UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-QSB

[X]
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly six month period ended June 30, 2007[ ]
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
    EXCHANGE ACTFor the transition period from [ ] to [ ]


--------------------------------------------------------------------

Commission File Number: 000-50431

CHINA MEDIA GROUP CORPORATION
---------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)

Texas
    7310
    32-003-4956-----------------------
    ------------------------
    ----------------------(State or other jurisdiction of incorporation or organization)
    (Primary Standard Industrial Classification Code Number)
    (I.R.S. Employer Identification No.)


1803 Chinachem Tower, 34-37 Connaught Road, Central, Hong Kong
    0000---------------------------------------------------------------------
    ----------------(Address of Company's principal executive offices)
    (Zip Code)


+011 852 3171 1208 (ext.222)
-------------------------------------------------
(Company's Telephone Number, Including Area Code)

This Quarterly
    Report on Form 10-QSB is the Registrant's Quarterly Report for the quarter ended June 30,
    2007 as filed with the Securities and Exchange Commission.


Check
    whether the issuer: (1) filed all reports required to be filed by Section 13 or 15(d) of
    the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
    period that the issuer was required to file such reports), and (2) has been subject to
    such filing requirements for the past 90 days.Yes
    [ X ] No [ ]


State
    the number of shares outstanding of each of the issuer's classes of common equity, as of
    the latest practical date.As
    of August 8, 2007 there were 500,532,222 no par value common stock of the Company issued
    and outstanding.Indicate
    by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
    Exchange Act)Yes
    [ ] No [X ]


Transitional
    Small Business Disclosure Format (check one):Yes
    [ ] No [X ]


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FORWARD-LOOKING
    STATEMENTSThis
    quarterly report contains forward-looking statements as that term is defined in thePrivate Securities Litigation Reform Act of 1995. These statements relate to future
    events or our future financial performance. In some cases, you can identify
    forward-looking statements by terminology such as "may", "will",
    "should", "expects", "plans", "anticipates",
    "believes", "estimates", "predicts", "potential"
    or "continue" or the negative of these terms or other comparable terminology.
    These statements are only predictions and involve known and unknown risks, uncertainties
    and other factors, including the risks in the section entitled " Risk Factors ",
    that may cause our or our industry's actual results, levels of activity, performance or
    achievements to be materially different from any future results, levels of activity,
    performance or achievements expressed or implied by these forward-looking statements.Although
    we believe that the expectations reflected in the forward-looking statements are
    reasonable, we cannot guarantee future results, levels of activity, performance or
    achievements. Except as required by applicable law, including the securities laws of the
    United States, we do not intend to update any of the forward-looking statements to conform
    these statements to actual results.Our
    financial statements are stated in United States Dollars and are prepared in accordance
    with United States Generally Accepted Accounting Principles. In this quarterly report,
    unless otherwise specified, all dollar amounts are expressed in United States Dollars.As
    used in this quarterly report, the terms "we", "us", "our",
    "CHMD", and "the Company" mean China Media Group Corporation and its
    subsidiaries unless otherwise indicated.


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PART
    I


Item 1.
    Condensed
    Consolidated Financial Statements


cmg_logo.gif

China Media Group Corporation
Condensed Consolidated Financial Statements
June 30, 2007
(Unaudited)

(Expressed In United
    States Dollars)Condensed
    Consolidated Balance Sheet as of June 30, 2007


Condensed
    Consolidated Statements of OperationsFor the three months
    and six months ended June 30, 2007 and 2006


Condensed
    Consolidated Statements of Cash FlowsFor the six months
    ended June 30, 2007 and 2006


Notes to Condensed
    Consolidated Financial Statements


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CHINA
    MEDIA GROUP CORPORATIONCONSOLIDATED
    BALANCE SHEETAS
    OF JUNE 30, 2007(UNAUDITED)


ASSETSUS$---------------------Current
    assets:Cash and
    cash equivalents
    
    99,372Accounts
    receivable
    
    11,570Loan
    receivables
    
    329,164Due from
    a director of a subsidiary
    
    20,260Prepayments,
    deposit and other receivables
    
    65,131---------------------Total
    current assets
    
    525,497Non-current
    assets:Property
    and equipments, net
    
    63,343Deposit
    for distribution rights
    
    138,000Goodwill
    on acquisition of subsidiary
    
    7,791,236---------------------Total
    non-current assets
    
    7,992,579---------------------Total
    assets
    
    8,518,076============LIABILITIES AND STOCKHOLDERS' EQUITYCurrent
    liabilities:Accounts
    payables and accrued expenses
    
    333,422Convertible
    debenture
    
    69,758Short-term
    debt
    
    67,600Due to
    officers and directors
    
    647,981---------------------Total
    current liabilities
    
    1,118,761**Long-term
    loan**
    
    2,000,000**Minority
    interest**
    
    208,097Stockholders'
    equity:Common
    stock, no par value, 85,000,000,000 shares authorized499,732,222
    at June 30, 2007 shares issued and outstanding
    
    7,215,182Additional
    paid-in-capital
    
    827,277Prepaid
    consulting expenses
    
    (68,049)Comprehensive
    income
    
    5,746Accumulated
    deficits
    
    (2,788,938)---------------------Total stockholders' equity
    
    5,191,218---------------------**Total
    liabilities and stockholders' equity**
    
    8,518,076============The accompanying notes are an integral part of these
    unaudited consolidated financial statements.


---

CHINA
    MEDIA GROUP CORPORATIONCONSOLIDATED
    STATEMENTS OF OPERATIONS
    (UNAUDITED)FOR
    THE THREE MONHTS AND SIX MONTHS PERIODS ENDED JUNE 30, 2007 AND 2006


For the Three  Months Periods
    Ended Jun  30
    
    For the Six Months Periods
    Ended Jun 302007
    
    2006
    
    2007
    
    2006-----------------
    
    -----------------
    
    -----------------
    
    -----------------US$
    
    US$
    
    US$
    
    US$Net
    revenue
    34,467
    
    8,567
    
    61,301
    
    8,567Cost of
    revenue
    23,142
    
    6,078
    
    43,389
    
    6,078-----------------
    
    -----------------
    
    -----------------
    
    -----------------Gross
    profit
    11,325
    
    2,489
    
    17,912
    
    2,489Operating
    expenses:Impairment
    of investment
    -
    
    -
    
    243,000
    
    -Selling,
    general and administrative expenses
    339,888
    
    185,333
    
    685,662
    
    328,911-----------------
    
    -----------------
    
    -----------------
    
    -----------------Total
    operating expenses
    339,888
    
    185,333
    
    928,662
    
    328,911-----------------
    
    -----------------
    
    -----------------
    
    -----------------Loss
    from operations before other expenses
    (328,563)
    
    (182,844)
    
    (910,750)
    
    (326,422)Other
    expense - interest expenses
    (24,950)
    
    (1,703)
    
    (28,463)
    
    (3,963)-----------------
    
    -----------------
    
    -----------------
    
    -----------------Net loss
    before minority interest
    (353,513)
    
    (184,547)
    
    (939,213)
    
    (330,385)Minority
    interest
    4,532
    
    -
    
    4,532
    
    ------------------
    
    -----------------
    
    -----------------
    
    -----------------Net loss
    (348,981)
    
    (184,547)
    
    (934,681)
    
    (330,385)Other
    comprehensive IncomeForeign currency translation gain
    2,208
    
    -
    
    5,746
    
    ------------------
    
    -----------------
    
    -----------------
    
    -----------------Comprehensive
    loss
    (346,773)
    
    (184,547)
    
    (928,935)
    
    (330,385)==========
    
    ==========
    
    ==========
    
    ==========Basic
    and diluted net loss per common share
    (0.00)
    
    (0.00)
    
    (0.00)
    
    (0.00)==========
    
    ==========
    
    ==========
    
    ==========Basic
    and diluted comprehensive loss per common share
    (0.00)
    
    (0.00)
    
    (0.00)
    
    (0.00)==========
    
    ==========
    
    ==========
    
    ==========Basic
    and diluted weighted average number
    of common shares outstanding*
    497,337,381
    
    345,774,145
    
    445,390,825
    
    344,943,574==========
    
    ==========
    
    ==========
    
    ==========


* Basic and diluted
    weighted average number of shares is same since the effect of dilutive securities are
    anti-dilutive.


The accompanying notes form an
integral part of these unaudited consolidated financial statements.

