risks associated with, among others, the political, economic and legal environment and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in the PRC and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation. These forward-looking statements are often identified by the use of forward-looking terminology such as “believes,” “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Company Contact:

Rita Jiang
Executive Vice President of Finance
646-691-5047
Rita.jiang@gmail.com
www.gywj.cn

                                           CHINA NEW MEDIA CORP. AND SUBSIDIARIES
                                           CONDENSED CONSOLIDATED BALANCE SHEETS
                                                      (IN US DOLLARS)
                                                        (UNAUDITED)

                                                                    As of March 31,             As of June 30,
                                                                               2012                       2011
                                                                               ----                       ----

     ASSETS

     Current assets
     Cash and cash equivalents                                                       $1,127,958                 $1,808,880
     Accounts receivable, net                                                         4,466,874                  5,395,698
     Advance to suppliers                                                               342,977                    619,582
     Prepaid expenses                                                                    47,316                    189,759
     Loans receivable                                                                 2,548,138                  1,761,139
     Other current assets                                                               753,150                    243,159
     Deferred tax assets                                                                185,476                    129,443
                                                                                        -------                    -------
     Total current assets                                                             9,471,889                 10,147,660
                                                                                      ---------                 ----------

     Property, equipment and
      construction in progress, net                                                  22,961,285                 18,867,352
                                                                                     ----------                 ----------

     Other assets
     Security deposits                                                                1,878,639                  1,955,343
     Equity investment                                                                   83,323                          -
     Billboards use right                                                             7,455,531                  4,766,060
                                                                                      ---------                  ---------
     Total other assets                                                               9,417,493                  6,721,403
                                                                                      ---------                  ---------

     Total Assets                                                                   $41,850,667                $35,736,415
                                                                                    ===========                ===========

     LIABILITIES AND EQUITY

     Current liabilities
     Short term loans                                                               $11,562,952                $11,603,746
     Current portion of long term
      loan                                                                              476,495                    464,150
     Capital lease obligation -
      current portion                                                                   585,945                          -
     Accounts payable                                                                 2,652,747                     47,067
     Other payables                                                                   1,818,067                  1,121,947
     Accrued expenses                                                                   134,651                    491,997
     Deferred revenues                                                                1,428,017                  1,618,548
     Taxes payable                                                                    1,215,075                  1,055,620
     Short term borrowing -third
      party                                                                             317,664                          -
     Due to related parties                                                             255,094                    158,297
                                                                                        -------                    -------
     Total current liabilities                                                       20,446,707                 16,561,372

     Capital leases obligation -
      non-current portion                                                               519,022                          -
                                                                                        -------                        ---

     Total  Liabilities                                                              20,965,729                 16,561,372
                                                                                     ----------                 ----------

     Commitments and contingencies

     Equity
    Series A Preferred Stock,
     $0.0001 par value, 20,000,000
     shares authorized,                                                                     100                        100
    1,000,000 shares issued and
     outstanding
    Common stock, $0.0001 Par value; 80,000,000 shares authorized;
      27,590,701 shares issued and
       outstanding                                                                        2,759                      2,759
     Additional paid-in-capital                                                       6,820,820                  6,820,820
     Accumulated other
      comprehensive income                                                            1,042,887                    636,300
     Retained earnings                                                               11,764,973                 10,724,103
                                                                                     ----------                 ----------
     Total China New Media Corp.
      equity                                                                         19,631,539                 18,184,082
     Noncontrolling interest                                                          1,253,399                    990,961
                                                                                      ---------                    -------
     Total equity                                                                    20,884,938                 19,175,043
                                                                                     ----------                 ----------

     Total Liabilities and Equity                                                   $41,850,667                $35,736,415
                                                                                    ===========                ===========

                                                            CHINA NEW MEDIA CORP. AND SUBSIDIARIES
                                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                                                                       (IN US DOLLARS)
                                                                         (UNAUDITED)

                                           For the nine months ended March 31,                  For the three months ended March
                                                                                                             31,
                                                2012                     2011                      2012                   2011
                                                ----                     ----                      ----                   ----

     Revenues                                          $13,677,360                          $14,571,264                          $4,071,427  $5,402,726

     Cost of revenue                                    (7,188,490)                          (6,304,608)                         (2,783,255) (2,342,570)
                                                        ----------                           ----------                          ----------  ----------

     Gross profit                                        6,488,870                            8,266,656                           1,288,172   3,060,156

     Selling, general and
      administrative expenses                           (3,874,595)                          (2,738,538)                         (1,415,572) (1,046,951)
                                                        ----------                           ----------                          ----------  ----------

     Income (loss) from operations                       2,614,275                            5,528,118                            (127,400)  2,013,205

     Other income (expenses):
     Interest income                                         4,442                                3,947                               1,551         916
     Interest expense                                     (774,245)                            (491,507)                           (305,100)   (175,950)
     Loss from equity investment                           (11,855)                                   -                              (3,954)          -
     Other income                                                -                              166,082                                   -      48,545
     Other expenses                                        (23,099)                             (15,526)                             (1,851)       (102)
                                                           -------                              -------                              ------        ----

       Total Other income (expenses)                      (804,757)                            (337,004)                           (309,354)   (126,592)
                                                          --------                             --------                            --------    --------

     Income (loss) before income taxes                   1,809,518                            5,191,114                            (436,754)  1,886,613
                                                         ---------                            ---------                            --------   ---------

