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


                                   FORM 10-QSB
                                     AMENDED



                                   (Mark One)
   [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                For the quarterly period ended: December 31, 2001
                            As amended March 18, 2002

       [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
      For the transition period from _________________ to _________________

                        Commission file number: 000-29915


                       China Xin Network Media Corporation


                             (formerly Frefax Inc.)

        (Exact name of small business issuer as specified in its charter)



                FLORIDA                          65-0786722
    (State or other jurisdiction of
     incorporation or organization)   (IRS Employer Identification No.)




                     1255 Peel Street, Suite 550, Montreal,
                        Quebec CANADA H3B 2T9 (Address of
                          principal executive offices)


                     Tel: (514) 398-0515 Fax: (514) 398-9901
                           (Issuer's telephone number)


                      APPLICABLE ONLY TO CORPORATE ISSUERS

                    State the number of shares outstanding of
                         each of the issuer's classes of
                         common equity, as of the latest
                                practicable date:
                        53,816,657 as of January 14, 2002

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


<PAGE>





PART I -- FINANCIAL INFORMATION........................................2
-------------------------------

   ITEM 1. FINANCIAL STATEMENTS........................................2
   -----------------------------
   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS..........................2
   ------------------------------------------
   ITEM 2. PLAN OF OPERATION...........................................3
   --------------------------

PART II -- OTHER INFORMATION...........................................5
----------------------------

   ITEM 1. LEGAL PROCEEDINGS...........................................5
   --------------------------
   ITEM 2. CHANGES IN SECURITIES.......................................5
   ------------------------------
   ITEM 3. DEFAULTS UPON SENIOR SECURITIES.............................5
   ---------------------------------------
   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........5
   ------------------------------------------------------------
   ITEM 5. OTHER INFORMATION...........................................5
   --------------------------
   ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................6
   -----------------------------------------
   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS.........................F1
   ------------------------------------------

<PAGE>


                         PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

At the end of this filing are attached audited financial statements for Frefax
(now known as China Xin Network media Corporation) and subsidiary, for the
period ending December 31, 2001, which are submitted in compliance with item 310
(b) of Regulation SB. These financials have been amended at the request of the
SEC.


                           Frefax, Inc. and Subsidiary
                          (A Development Stage Company)
                    Consolidated Interim Financial Statements
                     For the Period Ended December 31, 2001
                                       and
           Cumulative Period From October 19, 2000 (date of inception)
                              to December 31, 2001




Contents
Review Engagement Report                                                F-1
Unaudited Consolidated Interim Balance Sheet                            F-2
Unaudited Consolidated Interim Statements of Operations and
  Comprehensive Income (Loss)                                           F-3
Unaudited Consolidated Interim Statement of Stockholders' Deficiency    F-4
Unaudited Consolidated Interim Statement of Cash Flows                  F-5
Unaudited Consolidated Interim Notes to Financial Statements            F-6




                                       2
<PAGE>

ITEM 2. PLAN OF OPERATION

CEINet was created by the SIC as a professional information service network,
responsible for producing and publishing economic information on China. CEINet
has a local information network in over 150 cities and regions all across China,
forming a financial information network that covers the entire country.

The SIC is a government sponsored institution under the direct management of the
State Development Planning Commission (SDPC). The SDPC reports directly to the
State Council, which is China's cabinet, the highest body, of state
administration.

CEINet currently publishes over 2000 financial news articles and features a week
in Mandarin. This allows CXN Media to provide its subscribers with over 200 new
articles daily. The articles and reports that are published by CXN Media are
sourced primarily from CEINet. CEINet is the Chinese Government's primary source
of financial, economic and business news, used in the planning and economic
development of China.

CXN Media will edit, normalize and properly classify all this data using
industry standard NewsML tags. This process allows CXN Media to display, hide or
arrange certain areas of the same content in different ways. This allows the
content to be automatically prepared for multi-channel publishing. The main
products to be offered by CXN Media include, Real-time Financial News, Corporate
Profiles, Market Research and Monthly Industry Reviews.