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CHINA
    MEDIA GROUP CORPORATIONCONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (UNAUDITED)FOR
    THE SIX MONTHS PERIODS ENDED JUNE 30, 2007 AND 2006


Six month periods ended June 30------------------------------------2007
    
    2006---------------------
    
    ---------------------US$
    
    US$Cash
    flows from operating activities:Net Loss
    
    
    (934,681)
    
    (330,385)Adjustments
    to reconcile net loss to net cash used in operating activitiesDepreciation
    
    
    4,335
    
    748Minority interest
    
    
    (4,532)Write off of fixed assets
    
    
    3,253
    
    -Write off of goodwill
    
    
    1,589
    
    -Impairment in investment
    
    
    243,000
    
    -Common stock issuance for employees
    
    
    97,349
    
    -Common stock issuance for services
    
    
    132,876
    
    -Issuance for option for employees compensation
    
    
    22,454
    
    -(Increase)
    / decrease in current assets:Prepaid expenses, deposit and other receivables
    
    
    (12,337)
    
    (57,937)Accounts receivable
    
    
    (10,673)
    
    (5,639)Loan receivables
    
    
    87,214
    
    -Due from a director of a subsidiary
    
    
    (20,260)
    
    -Increase
    / (decrease) in current liabilities:Accounts payables and accrued expenses
    
    
    115,855
    
    40,615Amortization of convertible debenture
    
    
    19,758
    
    ----------------------
    
    ---------------------Net cash used in operating activities
    
    
    (254,800)
    
    (352,598)---------------------
    
    ---------------------Cash
    flows from investing activities:Purchase of property and equipment
    
    
    (49,079)
    
    (11,631)---------------------
    
    ---------------------Net cash used in investing activities
    
    
    (49,079)
    
    (11,631)---------------------
    
    ---------------------Cash
    flows from financing activities:Proceeds from issuance of debt
    
    
    75,000
    
    -Acquisition of subsidiary, net of cash
    
    
    26,671
    
    -Increase in Investment
    
    
    (53,000)
    
    -Advance from related parties
    
    
    285,795
    
    137,017Payment of debt
    
    
    -
    
    (16,000)Issuance of common stock for cash
    
    
    -
    
    250,000---------------------
    
    ---------------------Net
    cash provided by financing activities
    
    
    334,466
    
    371,017---------------------
    
    ---------------------Net
    increase in cash and cash equivalents
    
    
    30,587
    
    6,788Effect
    of exchange rate changes on cash and cash equivalents
    
    
    5,746
    
    -Cash
    and cash equivalents, beginning
    
    
    63,039
    
    7,001---------------------
    
    ---------------------Cash
    and cash equivalents, ending
    
    
    99,372
    
    13,789============
    
    =============Supplemental
    disclosure of cash flow information:Interest paid
    
    
    -
    
    3,700============
    
    =============Income taxes paid
    
    
    -
    
    -============
    
    =============Supplemental disclosure of non-cash investing and financing activities:The issuance of common stock for the investment of $190,000 was not included
    above since this did not involve  cash in the investment.The accompanying notes are an integral part of these
    unaudited financial statements.


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CHINA
    MEDIA GROUP CORPORATION
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


NOTE 1
    ORGANIZATION


China
    Media Group Corporation (the "Company") is a Texas corporation, incorporated on
    October 1, 2002.In
    January 2006, the Company established a wholly owned subsidiary Ren Ren Media Group
    Limited, a company incorporated in Hong Kong, as its operating company in Hong Kong.In
    March 2007, the Company acquired Good World Investments Limited ("Good World"),
    a company incorporated in the British Virgin Islands, which in turn owns a 50% subsidiary,
    Beijing Ren Ren Health Culture Promotion Limited ("Beijing Ren Ren") as
    hereinafter defined, a company established in the Peoples' Republic of China
    ("PRC") with a registered capital of RMB5,000,000. Beijing Ren Ren is working
    with the Chinese Government on the "Great Wall of China Project" which is to
    promote health awareness and health education in China.The
    Company plans to be engaged in the media and advertising business, focusing in China, and
    the marketing and distribution of convergent devices.


NOTE 2
    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND REALIZATION
    OF ASSETS


Unaudited
    Interim Financial InformationThe
    accompanying unaudited interim financial statements have been prepared in accordance with
    accounting principles generally accepted in the United States of America and the rules of
    the U.S. Securities and Exchange Commission, and should be read in conjunction with the
    audited financial statements and notes thereto for the year ended December 31, 2006. They
    do not include all information and footnotes required by accounting principles generally
    accepted in the United States of America for complete financial statements. However,
    except as disclosed herein, there has been no material change in the information disclosed
    in the notes to the financial statements for the year ended December 31, 2006 included in
    the Company Form 10-KSB filed with the Securities and Exchange Commission. In the opinion
    of management, all adjustments (consisting of normal recurring accruals) considered
    necessary for a fair presentation of financial position and the results of operations for
    the interim periods presented have been included. Operating results for the interim
    periods are not necessarily indicative of the results that may be expected for the
    respective full year.Use
    of EstimatesThe
    preparation of financial statements in conformity with generally accepted accounting
    principles 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.Principles
    of ConsolidationThe
    consolidated financial statements include the financial statements of the Company and its
    subsidiaries Ren Ren Media Group Limited, Good World Investments Limited and Beijing Ren
    Ren Health Culture Promotion Limited. Both Good World and Bejing Ren Ren were acquired in
    March 2007.The
    results of subsidiaries acquired during the period are consolidated from their effective
    dates of acquisition.All significant
    inter-company transactions and balances have been eliminated on consolidation.**Minority Interest**The amount of $208,097 as
    of June 30, 2007 represents a non-related minority shareholder's interest in Beijing Renren, a 50% subsidiary of the Company.


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Intangible
    AssetsThe
    Company evaluates intangible assets for impairment, at least on an annual basis and
    whenever events or changes in circumstances indicate that the carrying value may not be
    recoverable from its estimated future cash flows. Recoverability of intangible assets,
    other long-lived assets and, goodwill is measured by comparing their net book value to the
    related projected undiscounted cash flows from these assets, considering a number of
    factors including past operating results, budgets, economic projections, market trends and
    product development cycles. If the net book value of the asset exceeds the related
    undiscounted cash flows, the asset is considered impaired, and a second test is performed
    to measure the amount of impairment loss.


Investment
    in Equity SecuritiesThe Company's policy
    for investment in equity securities, other than investment in subsidiaries, are as
    follows:


-
    Investment
    in Securities held for trading are classified as current assets and are initially stated
    at fair value. At each balance sheet date the fair value is remeasured, with any resultant
    gain or loss being recognized in profit and loss;-
    Investments in nonmarketable securities that are not accounted for by the equity
    method are subject to the requirements of SFAS No. 107. Pursuant to SFAS No. 107, if
    quoted market prices are not available, management's best estimate of fair value may be
    based on the quoted market price of a financial instrument with similar characteristics or
    on valuation techniques.


During
    the six month period ended June 30, 2007, the Company evaluated its investment in
    Guangzhou Waho Culture & Media Co., Ltd. and recognized an impairment loss equal to
    the book value of these investments amounting to $243,000. These evaluations were based
    upon market value of similar investments.


Other Payables and Accrued ExpensesAccounts payable and accrued expenses consist of the following at June 30, 2007:As of June 30, 2007US$Accrued
    salaries and wages
    100,046Accrued
    interest
    24,851Accrued
    accounting and legal
    28,526Accrued
    consulting fee
    7,035Accrued
    trip and office expense
    45,391Account
    payables
    5,036Other
    payable deposit from customers
    46,109Other
    payable - commission
    12,500Others
    64,808------------------------------------334,302=====================


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Stock-based
    CompensationSFAS
    No. 123 prescribes accounting and reporting standards for all stock-based compensation
    plans, including employee stock options, restricted stock, employee stock purchase plans
    and stock appreciation rights. SFAS No. 123 requires compensation expense to be recorded
    (i) using the new fair value method or (ii) using the existing accounting rules prescribed
    by Accounting Principles Board Opinion No. 25, "Accounting for stock issued to
    employees" (APB 25) and related interpretations with proforma disclosure of what net
    income and earnings per share would have been had the Company adopted the new fair value
    method. The Company has chosen to account for stock-based compensation using Accounting
    Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" and
    has adopted the disclosure only provisions of SFAS 123. Accordingly, compensation cost for
    stock options is measured as the excess, if any, of the quoted market price of the
    Company's stock at the date of the grant over the amount an employee is required to pay
    for the stock.The
    Company accounts for stock-based compensation issued to non-employees and consultants in
    accordance with the provisions of SFAS 123 and the Emerging Issues Task Force consensus in
    Issue No. 96-18 ("EITF 96-18"), "Accounting for Equity Instruments that are
    Issued to Other Than Employees for Acquiring or in Conjunction with Selling, Goods or
    Services". Valuation of shares for services is based on the estimated fair market
    value of the services performed.


Issuance
    of Shares for ServiceThe
    Company accounts for the issuance of equity instruments to acquire goods and services
    based on the fair value of the goods and services or the fair value of the equity
    instrument at the time of issuance, whichever is more reliably measurable.Revenue
    RecognitionThe
    Company recognizes its revenue in accordance with the Securities and Exchange Commissions
    ("SEC") Staff Accounting Bulletin No. 104, "Revenue Recognition in
    Financial Statements" ("SAB 104"). Revenue is recognized upon shipment,
    provided that evidence of an arrangement exists, title and risk of loss have passed to the
    customer, fees are fixed or determinable and collection of the related receivable is
    reasonably assured. Revenue is recorded net of estimated product returns, which is based
    upon the Company's return policy, sales agreements, management estimates of potential
    future product returns related to current period revenue, current economic trends, changes
    in customer composition and historical experience.


Foreign
    Currency TranslationThe
    accounts of the Company's Hong Kong subsidiary are maintained; in the Hong Kong dollars
    (HK) and the China subsidiary are maintained in Renminbi. Such financial statements are
    translated into U.S. Dollars (USD) in accordance with Statement of Financial Accounts
    Standards ("SFAS") No. 52, "Foreign Currency Translation," with the
    Hong Kong dollar and the Renminbi as the functional currencies. According to the
    Statement, all assets and liabilities were translated at the exchange rate on the balance
    sheet date, stockholder's equity are translated at the historical rates and statement of
    operations items are translated at the weighted average exchange rate for the period. The
    resulting translation adjustments are reported under other comprehensive income in
    accordance with SFAS No. 130, "Reporting Comprehensive Income." As of June 30,
    2007 and for the three months ended June 30, 2007, such differences were a translation
    gain of $5,746 and $2,208, respectively.


