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

                                   FORM 10-QSB

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

       [ ] 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...........................................2
   --------------------------

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............................5
   -----------------------------------------
   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS..........................6
   ------------------------------------------



PART I -- FINANCIAL INFORMATION

Item 1. Financial Statements.

At the end of this filing are attached audited financial statements for China
Xin Network media Corporation (formerly Frefax, Inc.) and subsidiary, for the
period ending December 31, 2001 which are submitted in compliance with item 310
(b) of Regulation SB.

               China Xin Network Media Corporation and Subsidiary
                     (Formerly Frefax, Inc. and Subsidiary)
                          (A Development Stage Company)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Index
Independent Auditors' Report                                             F-1
Consolidated Interim Balance Sheet                                       F-2
Consolidated Interim Statements of Operations and
  Comprehensive Income (Loss)                                            F-3
Consolidated Interim Statement of Stockholders' Deficiency               F-4
Consolidated Interim Statement of Stockholders' Deficiency               F-5
Consolidated Interim Statement of Cash Flows                             F-6
Consolidated Interim Notes to Financial Statements                  F-7 - 11



Item 2. Plan of Operation.

In the second quarter ending December 31, 2001, China Xin Network Media
Corporation, herein referred to as CXN Media, (formerly Frefax Inc.) acquired
100% of the outstanding shares of China Xin Network (Canada) (herein referred to
as CXN Canada Inc., on November 8, 2001, in exchange for a total of 28,836,566
newly issued shares of CXN Media common stock to CXN Canada shareholders. The
issuance of the CXN Media shares to CXN Canada effectively created a merger and
change of control, such that CXN Canada is now a wholly owned subsidiary of CXN
Media.

The Company
CXN Canada was incorporated on October 19th, 2000, to acquire the exclusive
commercialization rights to the most reliable and timely financial, economic and
business financial information on China, published by the China Economic
Information Network (CEINet). On November 8, 2001 CXN Canada was acquired by CXN
Media.

CEINet is a subsidiary of the Chinese State Information Center (SIC) that
reports to the State Development Planning Commission.
<PAGE>

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.

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.
<PAGE>

(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. 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.
<PAGE>

                          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

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. 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. Subsequent to the close of this quarter, 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)

February 13, 2002.                  /s/ Mr. Jean-Francois Amyot
                                    ---------------------------
                                    Mr. Jean-Francois Amyot
                                    CEO & Chairman


<PAGE>


               China Xin Network Media Corporation and Subsidiary
                     (Formerly Frefax, Inc and Subsidiary.)
                          (A Development Stage Company)
                    Consolidated Interim Financial Statements
                     For the Period Ended December 31, 2001
                                       and
                    Cumulative Period From September 26, 1997
                    (Date of Inception) to December 31, 2001


               China Xin Network Media Corporation and Subsidiary
                     (Formerly Frefax, Inc. and Subsidiary)
                          (A Development Stage Company)
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Index

Independent Auditors' Report                                        F-1

Consolidated Interim Balance Sheet                                  F-2

Consolidated Interim Statements of Operations and
  Comprehensive Income (Loss)                                       F-3

Consolidated Interim Statement of Stockholders' Deficiency          F-4

Consolidated Interim Statement of Stockholders' Deficiency          F-5

Consolidated Interim Statement of Cash Flows                        F-6

Consolidated Interim Notes to Financial Statements             F-7 - 11


<PAGE>


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of
China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)

We have  audited the  accompanying  interim  balance  sheet of China Xin Network
Media  Corporation  and  Subsidiary  (Formerly  Frefax,  Inc and  Subsidiary) (a
development  stage  company)  (the  "Company")  as of December  31, 2001 and the
related  interim  statements  of operations  and  comprehensive  income  (loss),
stockholders'  deficiency  and cash flows for the period ended December 31, 2001
and  cumulative  period from  September 26, 1997 (date of inception) to December
31, 2001. These consolidated interim financial statements are the responsibility
of the  Company's  management.  Our  responsibility  is to express an opinion on
these consolidated interim financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform  the audits to obtain  reasonable  assurance  whether  the  consolidated
interim  financial  statements  are  free of  material  misstatement.  An  audit
includes  examining,  on a test  basis,  evidence  supporting  the  amounts  and
disclosures in the financial  statements.  An audit also includes  assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation.  We believe that our
audits provide a reasonable bases for our opinion.