CXN Media presently operates from its head office in Montreal and has a staff of
28 editors, translators and support staff in its Beijing editorial office.

Capital Needs
The company currently has enough capital to cover operations till the end of
April 2002. The company will require an additional $1 million to $1.5 in equity
to cover costs associated with;

o Hiring of additional key staff and sales staff;
o Cover development and operating costs of the company's enterprise portal; o
Launch marketing and advertising campaign; o Hire additional translators and
editors in China;

Based on the difficult funding environment faced by most companies, the company
will run a very streamlined sales office and support infrastructure which will
require much lower operating expense and need of ramp up capital. The company
will rely more on using content aggregators and strategic partnership to
distribute its content. This will translate to lower operating margins in the
range of 30-35%.

The company will generate revenue starting March 2002, and is expected to be
cash-flow positive by April 2003 or earlier.

Capital will be raised through, debt financing, private placements or secondary
offerings and should be completed before March 2002.

Product Development & Catalogue
During the next 12 months, the company will be rolling out all its content and
made available through its portal or through various e-content aggregators.

The company has presently available in English, a complete listing of all 1144
companies listed on the Shanghai and Shenzhen stock exchanges.


                                       3
<PAGE>



By the end of 2002, the company plans to have a complete translated database of
all 84,000 companies, including all of China's non-listed state owned
enterprises and major privately owned companies.

All of this data is produced and updated on a regular basis by CEINet, the
company will be transferring the data to its own servers, where the data will be
translated, normalized and available for delivery in various formats.

The company has produced a draft catalogue of all its products, listed below.

(i) China's Public Company Profiles Hoover's type profile for all listed
companies in China's Shanghai and Shenzhen stock exchanges. Reports include
company overview, leading financial ratios, two-year financial data and
five-year historical stock prices. The source of this product comes from CXN
research and the research center of China's State Planning & Development
Commission (SPDC). Over 1100 profiles will be available by January 15, 2002 in
XML and PDF format.

(ii) China's Private and State Owned Company Profiles Fact sheet information on
84,000 companies including all of China's non-listed state owned enterprises and
major privately owned companies.

(iii)China Macroeconomic Reports Macroeconomic reports from the research center
of China's powerful State Planning and Development Commission and two of China's
prominent brokerage houses Hongyuan Securities and Beijing Securities. These
reports are available in XML format.

(iv) China's 50 Economic Expert Forum Papers produced by China's top economists
on various financial & economical topics. On average, 7 papers are available
each month. The source of this information is the research center of SPDC. These
reports are available in XML format.

(v) Sector Research Reports on major industries in China Sector Research Reports
on major industries produced by Hongyuan Securities Co., Beijing Securities and
other prominent Chinese brokerage houses.

(vi)China Public Company Analysis In-depth coverage and investment analysis on
China's domestically listed companies. The data sources of this product are
prominent Chinese brokerage houses including Hongyuan Securities Co., Beijing
Securities and China Securities.

(vii) Other China Financial, Market & Economic Development Information CXN's
primary data source is the research center of the SPDC. All the titles included
in this section are already available in the Chinese Language. The English
versions of the following titles are currently under preparation.

1. News articles
a. Macroeconomic - information and commentary on China's domestic economy and
major international economies; b. Industry - daily news articles covering top
stories in China by industry sector and region; c. Markets - daily news articles
and commentary covering China's securities markets.


                                       4
<PAGE>


2. Macroeconomic and Industry Statistics
a. Macroeconomic - regular updates, historical coverage, and analysis of China's
fixed assets investment, value-added of industry, retail sales, and industrial
GDP, foreign trade, domestic and foreign investment, government fiscal data,
pricing, consumption and livelihood; b. Industry - regular updates, historical
coverage, and analysis of China's industrial production covering over 230 sector
headings, 32 regions, and 35 cities.

Major Expenditure - Portal
The only major purchase anticipated by the company is the development and
launching of its enterprise portal.