---

Recent
    Pronouncements


In
    September 2006, FASB issued SFAS 157 'Fair Value Measurements'. This Statement defines
    fair value, establishes a framework for measuring fair value in generally accepted
    accounting principles (GAAP), and expands disclosures about fair value measurements. This
    Statement applies under other accounting pronouncements that require or permit fair value
    measurements, the Board having previously concluded in those accounting pronouncements
    that fair value is the relevant measurement attribute. Accordingly, this Statement does
    not require any new fair value measurements. However, for some entities, the application
    of this Statement will change current practice. This Statement is effective for financial
    statements issued for fiscal years beginning after November 15, 2007, and interim periods
    within those fiscal years. The management is currently evaluating the effect of this
    pronouncement on financial statements.In
    September 2006, FASB issued SFAS 158 'Employers' Accounting for Defined Benefit Pension
    and Other Postretirement Plans--an amendment of FASB Statements No. 87, 88, 106, and
    132(R)' This Statement improves financial reporting by requiring an employer to recognize
    the over funded or under funded status of a defined benefit postretirement plan (other
    than a multi-employer plan) as an asset or liability in its statement of financial
    position and to recognize changes in that funded status in the year in which the changes
    occur through comprehensive income of a business entity or changes in unrestricted net
    assets of a not-for-profit organization. This Statement also improves financial reporting
    by requiring an employer to measure the funded status of a plan as of the date of its
    year-end statement of financial position, with limited exceptions. An employer with
    publicly traded equity securities is required to initially recognize the funded status of
    a defined benefit postretirement plan and to provide the required disclosures as of the
    end of the fiscal year ending after December 15, 2006. An employer without publicly traded
    equity securities is required to recognize the funded status of a defined benefit
    postretirement plan and to provide the required disclosures as of the end of the fiscal
    year ending after June 15, 2007. However, an employer without publicly traded equity
    securities is required to disclose the following information in the notes to financial
    statements for a fiscal year ending after December 15, 2006, but before June 16, 2007,
    unless it has applied the recognition provisions of this Statement in preparing those
    financial statements:


a.
    A brief
    description of the provisions of this Statementb.
    The date
    that adoption is requiredc.
    The date
    the employer plans to adopt the recognition provisions of this Statement, if earlier.


The
    requirement to measure plan assets and benefit obligations as of the date of the
    employer's fiscal year-end statement of financial position is effective for fiscal years
    ending after December 15, 2008. The management is currently evaluating the effect of this
    pronouncement on financial statements.


---

In
    February 2007, FASB issued FASB Statement No. 159, The Fair Value Option for Financial
    Assets and Financial Liabilities. FAS 159 is effective for fiscal years beginning after
    November 15, 2007. Early adoption is permitted subject to specific requirements outlined
    in the new Statement. Therefore, calendar-year companies may be able to adopt FAS 159 for
    their first quarter 2007 financial statements.The
    new Statement allows entities to choose, at specified election dates, to measure eligible
    financial assets and liabilities at fair value that are not otherwise required to be
    measured at fair value. If a company elects the fair value option for an eligible item,
    changes in that item's fair value in subsequent reporting periods must be recognized in
    current earnings. FAS 159 also establishes presentation and disclosure requirements
    designed to draw comparison between entities that elect different measurement attributes
    for similar assets and liabilities.In
    July 2006, the FASB released FASB Interpretation No. 48, Accounting for Uncertainty in
    Income Taxes, an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 clarifies the
    accounting and reporting for uncertainties in income tax law. This interpretation
    prescribes a comprehensive model for the financial statement recognition, measurement,
    presentation and disclosure of uncertain tax positions taken or expected to be taken in
    income tax returns. This statement is effective for fiscal years beginning after December
    15, 2006. We are currently in the process of evaluating the expected effect of FIN 48 on
    our results of operations and financial position.


ReclassificationsCertain comparative
    amounts have been reclassified to conform to the current year's presentation.


NOTE 3
    UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN


The
    Company's financial statements are prepared using the generally accepted accounting
    principles applicable to a going concern, which contemplates the realization of assets and
    liquidation of liabilities in the normal course of business. As of June 30, 2007, the
    Company has incurred an accumulated deficits totaling $2,788,938 and its total current
    liabilities exceed its total current assets by $593,264. In view of the matters described
    above, recoverability of a major portion of the recorded asset amounts shown in the
    accompanying balance sheets is dependent upon continued operations of the Company, which
    in turn is dependent upon the Company's ability to raise additional capital, obtain
    financing and to succeed in its future operations. The financial statements do not include
    any adjustments relating to the recoverability and classification of recorded asset
    amounts or amounts and classification of liabilities that might be necessary should the
    Company be unable to continue as a going concern.


Management
    has taken the following steps to revise its operating and financial requirements, which it
    believes are sufficient to provide the Company with the ability to continue as a going
    concern. The Company has entered into an Equity Line of Credit Agreement to sell up to
    US$2,500,000 common stock of the Company for a two year period from the effective date of
    registration statement which was May 14, 2007. The Company is also actively pursuing
    additional funding and potential merger or acquisition candidates and strategic partners,
    which would enhance stockholders' investment. Management believes that the above actions
    will allow the Company to continue operations through the next fiscal year. However there
    can be no assurances that the Company can draw down on the Equity Line of Credit Agreement
    which is conditional on achieving certain price and volume share trading activities or
    that sufficient financing will be available on terms acceptable to the Company or at all.


---

NOTE 4
    LOANS
    RECEIVABLEAs of June 30, 2007, the Company loaned $210,194 and $118,970 to two non-related
    parties at no interest through its subsidiary Beijing Renren respectively. The loan is
    unsecured and the principal is due on September 2007.NOTE 5
    PREPAYMENTS,
    DEPOSITS AND RECEIVABLESFollowing is the detail of prepayments, deposits and other receivable as of June
    30, 2007:US$Rental
    deposits
    15,810Utility
    deposits
    43,878Inventory
    327Other
    receivable
    5,116-----------------------65,131=============NOTE 6
    DUE
    FROM A DIRECTOR OF A SUBSIDIARYAs of June 30, 2007 the Company has a receivable of $20,260 from a director of
    its subsidiary Beijing Renren. The amount is unsecured, interest free and due on demand.NOTE 6
    PROPERTY
    AND EQUIPMENTProperty, Plant & Equipment consist of the following as of June 30, 2007:US$Furniture
    & Fixtures
    13,140Office
    Equipment
    496Computers
    9,756Automobile
    47,951-----------------------Less:
    Accumulation depreciation
    -8,000-----------------------Total
    63,343=============Depreciation expenses were $4,335 and $748 for the six month periods ended June
    30, 2007 and 2006, respectively.NOTE 7
    STOCKHOLDERS' EQUITY


Common Stock


In
    January 2007, the Company entered into an agreement to acquire 18% in Guangzhou Waho
    Culture & Media Co., Ltd. for $243,000 of which $53,000 was paid in cash and $190,000
    was paid by the issuance of 3,518,518 shares of common stock in the Company. The Company
    impaired the investment made in Waho Culture & Media Co., Ltd., as of March 31, 2007,
    as the marketable value is uncertain.In
    March 2007, the Company issued 1,700,000 shares of common stock for service valued at
    $85,000.In
    March 2007, the Company entered into an agreement to acquire 100% of Good World
    Investments Limited for a consideration of $6,000,000, which was settled by the issuance
    of 125,000,000 common stock in the Company.


---

In
    May 2007, the Company issued a total of 2,667,095 unrestricted shares of Common Stock to
    its staff and consultants in accordance with the Form S8 registration statements filed on
    March 8, 2007.In
    June 2007, the Company issued 1,230,000 shares of common stock for service valued at
    $60,550.


WarrantsThe
    Company issued stock warrants for 1,666,666 shares of common stock to Central Star
    Holdings Limited. The warrants expire on February 21, 2008 and have an exercise price of
    $0.30 per share. The company booked expense of $80,000.The
    Company issued stock warrants for 31,250,000 shares of common stock to Tailor-Made Capital
    Limited ("TMC"), as part of the Equity Line of Credit Agreement between TMC and
    the Company, in which TMC was to invest up to $2,500,000 to purchase the Company's common
    stock. The warrants expire on or about May 12, 2009. The warrants have an exercise price
    for 15,625,000 shares of common stock at $0.030 per share and the other 15,625,000 shares
    of common stock at $0.036 per share. The Company booked expense of $391,508.In
    December 2006, the Company also issued 138,889 stock warrants as part of commission in
    relation to the issuance of $50,000 Convertible Debenture under the Debenture Purchase
    Agreement with TMC. These warrants have an exercise price of $0.036 per share and expire
    on or about May 12, 2009.
    In March 2007, the Company issued
    208,333 stock warrants as part of commission in relation to the issuance of $75,000
    Convertible Debenture under the Debenture Purchase Agreement with TMC. These warrants have
    an exercise price of $0.036 per share and expire on or about May 12, 2009.


---

NOTE 8
    STOCK OPTIONS AND WARRANTS


Stock OptionsThe
    Company adopted SFAS No. 123 (Revised 2004), Share Based Payment ("SFAS No.
    123R"), under the modified-prospective transition method on April 1, 2006. SFAS No.
    123R requires companies to measure and recognize the cost of employee services received in
    exchange for an award of equity instruments based on the grant-date fair value.
    Share-based compensation recognized under the modified-prospective transition method of
    SFAS No. 123R includes share-based compensation based on the grant-date fair value
    determined in accordance with the original provisions of SFAS No. 123, Accounting for
    Stock-Based Compensation, for all share-based payments granted prior to and not yet vested
    as of April 1, 2006 and share-based compensation based on the grant-date fair-value
    determined in accordance with SFAS No. 123R for all share-based payments granted after
    April 1, 2006. SFAS No. 123R eliminates the ability to account for the award of these
    instruments under the intrinsic value method proscribed by Accounting Principles Board
    ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and allowed
    under the original provisions of SFAS No. 123. Prior to the adoption of SFAS No. 123R, the
    Company accounted for our stock option plans using the intrinsic value method in
    accordance with the provisions of APB Opinion No. 25 and related interpretation.2002 Stock Option PlanEffective
    on October 11, 2002, the Company adopted the 2002 Stock Option Plan (the "2002
    Plan") allowing for the awarding of options to acquire shares of common stock. This
    plan provides for the grant of incentive stock options to key employees and directors.
    Options issued under this plan will expire over a maximum term of ten years from the date
    of grant.
    On May 18, 2007, the board of directors approved to issue 12,300,000 stock options to
    employees to purchase shares of our Common Stock under the 200s Stock Option Plan, at
    exercise price of $0.038 for a vesting period of 3 years. The Company had 34,100,000 stock
    options outstanding as at June 30, 2007.