In our opinion,  the consolidated interim financial statements referred to above
present fairly, in all material respects,  the financial position of the Company
as of December 31, 2001 and the results of its operations and cash flows for the
period ended  December 31, 2001 and  cumulative  period from  September 26, 1997
(date  of  inception)  to  December  31,  2001  in  conformity  with  accounting
principles generally accepted in the United States of America.

The accompanying  consolidated  interim financial  statements have been prepared
assuming the Company will continue as a going concern. As discussed in Note 3 to
the  financial  statements,  the  Company  has  suffered  recurring  losses from
operations  and has no  established  source of revenue which raises  substantial
doubt about its ability to continue  as a going  concern.  Management's  plan in
regard to these matters are also  described in Note 3. The financial  statements
do not  include  any  adjustments  that might  result  from the  outcome of this
uncertainty.



Chartered Accountants
/s/ Fine & Associates
-----------------
Fine & Associates
Montreal, Quebec
January 24, 2002

                                       F-1

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

Consolidated Interim Balance Sheet
As at December 31, 2001

<TABLE>
<CAPTION>


Assets

Current
                                                                                                                2001
<S>                                                                                                        <C>
  Cash                                                                                                     $  78,271
  Receivable use tax (Please discuss)                                                                         26,151
                                                                                                              ------

                                                                                                             104,422

Capital Assets (Note 1(d))                                                                                    71,787
                                                                                                              ------

                                                                                                           $ 176,209


Liabilities

Current

  Accrued expenses                                                                                         $  50,368
  Accrued expenses - related party                                                                             9,113
  Loans from related parties                                                                                  37,223
                                                                                                              ------

                                                                                                              96,704


Loans Payable (Note 7)                                                                                       748,983
                                                                                                             -------

                                                                                                             845,687
Shareholders' Deficiency

  Common stock - $.001 per value, 50,000,000 shares
  Authorized - 50,331,657 shares issued and outstanding                                                       50,332
  Additional paid-in capital                                                                                 108,932
                                                                                                             -------
  Accumulated deficit during the development stage                                                          (828,742)
                                                                                                            --------

                                                                                                            (669,478)
                                                                                                           $ 176,209

</TABLE>


See accompanying notes
Approved on Behalf of the Board:

/s/ Jean-Francois Amyot
----------------------------------
Jean-Francois Amyot
Director

/s/ Raymond Boisvert
----------------------------------
Raymond Boisvert
Director

                                       F-2

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

Consolidated Interim Statements of Operations and Comprehensive Income (Loss)
For the
<TABLE>
<CAPTION>

                                                                                                      Cumulative
                                                                                                      period ended
                                                                                                      September 26, 1997
                                                                       period ended                   date of inception to
                                                                       December 31, 2001              December 31, 2001


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



Expenses

Selling, general and administrative expenses                                       514,964                       632,393
Write-off of stock subscriptions receivable                                        196,349                       196,349
                                                                                   -------                       -------


Loss before Provision for Income Taxes                                            (711,313)                     (828,742)

Provision for Income Taxes                                                          -                             -


Comprehensive Net (Loss)                                                      $   (711,313)                 $   (828,742)
                                                                              -------------                 ------------



Basic:

  Net loss                                                                               0                             0



Weighted Average Number of Common Shares Outstanding                            50,331,657                    50,331,657
                                                                                ----------                    ----------

</TABLE>


See accompanying notes











                                       F-3

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

Consolidated Interim Statements of Stockholders' Deficiency
For the Period from September 26, 1997 (Date of Inception) to December 31, 2001
<TABLE>
<CAPTION>

