UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2003
----------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from _________________ to _________________
Commission file number: 000-29915
---------------------------------
CHINA XIN NETWORK MEDIA CORPORATION
-----------------------------------
(Exact name of small business issuer as specified in its charter)
FLORIDA 65-0786722
- ------------------------------- -------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
1111 Brickell Avenue, 11th Floor, Miami, Florida 33130
------------------------------------------------------
(Address of principal executive offices)
Tel: (514) 820-9347
-------------------------
(Issuer's telephone number)
APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding
Of each of the issuer's classes of common equity, as of the latest
Practicable date: 130,642,401 as of September 30, 2003.
Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]
TABLE OF CONTENTS
PART I-- FINANCIAL INFORMATION...........................................2
Item 1. Financial Statements..........................................2
Item 2. Plan of Operation.............................................3
PART II-- OTHER INFORMATION..............................................4
Item 1. Legal Proceedings.............................................4
Item 2. Changes in Securities.........................................4
Item 3. Defaults Upon Senior Securities...............................5
Item 4. Submission of Matters to a Vote of Security Holders...........5
Item 5. Other Information.............................................5
Item 6. Exhibits and Reports on Form 8-K..............................6
SIGNATURES...............................................................6
CERTIFICATION..........................................................8-9
PART I -- FINANCIAL INFORMATION
Item 1. Financial Statements.
At the end of this filing are attached the financial statements for China Xin
Network Media Corporation and subsidiary, for the period ending September 30,
2003, which are submitted in compliance with item 310 (b) of Regulation SB.
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
Financial Statements
September 30, 2003
Contents
Review Engagement Report F-1
Unaudited Consolidated Interim Balance Sheet F-2
Unaudited Consolidated Interim Statements of Operations and
Comprehensive Income (Loss) F-3
Unaudited Consolidated Interim Statement of Stockholders' Deficiency F-4
Unaudited Consolidated Interim Statement of Cash Flows F-5
Unaudited Consolidated Interim Notes to Financial Statements F-6-11
-2-
Item 2. Plan of Operation.
The Company
- -----------
CHINA XIN NETWORK MEDIA CORPORATION is a Florida-registered and Miami-
based custom market research firm which will provide business intelligence to
Fortune 2000 companies seeking to enter or enhance their market presence in
the People's Republic of China.
The Company was incorporated on October 19, 2000, to acquire the
exclusive commercialization rights to the most reliable and timely
financial, economic and business financial information on the People's
Republic of China, published by the China Economic Information Network
(CEINet), an official government agency of the State Development
and Planning Commission.
CXN is a development stage company, which means it is in the process of
developing and growing its business. The company has incurred losses since
its inception, and it anticipates that it will continue to incur losses in
the foreseeable future. CXN will be unable to continue as a going concern
if it is unable to earn sufficient revenues from its operations or raise
additional capital through debt or equity financings to meet its working
capital obligations. Management is addressing this concern with a plan of
equity and debt financing.
Operations
- ----------
CXN originally had operations in Montreal and Beijing before being scaled
back due to a company-wide reorganization. In October 2002, George Lee
assumed control of CXN.
In January 2003, Mr. George Lee, the President of the Company, brought
in a new management team and also concluded a new arrangement with CEINet,
where CXN Media will launch a new joint venture providing custom market
research and business intelligence on mainland China, to companies seeking
to enter the market or expand their market share.
The underlying data that supports all of CXN's offerings is based on a
sophisticated metadata framework and search engine that brings together
vast amounts of information on the PRC. The data is provided to CXN by
its China-based partner and official government agency of the State
Development and Planning Commission, the China Economic Information
Network, CEINet.
Capital Needs
- -------------
CXN anticipates that it will be required to raise an additional $2 million to
fund the current plan of growth and existing operations through June 30, 2004.
The principal source of capital has been equity financing from investors and
founders. Meeting the future financing requirements is dependent on access to
equity capital markets. CXN may not be able to raise additional equity when
required or may have to borrow on terms that may be dilutive to existing
shareholders.
-3-
At the end of September 30, 2003, the company had current liabilities of
$897,808 and approximately US $1,594 of cash. The President & CEO, Mr. George
Lee continues to cover the costs of the company by providing the funds to pay
rent, telephone and other expenses related to keeping the offices of CXN
operational. Total due to officers and directors is at $479,527 on September
30, 2003.
