FORM
10-K









UNITED
STATES




SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549






[X]
            ANNUALLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT of 1934 For the fiscal year ended April 30, 2009OR[
       ]
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE ACT of 1934 For the
      transition period from





Commission File Number000-52760









K'S
MEDIA





(Exact
name of Registrant as specified in its charter)








Nevada
            None(State
      or other jurisdiction of incorporation or
    organization)
            (IRS
      Employer Identification No.)









Rm.1909,Tower
A, The Spaces International Center.No.8,Dongdaqiao Road, ChaoYang District,
Beijing 100020,P.R China





(Address
of Principal Executive Offices)  (Zip Code)








86-10-5921-2200





(Registrant's
telephone number, including area code)






Securities
registered pursuant to Section 12(b) of the
Act:  None.






Securities
registered pursuant to Section 12(g) of the Act:  Common Stock,
par value $0.00001 per share.







Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes [    ] No [ X
]





Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Act: Yes [    ] No [ X
]





Indicate
by check mark whether the registrant (1) has filed all reports required 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 registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes [ X ] No [    ]





Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulations S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [    ]





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      Accelerated filer  
      [    ]         Accelerated
      filer                     [     ]Non-accelerated
      filer     [    ]        
      Smaller Reporting Company    [    
      ]




(Do not
check if a smaller reporting company)





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes [  ] No [ X ]





The
aggregate market value of the voting stock held by non-affiliates of the
registrant computed by reference to the closing sale price on July 17, 2009 was
approximately $98 million, and as of the end of the registrant's most
recently completed second fiscal quarter was approximately $98
million.





The
number of shares of the registrant common stock issued and outstanding as of
August 12, 2009 was 33,466, 167 and 22,966,167 respectively.










TABLE
OF CONTENTS





PagePART
      IItem 1.
              Business.
              2Item 1A.
              Risk Factors.
              14Item 1B.
              Unresolved Staff
      Comments.
              34Item 2.
              Properties.
              34Item 3.
              Legal
      Proceedings.
              35Item 4.
              Submission of Matters to a Vote
      of Security Holders.
              35PART
      IIItem 5.
              Market Price for the
      Registrant's Common Equity, Related Stockholders Matters and Issuer Purchases of Equity
      Securities.
              35Item 6.
              Selected Financial
      Data.
              37Item 7.
              Management's Discussion and Analysis of Financial
      Condition and Results of Operation.
              37Item 7A.
              Quantitative and Qualitative
      Disclosures About Market Risk.
              51Item 8.
              Financial Statements and
      Supplementary Data.
              51Item 9.
              Changes in and Disagreements With
      Accountants on Accounting and Financial
    Disclosure.
              54Item
      9A.
              Controls and
      Procedures.
              54Item 9B.
              Other
      Information.
              56PART
      IIIItem
      10.
              Directors and Executive
      Officers, Promoters and Control Persons.
              56Item 11.
              Executive
      Compensation.
              60Item 12.
              Security Ownership of Certain
      Beneficial Owners and Management.
              63Item 13.
              Certain Relationships and
      Related Transactions, and Director
Independence.
              64Item 14.
              Principal Accounting Fees and
      Services.
              65PART
      IVItem 15.
              Exhibits and Financial Statement
      Schedules.
              65











PART
I








ITEM 1. BUSINESS




Background and Business of the
Company




K’s Media
engages in media and advertising throughout China, targeting consumers by
placing premium brand advertising in "KTV" clubs for consumer products clients.
KTV clubs are entertainment establishments that rent private rooms containing
karaoke singing equipment, and are popular throughout Asia.  In this
report, the terms "we," "us," "our," "Company" and "K's Media" mean K's
Media and its subsidiaries.





We were
incorporated under the name "Kinglake Resources, Inc." in the State of Nevada on
April 14, 2006. Prior to a reverse merger transaction effected on January 18,
2008, we had nominal assets and explored for mining properties in North America.
In September 2007, following a review of an aeromagnetic survey of our mineral
target and our belief the property included no material anomalies, our
management began to pursue the acquisition of another enterprise.




We
entered into a Share Exchange Agreement on December 23, 2007 with Orient Come
Holdings Limited, a company organized under the laws of the British Virgin
Islands, or Orient Come, and Beijing K's Media Advertising Ltd. Co., a limited
liability company organized under the laws of the People's Republic of China, or
the Chinese Advertisement Company.  Pursuant to the terms of the Share
Exchange Agreement, the shareholders of Orient Come transferred to us all Orient
Come shares in exchange for the issuance of 13,000,000 shares of our common
stock, which transaction we refer to as the share exchange. As a result of the
share exchange, Orient Come became our wholly-owned subsidiary and the
shareholders of Orient Come acquired in the aggregate approximately 62% of our
then issued and outstanding stock.  Also as part of the share
exchange, 10,500,000 shares of our common stock were issued and delivered to an
escrow agent.  A portion of these shares may be released each year to
the shareholders of the Chinese Advertisement Company, depending on the
satisfaction by the Chinese Advertisement Company of certain sales
objectives.  In February 2008 we changed our name to "K's
Media.”





Under the
terms of the Escrow Agreement executed in connection with the share exchange, a
total of 7,875,000, or 75%, of the escrowed shares are being held pending the
Chinese Advertisement Company's achievement of certain sales objectives by the
year end of the Chinese Advertisement Company.  According to the
Amendment No.4 of the Escrow Agreement, within 30 days from filing the Company’s
2009 Form 10-K, a maximum of 2,625,000 escrowed shares will be released upon
achievement of at least $1,900,000 in signed sales for the period ended April
30, 2009.If less
than $1,900,000 but at least $1,059,000 in signed sales is achieved, the number
of escrowed shares to be released will be 2,625,000 shares multiplied by the
ratio of actual signed sales over $1,900,000.  If signed sales are
less than $1,059,000, no escrowed shares will be released. In the second year, a
maximum of 2,625,000 escrowed shares will be released upon achievement of at
least $14,380,000 in signed sales. If less than $14,380,000 but at least
$7,990,000 in signed sales is achieved, the number of escrowed shares to be
released will be equal to 2,625,000 shares multiplied by the ratio of actual
signed sales over $14,380,000.  If signed sales are less than
$7,990,000, no escrowed shares will be released.  In addition, if no
escrowed shares were released in the first year because signed sales were less
than $1,059,000, some of these shares may be released in the second year if at
least $14,380,000 in signed sales is achieved in the second year.  In
that event, the number of escrowed shares from the first year to be released
will be equal to 2,625,000 shares multiplied by the ratio of actual signed sales
over $1,900,000.  In the third year, a maximum of 2,625,000 escrowed
shares will be released upon achievement of at least $33,230,000 in signed
sales. If less than $33,230,000 but at least $18,460,000 in signed sales is
achieved, the number of escrowed shares to be released will be equal to
2,625,000 shares multiplied by the ratio of actual signed sales over
$33,230,000.  If signed sales are less than $18,460,000, no escrow
shares will be released. Subsequent to the third year release, all escrowed
shares not released will be returned to the Company.





The
remaining 2,625,000 (25%), escrowed shares are issuable to an affiliate of Shine
MultiMedia Co., Ltd., or Shine, a provider of services to the Company, and are
being held pending the Company’s entering into advertising agreements with KTV
clubs as facilitated by the affiliate.  In the first year, 1,575,000
(60%) of the 2,625,000 escrowed shares held for this purpose will be released if
the affiliate has signed up more than 600 KTV clubs during the year under
advertising agreements with the Company.  If between 300 and 600 KTV
clubs have signed advertising agreements with the Company the number of shares
released will be reduced on a pro rata basis.  If less than 300 KTV
clubs have signed advertising agreements with the Company, then 1,575,000 (60%)
of the escrowed shares will be released to the Company, and the affiliate will
no longer be entitled to the shares. This condition has been changed
according to Amendment No.3 of the Escrow Agreement due to the change of the
overall economic environment during the second half of 2008, and under the new
agreement, 1,575,000 has been released to the affiliate of Shine in July 2009.
In the second year, 525,000 (20% each year) of the escrowed shares will be
released if the affiliate has signed up more than 600 KTV clubs during the
respective year under advertising agreements with the Company.  If
between 300 and 600 KTV clubs have signed advertising agreements during the year
the number of shares to be released will be reduced on a pro rata
basis.  If less than 300 KTV clubs have signed advertising agreements
with the Company during each of those years, then 525,000 (20% per year) of the
escrowed shares will be returned to the Company, and the affiliate will no
longer be entitled to the shares.





We do not
have a direct material equity interest in the Chinese Advertisement Company. In
order to meet ownership requirements under Chinese law, which restricts foreign
companies with less than three years of operating history in the advertising
industry from operating in the advertising industry in China, we and Orient Come
executed a series of exclusive contractual agreements with the Chinese
Advertisement Company and its shareholders.  These contractual
agreements are designed to provide us with significant rights over the Chinese
Advertisement Company’s business operations, policies, and
management.  These agreements include a Business Cooperation
Agreement, an Equity Pledge Agreement, and an Option Agreement, each dated as of
December 23, 2007, and we refer to those agreements by those names in this
Annual Report on Form 10-K.




Under the
Business Cooperation Agreement, Orient Come agreed to provide consulting
services to the Chinese Advertisement Company in return for a
fee.  The fee entitles Orient Come to 80% of the Chinese Advertisement
Company’s revenues after deduction of direct operating costs, expenses, and
taxes.  The term of the Business Cooperation Agreement is 20 years,
but the agreement may be terminated earlier if (i) Orient Come or the Chinese
Advertisement Company becomes bankrupt, subject to proceedings or arrangements
for liquidation or dissolution, ceases to carry on business, or becomes unable
to pay debts as they become due; or (ii) the business license or any other
license or approval material for the business operations of the Chinese
Advertisement Company is terminated, canceled, or revoked.





The
Equity Pledge Agreement is intended to secure payment of the fee under the
Business Cooperation Agreement.  Under the Equity Pledge Agreement the
shareholders of the Chinese Advertisement Company pledged to Orient Come all of
their equity interest in the Chinese Advertisement Company as security for the
payment of the fee.  Among other things, if the Chinese Advertisement
Company (i) fails to pay the fee; (ii) becomes incapable of paying its debts; or
(iii) breaches one of the many negative covenants in the agreement (discussed
below) Orient Come is entitled to certain remedies.  Specifically,
Orient Come may demand payment of the fee from the Chinese Advertisement
Company’s shareholders or Orient Come may transfer the equity interest of the
Chinese Advertisement Company’s shareholders to itself and vote, control, sell,
or dispose of those shares.  The Equity Pledge Agreement remains in
effect until the Business Cooperation Agreement is fully satisfied.





Under the
Option Agreement, the shareholders of the Chinese Advertisement Company
irrevocably granted Orient Come an option to purchase all equity interests owned
by those shareholders at any time for $100 (unless Chinese law requires
appraisal of equity interests or stipulates other restrictions on the purchase
price of equity).  The term of the Option Agreement is 20 years, but
it may be terminated earlier if (i) Orient Come or the Chinese Advertisement
Company becomes bankrupt, subject to proceedings or arrangements for liquidation
or dissolution, ceases to carry to carry on business, or becomes unable to pay
debts as they become due; or (ii) the business license or any other license or
approval material for the business operations of the Chinese Advertisement
Company is terminated, canceled, or revoked.





