MONTREAL, Quebec, May 20, 2004 (PRIMEZONE) -- China Xin Network Media Corp. (OTCBB: CXIN) released its quarterly filings for March 31, 2004.
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
Unaudited
March 31,
2004
ASSETS -----------
Current Assets:
Cash $ 676
Sales Tax Receivable --
R&D Refundable Tax Credits 212,308
Total current assets 212,924
Fixed Assets 25,672
Goodwill 4,762,020
Total assets $ 5,000,616
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ --
Due to officers and employees 38,463
Loan payable --
Total current liabilities 38,463
Contingencies
Stockholders' Equity:
Common stock, $.001 par value; authorized
500,000,000 shares; 30,000,000 preferred issued
and outstanding 337,865,401 shares and
140,395,401 shares, respectively 337,866
Paid-in capital deficiency 6,815,147
Accumulated deficit during development stage (2,190,860)
Total stockholders' equity 4,962,153
Total liabilities and stockholders' equity $ 5,000,616
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
Unaudited
For the Period For the Period Cumulative
January 1, 2004 January 1, 2003 Oct. 19, 2000
March 31, 2004 March 31, 2003 March 31, 2004
--------------- --------------- --------------
Sales:
Income $ -- $ -- $ 34,616
Expenses:
Selling, general and
administrative $ 50,002 $ 331,384 $ 2,225,476
Loss Before Provision
for Income Taxes (50,002) (331,384) (2,190,860)
Provision for Income
Taxes
Comprehensive Net
(Loss) (50,002) (331,384) (2,190,860)
Net Loss Per Common
Share $ (0.00) (0.003) (0.006)
Fully Diluted $ (0.00) (0.003) (0.006)
Weighted Average
Common Shares
Outstanding 337,865,401 104,452,401 337,865,401
--------------- --------------- --------------
Fully Weighted Average
Common Shares
Outstanding 353,905,735 113,826,068 353,905,735
--------------- --------------- --------------
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 MARCH 31, 2004
Unaudited
Accumulated
Deficit
Common Additional during the
Stock Paid-in Development Stockholders'
Shares Amount Capital Stage Deficiency
----------- -------- ---------- ----------- ----------
Balance at
June 30,
2003 115,902,401 $115,903 $1,011,849 $(2,063,966) $ (936,214)
----------- -------- ---------- ----------- ----------
Loss for
the Period
July 1,
2003 to
March 31,
2004 -- -- -- (126,894) (126,894)
----------- -------- ---------- ----------- ----------
Issuance
of Common
Stock for
Debt &
Services 121,963,000 121,963 969,792 -- 1,091,755
----------- -------- ---------- ----------- ----------
Issuance
of Common
Stock for
Acquisition
of Bio-
Tracking 100,000,000 100,000 4,833,506 -- 4,933,506
----------- -------- ---------- ----------- ----------
337,865,401 $337,866 $6,815,147 $(2,190,860) $4,962,153
----------- -------- ---------- ----------- ----------
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
Unaudited
For the Period
-------------------------------------------
Jan. 1, 2004 Jan. 1, 2003 Oct. 19, 2000
Mar. 31, 2004 Mar. 31, 2003 Mar. 31, 2004
------------- ------------- -------------
Cash Flows from Operating
Activities:
Net loss $ (50,002) $ (331,384) $(2,190,860)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Depreciation and
amortization -- 15,675 --
(Increase) decrease in:
R&D refundable tax
credit -- -- (212,308)
Sales tax receivable 6,388 7,860 --
Accrued expenses -- (4,875) --
Accrued expenses to
related parties -- -- --
Accounts payable (302,872) 14,000 302,872
Prepaid and deposits -- 979 --
Amounts due to
officers 135,505 38,334 38,463
Amounts due to
officers and
Employees -- 280,051 --
Loss on disposal of
assets -- -- 121,153
Net cash and cash
equivalents provided by
(used in) operating
activities (210,981) 21,090 (1,940,270)
Cash Flows from Investing
Activities:
Purchase of Goodwill $(4,562,020) $ -- $(4,762,020)
Purchase of Capital
Assets -- (21,389) (25,672)
Net Cash Used For
Investing Activities $(4,562,020) $ (21,389) $(4,787,692)
Cash Flows from Financing
Activities:
Write-off deficit to
Paid-in Capital $ -- $ -- $ 139,877
Write-off comprehensive