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.
The company is actively pursuing an arrangement for outstanding loans due
to Hughes Benoit and Peter Wood of Ontario, Canada. The two lenders collectively
loaned CDN $250,000 and have sought relief through court action to collect.
While the company does not question that this amount is owed to the parties,
it does question the validity on how the transaction was entered into and to
certain terms of the transaction.
On January 31, 2003, Benoit and Woods received a default judgment from Quebec
Superior Court. CXN is presently seeking to reverse the judgment on various
grounds , including, inter alia, that CXN was not properly notified to appear
and present its case.
Management also negotiated a settlement on this matter in June 2003. We are
presently awaiting to finalize the settlement shortly.
Item 2. Changes in Securities.
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
Not Applicable
Item 5. Other Information.
During the quarter, Bill Mavridis resigned his post as Administrator
in August 2003, to pursue other ventures. David Doran resigned his position
in early September. In late September Barry Brault resigned his post as
Controller.
On October 29, 2003, Mr. Jean-Francois Amyot was appointed to the Board of
Directors of the registrant and nominated as Chairman following the
resignation of George Lee.
George Lee also resigned as President, CEO and Director of the registrant
naming the new Chairman as the new President and CEO.
For consideration to Jean-Francois Amyot in taking over the leadership of
CXN, Mr. George Lee cancelled the transaction, dated October 25, 2002, of the
purchase of 100% interest in 3884368 Canada Inc., which holds 18,743,768
common shares of CXN.
-4-
On November 7, the registrant entered into an agreement with 3884386 Canada
Inc., a major shareholder of the registrant, to transfer all its liabilities
of $974,700 in exchange for the issuance of 97,470,000 restricted common shares.
Mr. Jean-Francois Amyot beneficially owns and controls 116,158,768 common shares
of CXN. As of November 14, 2003, there are a total of 234,042,401 common shares
issued. The authorized capital of the registrant is currently being amended
to 350,000,000.
Due to the continued inability of the Corporation to raise significant
financial resources, the Board agreed to seek the mutual termination of its
joint venture agreement with CEINet.
The termination of the agreement with CEInet will result in CXN Media changing
its business model entirely, and the company does not intend to pursue any
ventures in the People's Republic of China.
Further events; on November 11, 2003, an emergency shareholders meeting was
held, where shareholders representing 51% of the vote as of September 30,
2003, approved the nomination of Jean-Francois Amyot as the Chairman, Benoit
Briere as a director as well as voted to formally remove Len Sellers, Li Kai
and Chunzheng Wang as Directors. The Board of Directors than voted to remove
Len Sellers as an officer of the corporation and approved the appointment
Jean-Francois Amyot as President and Chief Executive Officer.
Item 6. Exhibits and Reports on Form 8-K.
There were no 8-K filings in the quarter.
Subsequent to the end of the quarter the registrant filed an 8-K
On October 29, 2003, an 8-K was filed disclosing change of control and
the resignation of George Lee. Mr. Jean-Francois Amyot was nominated to the
board of Directors and appointed President and CEO and Chairman of the
registrant.
On November 13, 2003, an 8-K was filed disclosing that the debt of the
registrant was assumed by 3884368 Canada Inc. for the issuance of 97,400,000.
The removal of Lens Sellers, Li Kai and Chunzheng Wang as directors of
the corporation as well as the removal of Len Sellers as COO and CTO was
approved by 51% of the shareholders of the corporation.