Each of
the agreements discussed above contain negative covenants that are designed to
provide the Company with certain rights.  Among other things, these
covenants collectively require the Chinese Advertisement Company or its
shareholders to obtain the written consent of Orient Come before (i) selling,
transferring, or encumbering business assets and income; (ii) providing
guarantees or incurring extraordinary debt; (iii) entering into material
agreements; (iv) making loans, providing credit, or making investments; (v)
entering into mergers, consolidations, or a sale of assets transaction; (vi)
winding up, liquidating, or dissolving; (vii) issuing, purchasing, or redeeming
equity or debt securities; (viii) paying dividends or other distributions to
shareholders; (ix) making capital expenditures; (x) amending the articles of
association; or (xi) transferring or assigning equity
interests.  Under these agreements the Company also obtained the right
to stipulate those persons to be appointed as members of the board of the
Chinese Advertisement Company.





At such
time as current restrictions under People's Republic Of China (PRC) law on
foreign ownership of Chinese companies engaging in the advertising industry in
China are lifted, or we acquire a non-Chinese advertisement company that has
over three years of operating experience in the advertising industry, which we
refer to as a qualified advertising subsidiary, Orient Come may exercise its
option to purchase the equity interests in the Chinese Advertisement Company and
transfer the ownership to the qualified advertising subsidiary.





On
February 22, 2008, Orient Come assigned all of its right, title, and interest in
and to the Business Cooperation Agreement to Beijing K's Media Broadcasting Ltd.
Co., or K’s Media Broadcasting, a company organized under the laws of the
People’s Republic of China and a wholly owned subsidiary of the Company in order
to implement the Agreement more efficiently.




Our
current corporate structure is set forth below:















As a
result of the share exchange and our relationship with the Chinese Advertisement
Company, we engage in media and advertising activities throughout
China.







Industry
and Market Overview




Business
Overview




We are an
emerging media company that targets mid to high-income consumers in China by
placing premium brand advertising in "KTV" clubs on behalf of consumer products
clients. KTV clubs are popular entertainment establishments in Asia that rent
private rooms containing karaoke singing equipment, typically to groups of
friends and business colleagues.  We believe that attempts to reach
mid to high-income consumers through traditional advertising channels with
powerful and visually appealing presentations can be costly and inefficient, and
we believe that advertising on selected KTV screens offers a way to effectively
target a captive audience of influential top earners.




The
Chinese Advertisement Company, a party to the Business Cooperation Agreement and
the entity that operates the KTV advertising business subject to our contractual
control, was incorporated in China in October, 2007. Under our direction, the
Chinese Advertisement Company targets consumer products companies in the
cosmetics, beverage, automobile, and other consumer goods sectors, and seeks to
enter into advertising agreements with those companies. The Chinese
Advertisement Company seeks to sign advertisement placement agreements with top
KTV chains in Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou, and other major
Chinese cities. Upon execution of advertisement placement agreements, the
Chinese Advertisement Company will then promote its clients’ brands at the KTV
clubs via advertising and promotional events.




According
to its 2009 report, China Advertising Industry Forecast Report, 2007-2010,
issued by Research in China, the Chinese advertising market is expected to grow
at a rate of up to 19% per year.




Services




Under our
direction, the Chinese Advertisement Company will provide advertisements to its
target audience at KTV clubs. Through its proprietary software, the Chinese
Advertisement Company can offer a sustainable, highly efficient, and measurable
media system to its advertiser clients.  The Chinese Advertisement
Company reaches the target audience by (a) presenting commercials on KTV
screens, and (b) staging promotional activities at KTV clubs.  In the
near term, companies and brands advertised will be primarily from the consumer
goods segment, including companies in the beverage, automobile, cosmetic, and
automobile sector.




The
Chinese Advertisement Company develops advertising videos, generally 15 to 30
seconds each. There is numerous times at which the Chinese Advertisement Company
may effectively place the advertisements, including early in a session when KTV
attendees are preparing for their event, between songs and performances, and
before the end of their event. With our informal, internal research indicating
those KTV sessions typically lasting one hour or more, there is ample
opportunity to display the advertisements to high-income consumers who lead busy
lifestyles and are not otherwise easily presented with other channels of
advertising.




The
Chinese Advertisement Company has also undertaken promotional activities in
lobbies and common areas of KTV clubs. This includes product sampling of
cosmetics and beverages, displays or raffling of luxury items like jewelry and
automobiles, and distribution of posters and leaflets.




Market




China's
advertising market is one of the largest and fastest-growing in the world.
Zenith Optimedia forecasts strong sustained growth, with a projected CAGR of
18.1% from 2005 to 2009, which would result in $20.6 billion of advertising
expenditures in China per year.




The
growth of China’s advertising industry is driven by a number of factors,
including rapid and sustained economic growth in China, growth in consumer
spending, and relatively low historical levels of advertising spending in China
per capita and as a percentage of China’s gross domestic
product.  According to Research in Motion, advertising was higher on
cosmetics/bath products than on any other segment, while ad spending on growing
fastest on beverages, at 55%.




As
reported by CTR Market Research Co., Ltd., the market share of traditional media
in China, such as newspaper, radio, and television, is decreasing as advertisers
seek new advertising vehicles that can segment and reach desired advertisers. We
believe that advertising in KTV clubs is an innovative and unique
approach.






Marketing
Strategy




Our
marketing strategy involves two primary components:  (a) signing
companies with premium brands as advertiser clients; and (b) signing contracts
with selected KTV clubs as advertising distribution outlets.




Our
business model offers advertisers an alternative media channel with significant
coverage of high-income consumers. As selling points to these potential
advertisers, we focus on our reach into KTV clubs, the novelty of KTV clubs as a
non-traditional form of advertising, the demographics of customers of the KTV
clubs selected by us, the receptive conditions in KTV clubs to advertising
effectiveness, our proprietary software that enables reliable ad tracking, and a
low “cost-per-thousand” rate compared to other forms of
advertising.




Advertisers
can be approached by our in-house advertising sales team as well as through
advertisement agents. We have recruited senior professionals from international
advertising companies, as well as sales representatives from top new media
companies.  Main club targets initially will be large flagship KTV
clubs in Beijing, Shanghai, Guangzhou and Shenzhen and expanded to other large
cities in the future.




We select
KTV clubs that are frequented by persons with relatively high income with active
lifestyles. Especially attractive are KTV clubs that appeal to the top 5% of
China's population based on income, with annual incomes of $70,000 or greater.
We target KTV clubs that cater primarily to this demographic of
customer.




According
to data from China's National Statistics Bureau, surveys of KTV managers and
data from a KTV song ordering system, in 2007 in the 10 largest cities of China,
there were 1,665 mid-high end KTV clubs with a total of approximately 60,000
rooms. Based on the same surveys, the average spending per room was
approximately $660 per day.




A
critical component of our marketing and distribution to KTV clubs is our
partnership with Shine. Shine is one of China’s largest KTV VOD, or video on
demand, system distributors with karaoke systems in over 3,000 KTV clubs and
more than 100,000 KTV rooms in China. Shine has bundled the Chinese
Advertisement Company’s proprietary Customer Relationship Management (“CRM”)
software with its VOD system and pursue advertising agreements with the KTV
clubs on our behalf.  We have entered into a 10 year exclusive service
cooperation agreement whereby Shine will arrange exclusive agency contracts
between us and KTV clubs.  Shine has also installed and maintained
advertisement equipment at the KTV clubs during the term of the service
cooperation agreement.  We have supplemented Shine's marketing efforts
with our own team of KTV agents that is responsible for signing up KTV clubs,
renewing contracts, and providing other follow-up services such as media channel
maintenance and ad placements.  Shine receives a fee from us for each
contract executed and a monthly maintenance fee for services provided by Shine
over the term of each contract.




Competition




We face
significant competition in the Chinese advertising industry. We compete for
advertising clients primarily on the basis of network size and coverage,
location, price, the quality of our programs, the range of services that we
offer, and brand recognition. We compete for overall advertising spending with
other alternative advertising media companies, such as Internet, street
furniture, billboard and public transport advertising companies, and with
traditional advertising media, such as newspapers, television, magazines, and
radio. We also compete for advertising dollars spent in the advertising
industry. We may also face competition from new entrants into advertising spaces
in the future, including competitors that seek to advertise in the KTV
market.




Intellectual
Property




We have
developed a proprietary advertising management system, which we refer to as CRM,
which provides automated advertisement publishing, automated broadcast
monitoring, and automated collection of statistical data.  We have not
filed for any intellectual property protection for our CRM and do not currently
intend to do so in the foreseeable future.




Regulation




We carry
on our business in an industry that is subject to significant regulation under
the laws of China.  Our ability to generate revenues from advertising
sales depends largely upon our ability to provide a large network of KTV screens
that show our programs in KTV clubs. This, in turn, requires that we obtain
advertising license rights contracts.  Advertising licensing rights
contracts have a term of five years and can be renewed upon termination, subject
to certain conditions. There can be no assurance we will be able to retain our
advertising licensing rights contracts for our KTV screens or programs on
exclusive or satisfactory terms, or at all. If we fail to retain our advertising
licensing rights contracts or enter into new advertising licensing rights
contracts, our business and operations could be materially and adversely
affected.




On May
22, 2006, the State Administration for Industry and Commerce, or the SAIC,
amended the Provisions on the Registration Administration of Outdoor
Advertisements, or the new outdoor advertisement provisions. Pursuant to the new
outdoor advertisement provisions, outdoor advertisements must be registered in
accordance with the local SAIC by “advertising distributors.” However, certain
terms are not defined under the new outdoor advertisement provisions or other
Chinese laws and regulations.  To ensure our KTV advertising
operations comply with applicable Chinese laws and regulations, we are in the
process of making inquiries with the local SAICs in the cities in which we
intend to operate with respect to the application for an advertising
registration certificate.  We intend to register with the relevant
SAICs if we are required to do so, but we can provide no assurance that we will
obtain the registration certificate in compliance with the new outdoor
advertisement provisions, or at all. If the requisite registration is not
obtained, the relevant local SAICs may require us to forfeit our advertising
income or may impose administrative fines on us. They may also require us to
discontinue advertisements at KTV clubs where the requisite advertising
registration is not obtained, which may result in a breach of one or more of our
agreements with our advertising clients and materially and adversely affect our
business and results of operations.




China’s
advertising laws and regulations require advertisers, advertising operators, and
advertising distributors, including businesses such as ours, to ensure that the
content of the advertisements they prepare or distribute are fair and accurate
and are in full compliance with applicable law. Violation of these laws or
regulations may result in penalties, including fines, confiscation of
advertising fees, orders to cease dissemination of the advertisements, and
orders to publish an advertisement correcting the misleading information. In
circumstances involving serious violations, the Chinese government may revoke a
violator’s license for advertising business operations.