It was originally planed to develop and maintain this portal in-house, but to
minimize capital expenditures associated to purchasing servers and maintaining
full time staff to support the infrastructure, the company has decided to
outsource all its enterprise portal needs to ECNext, a company specializing in
developing, managing and hosting portals and web sites for the e-content
industry.

With minimal upfront development costs and monthly maintenance fees and revenue
sharing arrangement, the company will have a world-class portal online starting
end of February and fully implemented by May 2002.

Staff
The company believes it will require a staff of 75 translators and editors in
its Beijing office by the end of 2002, to support its operations. The company
currently has 28 employees in its Beijing office.

With respect to the company's sales, marketing and advertising and
administrative operations in Montreal, it is expected the current head count of
6 persons will jump to 19. All staff will be ramped up as needed and pending
budget allocation from head office.


                          PART II -- OTHER INFORMATION
Item 1. Legal Proceedings.

Not applicable

Item 2. Changes in Securities.

Not applicable

Item 3. Defaults Upon Senior Securities

Not applicable

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

Not applicable

Item 5. Other Information.

Not applicable



                                       5
<PAGE>


Item 6. Exhibits and Reports on Form 8-K.

Exhibits
2 Acquisition of China Xin Network (Canada) inc. (1)
3.a Articles of Incorporation of the Company (2)
3.b Amendments to the Articles of Incorporation (2)
3.c By-Laws of the Company (2)
3.d Restated and Amended articles of Incorporation, for name change and increase
capital stock (3)

(1)Previously filed as an Exhibit to Form 8-K dated November 28, 2001
(2)Previously   filed  as  an  Exhibit  to  Form  10-SB12G,   General  form  for
registration of Securities filed on March 10, 2000
(3) Previously filed as an Exhibit to Form 8-K dated January 5, 2002


Forms 8-K
During the second  quarter,  covered  by this  filing,  a Form 8-K was filled on
November 28, 2001 reflecting  change of control  following merger with China Xin
Network. (Canada) Inc. This form was further amended on January 10th, to include
all the financials.  On February 21, 2002, the SEC requested that the financials
be amended reflect the financials of CXN only. This was filed on March 15, 2002.


On December 17, 2001 the new management engaged new accountants for China Xin
Network Media Corporation (formerly Frefax).

On December 21, 2001, two separate Form 8-Ks were filled reflecting changes of
auditors.

China Xin Network Media Corporation filed a Form 8-K on January 5, 2002
announcing the approval by Florida Department of State, for its request to
change its name from Frefax Inc. to China Xin Network Media Corporation and in
addition request to increase its capital stock.


                                                                      SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                           China Xin Network Media Corporation
                                                    (Registrant)






March 18, 2002.                  /s/ Mr. Jean-Francois Amyot
                                    ---------------------------
                                    Mr. Jean-Francois Amyot
                                    CEO & Chairman



                                       6
<PAGE>


                           Frefax, Inc. and Subsidiary
                          (A Development Stage Company)
                    Consolidated Interim Financial Statements
                     For the Period Ended December 31, 2001
                                       and
           Cumulative Period From October 19, 2000 (date of inception)
                              to December 31, 2001

Frefax, Inc. and Subsidiary
(A Development Stage Company)

Financial Statements
December 31, 2001



Contents
Review Engagement Report                                                F-1
Unaudited Consolidated Interim Balance Sheet                            F-2
Unaudited Consolidated Interim Statements of Operations and
  Comprehensive Income (Loss)                                           F-3
Unaudited Consolidated Interim Statement of Stockholders' Deficiency    F-4
Unaudited Consolidated Interim Statement of Cash Flows                  F-5
Unaudited Consolidated Interim Notes to Financial Statements            F-6




REVIEW ENGAGEMENT REPORT

To the Shareholders of
Frefax, Inc. and Subsidiary
(A Development Stage Company)

We have reviewed the consolidated interim balance sheet of Frefax, Inc. and
Subsidiary (a development stage company) as at December 31, 2001 and the
consolidated interim statements of operations and comprehensive income (loss)
and cash flows for the period October 1, 2001 to December 31, 2001 and from
October 19, 2000 (date of inception) to December 31, 2000 and cumulative from
October 19, 2000 (date of inception) to December 31, 2001. Our review was made
in accordance with generally accepted standards in the Unites States of America
for review engagements and accordingly consisted primarily of enquiry,
analytical procedures and discussion related to information supplied to us by
the Company.