-5-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CHINA XIN NETWORK MEDIA CORPORATION
Date: November 14, 2003 //s JEAN-FRANCOIS AMYOT
-----------------------
JEAN-FRANCOIS AMYOT,
President, CEO & Chairman
-6-
China Xin Network Media Corporation
and Subsidiary
(A Development Stage Company)
Consolidated Interim Financial Statements
For the Period Ended September 30, 2003
and
Cumulative Period From October 19, 2000
(date of inception)
to September 30, 2003
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
Financial Statements
September 30 2003
Contents
Review Engagement Report F-1
Unaudited Consolidated Interim Balance Sheet F-2
Unaudited Consolidated Interim Statements of Operations and
Comprehensive Income (Loss) F-3
Unaudited Consolidated Interim Statement of Stockholders' Deficiency F-4
Unaudited Consolidated Interim Statement of Cash Flows F-5
Unaudited Consolidated Interim Notes to Financial Statements F-6-11
-7-
REVIEW ENGAGEMENT REPORT
To the Shareholders of
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
I have reviewed the consolidated interim balance
sheet of China Xin Network Media Corporation and
Subsidiary (a development stage company) as at
September 30, 2003 and the consolidated interim
statements of operations and comprehensive income
(loss) and cash flows for the period then ended
from October 19, 2000 (date of inception) to
September 20, 2003. My review was made in
accordance with generally accepted standards in the
Unites States of America for review engagements and
accordingly consisted primarily of enquiry,
analytical procedures and discussion related to
information supplied to me by the Company.
A review does not constitute an audit and
consequently I do not express an audit opinion on
these interim consolidated financial statements.
Based on my review, nothing has come to my
attention that causes me to believe that these
interim consolidated financial statements are not,
in all material respects, in accordance with
generally accepted accounting principles in the
United States of America.
//s FRANCO LA POSTA
- -------------------
FRANCO LA POSTA, CA
Chartered Accountant
Montreal, Quebec, November 11, 2003
-F1-
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
Consolidated Interim Balance Sheet
As at September 30, 2003
(Unaudited)
Sep.30, 2003
US$
-----------
Assets
Cash $ 1,594
---------
1,594
Liabilities
Current
Accounts payable $ 223,493
Due to officers and employees 479,527
Other short term loans 194,788
---------
897,808
---------
Shareholders' Deficiency
Common stock - $.001 par value, 150,000,000 Shares
Authorized - Shares issued and outstanding-115,902,401 130,643
Paid-in capital deficiency 1,037,109
Accumulated deficit during the development stage (2,063,966)
-----------
(896,214)
-----------
$ 1,594
Approved on Behalf of the Board:
//s JEAN-FRANCOIS AMYOT
- -----------------------
JEAN-FRANCOIS AMYOT, Director
//s BENOIT BRIERE
- ------------------------
BENOIT BRIERE, Director
-F2-
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
Consolidated Interim Statements of Operations and Comprehensive Income(Loss)
(Unaudited)
From From Cumulative
July 1, 2003 July, 1 2002 period ended
to to October 19,2000
Sept. 30, 2003 Sept. 30, 2003 to Sept. 30, 2003
US$ US$ US$
----------------- ----------------- ---------------------
Income $ - $ 451 $ 34,616
Expenses
Selling,general
and admin.
expenses - (105,856) (2,098,582)
Loss before
Provision for
Income Taxes - (105,405) (2,063,966)
Provision for
Income Taxes - - -
Comprehensive
Net (Loss) - (105,405) (2,063,966)
========= ========= ===========
Basic:
Net loss $ (.00) $ (.00) $(0.00)
Fully Diluted $ (.00) $ (.00) $(0.00)
Weighted Avg
Number of
Common Shares
Outstanding 130,642,401 67,720,019 130,642,401
Fully Diluted
Weighted Aveg.
Number of
Common Shares 130,642,401 76,552,155 130,642,401
See accompanying
notes
-F3-
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
Consolidated Interim Statements of Stockholders' Deficiency
For the Period from October 19, 2000 to September 30, 2003
(Unaudited)
US$
Accumulated
US$ Deficit
Additional during the US$
Common Stock US$ Paid-in Development Stockholders'
Shares Amount Capital Stage Deficiency
$ $ $ $
---------- ----------- ----------- ----------- ----------
Balances at
June 30,2003 115,902,401 115,903 1,011,849 (2,063,966) (887,357)
Loss for the period
July 1, 2003 -
September 30, 2003 - - - - -
Issuance of Common
Stock in exchange
For debt and services 14,740,000 14,740 25,260 - 40,000
130,642,401 130,643 1,037,109 (2,063,966) (896,214)
See accompanying notes
-F4-
China Xin Network Media Corporation and Subsidiary
(A Development Stage Company)
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS FOR THE PERIOD ENDED
(Unaudited)
From From Cumulative
July 1, 2003 July 1, 2002 period ended
to to October 19,2000
Sept. 30, Sept. 30, to
2003 2002 June 30, 2003
U.S. U.S. U.S.