income to Paid Capital -- -- 10,807
Write-off stock
subscription receivable -- -- 196,349
Decrease in short term
loans -- -- --
(Decrease) in loans-
related party
(Decrease) Increase in
loans payable (868,579) (643,892) --
Increase in capital
stock 197,480 35,483 332,549
Increase in paid-in
capital 5,439,716 608,409 6,048,996
Net Cash from Financing
Activities 4,768,617 -- 6,728,578
Net (Decrease) Increase
in Cash (4,384) (299) 616
Cash - Beginning of Period 5,000 469 --
Cash - End of Period 616 170 616
Supplemental Disclosure
of Non-Cash Flow
Information:
Cash paid during the
year for:
Interest -- -- --
Income Taxes -- -- --
Reduction of Loan Outstanding
There were 100,000,000 restricted Shares issued on January 4, 2004 to complete The acquisition of Bio-Tracking. At which time a note for $868,569 was cancelled Which was issued as collateral until the shares were ready for delivery from the Transfer agent. Furthermore the shares for the Agreement of the settlement of Debts of CXN with 3884368 Canada Inc. were issued in January 2004.
Goodwill
In July 2001, the FASB issued Statement No. 141, Business Combinations. and No. 142, Goodwill and Other Intangible Assets. Statement No. 141 supercedes the previous accounting standard on business combinations, Accounting Principles Board Opinion No. 16. and requires that all business combinations initiated after June 30, 2001 must be accounted by the purchase method. Statement No. 141 also changes the requirements for recognizing assets as assets apart from goodwill in business combinations accounted for by the purchase method for which the date of the acquisition is July 1, 2001 or later. Under Statement No. 142, goodwill acquired in a business combination for which the acquisition date is after June 30, 2001, should not be amortized, but should be tested for impairment in accordance for the provisions of this accounting standard.
Goodwill is the result of the acquisition of Bio-Tracking Security Inc. by the registrant on December 2, 2003. The closing price of the shares traded on December 2, 2003 was $0.05. The Goodwill is calculated as the excess of the fairvalue of the acquisition (the purchase method) over its tangible assets.
The Company
CHINA XIN NETWORK MEDIA CORPORATION is a Florida-registered corporation. As previously reported in press releases dated November 26, 2003 and December 2, 2003, the registrant, has concluded the acquisition of Montreal (Canada) based Bio-Tracking Security Inc. (Bio-Tracking). Under the terms of the transaction, CXN acquires 100% of the outstanding shares of the Bio- Tracking, in exchange for 100,000,000 shares of CXN. The closing of the transaction occurred December 2, 2003, as a result of which Bio-Tracking is now a wholly owned subsidiary of CXN.
Capital Needs
CXN anticipates that it will be required to raise an additional $4 million to fund the current plan of growth and existing operations through June 30, 2005. 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.
Results of Operations
Three Months Ended March 31,
2004 2003 % Change
Sales General & Administrative $50,002 $331,384 -84.9%
CXN has worked diligently to reduce overhead and expenses while building shareholder value. As of March 31, 2004, Sales General and Administrative expenses were $50,002 versus $331,384 for the year-ago period. This represents a reduction of expenses of 84.9%.
Three Months Ended
March 31, 2004 December 31, 2003 % Change
Total Liabilities $38,463 $1,345,419 -97.1%
On March 31, 2004 the liabilities of the corporation were reduced 97.1%. The loan payable of $868,579 which represents security for the acquisition of Bio-Tracking was settled for the issuance of shares for the acquisition. As well, shares were issued to 3884368 Canada Inc. as per the agreement dated November 7, 2003 for the settling of debt.
The end result of these transactions, the Shareholders' equity of CXN has increased to $4,962,153 from a deficit of $896,051.
For the complete 10-QSB please go to www.sec.gov or www.bio-tracking.com