---

2007 Stock Incentive
    PlanOn
    February 19, 2007, the Company adopted the 2007 Stock Incentive Plan (the "2007
    Plan") allowing for the awarding of options to acquire shares of common stock. This
    plan provides for the grant of incentive stock options to key employees, directors and
    consultants. Options issued under this plan will expire over a maximum term of ten years
    from the date of grant.


On
    March 8, 2007, we registered 38,400,000 shares underlying stock options under the 2007
    Stock Incentive Plan with the SEC pursuant to a registration statement on Form S-8. On May
    18, 2007, the Company issued a total of 2,667,095 shares to its staff and consultants for
    their services provid.
    As of June 30, 2007, there were
    no outstanding stock options to purchase shares of our Common Stock under the 2007 Stock
    Incentive Plan.


Following
    is a summary of the stock option activity for the six months ended June 30, 2007:


Options outstanding------------------------------------Outstanding,
    December 31, 2006
    21,800,000Granted
    during the period - in May 2007
    12,300,000Forfeited
    during the period
    -Exercised
    during the period
    -------------------------------------Outstanding,
    June 30, 2007
    34,100,000=====================


Following is a summary
    of the status of options outstanding at June 30, 2007:


Outstanding Options
    
    Exercisable Options------------------------------------
    
    ----------------------------------------------------------------------


Grant
    Date
    Exercise
    Price
    Number
    Average Remaining Contractual Life
    Average Exercise Price
    Number
    Intrinsic Price12/23/2006
    $0.0365
    21,800,000
    2.48
    $0.0365
    21,800,000
    $0.005/18/2007
    $0.0380
    12,300,000
    2.88
    $0.0380
    12,300,000
    $0.00


The
    assumptions used in calculating the fair value of options granted using the Black-Scholes
    option pricing model are as follows:


Grant
    date:
    12/23/2006
    
    Grant date:
    5/18/2007Risk-free interest rate
    4.63%
    
    Risk-free interest rate
    4.63%Expected
    life of the options
    3.00 years
    
    Expected
    life of the options
    3.00 yearsExpected
    volatility
    95%
    
    Expected
    volatility
    139%Expected
    dividend yield
    0
    
    Expected
    dividend yield
    0


The 21,800,000 and
    12,300,000 stock options granted on December 23, 2006 and May 18, 2007, respectively.


---

Warrants


Following is a summary
    of the warrant activity for the six months ended June 30, 2007:


Outstanding,
    December 31, 2006
    33,055,555Granted
    during the period-March
    2007
    208,333Forfeited
    during the period
    -Exercised
    during the period
    -------------------------Outstanding,
    June 30, 2007
    33,263,888==============


Following is a summary
    of the status of warrants outstanding at June 30, 2007:


Outstanding Warrants
    
    Exercisable Warrants----------------------------
    
    ----------------------------------------------------------


Exercise
    Price
    Number
    Average Remaining Contractual Life
    Average Exercise Price
    Number
    Intrinsic Value$0.300
    1,666,666
    0.62
    $0.300
    1,666,666
    $0 .00$0.030
    15,625,000
    1.95
    $0.030
    15,625,000
    $0 .00$0.036
    15,625,000
    1.95
    $0.036
    15,625,000
    $0 .00$0.036
    138,889
    1.95
    $0.036
    138,889
    $0 .00$0.036
    208,333
    1.84
    $0.036
    208,333
    $0 .00


Details of the warrants
    are specified in Note 6 (d) and (e).


NOTE 9
    STOCK PURCHASE AGREEMENTS


a)
    On or about October 12 2005, the Company entered into two non-binding Stock Purchase
    Agreements with Central High Limited ("Central High")


1)
    for the entire issued share capital of Good World Investments Limited, subject to
    satisfactory completion of legal, financial and operational due diligence. Good World
    Investments Limited holds 50% interests in Beijing Ren Ren Health Culture Promotion
    Limited. This transaction closed on March 13, 2007 (refer to item (i) below);2)
    for 50,000,000 shares in Cody Ventures Corporation ("CVC") representing
    about 52.1% of the issued share capital in CVC in exchange for 30 million new common stock
    of the Company, subject to satisfactory completion of legal, financial and operational due
    diligence. CVC is quoted on the US Pink Sheets Market under the symbol CDYV. This
    agreement was terminated in July 2006.


Both
    directors, Messrs Con Unerkov and Alex Ho own 25% each in the issued share capital of
    Central High.


---

b) On or about
    January 25, 2006, the Company entered into an agreement with Fleming Assets Limited
    ("Fleming") to acquire the distribution rights for the M.A.G.I.C. Convergent
    Communications Device for the territory of China and Hong Kong. Under the agreement the
    Company will issue the following shares to Fleming:


-
    Within one
    month of signing the agreement, one million shares of the Company;-
    Within one
    month of receiving the prototype devices, one million shares of the Company;-
    Within one month of
    receiving the product from commercial production, two million shares of the Company; and-
    A royalty
    payment of 100,000 shares of the Company for every 5,000 devices sold for the next 3
    years.


As
    of June 30, 2007, the Company has only issued one million shares in respect of this
    agreement.


c) On or about
    February 1, 2006, the Company entered into a non-binding Stock Purchase Agreement with
    Dongguang Zhishixin Advertising Limited ("Zhishixin") for the controlling
    interests in Zhishixin ("Stock Purchase Agreement"). Under the Stock Purchase
    Agreement the Company will subscribe about $68,500 (RMB550, 000) of registered capital,
    representing about 52.3% of the enlarged capital, in Zhishixin. This Agreement is
    conditional on satisfactory completion of the legal, financial and operational due
    diligence by the Company. This agreement was terminated in September 2006.d) On or about
    February 13, 2006, the Company announced a Stock Purchase Agreement with Central Star
    Holdings Limited ("Central Star"). Under the agreement, Central Star will
    purchase 833,333 shares in the Company for $250,000 upon signing the agreement and
    thereafter purchasing an additional $1 million worth of stock of the Company in 4 equal
    tranches every 2 months over an 8 months period. Central Star is obliged to purchase the
    additional tranches provided that the share price of the 5 days prior to the relevant date
    is not below $0.33 per share. However if the share price is below $0.33 then Central Star
    still has the right, but not the obligation, to purchase the stock at $.30 per share. For
    every stock purchased, Central Star will be entitled to receive an option to purchase 2
    additional shares in the Company at the same price that it paid for the shares subscribed
    over a one year period from the later date of the final payment of the last tranche to
    complete the $1 million additional stock purchase and February 21, 2007. The Company
    received $250,000 in February 2006. $80,000 was expensed for issuing the warrants.e) On or about
    December 7, 2006 the Company entered into an Equity Line of Credit Agreement
    ("ELOC") with Tailor-Made Capital Limited ("TMC"). Pursuant to Equity
    Line of Credit Agreement, the Company may at its sole discretion, periodically sell to TMC
    common stock for a total purchase price of up to US$2,500,000 during the two year period
    commencing on the effective date of the registration statement but not later than three
    years from the date of the ELOC. The amount of each advance is subject to a maximum amount
    of US$250,000, and the Company may not submit an advance within 5 trading days of a prior
    notice of an advance. For each common stock purchased under the ELOC, TMC will pay between
    90-100% of the volume weighted average price of our common stock quoted on the
    Over-the-Counter Bulletin Board for the 5 days immediately preceding the notice date. As
    part of this agreement, the Company issued to TMC 12,500,000 common stock as commitment
    fee and stock warrants for a total of 31,250,000 shares of common stock. The warrants
    expire on May 7, 2009. The warrants have an exercise price for 15,625,000 shares of common
    stock at $0.030 per share and the other 15,625,000 shares of common stock at $0.036 per
    share.f) On December
    12, 2006, the Company issued 138,889 stock warrants as part of commission in relation to
    the issuance of $50,000 Convertible Debenture to TMC in respect of the Debenture Purchase
    Agreement. These warrants have an exercise price of $0.036 per share and expire on May 12,
    2009.


---

g) On January 3,
    2007, the Company issued 4,342,464 shares of common stock for accrued services of
    $158,500.h)
    On January 13, 2007 the Company acquired 18% interests in Guangzhou Waho Culture &
    Media Co., Ltd. (the "GWCM") for $243,000, of which $53,000 shall be paid in
    cash within 6 months from the date of the agreement and $190,000 worth of common stock,
    which is calculated to 3,518,518 shares of the Company. GWCM is a company focused in the
    business of online advertising for the China market.


i)
    On March 13, 2007 we entered into a Sales and Purchase Agreement to acquire the entire
    issued share capital of Good World Investments Limited which owns 50% issued shares
    capital of Beijing Ren Ren Health Culture Promotion Limited. Pursuant to the agreement,
    the Company will issue 125 million shares to Central High Limited as the consideration.
    This purchase consideration was negotiated with reference to the BRR accounts and the
    underlying projects in BRR. Our directors Messrs. Con Unerkov and Alex Ho each owns 25%
    interests in, but are not directors or officers of, Central High Limited.


j)
    On March 27, 2007, the Company issued 208,333 stock warrants as part of commission in
    relation to the issuance of $75,000 Convertible Debenture to TMC in respect of the
    Debenture Purchase Agreement. These warrants have an exercise price of $0.036 per share
    and expire on May 12, 2009.


k) On May 18, 2007, the Company
    issued 2,667,095 unrestricted shares of common stock for accrued services of $97,349.
    These shares were issued in accordance with the Form S8 registration statements.