$ $ $
--------- --------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss - (105,405) (2,063,966)
Adjustments to reconcile net loss to net
Cash used for operating activities:
Depreciation - 17,400 2,760
Decrease (Increase) in recoverable use tax - (10,505) -
(Decrease) Increase in accrued expenses (81,892) (71,283) 231,077
Decrease in accrued expenses - related parties - 9,006 -
Decrease in accounts receivable - 7,324 -
Decrease in prepaid and deposits - 10,990 -
Increase in amounts due to officers and employees - (10,667) 479,527
Loss on Disposal of Capital Assets - - 121,563
- ------------------------------------------ --------- --------- -----------
NET CASH USED FOR OPERATING ACTVITIES (81,892) (153,140) (1,199,039)
- ------------------------------------------ --------- --------- -----------
CASH FLOWS FROM INVESTING ACTVITIES
Purchase of Capital Assets - - (185,398)
- ------------------------------------------ -------- ------- ----------
NET CASH USED FOR INVESTING ACTIVITIES - - (185,398)
- ------------------------------------------ -------- ------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Write-off deficit to Paid-in-Capital - - 139,877
Write-off comprehensive income to Paid in Capital - - 10,807
rite-off stock subscription receivable - - 196,349
(Decrease) in bank indebtedness - (18,652) -
Increase in short term loans - 194,788 194,788
(Decrease) in loans-related party - (37,247) -
(Decrease) Increase in loans payable - (35,298) -
Increase in capital stock 14,740 10,843 110,576
Increase in paid-in capital 25,260 59,124 733,634
- ------------------------------------------ ------- ------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 40,000 173,558 1,386,031
- ------------------------------------------ ------- ------- ---------
Net (Decrease) Increase in Cash (41,892) 20,418 1,594
Cash- Beginning of Period 43,486 (19,949) -
- ------------------------------------------ ------- -------- -------
Cash - End of Period 1,594 469 1,594
- ------------------------------------------ ------- ------ -------
SUPPLEMENTAL DISCLOSURE OF NON-CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $- $- $-
Income taxes $- $- $-
- ---------------------------------------------------- ------ ------- --------
$- $- $-
See accompanying notes
-F5-
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 2003
1. BACKGROUND AND ORGANIZATION
China Xin Network Media Corporation (the Company) is a Florida registered
company. The Company is a provider of financial, economic and business
information on China. CXN originally had operations in Montreal and Beijing
before being scaled back due to a company-wide reorganization. In October 2002,
George Lee assumed control of CXN and moved the corporate office to Miami,
Florida in March 2003. These consolidated financial statements also represent
the transactions of its wholly owned Canadian subsidiary, China Xin Network
(Canada) Inc.
The Company was incorporated on October 19, 2000, to acquire the exclusive
commercialization rights to the most reliable and timely financial, economic
and business financial information on the People's Republic of China, published
by the China Economic Information Network (CEINet), an official government
agency of the State Development and Planning Commission. On May 25, 2001, the
Company signed an exclusive agreement with CEINet.
On May 14, 2003, CXN and CEInet finalized a new, multi year agreement between
their organizations to engage in the commercialization rights to the most
reliable and timely financial, economic and business financial information on
China. Under the terms of the agreement, CXN will be the English language
provider of financial, economic and business information on China. Subscribers
will be provided regular and recurring financial news, in-depth research reports
and market reviews, and comprehensive to a multi-million character
statistical database which will be written and edited using the best available
practices and quality control expected by a global audience. Information on
the finalized agreement was announced in a press release date May 14, 2003.
On October 29, 2003, Mr. Jean-Francois Amyot was appointed to the Board of
Directors of the registrant and nominated as Chairman following the
resignation of George Lee.
George Lee also resigned as President, CEO and Director of the registrant
naming the new Chairman as the new President and CEO.
Due to the continued inability of the Corporation to raise significant financial
resources, the Board agreed to seek the mutual termination of its joint venture
agreement with CEINet.
The termination of the agreement with CEInet will result in CXN Media changing
its business model entirely, and the company does not intend to pursue any
ventures in the People's Republic of China.