As an
advertising service provider, we are obligated under Chinese laws and
regulations to monitor the advertising content shown on our network for
compliance with applicable law. In general, the advertisements shown on our
network have previously been broadcast over public television networks and have
been subjected to review and verification by issuing networks. Nonetheless, we
are required to independently review and verify these advertisements for content
compliance before displaying the advertisements. In addition, if a special
government review is required for certain product advertisements before they are
shown to the public, we are obligated to confirm that such review has been
performed and approval has been obtained. In addition, for advertising content
related to certain types of products and services, such as food products,
alcohol, cosmetics, pharmaceuticals, and medical procedures, we are required to
confirm that the advertisers have obtained requisite government approvals,
including the advertising client’s operating qualifications, proof of quality
inspection of the advertised products, government pre-approval of the contents
of the advertisement, and filing with the local authorities.




Properties
and Facilities




We
maintain our executive offices at Rm.1909, Tower A, The Spaces International
Center.No.8,Dongdaqiao Road, ChaoYang District, Beijing, China.  We
lease the premises for approximately $10,000 per month through July 31,
2010.





Employees




We
currently employ about 70 persons, including our executive officers, all of
which are full-time employees. The Company intends to employ additional full and
part-time employees in the foreseeable future as it expands its business
operations. We believe that relations with our employees are good. None of our
employees are parties to collective bargaining agreements.




Our
Corporate Information




We are a
Nevada corporation.Our principal executive
offices are located at at Rm.1909,Tower A, The Spaces International
Center.No.8,Dongdaqiao Road, ChaoYang District, Beijing, China.  Our
telephone number is: 86-10-5921-2200, and our website address is
www.mediaks.cn.  The information on the Company’s website is not part
of this annual report on Form 10-K or any other report that we file with, or
furnish to, the Securities and Exchange Commission.




Unless
otherwise indicated, all dollar amounts set forth in this Annual Report on Form
10-K are in United States Dollars.






ITEM 1A.  RISK FACTORS.





Risks
Related to Our Business




In
addition to other information in this Form 10-K, the following risk factors
should be considered carefully in evaluating the Company’s business. Our
business, financial condition, and results of operations could be materially and
adversely affected by any of these risks. Additional risks and uncertainties,
including risks and uncertainties not presently known to the Company, or that
the Company currently deems immaterial, may also impair our business and results
of operations.





We
are an early stage company, we have a history of operating losses and we expect
to continue to realize significant net losses for the foreseeable
future.




We are an
early stage company. We have recorded a net loss in each reporting period since
our inception, and cannot anticipate with certainty what our earnings will be in
any future period. However, we expect to continue to incur net losses as we
develop and deploy our network in new and existing markets, expand our services,
and pursue our business strategy. In addition, at this stage of our development
we are subject to the following risks:


•
            our
      results of operations may fluctuate significantly, which may adversely
      affect the value of an investment in our common stock;•
            we
      may be unable to develop and deploy our network, expand our services, meet
      the objectives we have established for our business strategy or grow our
      business profitably, if at all;•
            because
      of our limited operating history, it may be difficult to predict
      accurately our key operating and performance metrics utilized in budgeting
      and operational decisions; and•
            our
      network and related technologies may fail or the quality and number of
      services we are able to provide may decline if our network fails to
      perform to our expectations.




If we are
unable to execute our business strategy and grow our business, either as a
result of the risks identified in this section or for any other reason, our
business, prospects, financial condition, and results of operations will be
materially and adversely affected.





We
have no operating history to provide you with an adequate basis to judge our
future prospects and results of operations.




We have
no operating history to provide a meaningful basis for you to evaluate our
business and financial performance. It is also difficult to evaluate the
viability of our KTV media network and other advertising media dedicated to the
KTV market because we do not have sufficient experience to address the risks
frequently encountered by early stage companies using new forms of advertising
media and entering new and rapidly evolving markets. Certain members of our
senior management team have worked together for only a relatively short period
of time and it may be difficult for you to evaluate their effectiveness, on an
individual or collective basis, and ability to address future challenges to our
business.




Given our limited operating history, we
may not be able to:




•
            
            preserve
      our position in the KTV media market in
China;




•
            
            manage
      our relationships with KTV clubs  to obtain advertising
      licensing rights contracts to operate KTV media in KTV clubs on acceptable
      terms or at all;




•
            
            retain
      and acquire advertising clients;




•
            
            manage
      our relationships with third-party non-advertising content
      providers;




•
            
            secure
      access to a sufficient amount of low-cost KTV screens from KTV club
      owners;




•
            
            manage
      our expanding operations, including the integration of any future
      acquisitions;




•
            
            increase
      and diversify our revenue sources by successfully expanding into other
      advertising media platforms;




•
            
            respond
      to competitive market conditions;




•
            
            maintain
      adequate control of our expenses;
or




•
            
            attract,
      train, motivate, and retain qualified
personnel.




If we are
unsuccessful in addressing any one or more of these risks, our business may be
materially and adversely affected.




If
advertisers or the viewing public do not accept, or lose interest in our KTV
media network, we may be unable to generate sufficient cash flow from our
operating activities and our prospects and results of operations could be
negatively affected.




The
market for KTV media networks in China is relatively new and its potential is
uncertain. We compete for advertising spending with many forms of more
established advertising media, such as television, print media, and the
Internet. Our success depends on the acceptance of our KTV media network by
advertising clients and agencies and their continuing and increased interest in
this medium as a component of their advertising strategies. Our success also
depends on the viewing public continuing to be receptive towards our media
network. Advertisers may elect not to use our services if they believe that
consumers are not receptive to our network or that our network does not provide
sufficient value as an effective advertising medium. Likewise, if consumers find
some element of our network to be disruptive or intrusive, KTV club owners may
decide not to allow us to place our programs on KTV screens and advertisers may
view our network as a less attractive advertising medium compared to other
alternatives. In that event, advertisers may determine to cancel current
contracts or reduce their spending on our network and KTV
advertising.




KTV
advertising is a relatively new concept in China and in the advertising
industry generally. If we are not able to adequately track audience responses to
our programs, we will not be able to provide sufficient feedback and data to
existing and potential advertising clients to help us generate demand and
determine pricing. Without improved market research, advertising clients may
reduce their use of KTV advertising and instead turn to more traditional
forms of advertising that have more established and proven methods of tracking
effectiveness.




If a
substantial number of advertisers lose interest in advertising on our media
network for these or other reasons or become unwilling to purchase advertising
time slots on our network, we will be unable to generate sufficient revenues and
cash flow to operate our business, and our revenues, prospects, and results of
operations could be negatively affected.




We
derive substantially all of our revenues from the provision of KTV advertising
services. If there is a downturn in the KTV advertising industry, we may not be
able to diversify our revenue sources and our ability to generate revenues and
our results of operations could be materially and adversely
affected.




Substantially
all of our historical revenues and expected future revenues have been and will
be generated from the provision of KTV advertising services, in particular
through the display of advertisements on KTV screens located in KTV clubs. We do
not have any current plans to expand outside this sector and enter into more
advertising segments to diversify our revenue sources. As a result, if there
were a downturn in the KTV advertising industry for any reason, we may not be
able to rapidly or efficiently diversify our revenue sources and our ability to
generate revenues and our results of operations could be materially and
adversely affected.




Our ability to
conduct our operations is contingent upon our obtaining and continuing in effect
advertising licensing rights contract.




Our
ability to generate revenues from advertising sales depends largely upon our
ability to provide a large network of KTV screens that show our programs in KTV
clubs. This, in turn, requires that we obtain advertising licensing rights
contracts to operate in KTV clubs. If we are unable to obtain advertising
licensing rights or carry out our operations in accordance with the terms of
advertising licensing rights contracts, we may be unable to expand our network
coverage and our costs may increase significantly in the future.




Our
advertising licensing rights contracts have terms of five years and can be
renewed upon the expiration of the term, subject to certain conditions. There is
no assurance we will be able to retain our advertising licensing rights
contracts for our KTV screens or programs on exclusive or satisfactory terms, or
at all at the expiration date. If we fail to retain our advertising licensing
rights contracts, advertisers may find advertising on our network unattractive
and may not wish to purchase advertising time slots on our network, which would
cause our revenues to decline and our business and prospects to significantly
deteriorate in the future.




A
substantial majority of our revenues is concentrated on mid to high-end KTV
clubs in major cities in China. If a material number of these KTV clubs
experiences a material business disruption, we would likely incur substantial
losses of revenues.




A
substantial majority of our KTV advertising revenues is concentrated on mid to
high-end KTV clubs in major cities in China. A material business disruption,
major construction or renovation, or a natural disaster affecting many of these
KTV clubs in our network could result in a substantial decrease in our revenues
and results of operations.




If
we are unable to attract advertisers to purchase advertising time on our
network, we will be unable to maintain or increase our advertising fees, which
could negatively affect our ability to grow our profits.




The fees
we charge advertising clients and agencies for time slots on our network depend
on the size and quality of our network and the demand by advertisers for
advertising time on our network. We believe advertisers choose to advertise on
our network in part based on the size of our network, the desirability of the
locations where we have placed our KTV screens, and the attractiveness of our
network content. If we fail to maintain or increase the number of our displays,
solidify our brand name, and reputation as a quality KTV media provider,
advertisers may be unwilling to purchase time on our network or to pay the
levels of advertising fees we require to operate.




When
our advertising network of KTV screens reaches saturation in the mid-high end
KTV clubs  in major cities, we may be unable to offer additional time
slots to satisfy all of our advertisers’ needs, which could hamper our ability
to generate higher levels of revenues and profitability over time.




When our
network of KTV screens reaches saturation in any particular KTV club, we may be
unable to offer additional advertising time slots to satisfy all of our
advertisers’ needs. We might need to increase our advertising rates for
advertising in such KTV clubs in order to increase our revenues. However,
advertisers may be unwilling to accept rate increases, which could adversely
affect our ability to generate higher levels of revenues over time.




If
advertising registration certificates are not obtained for our KTV advertising
operations where such registration certificates are deemed to be required, we
may be subject to administrative sanctions, including the discontinuation of our
advertisements at KTV clubs where the required advertising registration is not
obtained.




On May
22, 2006, the State Administration for Industry and Commerce, or the SAIC,
amended the Provisions on the Registration Administration of Outdoor
Advertisements, or the new outdoor advertisement provisions. Pursuant to the new
outdoor advertisement provisions, outdoor advertisements must be registered in
accordance with the local SAIC by “advertising distributors.” However, certain
terms are not defined under the new outdoor advertisement provisions or other
Chinese laws and regulations. To ensure that our KTV advertising operations
comply with the applicable Chinese laws and regulations, we are in the process
of making inquiries with the local SAICs in the cities in which we intend to
operate with respect to the application for an advertising registration
certificate.