NOTE 10
    INTANGIBLE ASSETS


a)
    On January 25, 2006, the Company entered into an agreement with Fleming Assets
    Limited ("Fleming") to acquire the distribution rights for the M.A.G.I.C.
    Convergent Communications Device for the territory of China and Hong Kong. Under the
    agreement the Company will issue the following shares to Fleming:


*
    Within one month of signing the agreement, one million shares of the Company;*
    Within one month of receiving the prototype devices, one million shares of the
    Company;*
    Within one month of receiving the product from commercial production, two million
    shares of the Company; and*
    A royalty payment of 100,000 shares of the Company for every 5,000 devices sold
    for the next 3 years.


The Company
    issued 1,000,000 shares of common stock valued at $138,000 and classified as deposit on
    distribution rights. The shares were valued at the market price on the date of issuance.
    As of March 31, 2007, the Company has not received the prototype device.


b)
    On March 13, 2007, the Company acquired 100% interests in Good World Investments
    Limited for $6,000,000, which resulted in the Group recording a goodwill upon
    consolidation of $7,791,236.


---

NOTE 11
    CONVERTIBLE DEBENTURE


On December 7, 2006 the Company entered into a Debenture
    Purchase Agreement ("DPA") with TMC whereby TMC agreed to purchase certain
    convertible securities issued by the Company. Pursuant to the terms of the DPA, the
    Company may sell and issue to TMC, and TMC will purchase from the Company, up to an
    aggregate of US$125,000 of convertible debenture ("Convertible Debenture") of
    the Company which will be due 12 months from the date of issuance. The terms of the
    Convertible Debenture due one year from the date of issue, bears interest at a rate of 10%
    per annum which is payable on the conversion date or at maturity, and can be converted at
    TMC's discretion at any time prior to maturity date at a conversion price of US$0.024 per
    share. Under the DPA, the Company can issue the Convertible Debentures in 3 stages: 1)
    US$50,000 upon signing the DPA, 2) US$50,000 upon filing the registration statement in
    accordance to the SPA, and 3) US$25,000 upon the aforementioned registration statement
    being declared effective by the Securities Exchange Commission. On December 12, 2006 and
    March 27, 2007, the Company issued US$50,000 and US$75,000 of convertible debentures,
    respectively, pursuant to the DPA. As of June 30, 2007, a total of $125,000 Convertible
    Debentures was issued and outstanding.The
    Company calculated a beneficial conversion feature of $75,000. The Company amortized the
    beneficial conversion feature in accordance with the conversion terms of the note. At
    March 31, 2007, the note is presented net of the unamortized beneficial conversion feature
    of $75,000 to be amortized over the term of the note of 1 year.


NOTE 12
    SHORT-TERM DEBT


As of June 30,
    2007, the Company has an outstanding short-term unsecured debt payable of $67,600, with
    annual interest rate of 10%. The interest expense amounted to $8,328 and $3,963 for the
    six-month periods ended June 30, 2007 and 2006, and $4,815 and $1,703 for the three months
    periods ended June 30, 2007 and 2006.


NOTE 13
    DUE TO DIRECTORS AND OFFICERS


The
    due to directors and officers are interests free, unsecured and due on demand. The balance
    of due to directors and officers is $647,981 as of June 30, 2007.


---

NOTE 14
    LONG TERM SHAREHOLDER LOAN


The
    long term shareholder loan amounting $2,000,000, is unsecured, repayable on November 25,
    2010. This long term loan bears no interest for the first two years to November 25, 2007
    and thereafter 8% per annum.


NOTE 15
    RELATED COMPANY TRANSACTIONS


There
    were no transactions with related parties for the six months ended June 30, 2006 and 2007
    other than as noted below.
    During the six months period
    ended June 30, 2007, the Company entered into an agreement to acquire 100% of Good World
    Investments Limited from Central High Limited which our directors Con Unerkov and Alex Ho
    each holds 25% interest.The
    Company agreed to pay directors and officers a monthly salary for services performed.
    During the six months period ended June 30, 2007 and 2006, the Company paid the directors
    and its officers and their services companies a total remuneration of $210,015 and
    $108,000 for the six months period ended June 30, 2007 and 2006, and $118,515 and $54,000
    for the three months period ended June 30, 2007 and 2006 respectively.


NOTE 16
    COMMITMENTS AND CONTINGENCIES


a)
    The Company leases office premises for its operations in United States, Hong Kong
    and Malaysia under operating leases. Rental expenses under operating lease for the
    three-months period and six months period ended June 30, 2007 was $18,314 and $36,628
    respectively.Future minimum rental payments under non-cancellable operating leases for the
    year ended December 31, 2007 is $5,474.b)
    The Company has service or employment agreements with the Directors and Officer
    and its service companies (the "Executives") for two years commencing on October
    1, 2005 and the agreements shall continue thereafter unless terminated by either parties.
    The Executives will receive a monthly salary at a rate to be agreed by the Company and the
    Executives from time to time. In addition, the Executives will receive an annual
    management bonus to be determined by the majority of the Board based on the operating
    results of the Company and the Executives' performances, provided that it does not exceed
    8.8 % of the net profit of the Company.c)
    On or about February 6, 2006, the Company received a correspondence from the
    Florida Attorney General's office regarding some complaints on some transmissions of
    unsolicited facsimile allegedly from the Company, and advised of potential civil
    penalties. The Company's legal council contacted the Attorney General office to state that
    the Company has never sent or authorized any unsolicited facsimile transmission, and that
    the Company has taken every possible effort to distance from these unauthorized
    transmissions including adding a "pop up" window on its website. The Company has
    offered its assistance in any investigation to the Attorney General office. The Attorney
    General office has not imposed any penalties on the Company to date. The Company would
    vigorously defend any such civic action if pursued.


---

d)
    On March 1, 2006 the Company entered into an agreement with Dolphin Investments
    Inc., (DII) whereby DII will assist Company in procuring R & D funding, developing
    resource pool for engineering expertise and liaising and building relationship with
    customers to achieve business and sales target.According to the terms of the agreement the Company will pay $10,500 per month as
    consulting fees for the period of 12 months from the date of the agreement.e)
    On December 7, 2007 The Company has entered into an Equity Line of Credit
    Agreement to sell US$2,500,000 of common stock, as further described in Note 6 (E) above.f)
    The Company will pay a 10% commission in cash and an equal amount in stock
    warrant to an independent party on any funds received under the ELOC Agreement and the
    Debenture Purchase Agreement.


NOTE 17
    SUBSEQUENT EVENTS


In
    July 2007, the Company issued a total of 800,000 unrestricted shares of Common Stock to
    its staff and consultant in accordance with the Form S8 registration statements filed on
    March 8, 2007.


On July 14, 2007, the Registrant, China Media Group
    Corporation (the "Company") entered into a Stock Right Transfer Agreement (the
    "Agreement") with the shareholders of Conwood Industrial Limited
    ("CIL") to acquire 70% of the issued and outstanding shares of CIL. The
    consideration for the acquisition of these shares shall be RMB 13 million. Under the terms
    of the Agreement, the closing of this transaction is subject to satisfactory due diligence
    by the Company.CIL
    is a company registered in Hong Kong, which owns 49% of a joint venture company in China
    that owns and operates a microwave network in Hunan province and has a 25% interests in a
    digital television channel.NOTE 18
    BUSINESS COMBINATIONS


Sale
    and Purchase Agreement between the Company and Central High Limited


On
    March 13, 2007, the Company entered into a Sales and Purchase agreement (the
    "Purchase Agreement") to acquire 100% of the issued and outstanding shares of
    Good World Investments Limited ("Good World") from Central High Limited.


The
    consideration for the acquisition is 125,000,000 shares of the Company's common stock
    valued at $6,000,000 based upon the market value of shares as it traded on the
    Over-the-Counter Bulletin Board (OTCBB) at the date of acquisition. Our directors, Messrs.
    Con Unerkov and Alex Ho, each own 25% interests in Central High Limited. Good World, an
    investment holding company, owns 50% of the registered capital of Beijing Ren Ren Health
    Culture Promotion Limited (the "BRR"). BRR is a company incorporated in the
    People's Republic of China, and is working with the Chinese Government on a benevolent
    project named "Great Wall of China Project" to promote health education and
    health awareness to China.


The
    purchase price was allocated as follows:


US$Cash
    
    
    26,671Current
    assets
    
    416,378Current
    liabilities
    
    (29,161)Property,
    plant and equipment
    
    7,505Goodwill
    
    7,791,236Long-term
    loan
    
    (2,000,000)Minority
    interest (50%)
    
    
    (212,629)Purchase
    price
    
    
    6,000,000


---

Proforma
    Financials


The
    accompanying pro-forma condensed consolidated financial statements are provided for
    informational purposes only. The Pro-Forma Consolidated Balance Sheet and Pre-Forma
    Combined Statement of Operations are unaudited and are not necessarily indicative of the
    consolidated financial position which actually would have occurred if the above
    transaction had been consummated on June 30, nor does it purport to present the operating
    results that would be achieved for future periods.


The
    Unaudited Pro-Forma Consolidated Financial Statement reflect financial information which
    gives pro-forma effect to the acquisition of all the outstanding common shares of Good
    World in exchange for 125,000,000 shares of common stock of the Company.


The
    acquisition is to be recorded as a purchase acquisition. The Pro-Forma Consolidated
    Balance Sheet included herein reflects the use of the purchase method of accounting for
    the above transaction.