     Income tax provision (benefit)
       Current                                             589,993                            1,409,685                              23,558     511,169
       Deferred                                            (55,027)                             (46,504)                            (98,822)    (23,300)
                                                           -------                              -------                             -------     -------
      Total income tax provision
       (benefit)                                           534,966                            1,363,181                             (75,264)    487,869
                                                           -------                            ---------                             -------     -------

     Net income (loss)                                   1,274,552                            3,827,933                            (361,490)  1,398,744

     Less: net income attribute to the
      noncontrolling interest                              233,684                               94,452                              80,737       7,881
                                                           -------                               ------                              ------       -----

     Net income (loss) attributable to
      China New Media Corp.                             $1,040,868                           $3,733,481                           $(442,227) $1,390,863
                                                        ==========                           ==========                           =========  ==========

     Net income (loss)                                   1,274,552                            3,827,933                            (361,490   1,398,744

     Other comprehensive income
     Foreign currency translation
      adjustments                                          435,340                              882,032                              17,623     601,418
                                                           -------                              -------                              ------     -------

     Comprehensive income (loss)                         1,709,892                            4,709,965                            (343,867)  2,000,162

     Less: comprehensive income
      attribute to the noncontrolling
      interest                                             262,437                              616,469                              82,721     504,311
                                                           -------                              -------                              ------     -------

     Comprehensive income (loss)
      attributable to China New Media
      Corp.                                             $1,447,455                           $4,093,496                           $(426,588) $1,495,851
                                                        ==========                           ==========                           =========  ==========

     Earnings (loss) per share
     Basic                                                   $0.04                                $0.14                              $(0.02)      $0.05
                                                             =====                                =====                              ======       =====
     Diluted                                                 $0.04                                $0.13                              $(0.02)      $0.05
                                                             =====                                =====                              ======       =====
     Weighted average number of common
      shares
     Basic                                              27,550,701                           27,550,701                          27,550,701  27,550,701
                                                        ==========                           ==========                          ==========  ==========
     Diluted                                            27,550,701                           28,196,904                          27,550,701  27,550,701
                                                        ==========                           ==========                          ==========  ==========

                                    CHINA NEW MEDIA CORP. AND SUBSIDIARIES
                               CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                               (IN US DOLLARS)
                                                 (UNAUDITED)

                                                         For the nine months ended March 31,
                                                              2012                     2011
                                                              ----                     ----

     CASH FLOWS FROM OPERATING
      ACTIVITIES:
     Net income                                                       $1,274,552             $3,827,933
     Adjustments to reconcile net income
      to net cash
     provided by operating activities:
     Depreciation and amortization                                     3,498,270              1,955,181
     Amortization of stock based
      compensation expense                                                22,871                      -
     Loss from equity investment                                          11,855                      -
     Provision for doubtful accounts                                     207,142                      -
     Deferred tax benefit                                                (52,056)               (46,504)
     Changes in operating assets and
      liabilities
     Accounts receivable                                                 854,311             (2,794,405)
     Other current assets                                               (600,660)            (2,261,688)
     Security deposit                                                    127,405                 17,991
     Advance to suppliers                                                290,110                959,485
     Accounts payable                                                  2,885,753                428,261
     Other payables                                                      505,975                679,643
     Accrued expenses                                                   (378,169)               153,697
     Deferred revenues                                                  (231,210)               575,784
     Taxes payable                                                       130,044              1,080,481
                                                                         -------              ---------

                 Net cash provided by operating
                  activities                                           8,546,193              4,575,859
                                                                       ---------              ---------

     CASH FLOWS FROM INVESTING
      ACTIVITIES:
     Loan to third party                                                (732,643)                     -
     Acquisition of billboards use right                              (4,504,460)            (1,566,756)
     Purchase of property and equipment                               (3,980,837)            (4,798,015)
                                                                      ----------             ----------

                 Net cash used in investing
                  activities                                          (9,217,940)            (6,364,771)
                                                                      ----------             ----------

     CASH FLOWS FROM FINANCING
      ACTIVITIES:
     Net proceeds from capital
      contributions                                                            -                479,837
     Net proceeds from short-term bank
      loans                                                              754,653              1,799,390
     Payment of capital leases
      obligations                                                       (105,878)                     -
     Repaymnet of short-term bank loans                               (1,100,536)                     -
     Repayment of related party loans                                     87,698               (321,034)
     Proceeds from outside party                                         314,439                      -
     Repayments of long-term bank loans                                        -               (299,898)
                                                                             ---               --------

                 Net cash (used in) provided by
                  financing activities                                   (49,624)             1,658,295
                                                                         -------              ---------

     EFFECT OF EXCHANGE RATE CHANGE ON
     CASH AND CASH EQUIVALENTS                                            40,449                 50,272
                                                                          ------                 ------

     NET DECREASE IN CASH AND CASH
      EQUIVALENTS                                                       (680,922)               (80,345)

     CASH AND CASH EQUIVALENTS,
      BEGINNING OF PERIOD                                              1,808,880              1,672,017
                                                                       ---------              ---------

     CASH AND CASH EQUIVALENTS, END OF
      PERIOD                                                          $1,127,958             $1,591,672
                                                                      ==========             ==========

     SUPPLEMENTAL CASH FLOW DISCLOSURE
        Income taxes paid                                               $446,077               $692,274
                                                                        ========               ========
        Interest paid                                                   $724,034               $491,507
                                                                        ========               ========

SOURCE China New Media Corp.


Source: PR Newswire