A review does not constitute an audit and consequently we do not express an
audit opinion on these interim consolidated financial statements.

Based on our review, nothing has come to our attention that causes us to believe
that these interim consolidated financial statements are not, in all material
respects, in accordance with generally accepted accounting principles in the
United States of America.

//s Fine & Associates
Fine & Associates
Chartered Accountants

Montreal, Quebec
March 4, 2002

                                       F-1


<PAGE>
<TABLE>
<CAPTION>



Frefax, Inc. and Subsidiary
(A Development Stage Company)

Consolidated Interim Balance Sheet
As at December 31, 2001
(Unaudited)



                                                                                                             2001
                                                                                                             US$

Assets

Current
<S>                                                                                                           <C>
  Cash                                                                                                        77,784
  Receivable use tax                                                                                          25,988
                                                                                                              ------

                                                                                                             103,772

Capital Assets (Note 2(d))                                                                                    71,341

                                                                                                           $ 175,113

Liabilities

Current

  Accrued expenses                                                                                          $ 50,055
  Accrued expenses - related party                                                                             9,112
  Loans from related parties                                                                                  37,223

                                                                                                              96,390

Loans Payable (Note 7)                                                                                       744,325

                                                                                                             840,715

Shareholders' Deficiency
  Common stock - $.001 par value, 50,000,000 shares
  Authorized - 50,331,657 shares issued and outstanding                                                       50,332
  Paid-in capital deficiency                                                                                 (87,472)
  Accumulated deficit during the development stage                                                          (628,462)

                                                                                                            (665,602)

                                                                                                           $ 175,113

</TABLE>


See accompanying notes

Approved on Behalf of the Board:

//s Jean-Francois Amyot Director

//s Raymond Boisvert Director

                                       F-2



<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Consolidated Interim Statements of Operations and Comprehensive Income (Loss)
(Unaudited)

<TABLE>
<CAPTION>





                                                                              From               From               Cumulative
                                                                         Oct.  1,2001          Oct 19, 2000           Ended
                                                                           Period           date of inception)     Oct 19 2000
                                                                              to                  to           (date of inception)
                                                                            Dec. 31,            Dec. 31,            to Dec 31
                                                                            2001                2000                  2001
                                                                              US$                 US$                  US$


<S>                                                                <C>             <C>                        <C>
Income                                                             $         -     $         -                $     -

Expenses

  Selling, general and administrative expenses                              234,586           576              628,462



Loss before Provision for Income Taxes                                    (234,586)         (576)             (628,462)

Provision for Income Taxes                                                   -             -                         -


Comprehensive Net (Loss)                                              $   (234,586)     $   (576)           $ (628,462)



Basic:

  Net loss                                                                       0             0



Weighted Avg. Number of Common S/O                                      50,331,657         50,331,657         50,331,657

</TABLE>


See accompanying notes

                                       F-3



<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Consolidated Interim Statements of Stockholders' Deficiency For the Period from
October 19, 2000 (date of inception) to December 31, 2001 (Unaudited)


<TABLE>
<CAPTION>



                                                                           Accumulated
                                                                             Deficit      Accumulated
                                                                Paid-in   during the       other         Stock         Total
                                          Common Stock         Capital     Development    Comprehensive  Subscriptions Stockholders'
                                   Shares            Amount    Deficiency    Stage         Income (Loss) Receivable    Deficiency
                                                      US$        US$          US$            US$              US$           US$