Unaudited Pro-Forma
    Consolidated Balance SheetThe
    acquisition was completed on March 13, 2007 and has been accounted for in the consolidated
    balance sheet presented in the Condensed Consolidated Balance Sheet as at June 30, 2006.


Unaudited Pro-Forma
    Consolidated Statement of OperationsThe Pro-Forma Combined Statement of Operations give effect to the above
    transaction as if it occurred on the earliest date of the period presented, i.e., June 30,
    2006.


---

CHINA MEDIA GROUP CORPORATION
UNAUDITED PRO-FORMA
AS OF JUNE 30, 2006 FOR BLANCE SHEET ACCOUNTS
AND FOR THE SIX MONTHS PERIOD ENDED
JUNE 30 2006

ProformaUS$---------------Current
    assets
    
    
    
    
    
    
    
    522,513Non-current
    assets
    
    
    
    
    
    
    
    7,862,624Current
    liabilities
    
    
    
    
    
    
    
    (371,368)Long
    term liabilities
    
    
    
    
    
    
    
    (2,180,648)Stockholders'
    equity
    
    
    
    
    
    
    
    (5,833,121)Net
    revenues
    
    
    
    
    
    
    
    9,464Cost
    of revenue
    
    
    
    
    
    
    
    (6,078)Gross
    profits
    
    
    
    
    
    
    
    3,386Selling,
    general and administrative expenses
    
    
    
    
    
    
    
    (408,682)Other
    expenses - interest expense
    
    
    
    
    
    
    
    (3,963)Minority
    interests
    
    
    
    
    
    
    
    38,966Net
    loss
    
    
    
    
    
    
    
    (370,294)Basic
    and diluted loss per common share
    
    
    
    
    
    
    
    $0.01============Basic
    and diluted weighted average number of common shares
    
    
    
    
    
    
    
    345,774,145============


---

Item 2.
    Management's
    Discussion and Analysis of Financial Condition and Results of Operations.


Forward Looking
    Statements


THIS FOLLOWING
    INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THE COMPANY.
    FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING OF FUTURE EVENTS AND
    ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE
    OF FORWARD-LOOKING TERMINOLOGY, SUCH AS "MAY", "SHALL",
    "COULD", "EXPECT", "ESTIMATE", "ANTICIPATE",
    "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD",
    "CONTINUE", OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE
    TERMS. THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
    COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED
    BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO
    PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE
    FORWARD-LOOKING STATEMENTS.
    THE ASSUMPTIONS USED FOR PURPOSES
    OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT
    ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN
    ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION
    AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING
    ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO
    THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM
    ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE
    ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY THAT ANY OF THE
    ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING
    INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING
    STATEMENTS.


Critical Accounting
    Policy and Estimates


Our Management's
    Discussion and Analysis of Consolidated Financial Condition and Results of Operations
    section discusses our consolidated financial statements, which have been prepared in
    accordance with accounting principles generally accepted in the United States of America.
    The preparation of these consolidated financial statements requires management to make
    estimates and assumptions that affect the reported amounts of assets and liabilities at
    the date of the consolidated financial statements and the reported amounts of revenues and
    expenses during the reporting period. On an on-going basis, management evaluates its
    estimates and judgments, including those related to revenue recognition, accrued expenses,
    financing operations, and contingencies and litigation. Management bases its estimates and
    judgments on historical experience and on various other factors that are believed to be
    reasonable under the circumstances, the results of which form the basis for making
    judgments about the carrying value of assets and liabilities that are not readily apparent
    from other sources. Actual results may differ from these estimates under different
    assumptions or conditions. The most significant accounting estimates inherent in the
    preparation of our consolidated financial statements include estimates as to the
    appropriate carrying value of certain assets and liabilities which are not readily
    apparent from other sources. These accounting policies are described at relevant sections
    in this discussion and analysis and in the notes to the consolidated financial statements
    included in our Quarterly Report on Form 10-QSB for the period ended June 30, 2007.


---

Overview


The
    Company was incorporated in Texas on October 1, 2002 and was originally formed to be a
    frozen drink machine rental service. It was intended to specialize in renting frozen drink
    machines for gatherings such as wedding receptions, birthday parties, football parties,
    anniversaries, family reunions, weekend barbeques, social functions and fund raising
    events, as well as any other type of occasion. From the beginning, this business was at
    the first stage of development and the primary focus was on continuing to developing and
    revising our business strategies.


In
    2005, the Company changed its name to International Debt Exchange Associates Inc.
    reflecting the Company's then intent to become a diverse company through mergers and
    acquisitions and to still maintain business as a frozen drink machine rental service.
    In September 2005, the Company
    changed its board of directors and has since changed the Company name to China Media Group
    Corporation to reflect the Company's intent to focus all its efforts in advertising and
    media in the emerging China market. Under new management, the Company commenced to
    position the Company to capitalize on the growth of the Chinese advertising market where
    global companies are rushing into China to try to grab and hold the attention of its 1.3
    billion citizens. It is estimated that advertising expenditure in China will surpass those
    in Japan by 2010, making China the second largest advertising market in the world after
    the USA.


Our
    mission is to become one of China's leading new age media companies through the use of new
    technologies and devices combined with traditional media of TV, Newspapers, Magazines,
    Billboards and Internet to reach today's mobile society. In order to facilitate this
    mission the Company established 5 strategic business units: "Television",
    "Advertising" "Print", "Telecommunications and Mobile
    Computing" and "Products and Services".


In summary, the update
    of some of the events are as follows:Acquisition AgreementOn March 13, 2007, the Company
    acquired 100% of the issued and outstanding shares of Good World Investments Limited,
    which owns 50% of the registered capital of Beijing Ren Ren Health Culture Promotion
    Limited ("BRR"). BRR is working with the Chinese Government on a benevolent
    project named "Great Wall of China Project" to advertise and promote health
    education and health awareness in China. We believe BRR provides a strategic advertising
    platform for us to launch our advertising operations in China as it can advertise in
    hospitals and districts across China.Pending AcquisitionOn July 14, 2007, we entered into a
    Stock Right Transfer Agreement with the shareholders of Conwood Industrial Limited
    ("CIL") to acquire 70% of the issued and outstanding shares of CIL. CIL is a
    company registered in Hong Kong, which owns 49% of a joint venture company in China that
    owns and operates a microwave network in Hunan province and has a 25% interests in a
    digital television channel. This transaction is expected to close in the fourth quarter
    after successful completion of financial, legal and operational due diligence.


---

Advertising UnitOn or about December 5, 2005, the
    Company announced that it has been appointed as the advertising agent for Beijing Ren Ren
    Health Culture Promotion Co. Limited. As further announced later, Beijing Ren Ren had
    obtained approval for over 600 sign ad placements of which about 90 location placements
    have been approved in Chao Yuan District in Beijing. Beijing Ren Ren has initially
    provided about 12 ad placements in the Chao Yuan District for the Company to sell
    advertising in June 2006. No advertising revenue has been generated yet from these signs.


Furthermore
    on or about December 7, 2005 the Company entered into a cooperation agreement with Harbin
    Shendong Advertising Co. Limited on developing adverting revenue in Harbin, which then
    progressed to discussions on acquisition of 9 signs from Harbin Shengdong. The Company is
    having on going discussion with Harbin Shendong on the acquisition of the 9 signs through
    the establishment of setting up a 70%/30% joint venture company where we would have the
    major shareholding. The joint venture is still being processed and is expected to be
    completed before the end of the year. No revenue has been generated yet from these signs.


On
    or about December 9, 2005 the Company entered into a cooperation agreement with DreamWorks
    Movie & TV Culture Media Co. Limited on developing the advertising market for
    Changsha. We are working with DreamWorks to secure customers to advertise in Changsha, but
    at the date of this report no revenue has been generated yet.


On
    or about December 12, 2005 the Company entered into a cooperation agreement with Dalian
    Goal Media Limited to allow us to tap into existing target market of Dalian. We are
    working with Dalian Goal Media to secure customers to advertise in their print magazine,
    but at the date of this report no revenue has been generated yet.


Telecommunications
    UnitIn January 2006, the
    Company announced the establishment of the Telecommunications and Mobile Computing
    Division to focus on the new media advertising where we would take advantage of new
    convergent devices for telecommunications advertising. The business of selling advertising
    through telecommunications media and devices is still at an early stage as we are
    developing strategies to effectively enter the market. No revenue has been generated from
    advertising through telecommunications media and devices at the date of this report.


As
    announced on or about January 25, 2006 the Company entered into a distribution agreement
    for the territory of China and Hong Kong for the M.A.G.I.C. Convergent Device. The Company
    has acquired the rights to M.A.G.I.C. convergent device which is expected to be
    commercially available for sales after successful testing. M.A.G.I.C. is a next generation
    convergent device that has the full capabilities of a notebook computer shrink to a size
    of a PDA phone. The Company received the prototype unit in May 2006 and is still
    conducting compliance, functional, stability, load and usability testing on the device
    prior to testing by our resellers and partners. We expect that compliance testing will be
    completed in September 2007. No revenue has been generated from this M.A.G.I.C. convergent
    device at the date of this report.


---

The Company also
    announced on or about January 17, 2006 that it has signed a Letter of Intent with
    DreamWorks Movie & TV Culture Media Co. Ltd to jointly develop mobile TV network in
    Hunan Province and advertising on such mobile network. No further update since the last
    report. No revenue has been generated from this cooperation.
    In January 2007, the Company
    acquired 18% interests in Guangzhou Waho Culture co, Ltd. ("Waho"), a company in
    the business of online advertising with specifically a contract to do the print and online
    edition of Yellow Pages for Guangdong Province for China Tietong Communications Co., Ltd.,
    one of the licensed telecommunication carriers in China. This investment provides us an
    entry into this online portal and possible future collaboration between Waho's online
    portal with our advertising and technology platforms.