We intend
to register with the relevant SAICs if we are required to do so, but we can
provide no assurance that we will obtain the registration certificate in
compliance with the new outdoor advertisement provisions, or at all. If we do
not obtain the requisite registration, the relevant local SAICs may require us
to forfeit our advertising income or may impose administrative fines on us. They
may also require us to discontinue advertisements at KTV clubs where the
requisite advertising registration is not obtained, which may result in a breach
of one or more of our agreements with our advertising clients and materially and
adversely affect our business and results of operations.




Because
we rely on third-party agencies to help source advertising clients, our failure
to retain key third-party agencies or attract additional agencies on favorable
terms could materially and adversely affect our revenue growth.




We will
engage third-party agencies to help source advertising clients from time to
time. We do not have long-term or exclusive agreements with these agencies and
cannot assure you that we will maintain favorable relationships with them. If we
fail to retain key third-party agencies or attract additional agencies, we may
not be able to retain existing advertising clients or attract new advertisers or
advertising agency clients and our business and results of operations could be
materially adversely affected. Furthermore, the fees that we paid to these
third-party agencies constituted a significant portion of our net. It is
important therefore for us to maintain favorable commercial terms with these
third-party agencies.




If
we are unable to adapt to changing advertising trends and the technology needs
of advertisers and consumers, we will not be able to compete effectively and we
will be unable to increase or maintain our revenues, which may materially and
adversely affect our business prospects and revenues.




The
market for KTV advertising requires us to continuously identify new advertising
trends and the technological needs of both advertisers and consumers, which may
require us to develop new formats, features, and enhancements for our
advertising network.




We must
be able to quickly and cost-effectively expand into additional advertising media
and platforms beyond KTV screens if advertisers find these other media and
platforms to be more attractive and cost-effective. In addition, as the
advertising industry is highly competitive and fragmented with many advertising
agencies exiting and emerging, we must closely monitor the trends in the
advertising agency community. We must maintain strong relationships with leading
advertising agencies to make certain that we are reaching the leading
advertisers and are responsive to the needs of both the advertising agencies and
the advertisers.




At
present, we play advertisements in our KTV clubs on KTV screens owned or leased
by third parties. In the future, we may use other technologies to implement our
advertising program. We may be required to incur development and acquisition
costs in order to keep pace with new technology needs but we may not have the
financial resources necessary to fund and implement future technological
innovations or to replace obsolete technology. Furthermore, we may fail to
respond to these changing technology needs. For example, if the use of VOD
system changed, and we fail to implement such changes on our network or fail to
do so in a timely manner, our competitors or future entrants into the market who
take advantage of such initiatives could gain a competitive advantage over
us.




If we
cannot succeed in defining, developing, and introducing new formats, features,
and technologies on a timely and cost-effective basis, advertising demand for
our advertising network may decrease and we may not be able to compete
effectively or attract advertising clients, which would have a material and
adverse effect on our business prospects and revenues.




We
face significant competition in the Chinese advertising industry, and if we do
not compete successfully against new and existing competitors, we may lose our
market share, and our profitability may be adversely affected.




We face
significant competition in the Chinese advertising industry. We compete for
advertising clients primarily on the basis of network size and coverage,
location, price, the quality of our programs, the range of services that we
offer, and brand recognition. We compete for overall advertising spending with
other alternative advertising media companies, such as the Internet, street
furniture, billboard, and public transport advertising companies, and with
traditional advertising media, such as newspapers, television, magazines, and
radio. We also compete for advertising dollars spent in the advertising
industry. We may also face competition from new entrants into advertising in the
future.




The
affects of significant competition could reduce our operating margins and
profitability and result in a loss of market share. Some of our existing and
potential competitors may have competitive advantages, such as significantly
greater brand recognition, financial, marketing, or other resources, and may be
able to mimic and adopt our business model. In addition, several of our
competitors have significantly larger advertising networks than we do, which
gives them an ability to reach a larger number of overall potential consumers
and which make them less susceptible to downturns in particular sectors, such as
KTV networks. Moreover, significant competition will provide advertisers with a
wider range of media and advertising service alternatives, which could reduce
our revenues, gross margins, and profits. We can provide no assurance that we
will be able to successfully compete against new or existing
competitors.




Our
results of operations are subject to fluctuations in the demand for entertaining
in KTV clubs, which is affected by, among other things, general economic
conditions, and a decrease in the demand for entertaining in KTV clubs may make
it difficult for us to sell our advertising time slots.




Our
results of operations are directly linked to the success of the KTV night club
industry. Demand for entertaining in KTV clubs is susceptible to downturns in
the economy. In addition, among other things, factors that reduce the demand for
group functions, such as health epidemics, could lead to a reduction in the
growth of the KTV entertainment industry in China.  In the event of an
economic downturn, overall KTV consumers would likely to decrease.




Our
clients may reduce the money they spend to advertise on our network for a number
of reasons, including:




•
            
            a
      general decline in economic
conditions;




•
            
            a
      general decline in the number of consumers in KTV
  clubs;




•
            
            a
      decline in economic conditions in the particular cities where our network
      are located;




•
            
            a
      decision to shift advertising expenditures to other available advertising
      media; and




•
            
            a
      decline in advertising spending in
general.




A
decrease in demand for advertising media in general, and for our advertising
services in particular, would materially and adversely affect our ability to
generate revenues from our advertising services, and our financial condition and
results of operations may be materially and adversely affected.




If
we fail to manage our growth effectively, we may not be able to take advantage
of market opportunities, execute our expansion strategies or meet the demands of
our advertising clients.




We must
continue to expand our operations to meet the demands of advertisers for larger
and more diverse network coverage. To accommodate our growth, we anticipate that
we will need to implement a variety of new and upgraded operational and
financial systems, procedures and controls, including the improvement of our
accounting and other internal management systems, all of which require
substantial management efforts.




We also
will need to continue to expand, train, manage, and motivate our workforce as
well as manage our relationships with KTV clubs and third-party advertising
agencies. We will likely need to add sales and marketing offices and personnel
to service relationships with new KTV clubs that we will aim to add as part of
our network. As we add new KTV screens and other media platforms, we incur
greater costs and expenses to maintain our equipment.




All of
these endeavors will require substantial managerial efforts and skill, as well
as the incurrence of additional expenditures. We can provide no assurance we
will be able to manage our growth effectively, and we may not be able to take
advantage of market opportunities, execute our expansion strategies, or meet the
demands of our advertising clients.




Future
acquisitions may have an adverse effect on our ability to manage our
business.




We may
acquire businesses, technologies, services, or products which are complementary
to our core KTV media network business. Future acquisitions may expose us to
potential risks, including risks associated with:




•
            
            the
      integration of new operations, services and
  personnel;




•
            
            unforeseen
      or hidden liabilities;




•
            
            the
      diversion of resources from our existing business and
      technology;




•
            
            our
      potential inability to generate sufficient revenue to offset new
      costs;




•
            
            the
      expenses of acquisitions; or




•
            
            the
      potential loss of or harm to relationships with both employees and
      advertising clients resulting from our integration of new
      businesses.




Any of
the potential risks listed above could have a material and adverse effect on our
ability to manage our business, our revenues, and our ability to generate net
income.




We may
need to sell additional debt or equity securities to make such acquisitions.
Raising of additional debt by us, if required, would result in increased debt
service obligations and could result in additional operating and financing
covenants, or liens on our assets that might restrict our operations. The sale
of additional equity securities would result in dilution to our
shareholders.




Our
business depends substantially on the continuing efforts of our senior
executives, and our business may be severely disrupted if we lose their
services.




Our
future success depends significantly upon the services of our senior executives
and other key employees. We rely on their industry expertise, their experience
in our business operations and sales and marketing, and their working
relationships with our employees, our other major shareholders, our advertising
clients, KTV clubs, and relevant government authorities. If one or more of our
senior executives were unable or unwilling to continue in their present
positions, we may be unable to replace them easily or at all. If any of our
senior executives joins a competitor or forms a competing company, we may lose
clients, suppliers, key professionals, and employees.




Our
internal controls over financial reporting and our controls and procedures may
in the future be inadequate.




Effective
internal controls are necessary for us to provide reliable financial reports and
effectively prevent fraud. We maintain a system of internal control over
financial reporting, which is defined as a process designed by, or under the
supervision of, our principal executive officer and principal financial officer,
or persons performing similar functions, and effected by our board of directors,
management and other personnel, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting
principles.




As a
public reporting company, we will have significant additional requirements for
enhanced financial reporting and internal controls. We will be required to
document and test our internal control procedures in order to satisfy the
requirements of the Sarbanes-Oxley Act of 2002, which requires annual management
assessments of the effectiveness of our internal controls. The process of
designing and implementing effective internal controls is a continuous effort
that requires us to anticipate and react to changes in our business and the
economic and regulatory environments and to expend significant resources to
maintain a system of internal controls that is adequate to satisfy our reporting
obligations as a public company.




We cannot
assure you we will not, in the future, identify areas requiring improvement in
our internal control over financial reporting. We cannot assure you that the
measures we will take to remediate any areas in need of improvement will be
successful or that we will implement and maintain adequate controls over our
financial processes and reporting in the future as we continue our growth. If we
are unable to establish appropriate internal financial reporting controls and
procedures, it could cause us to fail to meet our reporting obligations, result
in the restatement of our financial statements, harm our operating results,
subject us to regulatory scrutiny and sanction, cause investors to lose
confidence in our reported financial information and have a negative effect on
the market price for shares of our common stock.




We
may need additional capital, which, if obtained, could result in dilution or
significant debt service obligations. We may not be able to obtain additional
capital on commercially reasonable terms, which could adversely affect our
liquidity and financial position.




We may
require additional cash resources due to changed business conditions or other
future developments. If our current sources are insufficient to satisfy our cash
requirements, we may seek to sell additional equity or debt securities or obtain
a credit facility. The sale of convertible debt securities or additional equity
securities could result in additional dilution to our shareholders. The
incurrence of indebtedness would result in increased debt service obligations
and could result in operating and financing covenants that would restrict our
operations and liquidity.




In
addition, our ability to obtain additional capital on acceptable terms is
subject to uncertainties, including:




•
            
            investors’
      perception of, and demand for, securities of alternative advertising media
      companies;




•
            
            conditions
      of the U.S. and other capital markets in which we may seek to raise
      funds;




•
            
            our
      future results of operations, financial condition and cash
      flows;




•
            
            China’s
      governmental regulation of foreign investment in advertising services
      companies in China;




•
            
            economic,
      political and other conditions in China;
and




•
            
            China’s
      governmental policies relating to foreign currency
    borrowings.




We cannot
assure you financing will be available in amounts or on terms acceptable to us,
if at all. Any failure to raise additional funds on favorable terms could have a
material adverse effect on our liquidity and financial condition.




To raise
additional capital, we may issue additional equity securities in public or
private offerings, potentially at a price lower than the market price of our
common stock at the time of such issuance. We will likely seek significant
additional equity or debt financing, in the short-term and the long-term, and,
as a result, may incur significant interest expense. We also may decide to sell
additional debt or equity securities in our domestic or international
subsidiaries, which may dilute our ownership interest in or reduce or eliminate
our income, if any, from those entities. The recent turmoil in the economy, and
the world-wide financial markets in particular, may make it more difficult for
us to obtain necessary additional capital or financing on acceptable
terms.