                                                                              Accumulated
                                                                              Deficit      Accumulated
                                                                  Additional  during the    other          Stock           Total
                                                  Common Stock     Paid-in    Development  Comprehensive Subscriptions Stockholders'
                                               Shares      Amount  Capital        Stage    Income (Loss)  Receivable    Deficiency
                                                             $        $              $          $             $             $
                                               ------      ------ ---------     ----------- ------------   ------------  -----------
Issuance of common stock
<S>                                            <C>          <C>    <C>                                                     <C>
  upon  capitalization of company              500,000      500    2,000          -            -             -             2,500

Issuance of common stock in
  connection with limited offerings            403,000      403      297          -            -             -               700

Net loss from date of inception
(September 26,1997) to June 30, 1998            -             -       -          (2,954)       -             -            (2,954)

Balances at June 30, 1998                      903,000      903    2,297         (2,954)       -             -               246

Issuance of common stock in
connection with acquisition of subsidiary   10,000,000   10,000   -              -             -             -            10,000

Issuance of common stock in connection
  with limited offering (November 1998)      6,001,000    6,001   54,009         -            -            (60,010)       -

Issuance of common stock in connection
  with limited offering (February 1999)      2,542,000    2,542  124,558         -            -           (127,100)       -

Accrued interest on subscriptions receivable    -        -        -              -            -             (1,755)       (1,755)

Foreign currency translation adjustment         -        -        -              -            (6,436)       -             (6,436)

Net loss for the year ended June 30, 1999       -        -        -             (49,719)      -             -            (49,719)

Balances at June 30, 1999 (forwarded)       19,446,000   19,446  180,864        (52,673)      (6,436)     (188,865)      (47,664)
</TABLE>

See accompanying notes                                               F-4

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

Consolidated Interim Statements of Stockholders' Deficiency
For the Period from September 26, 1997 (Date of Inception) to December 31, 2001
<TABLE>
<CAPTION>
                                                                               Accumulated
                                                                               Deficit    Accumulated
                                                                    Additional during the other          Stock         Total
                                                  Common Stock      Paid-in   Development Comprehensive  Subscriptions Stockholders'
                                             Shares         Amount  Capital      Stage    Income (Loss)  Receivable    Deficiency
                                                             $        $            $           $            $             $
                                             -------        ------ -------- ------------- -----------  ------------   -----------
Balance at June 30, 1999
<S>                                            <C>          <C>     <C>          <C>          <C>        <C>            <C>
  (from previous page)                         19,446,000   19,446  180,864      (52,673)     (6,436)    (188,865)      (47,664)

Accrued interest on subscriptions receivable       -        -        -            -           -            (3,742)       (3,742)

Foreign currency translation adjustment            -        -        -            -           (4,936)      -             (4,936)

Net loss for the year ended June 30, 2000          -        -        -           (35,300)     -            -            (35,300)

Balances at June 30, 2000                      19,446,000   19,446  180,864      (87,973)    (11,372)    (192,607)      (91,642)

Issuance of common stock for services
  rendered                                      2,049,091    2,049   98,451       -           -            -            100,500

Accrued interest on subscriptions receivable       -        -        -            -           -            (3,742)       (3,742)

Foreign currency translation adjustment            -        -        -            -              565       -                565

Net loss for the year ended June 30, 2001          -        -        -           (51,904)     -            -            (51,904)

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

Issuance of common stock on reverse takeover
  of CXN (Canada) Inc.                         28,836,566   28,837 (170,383)      22,448      10,807       -           (108,291)

Net loss for the period ended
September 30, 2001                                     -        -        -      (711,313)     -           196,349      (514,964)

                                               50,331,657   50,332  108,932     (828,742)     -             -          (669,478)
                                               --------------------------------------------------------------------------------
</TABLE>

See accompanying notes                F-5

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)


Consolidated Interim Statements of Cash Flows
For the Year Ended December 31, 2001

<TABLE>
<CAPTION>
                                                                                                             2001

Cash Flows from Operating Activities

<S>                                                                                                       <C>
  Net loss                                                                                                $ (711,313)
  Adjustments to reconcile net loss to net
    cash used for operating activities:
    Depreciation                                                                                               4,294
    Decrease in recoverable use tax                                                                          (26,151)
    Increase in accrued expenses - related party                                                                 113
    Increase in accrued expenses                                                                              50,368
    Decrease in stock subscriptions receivable                                                               196,349
                                                                                                             -------