<S>                                   <C>              <C>        <C>          <C>            <C>         <C>            <C>
Balances at June 30, 2001          21,495,091       21,495     279,315      (139,877)      (10,807)    (196,349)      (46,223)

November 8, 2001 issuance of
common stock in connection with
acquisition of subsidiary          28,836,566       28,837     366,787)      139,877        10,807      196,349         9,083

Net loss for the period
Oct 19, 2000,
(date of inception)
to Sept 30, 2001                       -            -           -           (393,876)        -           -           (393,876)

Net loss for the period
Oct 1, 2001 to
  December 31, 2001                    -            -           -           (234,586)        -           -           (234,586)


                                   50,331,657       50,332     (87,472)     (628,462)        -           -           (665,602)

</TABLE>


See accompanying notes

                                       F-4



<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Consolidated Interim Statements of Cash Flows For the Period Ended
(Unaudited)

<TABLE>
<CAPTION>


                                                                                        October 1,        October 19, 2000
                                                                                          2001 to       (date of inception) to
                                                                                       December 31,          December 31, 2001
                                                                                            US$                   US$

Cash Flows from Operating Activities
<S>                                                                                     <C>                 <C>
  Net loss                                                                              $ (234,586)         $ (628,462)
  Adjustments to reconcile net loss to net
    Cash used for operating activities:
    Depreciation                                                                             4,032               8,354
    Decrease in prepaids and deposits                                                       19,962              -
    Increase in recoverable use tax                                                         (6,839)            (25,988)
    Decrease in accrued expenses                                                            33,348              50,054
    Decrease in accrued expenses - related parties                                         (65,859)                112
                                                                                           --------                ---

Net Cash used for Operating Activities                                                    (249,942)           (595,930)
                                                                                          ---------           ---------

Cash Flows from Investing Activities
  Purchase of capital assets                                                               (15,344)            (79,694)
                                                                                           --------            --------

Net Cash used for Investing Activities                                                     (15,344)            (79,694)
                                                                                           --------            --------

Cash Flows from Financing Activities
  Increase in loans payable                                                                335,021             744,325
  Increase in capital stock                                                                 19,754              28,837
  Write-off of deficit to paid-in capital                                                  139,877             139,877
  Write-off of other comprehensive income to paid-in capital                                10,807              10,807
  Write-off of stock subscription receivable to paid-in capital                            196,349             196,349
  Decrease in paid-in capital                                                             (366,787)           (366,787)
                                                                                          ---------           ---------

Net Cash Provided by Financing Activities                                                  335,021             753,408
                                                                                           -------             -------

Net Increase in Cash                                                                        69,735              77,784
Cash - Beginning of Period                                                                   8,049              -
                                                                                             -----              -----

Cash - End of Period                                                                      $ 77,784            $ 77,784

Supplemental disclosure of non-cash flow information: Cash paid during the year
  for:
    Interest                                                                         $      -           $       -
    Income taxes                                                                            -                   -
                                                                                     $      -           $       -


</TABLE>

See accompanying notes
                                       F-5



<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Notes to Consolidated Interim Financial Statements As at December 31, 2001
(Unaudited)

1.       Background and Organization

Frefax Inc. was  incorporated  in the State of Florida on September  26, 1997 as
Central Group Inc.

On November 8, 2001,  Frefax Inc. acquired China Xin Network (Canada) Inc., (the
Company), a Canadian corporation.  Under the acquisition agreement,  Frefax Inc.
acquired  all of the  outstanding  common  stock of the Company in exchange  for
28,836,566  newly issued  common  shares of its common stock issued on a 2 for 1
basis to the existing  shareholders of the Company.  The acquisition was treated
as a reverse acquisition.

In order to provide meaningful comparatives, the accompanying historical
financial statements relating to periods prior to November 8, 2001 are those of
the Company. Since Frefax Inc. did not have any assets or liabilities on
November 8, 2001, all amounts reflected in its Stockholder's deficiency were
written off by the Company. Furthermore in this connection, the former Chairman
of Frefax Inc. has signed a statutory declaration to personally indemnify the
Company for any unrecorded liabilities and their party claims if any, that may
arise in the future.