We may be
subject to, and may expend significant resources in defending against,
government actions and civil suits based on the content we provide through our
KTV media network.




Civil
claims may be filed against us for fraud, defamation, subversion, negligence,
copyright or trademark infringement or other violations due to the nature and
content of the information displayed on our network. If consumers find the
content displayed on our network to be offensive, KTV clubs may seek to hold us
responsible for any consumer claims or may terminate their relationships with
us. Offensive and objectionable content and legal standards for defamation and
fraud in China are less defined than in other more developed countries and we
may not be able to properly screen out unlawful content.




In
addition, if the security of our content management system is breached and
unauthorized images, text or audio sounds are displayed on our network, viewers
or the Chinese government may find these images, text or audio sounds to be
offensive, which may subject us to civil liability or government censure despite
our efforts to ensure the security of our content management system. Any such
event may also damage our reputation. If our advertising viewers do not believe
our content is reliable or accurate, our business model may become less
appealing to viewers in China and our advertising clients may be less willing to
place advertisements on our network.




We
may be subject to intellectual property infringement claims, which may force us
to incur substantial legal expenses and, if determined adversely against us, may
materially disrupt our business.




There is
no assurance our displays, proprietary software, or other aspects of our
business do not or will not infringe upon patents, copyrights, or other
intellectual property rights held by third parties. Although we are not aware of
any such claims, we may become subject to legal proceedings and claims from time
to time relating to the intellectual property of others in the ordinary course
of our business. If we are found to have violated the intellectual property
rights of others, we may be enjoined from using such intellectual property, and
we may incur licensing fees or be forced to develop alternatives. In addition,
we may incur substantial expenses and diversion of management time in defending
against these third-party infringement claims, regardless of their merit.
Successful infringement or licensing claims against us may result in substantial
monetary liabilities, which may materially and adversely disrupt our
business.




We
do not have any business liability, disruption, or litigation insurance, and any
business disruption or litigation we experience might result in our incurring
substantial costs and the diversion of our limited resources.




The
insurance industry in China is still at an early stage of development. Insurance
companies in China offer limited business insurance products and do not, to our
knowledge, offer business liability insurance. While business disruption
insurance is available to a limited extent in China, we have determined that the
risks of disruption, cost of such insurance, and the difficulties associated
with acquiring such insurance on commercially reasonable terms make it
impractical for us to have such insurance. As a result, except for fire
insurance, we do not have any business liability, disruption or litigation
insurance coverage for our operations in China. Any business disruption or
litigation may result in our incurring substantial costs and the diversion of
resources.




Risks
Related to Regulation of Our Business and Our Structure




Compliance
with China’s advertising laws and regulations may be difficult and could be
costly, and failure to comply could subject us to government
sanctions.




China’s
advertising laws and regulations require advertisers, advertising operators, and
advertising distributors, including businesses such as ours, to ensure the
content of the advertisements they prepare or distribute are fair and accurate
and are in compliance with applicable law. Violation of these laws or
regulations may result in penalties, including fines, confiscation of
advertising fees, orders to cease dissemination of the advertisements, and
orders to publish an advertisement correcting the misleading information. In
circumstances involving serious violations, the Chinese government may revoke a
violator’s license for advertising operations.




As an
advertising service provider, we are obligated under China’s laws and
regulations to monitor the advertising content shown on our network for
compliance with applicable law. In general, advertisements shown on our network
have been broadcast over public television networks and were subjected to review
and verification of such networks. We are still required to independently review
and verify these advertisements for content compliance before displaying the
advertisements. In addition, if a special government review is required for
certain product advertisements before they are shown to the public, we are
obligated to confirm that such review has been performed and approval has been
obtained. In addition, for advertising content related to certain types of
products and services, such as food products, alcohol, cosmetics,
pharmaceuticals and medical procedures, we are required to confirm that the
advertisers have obtained requisite government approvals including the
advertising client’s operating qualifications, proof of quality inspection of
the advertised products, government pre-approval of the contents of the
advertisement, and filing with the local authorities.




We
endeavor to comply with such requirements, including by requesting relevant
documents from the advertisers. However, we can provide no assurance each
advertisement that an advertiser or advertising agency client provides us and
which we include in our network programs is in compliance with relevant
advertising laws and regulations or that the supporting documentation and
government approvals provided to us by our advertising clients in connection
with certain advertising content are complete. Although we employ qualified
advertising inspectors who are trained to review advertising content for
compliance with relevant laws and regulations, the content standards in China
are less certain and less clear than in those in more developed countries such
as the U.S. and we can provide no assurance that we will be able to properly
review the content to comply with the standards imposed on us.




If
the Chinese government finds that the agreements that establish the structure
for operating our China business do not comply with Chinese governmental
restrictions on foreign investment in the advertising industry and in the
operating of non-advertising content, we could be subject to severe
penalties.




Substantially
all of our operations are conducted through our contractual arrangements with
the Chinese Advertisement Company. Though China’s regulations currently permit
100% foreign ownership of companies that provide advertising services, any
foreign entities that invest in the advertising services industry are required
to have at least three years of direct operations in the advertising industry
outside of China. In addition, Chinese regulations currently prohibit foreign
investment in the production and operation of any non-advertising content. We do
not currently directly operate an advertising business outside of China and thus
cannot qualify under China’s regulations until three years after we commence any
such operations outside of China or until we acquire a company that has directly
operated an advertising business outside of China for the required period of
time. Accordingly, we and our subsidiary, Orient Come, are currently ineligible
to apply for the required licenses for providing advertising services in
China.




The
Chinese Advertisement Company is owned by Yong Lu and James Wei, both of
whom are Chinese citizens. James Wei is a director of the
Company.  The Chinese Advertisement Company is the company through
which we provide advertising services in China. It directly operates our
advertising network, enters into advertising licensing rights contracts, and
sells advertising time slots to our clients. We expect to continue to depend on
the Chinese Advertisement Company to operate our advertising business. We have
entered into the Business Cooperation Agreement with the Chinese Advertisement
Company pursuant to which we, through Orient Come, provide technical support and
consulting services to that entity. In addition, we have entered into agreements
with the Chinese Advertisement Company and its shareholders, which provide us
with the substantial ability to control the Chinese Advertisement Company. For a
description of these contractual arrangements, see “Business - Background and
Business of the Company.”




The
shareholders of the Chinese Advertisement Company pledged their equity interests
in the Chinese Advertisement Company to Orient Come. This pledge was created by
recording the pledge on Orient Come’s register of shareholders in accordance
with the PRC Security Law, and is currently effective. According to the PRC
Property Rights Law, however, the effectiveness of such pledge will depend on
whether the pledge is registered with the relevant administration for industry
and commerce. Orient Come will register such pledge when the administration for
industry and commerce implements registration procedures in accordance with the
PRC Property Rights Law in the future. Although we believe Orient Come will be
able to register the pledge, we cannot assure you that will be the case, and if
Orient Come is unable to do so, the effectiveness of such pledge may be
affected.  If the pledges are found to be ineffective, our control
over the Chinese Advertisement Company, and hence our ability to operate our
business, could be materially and adversely affected.




If we,
Orient Come, or the Chinese Advertisement Company are found to be in violation
of any existing or future Chinese laws or regulations or fail to obtain or
maintain any of the required permits or approvals, the relevant Chinese
regulatory authorities, including the SAIC, which regulates advertising
companies, and the State Administration of Radio, Film or Television, or the
SARFT, would have broad discretion in dealing with such violations,
including:




•
            
            revoking
      the business and operating licenses of our Chinese subsidiaries and
      affiliates;




•
            
            discontinuing
      or restricting our Chinese subsidiaries’ and affiliates’
      operations;




•
            
            imposing
      conditions or requirements with which we or our Chinese subsidiaries and
      affiliates may not be able to
comply;




•
            
            requiring
      us or our Chinese subsidiaries and affiliates to restructure the relevant
      ownership structure or operations;
or




•
            
            restricting
      or prohibiting our use of the proceeds of this offering to finance our
      business and operations in China.




The
imposition of any of these penalties would result in a material and adverse
effect on our ability to conduct our business.




We
rely on contractual arrangements with the Chinese Advertisement Company and
shareholders of the Chinese Advertisement Company for a substantial portion of
our China operations, which may not be as effective as direct ownership in
providing operational control.




We rely
on contractual arrangements with the Chinese Advertisement Company and
shareholders of the Chinese Advertisement Company to operate our advertising
business. For a description of these contractual arrangements, see “Business -
Background and Business of the Company.” These contractual arrangements may not
be as effective as direct ownership in providing us with control over our
variable interest entity. Under the current contractual arrangements, if the
Chinese Advertisement Company or its shareholders fail to perform their
respective obligations under these contractual arrangements, we may have to
incur substantial costs and resources to enforce such arrangements, and rely on
legal remedies under Chinese laws, including seeking specific performance or
injunctive relief, and claiming damages, and we can provide no assurance as to
the effectiveness of these remedies, if available.




Many of
these contractual arrangements are governed by Chinese law and provide for the
resolution of disputes through either arbitration or litigation in China.
Accordingly, these contracts would be interpreted in accordance with Chinese law
and any disputes would be resolved in accordance with Chinese legal procedures.
The legal environment in China is not as developed as in other jurisdictions,
such as the United States. As a result, uncertainties in the Chinese legal
system could limit our ability to enforce these contractual arrangements, which
may make it difficult to exert effective control over the Chinese Advertisement
Company, and our ability to conduct our business may be materially and adversely
affected.




Contractual
arrangements we have entered into among our subsidiaries and the Chinese
Advertisement Company may be subject to scrutiny by Chinese tax authorities and
a finding that we owe additional taxes or are ineligible for our preferential
tax treatment, or both, could substantially increase our taxes owed, and reduce
our net income and the value of your investment.




Under
Chinese law, arrangements and transactions among related parties may be
audited or challenged by China’s tax authorities. If any of the transactions we
entered into with Orient Come or the Chinese Advertisement Company are found not
to be on an arm’s-length basis, or to result in an unreasonable reduction in tax
under Chinese law, Chinese tax authorities have the authority to assess
penalties.




Certain
of the agreements pursuant to which we operate our business, and which are
necessary to such operation, are subject to termination in certain
events.




The term
of the Business Cooperation Agreement and Option Agreement is 20 years;
provided, however, the agreements may be terminated earlier if (i) Orient Come
or the Chinese Advertisement Company becomes bankrupt, subject to proceedings or
arrangements for liquidation or dissolution, ceases to carry on business, or
becomes unable to pay debts as they become due; or (ii) the business license or
any other license or approval material for the business operations of the
Chinese Advertisement Company is terminated, canceled, or revoked. If our Business
Cooperation Agreement or Option Agreement is terminated, we would lose
substantial control over the Chinese Advertisement Company, in which case our
ability to operate our business would be substantially impaired, except to the
extent we are able to enter into new contractual arrangements with the Chinese
Advertisement Company or other third parties to provide services on our and our
subsidiary’s behalf.