Net Cash used for Operating Activities                                                                      (486,340)
                                                                                                            --------

Cash Flows from Investing Activities

  Acquisition of wholly-owned subsidiary                                                                    (108,291)
  Purchase of furniture, fixtures and equipment                                                              (76,081)
                                                                                                             -------


Net Cash used for Investing Activities                                                                      (184,372)
                                                                                                            ---------


Cash Flows from Financing Activities

  Advances to shareholder                                                                                     -
  Loans payable                                                                                              748,983
                                                                                                             -------

Net Cash Provided by financing Activities                                                                    748,983
                                                                                                             -------

Net Increase in Cash                                                                                          78,271
                                                                                                              ------

Cash - Beginning of Year                                                                                      -

Cash - End of Year                                                                                          $ 78,271
                                                                                                            ---------


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


                                                                                                              -
</TABLE>

See accompanying notes                                       F-6

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

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

1.    Background and Organisation

Prior to operating under its current name of China Xin Network Media Corporation
(the Company), Frefax Inc. was incorporated in the State of Florida on September
26, 1997 as Central Group Inc.  Frefax , under a stock purchase  agreement dated
July 30, 1998 with the shareholders of Frefax, Inc. (Canada), ("Frefax Canada"),
a company incorporated in the Province of Ontario, Canada issued an aggregate of
10,000,000  shares at a $.001  par value  common  stock to the  shareholders  of
Frefax  Canada in exchange for 100% of Frefax  Canada's  issued and  outstanding
common stock.  Accordingly,  Frefax Canada became a  wholly-owned  subsidiary of
Frefax Inc..

Frefax  Canada  was  incorporated  on  September  5,  1996  for the  purpose  of
developing  software  to be utilized in reducing  long  distance  telephone  fax
charges.  Frefax Inc.,  Canada ceased  pursuing this activity  prior to June 30,
2000.

In May 2001,  the  Frefax  Inc.,  sold 100% of Frefax  (Canada)  for a total net
proceeds  of  $68,389,  which  were  equal to the total  net asset  value of the
subsidiary.

On November  8, 2001,  Frefax Inc.  acquired  China Xin Network  (Canada ) Inc.,
(CXN), a Canadian  Corporation . Under the  acquisition  agreement,  Frefax Inc.
acquired all of the  outstanding  common stock of CXN in exchange for 28,836,566
newly issued  common shares of its common stock issued on a 2 for 1 basis to the
existing  CXN  shareholders.   The  acquisition  was  l  treated  as  a  reverse
acquisition,  and accordingly the accompanying  historical  financial statements
relating to periods prior to November 8, 2001 are those of CXN. The  transaction
is considered a capital  transaction  whereby CXN  contributes its stock for the
net assets of Frefax Inc.

As of  November  8, 2001  Frefax  Inc.  did not have any assets or  liabilities.
Further more in this  connection 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  50,000,00  Authorized  shares by  331,657  shares As
stated in Note 10,  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 September 26, 1997 (date of inception) and its wholly-owned
subsidiary, CXN Canada from October 2001 herein after referred to as the
("Companies") 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-7


<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

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

2.       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 declining balance 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 the accompanying financial statements, which are in
conformity with generally accepted accounting principles in the United States of
America, requires management to make estimates and assumptions that materially
affect the reported amounts of assets and liabilities; disclosure of material
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.

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

During June 2001, SFAS No. 141, "Business Combinations" was issued. This
standard addresses financial accounting and reporting for business combinations.
All business combinations within the scope of SFAS 141 are to be accounted for
using one method - the purchase method. Use of the pooling-of-interests 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.

                                       F-8


<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)

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

3.    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.


4.    Accrued Expenses Related Party

Accrued expenses at December 30, 2001 consist of $9,000  professional fees which
have been subsequently paid directly by the Company's President.


5.    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.