- F6 -
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 2003
2. ACCOUNTING POLICIES
a) Basis of Presentation
The Company is considered to be a development stage company as of September 30,
2003 since planned principal operations have not yet commenced.
b) Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
the Company from October 19, 2000 and its wholly-owned subsidiary, CXN from
October 19, 2000 herein after referred to together as the ( "Companies ") after
elimination of any significant intercompany transaction and accounts.
c) Cash and Cash Equivalent
The Company considers highly liquid investments with maturities of three
months or less at the time of purchase to be cash equivalents.
d) Furniture, Fixtures and Equipment
Furniture, fixtures and equipment are recorded at cost less accumulated
depreciations which is provided on the straight-line basis over the estimated
useful lives of the assets which range between three and seven years.
Expenditures for maintenance and repairs are expensed as incurred.
e) Income Taxes
The Company accounts for income taxes in accordance with the liability
method of accounting for income taxes. Accordingly, deferred tax assets and
liabilities are determined based on the difference between the financial
statement and tax bases of assets and liabilities, using the enacted tax rates
in effect for the year in which the differences are expected to reverse.
Current income taxes are based on the respective periods taxable income for
federal, state and foreign income tax reporting purposes. As at June 30,
2003, these amounts were Nil.
f) Earnings Per Share
Earnings per common share is computed pursuant to SFAS No. 128 Earnings Per
Share . Basic earnings per share is computed as net income (loss) available
to common shareholders divided by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur from common shares issuable through stock options,
warrants and convertible preferred stock.
- F7 -
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 2003
2. Accounting Principles Cont'd
g) Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
h) Fair Value Disclosure at September 30, 2003
The carrying value of recoverable use tax, accrued expenses related party,
and loans from related party is a reasonable estimate of their fair value.
i) Effect of New Accounting Standards
The Company does not believe that any recently issued accounting standards,
not yet adopted by the Company, will have a material impact on its financial
position and results of operations when adopted.
During June 2001, SFAS No. 141, Business Combinations was issued. This
standard addresses financial accounting and reporting for business
combinations. All business combinations within the scope of SFAS 141 are to be
accounted for using one method the purchase method. Use of the pooling-of-
interests methods is prohibited. The provisions of SFAS141 apply to all
business combinations initiated after June 30, 2001.
During June 2001, SFAS No. 142, Goodwill and Other Intangible Assets was
issued. This standard addresses how intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business combination) should be accounted for in financial statements upon
their acquisition. SFAS 142 also addresses how goodwill and other intangible
assets should be accounted for after they have been initially recognized in
the financial statements. The provision of SFAS 142 is effective for fiscal
years beginning after December 15, 2001.
3. GOING CONCERN
The Company 's financial statements are prepared using generally accepted
accounting principles to a going concern which contemplates the realization
of assets and liquidation of liabilities in the normal course of business.
The Company has not established revenues sufficient to cover its operating
costs and allow it to continue as a going concern. Until such time the company
is raising investments capital to cover its ongoing operating costs.
- F8-
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 2003
4. PROVISION FOR INCOME TAX
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related to differences between the financial statement and income tax bases of
assets and liabilities for financial statement and income tax reporting
purposes. Deferred tax assets and liabilities represent the future tax return
consequences of these temporary differences, which will either be taxable or
deductible in the year when the assets or liabilities are recovered or settled.
Accordingly, measurement of the deferred tax assets and liabilities
attributable to the book-tax basis differentials are computed by the Company
at a rate of approximately 34% for federal and 6% for state.
5. COMMITMENTS AND CONTINGENCIES
Insurance
The Company does not maintain any property and general liability insurance.
At the date of the Balance Sheet, the Company is not aware of any claims.
6. SUBSEQUENT EVENTS
Significant Changes to Key Management and Share Capital
Management Changes
- ------------------
During the quarter, Bill Mavridis resigned his post as Administrator
in August 2003, to pursue other ventures. David Doran resigned his position
in early September. In late September Barry Brault resigned his post as
Controller.
Subsequent to the end of the quarter, on October 29, 2003, Mr. Jean-Francois
Amyot was appointed to the Board of Directors of the registrant and nominated
as Chairman following the resignation of George Lee.
George Lee also resigned as President, CEO and Director of the registrant
naming the new Chairman as the new President and CEO.