Hospital Advertising UnitOn
    or about December 13, 2005 the Company announced that it will undertake the advertising
    works inside/outside of the Changsha Central Hospital to introduce domestic and
    international healthcare companies to advertise at the hospitals. Also on or about
    February 27, 2006 the Company announced that it has been appointed to undertake the
    advertising placement work for Beijing Number 6 Hospital. Our staff continues to work to
    secure advertising customers for both these hospitals. No revenue has been generated from
    the placement from these two hospitals at the date of this report.


Product Services UnitWe have commenced a Products
    Services Unit to build brands and to take advantage of our contacts, distribution network
    and trading opportunities. We will leverage off our advertising platform to develop our
    won brands for selected products. This will uniquely position our Product Services for
    brand awareness and as well as develop a long term business unit that will serve both
    consumers and industries.


It
    is the Company's intention to increase the Company's size and earning potential through
    internal growth, joint venture, acquisitions and mergers with similar businesses to gain a
    greater foothold in the marketplace. We are continuing to search for possible acquisition
    and\or merger candidates to be identified and this will be competitors, business
    associates and other similar businesses that would help strengthen the Company.


---

Plan of operationsOUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS.We hope to generate additional revenues in the next twelve months by engaging business
    operations through internal growth and through strategic acquisitions and cooperative
    advertising agreements, as described more fully under "Overview" above.


We
    have cash and cash equivalents of $99,372 as of June 30, 2007; an increase from the
    previous period end of December 31, 2006. 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.


The
    Company entered into an agreement to sell USD$2,500,000 in common stock in December 2006,
    under the ELOC agreement, subject to the approval of the Registration Statement. As of the
    date of this report, the Registration Statement has been approved by the SEC. Management
    intends to continue to raise additional financing through debt and equity financing or
    other means and interests that it deems necessary, with a view to implementing our
    business plan and building a revenue base. We plan to use the proceeds of such financings
    to provide working capital to our operations and increase our capital expenditure for
    marketing and working with our co-operative partners. There can be no assurances that
    sufficient financing will be available on terms acceptable to us or at all. Our forecast
    for the period for which financial resources will be needed to support our operations
    involves risks and uncertainties and actual results could fail as a result of a number of
    factors.


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.


Over
    the course of the next two years, we propose to build up our advertising presences to over
    5 regional offices in China. Over the next two years, we also propose to acquire strategic
    partners that have existing operations in cities or regions to grow our business by
    acquisition and through cooperation agreements and otherwise, subject to available
    funding. Additional support staff may be hired as necessity and resources dictate within
    the next twelve months.


We
    are not currently conducting any research and development activities, other than the
    continual development of our website in both English and Chinese. We do not anticipate
    conducting such activities in the near future. In the event that we expand our business
    scope, then we may need to hire additional employees or independent contractors as well as
    purchase or lease additional equipment.


---

Results
    of Operations


FOR
    THE THREE AND SIX MONTHS PERIODS ENDED JUNE 30, 2007 COMPARED TO THE THREE AND SIX MONTHS
    PERIODS ENDED JUNE 30, 2006.


REVENUES.
    The Group has realized revenue of $61,301 and $8,567 for the six months ended June 30,
    2007 and 2006, respectively. The Group incurred a cost of revenue of $43,389, achieving a
    gross profit of $17,912 for the six months ended June 30, 2007 and for the similar period
    in 2006, the Group had a cost of revenue of $6,078, achieving a gross profit of $2,489.
    For the three months ended June 30, 2007 and 2006, the Group realized revenue of $34,467
    and $8,567. Respectively. The Group incurred a cost of revenue of $23,142 and achieved a
    gross profit of $11,325 for the three months ended June 30, 2007, and for the three months
    ended June 30, 2006, the group incurred a cost of revenue of $6,078 and a gross profit of
    $2,489. We hope to generate additional revenues when we receive more contracts from
    clients or through acquisitions. Depending upon the availability of operating capital, we
    intend to expand our operations in the next 12 months.
    OPERATING EXPENSES.
    For the six month period ended
    June 30, 2007, our gross profit was $17,912 and our total operating expenses were
    $928,662, all of which were selling, general and administrative expenses and $243,000 for
    impairment in investment. We also had $28,463 in interest expenses,$4,532 in minority
    interest and $5,746 in comprehensive income, so that the net loss to our shareholders for
    the six month period ended June 30, 2007 was $934,681. This is in comparison to the same
    period ended June 30, 2006, where we had $328,911 in selling, general and administrative
    expenses and $3,963 in interest expenses, making our net loss for that period $330,385.
    For the three months period ended
    June 30, 2007, our gross profit was $11,325 and our total operating expenses were
    $339,888, all of which were selling, general and administrative expenses. We also had
    $24,950 in interest expenses, $ 4,532 in minority interest and $2,208 in comprehensive
    income, so that the net loss to our shareholders for the three months period ended June
    30, 2007 was $348,981. This is in comparison to the same period ended June 30, 2006, where
    we had $185,333 in selling, general and administrative expenses and $1,703 in interest
    expenses, making our net loss for that period $184,547.


Liquidity
    and Capital ResourcesAs
    at June 30, 2007, the Company had cash and cash equivalents totaling $99,372, other
    current assets of $426,125 and non-current assets totaling $7,992,579 which were
    represented by $63,343 in fixed assets, $138,000 in distribution rights and $7,791,236 in
    goodwill. The total assets of the Company were $8,518,076 as of June 30, 2007. We also had
    current liabilities of $1,118,761 which were represented by $333,422 in accruals, $67,600
    in short term debt, $647,981 due to related parties, $69,758 in convertible debenture as
    of June 30, 2007. We also had $2,000,000 in long-term shareholders loan as of June 30,
    2007, making our total liabilities $3,118,761.
    At present the Company does not have sufficient cash resources to provide for all general
    corporate operations in the foreseeable future. The Company will be required to complete
    the registration statement relating to the ELOC agreement for $2,500,000 in order to draw
    down on this facility and to raise additional capital in order to continue to operate in
    fiscal 2007.


---

Going
    Concern


The
    Company's financial statements are presented on a going concern basis, which contemplates
    the realization of assets and satisfaction of liabilities in the normal course of
    business. The Company has experienced significant losses from operations in recent
    periods. For the six months ended June 30, 2007 the Company incurred net loss of $934,681,
    and has accumulated losses of $2,788,938 as at June 30, 2007. The Company's ability to
    continue as a going concern is contingent upon its ability to continue as a going concern
    must be considered in light of the problems, expenses and complications frequently
    encountered in developing markets and the competitive environment in which the Company
    operates. The Company is pursuing financing for its operations and seeking additional
    investment. In addition, the Company is seeking to expand its revenue base by adding new
    customers and to start out its advertising business. Failure to secure such financing, to
    raise additional equity capital and to expand its revenue based may result in the Company
    depleting its available funds and not being able to pay its obligations. These financial
    statements do not include any adjustments to reflect the possible future effects on the
    recoverability and classification of assets or the amounts and classification of
    liabilities that may result from the possible inability of the Company to continue as a
    going concern.


Off
    Balance Sheet Arrangements


As
    of June 30, 2007, there were no off balance sheet arrangements.


Item 3.
    Controls
    and Procedures.


(A)
    Evaluation
    Of Disclosure Controls And Procedures


As
    of the end of the period covered by this report, the Company carried out an evaluation,
    under the supervision and with the participation of the Company's Principal Executive
    Officer/Principal Financial Officer, of the effectiveness of the design and operation of
    the Company's disclosure controls and procedures. The Company's disclosure controls and
    procedures are designed to provide a reasonable level of assurance of achieving the
    Company's disclosure control objectives. The Company's Principal Executive
    Officer/Principal Accounting Officer has concluded that the Company's disclosure controls
    and procedures are, in fact, effective at this reasonable assurance level as of the period
    covered.


(B)
    Changes In
    Internal Controls Over Financial Reporting


In
    connection with the evaluation of the Company's internal controls during the Company's
    last fiscal quarter, the Company's Principal Executive Officer/Principal Financial Officer
    has determined that there are no changes to the Company's internal controls over financial
    reporting that has materially affected, or is reasonably likely to materially effect, the
    Company's internal controls over financial reporting.


---

PART
    II


Item 1.
    Legal
    Proceedings


None.


Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds


a)
    On December 23, 2006, the Company entered into a number of Subscription
    Agreements with its employees for them to subscribe a total of 4,342,464 shares (the
    "Subscription Shares") at USD0.0365 per share for an aggregate of USD158,500
    which was used to retire debts owed to its employees. This Subscription Shares included
    1,369,863 shares that were subscribed for USD50,000 by our director Mr. Con Unerkov,
    1,232,876 shares that were subscribed for USD45,000 by our director Mr. Alex Ho and
    1,369,863 shares that were subscribed for USD50,000 by Mr. Paul Scanlan, President of our
    Telecommunication and Mobile Computing Division. The Company relied upon the exemption
    from registration as set forth in Regulation S of the Securities Act for the issuance of
    these shares. The stockholders are not a "U.S. Person" as that term is defined
    in the Securities Act, and at the time of the offering and issuance of the shares, the
    stockholders were located outside of the United States. In addition, the stockholders took
    the shares for investment purposes without a view to distribution and had access to
    information concerning the Company and our business prospects, and were permitted access
    to the Company's management for the purpose of acquiring investment information, as
    required by the Securities Act. Further, there was no general solicitation or advertising
    for the issuance of the shares. The Company issued the shares without compliance with the
    registration requirements of the Securities Act in reliance upon the exemptions therefrom
    afforded by Section 4(2) and Regulations D thereunder as well as Regulation S.


b)
    On January 13, 2007, the Company entered into a Sale and Purchase Agreement (the
    "SP Agreement") with an independent third party (the "Vendor") to
    purchase 18% of the registered capital of Guangzhou Waho Culture & Media Co., Ltd.
    ("GWCM") for US$243,000, which will be paid by US$53,000 in cash and US$190,000
    in common stock which is calculated to 3,518,518 shares of the Company. Pursuant to the
    Agreements, the cash consideration of US$53,000 shall be paid within 6 months from the
    date of the SP Agreement and the shares consideration of 3,518,518 shares are kept in
    escrow by the Company until the completion of the registration of the 18% of the
    registered capital of GWCM into the Company's name. The Company relied upon the exemption
    from registration as set forth under Section 4(2) of the Securities Act for the issuance
    of these shares. The stockholder was an Accredited Investor as that term is defined in the
    Securities Act and took the shares for investment purposes without a view to distribution
    and had access to information concerning the Company and our business prospects, as
    required by the Securities Act. In addition, there was no general solicitation or
    advertising for the issuance of the shares. The stockholder was permitted access to the
    Company's management for the purpose of acquiring investment information.


c)
    On March 1, 2007, the Company issued the 2nd tranche of 1,500,000
    shares to an independent third party in accordance with the Consultant Agreement executed
    on December 1, 2006. The Company relied upon the exemption from registration as set forth
    under Section 4(2) for the issuance of these shares. The stockholder was an Accredited
    Investor as that term is defined in the Securities Act and took the shares for investment
    purposes without a view to distribution and had access to information concerning the
    Company and our business prospects, as required by the Securities Act. In addition, there
    was no general solicitation or advertising for the issuance of the shares. The stockholder
    was permitted access to the Company's management for the purpose of acquiring investment
    information.


---

d)
    On March 13, 2007 we entered into a Sales and Purchase Agreement to acquire the
    entire issued share capital of Good World Investment Limited which owns 50% issued shares
    capital of Beijing Ren Ren Health Culture Promotion Limited. Pursuant to the agreement,
    the Company will issue 125 million shares to Central High Limited as the consideration.
    This purchase consideration was negotiated with reference to the BRR accounts and the
    underlying projects in BRR. Our directors Messrs. Con Unerkov and Alex Ho each owns 25%
    interests in, but are not directors or officers of, Central High Limited. The Company
    relied upon the exemption from registration as set forth under Section 4(2) of the
    Securities Act for the issuance of these shares. The stockholder was an Accredited
    Investor as that term is defined in the Securities Act and took the shares for investment
    purposes without a view to distribution and had access to information concerning the
    Company and our business prospects, as required by the Securities Act. In addition, there
    was no general solicitation or advertising for the issuance of the shares. The stockholder
    was permitted access to the Company's management for the purpose of acquiring investment
    information.


e)
    On May 31, 2007, we entered into a Financial Public Relation Agreement ("FPR
    Agreement") with a third party consultant to provide promotion services for the
    Company. Pursuant to the FPR Agreement, The term of the Agreement shall be for 30 days
    commencing on June 1, 2007 (the "Effective Date"). The Company issued to the
    consultant 180,000 shares of common stock as a consideration of the Agreement. The Company
    relied upon the exemption from registration as set forth under Section 4(2) of the
    Securities Act for the issuance of these shares. The stockholder was an Accredited
    Investor as that term is defined in the Securities Act and took the shares for investment
    purposes without a view to distribution and had access to information concerning the
    Company and our business prospects, as required by the Securities Act. In addition, there
    was no general solicitation or advertising for the issuance of the shares. The stockholder
    was permitted access to the Company's management for the purpose of acquiring investment
    information.


f)
    On
    June 11, 2007, we entered into a Comprehensive Campaign Agreement ("Agreement")
    with a third party consultant to provide promotional coverage for the Company and, in
    return, the Company shall issue 1,050,000 shares of Common Stock to Pentony as
    compensation fee. The term of this Agreement is 90 days commencing on June 14, 2007. The
    Company relied upon the exemption from registration as set forth under Section 4(2) of the
    Securities Act for the issuance of these shares. The stockholder was an Accredited
    Investor as that term is defined in the Securities Act and took the shares for investment
    purposes without a view to distribution and had access to information concerning the
    Company and our business prospects, as required by the Securities Act. In addition, there
    was no general solicitation or advertising for the issuance of the shares. The stockholder
    was permitted access to the Company's management for the purpose of acquiring investment
    information.


---

Item 3.
    Defaults
    Upon Senior Securities


None.


Item 4.
    Submissions
    of Matters to a Vote of Security Holders


None.


Item 5.
    Other
    Information


None.


---

Item 6.
    Exhibits


Exhibit Number
    Description of Exhibit----------------
    ----------------------------------------------------------------------------------------------------------------3.1
    Articles of Incorporation (1)3.1.1
    Certificate of Amendment to Articles of Incorporation (2)3.1.2
    Certificate of Amendment to Articles of Incorporation, as amended.(6)3.2
    Bylaws (1)10.1
    ELOC Arrangement with Tailor-Made Capital Ltd. (3)10.2
    Debenture Purchase Agreement with Tailor-Made Capital Ltd.(3).10.3
    2002 Stock Option Plan (4)10.4
    2007 Stock Incentive Plan (5)21.1
    Subsidiaries of small business issuer. (6)31*
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 200232*
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to
    18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
    2002


1. Incorporated by
    reference to our Registration Statement on Form SB-2 filed with the SEC on April 15, 2003.2. Incorporated by
    reference to our Current Report on Form 8-K filed with the SEC on February 3, 2005.3. Incorporated by
    reference to our Current Report on Form 8-K/A as filed with the SEC on March 8, 2007.4. Incorporated by
    reference to our Registration Statement on Form SB-2 filed with the SEC on April 15, 2003.5. Incorporated by
    reference to our Registration Statement on Form S8 filed with the SEC on March 8, 2007.6. Incorporated by
    reference to our Registration Statement on Form SB-2/A filed with the SEC on April 23,
    2007.


* Attached herein.


---

SIGNATURESPursuant
    to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 34, the
    registrant has duly caused this report to be signed on its behalf by the undersigned,
    thereunto duly authorized.


China Media
    Group Corporationa Texas
    corporation/s/ Con
    Unerkov---------------------------------------Con UnerkovPrincipal
    executive officerPresident,
    director


In accordance with the
    Exchange Act, this report has been signed below by the following persons on behalf of the
    registrant and in the capacities and on the dates indicated.


By:
    /s/ Con
    Unerkov
    August 14,
    2007--------------------------------------------Con UnerkovIts:
    Principal
    executive officerPresident,
    CFO, director


---

Exhibit
    31Rule
    13a-14(a)/15d-14(a)Certification
    of Chief Executive Officer and Chief Financial Officer of the Company
    Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
    and Securities and Exchange Commission Release 34-46427I,
    Con Unerkov, certify that:1. I
    have reviewed this quarterly report on Form 10-QSB of China Media Group Corporation;2.
    Based on my knowledge, this report does not contain any untrue statement of a material
    fact or omit to state a material fact necessary to make the statements made, in light of
    the circumstances under which such statements were made, not misleading with respect to
    the period covered by this report;3.
    Based on my knowledge, the financial statements, and other financial information included
    in this report, fairly present in all material respects the financial condition, results
    of operations and cash flows of the small business issuer as of, and for, the periods
    presented in this report;4. The small
    business issuer's other certifying officer(s) and I are responsible for establishing and
    maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
    and 15d-15(e)) for the small business issuer and have:


(a)
    Designed such disclosure controls and procedures, or caused such disclosure
    controls and procedures to be designed under our supervision, to ensure that material
    information relating to the small business issuer, including its consolidated
    subsidiaries, is made known to us by others within those entities, particularly during the
    period in which this report is being prepared;(b)
    Evaluated the effectiveness of the small business issuer's disclosure controls
    and procedures and presented in this report our conclusions about the effectiveness of the
    disclosure controls and procedures, as of the end of the period covered by this report
    based on such evaluation; and(c)
    Disclosed in this report any change in the small business issuer's internal
    control over financial reporting that occurred during the small business issuer's most
    recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an
    annual report) that has materially affected, or is reasonably likely to materially affect,
    the small business issuer's internal control over financial reporting.


5. I
    have disclosed, based on our most recent evaluation of internal control over financial
    reporting, to the small business issuer's auditors and the audit committee of the small
    business issuer's board of directors (or persons performing the equivalent functions):


(a)
    All significant deficiencies and material weaknesses in the design or operation
    of internal control over financial reporting which are reasonably likely to adversely
    affect the small business issuer's ability to record, process, summarize and report
    financial information; and(b)
    Any fraud, whether or not material, that involves management or other employees
    who have a significant role in the small business issuer's internal control over financial
    reporting.


Date: August 14, 2007/s/ Con Unerkov-----------------------Con UnerkovChief Executive Officer
    and Chief Financial Officer


---

Exhibit 32


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 Media Group Corporation a Texas corporation
    (the "Company") on Form 10-QSB for the period ending June 30, 2007, as filed
    with the Securities and Exchange Commission on the date hereof (the "Report"),
    Con Unerkov, Chief Executive Officer and Chief Financial Officer of the Company, certifies
    to the best of his 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 result of operations of the Company.


A
    signed original of this written statement required by Section 906 has been provided to
    China Media Group Corporation, and will be retained by China Media Group Corporation and
    furnished to the Securities and Exchange Commission or its staff upon request./s/
    Con Unerkov--------------------------Con
    UnerkovChief
    Executive Officer and Chief Financial OfficerAugust
    14, 2007