6.    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  leases expiring in June 2002 ,
and August 2003. Minimum monthly payments are approximately $8,726.

7.    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>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)
(A Development Stage Company)


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


8.    Stockholders' Deficiency

a)    Capitalization

Frefax  Inc.  was  initially  organized  during  September  1997 by  issuing  an
aggregate  of 500,000  shares of its $.001 par value common stock to its founder
for $2,500.

b)    Acquisition of Subsidiary

Pursuant to a stock purchase  agreement  dated July 30, 1998 between Frefax Inc.
and the shareholders of Frefax Canada,  Frefax issued an aggregate of 10,000,000
shares of its $.001 par value common stock to the  shareholders of Frefax Canada
in exchange for 100% of Frefax Canada, as a result of which Frefax Canada became
a  wholly-owned  subsidiary  of Frefax Inc..  Such  transaction  is considered a
capital transaction whereby Frefax Canada contributed its stock for the net book
value ofFrefax Inc. , and accordingly, no goodwill was recognized.

c)    Limited Offering Memorandums

During October 1997Frefax Inc initiated two Limited Offerings pursuant to Rule
504 of Regulation DF promulgated under the Securities Act of 1933. FRefax Inc.,
offered 400,000 shares of its common stock at $.001 per share and 4,000 shares
of its common stock of $.10 per share, respectively. Frefax Inc., sold an
aggregate of 403,000 shares of common stock yielding net proceeds of $700.

d)    Private Offerings

i) During November 1998,  Frefax Inc.,  offered  7,500,000  shares of its common
stock at $.01 per share  pursuant to rule 504 of regulation D promulgated  under
the Securities  Act of 1933.  Frefax Inc.,  sold a total of 6,001,000  shares of
common  stock in  exchange  for a  promissory  note of  $60,010  which  had been
previously  classified  as a  stock  subscription  receivable  thereby  reducing
stockholder's equity.

ii) During February 1999, Frefax Inc.,  offered  10,000,000 shares of its common
stock at $.05 per share pursuant to Rule stock in exchange for a promissory note
of  $127,100,  which  was also  previously  classified  as a stock  subscription
thereby reducing  stockholder's  equity. These promissory notes were callable on
demand and were accruing  interest at a rate of 2% per annum. As of December 31,
2001, the Company has decided to write off all these  promissory  notes together
with related accrued  interest  receivable of $ 10,175 as it believes that these
promissory notes no longer have any realizable values.

e)    Shares Issued for Services Rendered

In June 2001,  2,049,091  shares of common  stock were  issued in  exchange  for
services rendered at a value of $100,500,  or $.05 per share,  including a total
of 1,622,728 shares issued to the Chairman as compensation.





                                      F-10

<PAGE>


China Xin Network Media Corporation and Subsidiary
(Formerly Frefax, Inc. and Subsidiary)(A Development Stage Company)


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


8.    Stockholders' Deficiency (Cont'd)

f) As of the date of the reverse merger, with CXN,  subsequently  referred to as
the Company,  Frefax Inc., had no assets or liabilities.  Furthermore the former
Chairman  of Frefax  Inc.,  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., exceeded its Authorized Share Capitals by 331,657 shares .

On January 4, 2002,  the  Company  obtained  approval  to amend and  restate its
Articles of  Incorporation  to reflect  the  increase  to its  Authorized  Share
Capital.  Simultaneously  the  authorities  accepted the change of the Company's
name to China Xin Network Media Corporation,



9.    Related Party Transactions

In June 2001,  1,622,728  shares of common stock were issued to the Chairman for
compensation at a value of $80,000, or $0.05 per share.


10.   Subsequent Events

On January 4, 2002,  the  Company  obtained  approval  to amend and  restate its
Articles of  Incorporation  to reflect  the  increase  to its  Authorized  Share
Capital.  Simultaneously  the  authorities  accepted the change of the Company's
name to China Xin Network Media Corporation,

The Company currently trades on the Pink Sheets under the symbol CXIN .

On January 25th , 2002, the Company has made the necessary  arrangements to file
a request to list its shares on the OTCBB.










                                      F-11