As a result of the issuance of  28,836,566  new shares of common  stock,  Frefax
Inc. was in excess of its  50,000,00  authorized  shares by 331,657  shares.  As
stated in Note 9,  Frefax  Inc.  on January 4, 2002  amended  and  restated  its
Articles of Incorporation to reflect the increased Authorized Share Capital.

2. Accounting Policies

a)       Basis of Presentation

The Company is considered to be a development stage company as of December 31,
2001 since planned principal operations have not yet commenced.

b) Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company from October 19, 2000 (date of inception) after elimination of all
significant intercompany transaction and accounts.

c) Cash and Cash Equivalent

The Company considers highly liquid investments with maturities of three months
or less at the time of purchase to be cash equivalents.

                                       F-6



<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Notes to Consolidated Interim Financial Statements As at December 31, 2001
(Unaudited)

3.  Accounting Policies (Cont'd)

d) Furniture, Fixtures and Equipment

Furniture, fixtures and equipment are recorded at cost less accumulated
depreciation which is provided on the straight-line basis over the estimated
useful lives of the assets which range between three and seven years.
Expenditures for maintenance and repairs are expensed as incurred.

e) Income Taxes

The Company accounts for income taxes in accordance with the "liability method"
of accounting for income taxes. Accordingly, deferred tax assets and liabilities
are determined based on the difference between the financial statement and tax
bases of assets and liabilities, using enacted tax rates in effect for the year
in which the differences are expected to reverse. Current income taxes are based
on the respective periods' taxable income for federal, state and foreign income
tax reporting purposes. As at December 31, 2001, these amounts were Nil.

f) Earnings per Share

Earnings per common share is computed pursuant to SFAS No. 128 "Earnings Per
Share". Basic earnings per share is computed as net income (loss) available to
common shareholders divided by the weighted average number of common shares
outstanding for the period. Diluted earnings per share reflects the potential
dilution that could occur from common shares issuable through stock options,
warrants and convertible preferred stock.

g) Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

h) Fair Value Disclosure at December 31, 2001

The carrying value of recoverable use tax, accrued expenses - related party, and
loans from related party is a reasonable estimate of their fair value.

                                       F-7



<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Notes to Consolidated Interim Financial Statements As at December 31, 2001
(Unaudited)

4.       Effect of New Accounting Standards

The Company does not believe that any recently issued accounting standards, not
yet adopted by the Company, will have a material impact on its financial
position and results of operations when adopted.

During June 2001, SFAS No. 141, "Business Combinations" was issued. This
standard addresses financial accounting and reporting for business combinations.
All business combinations within the scope of SFAS 141 are to be accounted for
using one method - the purchase method. Use of the pooling-of-interests method
is prohibited. The provisions of SFAS 141 apply to all business combinations
initiated after June 30, 2001. It also applies to all business combinations
accounted for using the purchase method for which the date of acquisition is
July 1, 2001 or later.

During June 2001, SFAS No. 142, "Goodwill" and Other Intangible Assets" was
issued. This standard addresses how intangible assets that are acquired
individually or with a group of other assets (but not those acquired in a
business combination) should be accounted for in financial statements upon their
acquisition. SFAS 142 also addresses how goodwill and other intangibles assets
should be accounted for after they have been initially recognized in the
financial statements. The provision of SFAS 142 is effective for fiscal years
beginning after December 15, 2001.

5. Going Concern The Company's financial statements are prepared using 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. The Company has not established revenues sufficient to cover its
operating costs and allow it to continue as a going concern. Until such time,
the Company is raising investment capital to cover its ongoing operating costs.

6. Accrued Expenses Related Party Accrued expenses at December 31, 2001 consist
of $9,000 professional fees which have been subsequently paid directly by the
Company's President.