Risks
Related to Doing Business in China




Adverse
changes in the political and economic policies of the Chinese government could
have a material adverse effect on the overall economic growth of China, which
could reduce the demand for our services and have a material adverse effect on
our competitive position.




Substantially
all of our assets are located in China and substantially all of our revenues
will be derived from our operations in China. Accordingly, our business,
financial condition, results of operations, and prospects are affected
significantly by economic, political, and legal developments in China. The
Chinese economy differs from the economies of many developed countries in many
respects, including:




•
            
            the
      amount of government involvement;




•
            
            the
      level of development;




•
            
            the
      growth rate;




•
            
            the
      control of foreign exchange; and




•
            
            the
      allocation of resources.




While the
Chinese economy has experienced significant growth in the past 25 years, growth
has been uneven both geographically and among various sectors of the economy.
The Chinese government has implemented various measures to encourage economic
growth and guide the allocation of resources. Some of these measures may benefit
the overall Chinese economy, but may also have a negative effect on us. We
cannot predict the future direction of political or economic reforms or the
effects such measures may have on our business, financial position or results of
operations. Any adverse change in the political or economic conditions in China,
including changes in the policies of the Chinese government or in laws and
regulations in China, could have a material adverse effect on the overall
economic growth of China and in the KTV advertising industry. Such developments
could have a material adverse effect on our business, lead to reduction in
demand for our services and materially and adversely affect our competitive
position.





Uncertainties
with respect to the Chinese legal system could limit the legal protections
available to us or result in substantial costs and the diversion of resources
and management attention.




We
conduct our business primarily through the Chinese Advertisement Company, which
is subject to Chinese laws and regulations applicable to foreign investment in
China and, in particular, laws applicable to wholly-foreign owned companies. The
Chinese legal system is based on written statutes. Prior court decisions may be
cited for reference but have limited precedential value. Since 1979, Chinese
legislation and regulations have significantly enhanced the protections afforded
to various forms of foreign investments in China. However, since these laws and
regulations are relatively new and the Chinese legal system continues to rapidly
evolve, the interpretations of many laws, regulations and rules are not always
uniform and enforcement of these laws, regulations and rules involve
uncertainties, which may limit the legal protections available to us. In
addition, any litigation in China may be protracted and result in substantial
costs and the diversion of resources and management attention.




Fluctuations
in exchange rates may have a material adverse effect on your
investment.





The value of
the RMB against the U.S. dollar and other currencies may fluctuate and is
affected by, among other things, changes in China’s political and economic
conditions. The conversion of RMB into foreign currencies, including U.S.
dollars, has been based on rates set by the People’s Bank of China. Our
reporting and functional currency is the U.S. dollar. However, substantially all
of the revenues and expenses of our consolidated operating subsidiaries and
affiliate entities are denominated in RMB. Substantially all of our sales
contracts will be denominated in RMB and substantially all of our costs and
expenses is denominated in RMB. Fluctuations in exchange rates, primarily those
involving the U.S. dollar, may affect our balance sheet and earnings per share
in U.S. dollars. In addition, appreciation or depreciation in the value of the
RMB relative to the U.S. dollar would affect our financial results reported in
U.S. dollar terms without giving effect to any underlying change in our business
or results of operations. Fluctuations in the exchange rate will also affect the
relative value of any dividend we issue after this offering, which will be
exchanged into U.S. dollars.




Very
limited hedging transactions are available in China to reduce our exposure to
exchange rate fluctuations. To date, we have not entered into any hedging
transactions in an effort to reduce our exposure to foreign currency exchange
risk. While we may decide to enter into hedging transactions in the future, the
availability and effectiveness of these hedges may be limited so that we may not
be able to successfully hedge our exposure at all. In addition, our currency
exchange losses may be magnified by China’s exchange control regulations that
restrict our ability to convert RMB into foreign currency. As a result,
fluctuations in exchange rates may have a material adverse effect on your
investment.




Foreign
exchange transactions by our subsidiary and the Chinese Advertisement Company
are subject to significant foreign exchange controls and require the approval
of, or registration with, Chinese governmental authorities. In particular, if we
or other foreign lenders make foreign currency loans to our subsidiaries or the
Chinese Advertisement Company, these loans must be registered in China, and if
we finance them by means of additional capital contributions, these capital
contributions must be approved or registered by certain Chinese government
authorities. These limitations could affect the ability of these entities to
obtain foreign exchange through debt or equity financing, and could affect our
business and financial condition.




Recent
Chinese regulations relating to the establishment of offshore special purpose
companies by Chinese residents and registration requirements for employee stock
ownership plans or share option plans may subject our Chinese resident
beneficial owners or the plan participants to personal liability, limit our
ability to inject capital into our Chinese subsidiaries, limit our subsidiaries’
ability to increase their registered capital or distribute profits to us, or may
otherwise adversely affect us.





State
Administration of Foreign Exchange (“SAFE”) recently promulgated regulations
that require Chinese residents and Chinese corporate entities to register with
local branches of SAFE in connection with their direct or indirect offshore
investment activities. These regulations apply to our shareholders who are
Chinese residents and may apply to any offshore acquisitions that we make in the
future.




Under the
SAFE regulations, Chinese residents who make, or have previously made, direct or
indirect investments in offshore companies, will be required to register those
investments. In addition, any Chinese resident who is a direct or indirect
shareholder of an offshore company is required to file or update the
registration with the local branch of SAFE, with respect to that offshore
company, any material change involving its round-trip investment, capital
variation, such as an increase or decrease in capital, transfer or swap of
shares, merger, division, long-term equity or debt investment, or creation of
any security interest. Moreover, the Chinese subsidiaries of that offshore
company are required to urge the Chinese resident shareholders to update their
SAFE registration with the local branch of SAFE when such updates are required
under applicable SAFE regulations. If any Chinese shareholder fails to make the
required SAFE registration or file or update the registration, the Chinese
subsidiaries of that offshore parent company may be prohibited from distributing
their profits and the proceeds from any reduction in capital, share transfer, or
liquidation, to their offshore parent company, and the offshore parent company
may also be prohibited from injecting additional capital into their Chinese
subsidiaries. Moreover, failure to comply with the various SAFE registration
requirements described above could result in liability under Chinese laws for
evasion of applicable foreign exchange restrictions.




We can
provide no assurance that all of our shareholders who are Chinese residents will
make or obtain any applicable registrations or approvals required by these SAFE
regulations. The failure or inability of our Chinese resident shareholders to
comply with the registration procedures set forth therein may subject us to
fines and legal sanctions, restrict our cross-border investment activities, or
limit our Chinese subsidiaries’ ability to distribute dividends or obtain
foreign-exchange-dominated loans to us.




As it is
uncertain how the SAFE regulations will be interpreted or implemented, we cannot
predict how these regulations will affect our business operations or future
strategy. For example, we may be subject to more stringent review and approval
process with respect to our foreign exchange activities, such as remittance of
dividends and foreign-currency-denominated borrowings, which may adversely
affect our results of operations and financial condition. In addition, if we
decide to acquire a Chinese domestic company, we cannot assure you that we or
the owners of such company, as the case may be, will be able to obtain the
necessary approvals or complete the necessary filings and registrations required
by the SAFE regulations. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and
prospects.




We will
conduct a substantial portion of our operations in China. A majority of our
directors and officers reside outside the United States and a substantial
portion of their assets are located outside of the United States. As a result,
it may be difficult or impossible for you to bring an action against us or
against these individuals in China in the event that you believe that your
rights have been infringed under the securities laws or otherwise. Even if you
are successful in bringing an action of this kind, the laws of China may render
you unable to enforce a judgment against our assets or the assets of our
directors and officers. As a result, our shareholders may have more difficulty
in protecting their interests through actions against us, our management, our
directors or our major shareholders than would shareholders of a corporation
incorporated in a jurisdiction in the United States.




The
Chinese government exerts substantial influence over the manner in which we must
conduct our business activities.




China
only recently has permitted provincial and local economic autonomy and private
economic activities, and, as a result, we are dependent on our relationship with
the local government in the province in which we operate our
business.  Chinese government has exercised and continues to exercise
substantial control over virtually every sector of the Chinese economy through
regulation and state ownership.  Our ability to operate in China may
be harmed by changes in its laws and regulations, including those relating to
taxation, environmental regulations, land use rights, property and other
matters. The central or local governments of these jurisdictions may impose new,
stricter regulations or interpretations of existing regulations that would
require additional expenditures and efforts on our part to ensure our compliance
with such regulations or interpretations. Accordingly, government actions in the
future, including any decision not to continue to support recent economic
reforms and to return to a more centrally planned economy or regional or local
variations in the implementation of economic policies, could have a significant
effect on economic conditions in China or particular regions thereof, and could
require us to divest ourselves of any interest we then hold in Chinese
properties.




We
may have difficulty establishing adequate management, legal and financial
controls in the People's Republic of China.




China has
historically had fewer or less developed management and financial reporting
concepts and practices, as well as modern banking, computer, and other control
systems.  As a result, we may experience difficulty in hiring and
retaining a sufficient number of qualified employees in China.  As a
result, we may experience difficulty in establishing management, legal, and
financial controls, collecting financial data and preparing financial
statements, books of account, and corporate records and instituting business
practices that meet business standards such as those in the United
States.




Risks
Related to the Common Stock




There
may not be sufficient liquidity in the market for our securities in order for
investors to sell their securities.




There is
currently only a very limited public market for our common stock, which is
listed on the Over-the-Counter Bulletin Board, and there can be no assurance
that a trading market will develop further or be maintained in the future.
Trading volumes in our common stock have historically been very low, and the
trading price of our common stock highly volatile, which has contributed to a
lack of liquidity in our common stock.




The
market price of our common stock may be volatile.




The
market price of our common stock has been and will likely continue to be highly
volatile. Some of the factors that may materially affect the market price of our
common stock are beyond our control, such as changes in financial estimates by
industry and securities analysts and conditions or trends in the industry in
which we operate. These factors may materially adversely affect the market price
of our common stock, regardless of our performance. In addition, the public
stock markets have experienced extreme price and trading volume volatility. This
volatility has significantly affected the market prices of securities of many
companies for reasons frequently unrelated to the operating performance of the
specific companies. These broad market fluctuations may adversely affect the
market price of our common stock.  We expect the price of our common
stock will be subject to continued volatility. In addition, in the past,
following periods of volatility in the trading price of a company’s securities,
securities class action litigation or shareholder derivative suits have often
been instituted against those companies. Such litigation, if instituted against
us, could result in substantial costs and divert our management’s attention and
resources.





ITEM 1B.  UNRESOLVED STAFF COMMENTS.





Not
applicable.





ITEM 2. DESCRIPTION OF PROPERTY




We
maintain our executive offices at Rm.1909, Tower A, The Spaces International
Center.No.8, Dongdaqiao Road, ChaoYang District, Beijing, China where we lease a
total of 10,000 square feet of office space.  We lease the premises
from a Director.  We do not own any real property.  We
believe that substantially all of our property and equipment is in good
condition, subject to normal wear and tear. We believe that our current
facilities have sufficient capacity to meet the projected needs of our business
for the next twelve months.