For consideration to Jean-Francois Amyot in taking over the leadership of
CXN, Mr. George Lee cancelled the transaction, dated October 25, 2002, of the
purchase of 100% interest in 3884368 Canada Inc., which holds 18,743,768
common shares of CXN.
On November 7, the registrant entered into an agreement with 3884386 Canada
Inc., a major shareholder of the registrant, to transfer all its liabilities
of $974,700 in exchange for the issuance of 97,470,000 restricted common shares.
- F9 -
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 2003
6. subsequent events continued
Mr. Jean-Francois Amyot beneficially owns and controls 116,158,768 common shares
of CXN. As of November 14, 2003, there are a total of 234,042,401 common shares
issued. The authorized capital of the registrant is currently being amended
to 350,000,000.
Due to the continued inability of the Corporation to raise significant
financial resources, the Board agreed to seek the mutual termination of its
joint venture agreement with CEINet. The board agreed that this decision was
necessary, due to CXN's continued inability to meet its obligations under the
agreement.
The termination of the agreement with CEInet will result in CXN Media changing
its business model entirely. The company needs to be restructured in order to
eliminate debt, settle any claims and clear the corporation from any potential
liabilities.
Further events; on November 11, 2003, an emergency shareholders meeting was
held, where shareholders representing 51% of the vote as of September 30,
2003, approved the nomination of Jean-Francois Amyot as the Chairman, Benoit
Briere as a director as well as voted to formally remove Len Sellers, Li Kai
and Chunzheng Wang as Directors. The Board of Directors than voted to remove
Len Sellers as an officer of the corporation and approved the appointment
Jean-Francois Amyot as President and Chief Executive Officer.
Share Capital
- -------------
There are a total of 9,373,667 outstanding warrants to be issued which are
exercisable at US 0.30. As of the date of these statements, these warrants
have not been issued.
In April the company raised $100,000 from investors to fund the operations
and the construction of the metadata engine. The transaction was completed at
the end of June and early July. The final terms of the transaction provided
the investors with 6,666,667 restricted stock at $0.015 and 6,666,667
warrants exercisable at $0.03. The stock and warrants are to be registered
by way of an SB-2 filing. The warrants expire 12 months from time the SB-2
is cleared.
On April 4, 2003, the company filed an S-8 to create a Nonqualified Stock
Option Plan. The company set aside 15,000,000 shares for issuance to employees
and consultants to the corporation. Under the plan, the company issued a total
of 11,213,000 to its employees, officers and advisors.
On November 7, the registrant entered into an agreement with 3884386 Canada
Inc., a major shareholder of the registrant, to transfer all its liabilities
of $974,700 in exchange for the issuance of 97,470,000 restricted common shares.
-F10-
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS AT SEPTEMBER 30, 2003
6. subsequent events: Share Capital continued
The registrant signed service agreement with consultants Mr. Trevor Vale and
Mr. Jason Lake to assist the company's executives with the new business plan,
management structure, procedures and implementing the new business model. The
consultants have agreed to receive shares as their remuneration for their
services. The registrant has issued 3 million common shares each, for a total
of 6 million shares.
As of November 14, 2003, there are a total of 234,042,401 common shares issued.
The authorized capital of the registrant is currently being amended
to 350,000,000.
-F11-
CERTIFICATIONS
==============
I, Jean-Francois Amyot, certify that:
1) I have reviewed this quarterly report on Form 10-QSB of China Xin Network
Media (CXIN);
2) Based on my knowledge, this quarterly 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 quarterly report;
3) Based on my knowledge, the financial statements, and other financial
information included in this quarterly 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 quarterly report;
4) The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5) The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls;
and
6) The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: November 14 ,2003
By://s JEAN-FRANCOIS AMYOT
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JEAN-FRANCOIS AMYOT
Chief Executive Officer & acting Chief Financial Officer
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CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In Connection with the quarterly report of China Xin Network Media Corporation
(the "Company") on Form 10-QSB for the period ending September 30, 2003 as
filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I Jean-Francois Amyot, President of the Company, certify, to the
best of my knowledge, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant
to ss. 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d)of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
Dated: November 14, 2003
//s JEAN-FRANCOIS AMYOT
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JEAN-FRANCOIS AMYOT
President and acting Chief Financial Officer
CXN Media Corp
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