7. Provision for Income Tax Income taxes are provided for the tax effects of
transactions reported in the financial statements and consist of taxes currently
due plus deferred taxes related to differences between the financial statement
and income tax bases of assets and liabilities for financial statement and
income tax reporting purposes. Deferred tax assets and liabilities represent the
future tax return consequences of these temporary differences, which will either
be taxable or deductible in the year when the assets or liabilities are
recovered or settled. Accordingly, measurement of the deferred tax assets and
liabilities attributable to the book-tax basis differentials are computed by the
Company at a rate of approximately 34% for federal and 6% for state.

                                       F-8


<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Notes to Consolidated Interim Financial Statements As at December 31, 2001
(Unaudited)

8. Commitments and Contingencies
a)       Insurance

The Company maintains adequate property and general liability insurance. At the
date of the Balance Sheet, the Company is not aware of any claims.

b) Rent

The Company leases office space under temporary lease expiring in June 2002, and
August 2003. Minimum monthly payments are approximately $8,726.

9 . Loans Payable The loans payable bear interest at prime + 2% and are
convertible into common shares of the Company at the option of the holder at a
rate of $0.125 per common share for a total of 6,020,932 common shares and
6,005,632 warrants.

As of December 31st, 2001, the majority of the holders of the loans payable have
agreed to the conversion privilege.

                                       F-9


<PAGE>


Frefax, Inc. and Subsidiary
(A Development Stage Company)

Notes to Consolidated Interim Financial Statements As at December 31, 2001
(Unaudited)

10. Stockholders' Deficiency

On November 8, 2001,  Frefax Inc.  acquired the Company.  Under the  acquisition
agreement,  Frefax Inc.  acquired  all of the  outstanding  common  stock of the
Company in exchange  for  28,836,566  newly issued  common  shares of its common
stock issued on a 2 for 1 basis to the existing shareholders of the Company. The
acquisition was treated as a reverse acquisition.

In order to provide meaningful comparatives, the accompanying historical
financial statements relating to periods prior to November 8, 2001 are those of
the Company. Since Frefax Inc. did not have any assets or liabilities on
November 8, 2001, all amounts reflected in its Stockholder's deficiency were
written off by the Company. Furthermore in this connection, the former Chairman
of Frefax Inc. has signed a statutory declaration to personally indemnify the
Company for any unrecorded liabilities and their party claims if any, that may
arise in the future.

As a result of the issuance of  28,836,566  new shares of common  stock,  Frefax
Inc. was in excess of its  50,000,00  authorized  shares by 331,657  shares.  As
stated in Note 9,  Frefax  Inc.  on January 4, 2002  amended  and  restated  its
Articles of Incorporation to reflect the increased Authorized Share Capital.

11.  Subsequent Events

On November 8, 2001, Frefax Inc. a US public company acquired 100% of the issued
and outstanding shares of the Company. In exchange Frefax Inc. issued 28,836,566
issued common shares on a 2 for 1 basis to the existing shareholders of the
Company. This acquisition was treated as a reverse takeover, and accordingly the
accompanying historical financial statements relating to periods prior to
November 8, 2001 are those of the Company.

As of November 8, 2001, Frefax Inc. did not have any assets or liabilities.
Furthermore, the former Chairman of the Company has signed a statutory
declaration to personally indemnify the Company for any unrecorded liabilities
and third party claims if any, that may arise in the future.

As a result of the issuance of  28,836,566  new shares of common  stock,  Frefax
Inc. was in excess of its 50,000,000 authorized share capital by 331,657 shares.
On  January  4,  2002  Frefax  Inc.   amended  and   restated  its  Articles  of
Incorporation  to reflect the increased  Authorized  Share Capital.  On the same
date,  Frefax  Inc.  changed its name to CHINA XIN  NETWORK  MEDIA  CORPORATION.
Accordingly  the Company has now become a wholly owned  subsidiary  of CHINA XIN
NETWORK MEDIA CORPORATION.


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