ITEM 3. LEGAL PROCEEDINGS




We are
not presently a party to any material litigation.  From time to time,
we may be involved in disputes and litigation relating to claims arising out of
our operations in the ordinary course of business. Further, we are periodically
subject to government audits and inspections.





ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS




During
the fourth fiscal quarter of fiscal year 2009, there were no matters submitted
to a vote of our stockholders.




PART
II




ITEM 5. MARKET PRICE FOR THE REGISTRANT’S COMMON EQUITY,
      RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
      SECURITIES.




Market
Prices of Common Stock





Our
common stock is traded on the Over-the-Counter Bulletin Board under the trading
symbol “KVME.OB.”  The following table sets forth high and low bid
prices of the common stock for fiscal years ended April 30, 2009 and
2008:




Bid
      Price (U.S. $)High
              LowFiscal
      2009Quarter
      Ended April 30, 2009
              $
              5.70
              5.70Quarter
      Ended January 31, 2009
              
              5.70
              5.70Quarter
      Ended October 31, 2008
              
              5.70
              5.70Quarter
      Ended July 31, 2008
              
              5.70
              5.70Fiscal
      2008Quarter
      Ended April 30, 2008
              $
              5.70
              5.70Quarter
      Ended January 31, 2008
              
              5.70
              5.70Quarter
      Ended October 31, 2007
              
              N/A
              N/AQuarter
      Ended July 31, 2007
              
              N/A
              N/A


The last
reported bid price of our common stock on the Over-the-Counter Bulletin Board on
August 1, 2009 was $5.70.  Quotations, if made, represent only prices
between dealers and do not include retail markups, markdowns or commissions and
accordingly, may not represent actual transactions.  Because of the
rules and regulations governing the trading of small issuers' securities, the
Company's securities are presently classified as "Penny Stock," a classification
which places significant restrictions upon broker-dealers desiring to make a
market in these securities. It has been difficult for management to obtain the
interest of broker-dealers in our securities and it is anticipated that these
difficulties will continue until the Company is able to obtain a listing on a
national securities exchange, if at all. The existence of market quotations
should not be considered evidence of an "established public trading market." The
public trading market is presently limited as to the number of market markers in
the Company stock.





Our
shares have historically been considered “penny stock” covered by section 15(g)
of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and
Rules 15g-1 through 15g-6, and 15g-9 promulgated under the Exchange Act. They
impose additional sales practice requirements on broker-dealers who sell our
securities to persons other than certain types of investors.  Before a
broker-dealer can sell a penny stock, SEC rules require the firm to first
approve the customer for the transaction and receive from the customer a written
agreement to the transaction. The firm must furnish the customer a document
describing the risks of investing in penny stocks. The firm must tell the
customer the current market quotation, if any, for the penny stock and the
compensation the firm and its broker will receive for the trade. Finally, the
firm must send monthly account statements showing the market value of each penny
stock held in the customer’s account.  The application of the penny
stock rules may affect the ability to purchase or resell shares of our commons
stock.





As of
August 4, 2009, the Company had approximately 384 holders of record of our
common stock. As many of our shares of common stock are held by brokers and
other institutions on behalf of shareholders, we are unable to estimate the
total number of beneficial holders of our common stock represented by these
record holders.





Dividend
Policy





Our
policy has been to retain cash to fund future growth. Accordingly, we have not
paid dividends and do not anticipate declaring dividends on our common stock in
the foreseeable future.





Equity
Compensation Plan Information





The following
table sets forth certain information pertaining to our equity compensation
plans.





Plan
      Category
            Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights
            Weighted-average
      exercise price of outstanding options, warrants and rights
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))Equity
      compensation plans approved by security holders
            None
            None
            NoneEquity
      compensation plans not approved by security holders
            None
            None
            NoneTotal
            None
            None
            None





Recent
Sales of Unregistered Securities





All
information regarding the sale of any unregistered securities in fiscal year
2008 has been previously disclosed in the Company’s Form 10-Q and Form 8-K
filings.





ITEM 6. SELECTED FINANCIAL DATA





Not
applicable.





ITEM 7.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.





The
following discussion and analysis summarizes the significant factors affecting
our consolidated results of operations, financial condition and liquidity
position for the years ended April 30, 2009 and 2008 and should be read in
conjunction with our consolidated financial statements and related notes
included elsewhere in this filing. The following discussion and analysis
contains forward-looking statements that reflect our plans, estimates and
beliefs. Our actual results could differ materially from those discussed in the
forward-looking statements. Factors that could cause or contribute to these
differences include those discussed below and elsewhere in this annual report on
Form 10-K, particularly in the section entitled “Risk
Factors.”




Forward-Looking
Statements




Statements
and information included in this Annual Report on Form 10-K by K's Media
("Company," "we," "us," or "our") that are not purely historical are
forward-looking statements within the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995.




Forward-looking
statements in this Annual Report on Form 10-K represent our beliefs,
projections and predictions about future events. These statements are
necessarily subjective and involve known and unknown risks, uncertainties and
other important factors that could cause our actual results, performance or
achievements, or industry results, to differ materially from any future results,
performance or achievement described in or implied by such statements. Actual
results may differ materially from the expected results described in our
forward-looking statements, including with respect to the correct measurement
and identification of factors affecting our business or the extent of their
likely impact, the accuracy and completeness of publicly available information
relating to the factors upon which our business strategy is based or the success
of our business.




When used
in this report, the words "believe," "expect," "anticipate," "intend,"
"estimate," "evaluate," "opinion," "may," "could," "future," "potential,"
"probable," "if," "will," and similar expressions generally identify
forward-looking statements.




Company
Overview





We were
incorporated under the name “Kinglake Resources, Inc.” in the State of Nevada on
April 14, 2006. Prior to a share exchange transaction effected on January 18,
2008, we were a public “shell” company with nominal assets and engaged in the
business of exploration of mining properties in North America. In September
2007, following a review of an aeromagnetic survey of our mineral properties and
our belief the properties included no material anomalies, our management began
to pursue the acquisition of another enterprise.




Following
the share exchange effected in January 2008, we became an emerging media company
that targets high end consumers in China by placing premium brand advertising in
"KTV" clubs on behalf of consumer products clients. KTV clubs are popular
entertainment establishments in Asia that rent private rooms containing karaoke
singing equipment, typically to groups of friends and business
colleagues.  We believe that attempts to reach high-end consumers
through traditional advertising channels with powerful and visually appealing
presentations can be costly and inefficient, and we believe that advertising on
selected KTV screens offers a way to effectively target a captive audience of
influential top earners.




The
Chinese Advertisement Company, our contractual affiliate and the entity that
operates the KTV advertising business, was incorporated in China in October,
2007. Under our direction, the Chinese Advertisement Company intends to sign
advertising agreements with companies in the cosmetics, beverage, automobile,
and other consumer goods sectors. The Chinese Advertisement Company also intends
to sign advertisement placement agreements with top KTV chains in Beijing,
Shanghai, Guangzhou, Shenzhen, Hangzhou, and other major Chinese cities. The
Chinese Advertisement Company will then promote its clients’ brands at the KTV
clubs via advertising and promotional events.




Recent
Developments




Effective
July 17, 2008, we completed the sale of 1,666,667 units of our securities, or
the Units, with each Unit consisting of (a) one share of our common stock, (b) a
warrant to purchase one share of our common stock at a purchase price of $6.00
per share, or the Group A Warrant, and (c) a warrant to purchase one share of
our common stock at a purchase price of $9.00 per share, or the Group B Warrant,
for a purchase price of $3.00 per Unit. The aggregate proceeds from the sale of
the Units, prior to expenses incurred in connection with the offer and sale of
the Units, was $5,000,000.




The Group
A Warrant has an exercise price of $6.00 per share, is exercisable for a
five-year period commencing on July 17, 2008, and is exercisable to purchase
1,666,667 shares of common stock in the aggregate.  Upon our issuance
of additional shares of common stock or derivatives of our common stock for a
six month period following the closing of the offering, we may be required to
repurchase the Units or adjust the number of shares of common stock underlying
the Units.  We may redeem the Group A Warrant at our option at a price
of $0.05 if the closing bid price of our common stock exceeds $8.00 per share
for a period of 20 consecutive trading days, provided that our redemption right
will not be in effect during any period during which we do not have in place an
effective registration statement under the Securities Act registering the shares
of common stock issuable upon exercise of the Group A Warrant.  We do
not currently have such a registration statement outstanding.  The
Group B Warrant is exercisable to purchase 1,666,667 shares of common
stock.  The terms of the Group B Warrant is identical to the Group A
Warrant, except that the exercise price is $9.00 per share and the price per
share of common stock implicating the Company's repurchase rights is $12.00 per
share.





The Company has made 3 amendments
during the period ended April 30, 2009 to its Escrow Agreement. Please refer to
note 1 to Consolidated Financial Statements for reference.





The Company has signed up over 300 KTV
lounges in tier 1 cities including Beijing, Shanghai, Guangzhou and Shenzhen by
April 30, 2009.
K’s  Media  selects  KTV  clubs  that  are  frequented  by  high  earners  such  as  business  owners  and  professionals  with  active
lifestyles. Especially attractive are clubs that appeal to the top 5% of China's
population by income. K’s Media will reach these individuals by being sure to
only contract with mid- to high-end KTV lounges, starting from tier 1
city.





Critical
Accounting Policies




We
prepare our financial statements in accordance with generally accepted
accounting principles in the United States. In doing so, we have to make
estimates and assumptions that affect our reported amount of assets,
liabilities, revenues and expenses, as well as related disclosure of contingent
assets and liabilities. In some cases, changes in the accounting estimates are
reasonably likely to occur from period to period. Accordingly, actual results
could differ materially from our estimates. To the extent that there are
material differences between these estimates and actual results, our financial
condition or results of operations will be affected. We base our estimates on
historical data and trends and other assumptions that we believe are reasonable
under the circumstances, and we evaluate these estimates on an ongoing
basis.




Use of Estimates.The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of expenses during the reporting period.
Actual results could differ from those estimates. We do not believe that there
are any critical or significant accounting estimates included in the condensed
consolidated financial statements.




Revenue Recognition.We
follow the guidance of the Securities and Exchange Commission’s Staff Accounting
Bulletin 104 for revenue recognition. In general, we record revenue when
persuasive evidence of an arrangement exists, services have been rendered or
product delivery has occurred, the sales price to the customer is fixed or
determinable, and collectibility is reasonably assured. The following policies
reflect specific criteria for the various revenues streams of the Company: our
revenues from the sale of products and services are recorded when the goods are
shipped, or services have been performed, title passes, and collectibility is
reasonably assured.




Sales
revenue represents the invoiced value of goods, net of a value-added tax (VAT).
All of the Company’s products that are sold in China are subject to a Chinese
value-added tax at a rate of 17% of the gross sales price. This VAT may be
offset by VAT paid by the Company on raw materials and other materials included
in the cost of producing their finished product.




Foreign Currency
Translation.Our
functional currency is the Chinese Renminbi (“RMB”). Our financial statements
are translated to United Stated dollars using year-end exchange rates as to
assets and liabilities and average exchange rates as to revenues and expenses.
Capital accounts are translated at their historical exchange rates when the
capital transaction occurred. Net gains and losses resulting from foreign
exchange translations are included in the statements of operations and
stockholders' equity as other comprehensive income.




This
quotation of the exchange rates does not imply free convertibility of RMB to
other foreign currencies. All foreign exchange transactions continue to take
place either through the People’s Bank of China or other banks authorized to buy
and sell foreign currencies at the exchange rate quoted by the People’s Bank of
China.




On July
21, 2005, the central government of China allowed the RMB to fluctuate, ending
its decade old valuation peg to the U.S. dollar. The new RMB rate reflects
approximately a 2% increase in value against the U.S. dollar. Historically, the
Chinese government has benchmarked the RMB exchange ratio against the U.S.
dollar, thereby mitigating the associated foreign currency exchange rate
fluctuation risk. We do not believe that its foreign currency exchange rate
fluctuation risk is significant, especially if the Chinese government continues
to benchmark the RMB against the U.S. dollar.





Recent
Accounting Pronouncements




(i)
Disclosure about Derivative Instruments and Hedging Activities





In
March 2008, the FASB issued SFAS 161, “Disclosure about Derivative
Instruments and Hedging Activities, an amendment of SFAS No.133”. This statement
requires that objectives for using derivative instruments be disclosed in terms
of underlying risk and accounting designation. The Company is required to adopt
SFAS 161 on January 1, 2009. The Company is currently evaluating the
potential impact of SFAS 161 on the Company’s consolidated financial
statements.




In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement
No. 133”. This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” as well as related hedged items, bifurcated
derivatives, and nonderivative instruments that are designated and qualify as
hedging instruments. Entities with instruments subject to SFAS 161 must provide
more robust qualitative disclosures and expanded quantitative disclosures. SFAS
161 is effective prospectively for financial statements issued for fiscal years
and interim periods beginning after November 15, 2008, with early
application permitted. We are currently evaluating the disclosure implications
of this statement. The adoption of this statement is not expected to have a
material effect on the Company's financial statements.





(ii)
Determination of the Useful Life of Intangible Assets





In
April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful
Life of Intangible Assets”, which amends the factors that should be considered
in developing renewal or extension assumptions used to determine the useful life
of intangible assets under SFAS 142 “Goodwill and Other Intangible Assets”.
The intent of this FSP is to improve the consistency between the useful life of
a recognized intangible asset under SFAS 142 and the period of the expected cash
flows used to measure the fair value of the asset under SFAS 141 (revised 2007)
“Business Combinations” and other U.S. generally accepted accounting principles.
 The Company is currently evaluating the potential impact of FSP FAS 142-3
on its consolidated financial statements.





(iii)
Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement)





In
May 2008, the FASB issued FSP APB 14-1, “Accounting for Convertible
Debt Instruments That May Be Settled in Cash upon Conversion (Including
Partial Cash Settlement).” The FSP clarifies the accounting for convertible debt
instruments that may be settled in cash (including partial cash settlement) upon
conversion. The FSP requires issuers to account separately for the liability and
equity components of certain convertible debt instruments in a manner that
reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when
interest cost is recognized. The FSP requires bifurcation of a component of the
debt, classification of that component in equity and the accretion of the
resulting discount on the debt to be recognized as part of interest expense in
our consolidated statement of operations. The FSP requires retrospective
application to the terms of instruments as they existed for all periods
presented. The FSP is effective for us as of January 1, 2009 and early
adoption is not permitted. The Company is currently evaluating the potential
impact of FSP APB 14-1 upon its consolidated financial statements.





(iv) The
Hierarchy of Generally Accepted Accounting Principles





In
May 2008, the FASB issued SFAS 162, "The Hierarchy of Generally Accepted
Accounting Principles". SFAS 162 identifies the sources of accounting principles
and the framework for selecting the principles used in the preparation of
financial statements. SFAS 162 is effective 60 days following the SEC's approval
of the Public Company Accounting Oversight Board amendments to AU
Section 411, "The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles". The implementation of this standard will not
have a material impact on the Company's consolidated financial position and
results of operations.





(v)
Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an
Entity's Own Stock





In
June 2008, the FASB ratified EITF 07-5, "Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity's Own Stock". EITF 07-5
provides that an entity should use a two step approach to evaluate whether an
equity-linked financial instrument (or embedded feature) is indexed to its own
stock, including evaluating the instrument's contingent exercise and settlement
provisions. It also clarifies on the impact of foreign currency denominated
strike prices and market-based employee stock option valuation instruments on
the evaluation. EITF 07-5 is effective for fiscal years beginning after
December 15, 2008. The Company is currently assessing the impact of EITF
07-5 on its consolidated financial position and results of
operations.





(vi)
Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities





In
June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities.” The FSP addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting and,
therefore, need to be included in the earnings allocation in computing earnings
per share under the two-class method. The FSP affects entities that accrue
dividends on share-based payment awards during the awards’ service period when
the dividends do not need to be returned if the employees forfeit the award.
This FSP is effective for fiscal years beginning after December 15, 2008.
The Company is currently assessing the impact of FSP EITF 03-6-1 on its
consolidated financial position and results of operations.





(vii)
Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party
Credit Enhancement





In
September 2008, the FASB issued EITF 08-5 “Issuer’s Accounting for
Liabilities Measured at Fair Value with a Third-Party Credit Enhancement.” This
FSP determines an issuer’s unit of accounting for a liability issued with an
inseparable third-party credit enhancement when it is measured or disclosed at
fair value on a recurring basis. FSP EITF 08-5 is effective on a prospective
basis in the first reporting period beginning on or after December 15,
2008. The Company is currently assessing the impact of FSP EITF 08-5 on its
consolidated financial position and results of operations.





(viii)
Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of
SFAS 133 and FIN 45; and Clarification of the Effective Date of SFAS
161





In
September 2008, the FASB issued FSP FAS 133-1, “Disclosures about Credit
Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133
and FASB Interpretation No. 45; and Clarification of the Effective Date of
FASB Statement No. 161.” This FSP amends SFAS 133, “Accounting for
Derivative Instruments and Hedging Activities,” to require disclosures by
sellers of credit derivatives, including credit derivatives embedded in a hybrid
instrument. The FSP also amends SFAS 45, “Guarantor’s Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of
Others,” to require and additional disclosure about the current status of the
payment/performance risk of a guarantee. Finally, this FSP clarifies the Board’s
intent about the effective date of SFAS 161, “Disclosures about Derivative
Instruments and Hedging Activities.” FSP FAS 133-1 is effective for fiscal years
ending after November 15, 2008. The Company is currently assessing the
impact of FSP FAS 133-1 on its consolidated financial position and results of
operations.





(ix)
Determining the Fair Value of a Financial Asset When the Market for That Asset
is Not Active





In
October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of
a Financial Asset When the Market for That Asset is Not Active.” This FSP
clarifies the application of SFAS 157, “Fair Value Measurements,” in a market
that is not active. The FSP also provides examples for determining the fair
value of a financial asset when the market for that financial asset is not
active. FSP FAS 157-3 was effective upon issuance, including prior periods for
which financial statements have not been issued. The impact of adoption was not
material to the Company’s consolidated financial condition or results of
operations.





(x)
Accounting for Defensive Intangible Assets





In
November 2008, the FASB issued EITF 08-7, “Accounting for Defensive
Intangible Assets.” EITF 08-7 clarifies how to account for defensive intangible
assets subsequent to initial measurement. EITF 08-7 applies to all defensive
intangible assets except for intangible assets that are used in research and
development activities. EITF 08-7 is effective for intangible assets acquired on
or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company is currently assessing the impact of
EITF 08-7 on its consolidated financial position and results of
operations.





(xi)
Equity Method Investment Accounting Considerations





In
November 2008, the FASB issued EITF 08-6 “Equity Method Investment
Accounting Considerations.” EITF 08-6 clarifies accounting for certain
transactions and impairment considerations involving the equity method.
Transactions and impairment dealt with are initial measurement, decrease in
investment value, and change in level of ownership or degree of influence. EITF
08-6 is effective on a prospective basis for fiscal years beginning on or after
December 15, 2008. The Company is currently assessing the impact of EITF
08-6 on its consolidated financial position and results of
operations.





(xii)
Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount
That is Based on the Stock of an Entity’s Consolidated Subsidiary





In
November 2008, the FASB issued FSP EITF 08-8, “Accounting for an Instrument
(or an Embedded Feature) with a Settlement Amount That is Based on the Stock of
an Entity’s Consolidated Subsidiary.” EITF 08-8 clarifies whether a financial
instrument for which the payoff to the counterparty is based, in whole or in
part, on the stock of an entity’s consolidated subsidiary is indexed to the
reporting entity’s own stock. EITF 08-8 also clarifies whether or not stock
should be precluded from qualifying for the scope exception of SFAS 133,
“Accounting for Derivative Instruments and Hedging Activities,” or from being
within the scope of EITF 00-19, “Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company’s Own Stock.” EITF 08-8 is
effective for fiscal years beginning on or after December 15, 2008, and
interim periods within those fiscal years. The Company is currently assessing
the impact of EITF 08-8 on its consolidated financial position and results of
operations.





(xiii)
Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets
and Interests in Variable Interest Entities





In
December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R) -8, “Disclosures
by Public Entities (Enterprises) about Transfers of Financial Assets and
Interests in Variable Interest Entities.” This FSP amends SFAS 140, “Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities,” to require public entities to provide additional disclosures about
transfers of financials assets. FSP FAS 140-4 also amends FIN 46(R)-8,
“Consolidation of Variable Interest Entities”, to require public enterprises,
including sponsors that have a variable interest entity, to provide additional
disclosures about their involvement with a variable interest entity. FSP FAS
140-4 also requires certain additional disclosures, in regards to variable
interest entities, to provide greater transparency to financial statement users.
FSP FAS 140-4 is effective for the first reporting period (interim or annual)
ending after December 15, 2008, with early application encouraged. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.





(xiv)
Recognition of Interest Income and Impairment on Purchased Beneficial Interests
and Beneficial Interests that Continue to be Held by a Transferor in Securitized
Financial Assets





In
January 2009, The FASB released FASB Staff Position (FSP) No. EITF 99-20-1,
“Amendments to the Impairment Guidance of EITF Issue No. 99-20”. The guidance,
which modifies Emerging Issues Task Force (EITF) Issue No. 99-20, “Recognition
of Interest Income and Impairment on Purchased Beneficial Interests and
Beneficial Interests That Continue to Be Held by a Transferor in Securitized
Financial Assets”, is effective for interim and annual reporting periods ending
after December 15, 2008, and should be applied prospectively, the FASB said.
Application to a prior reporting period is not permitted.





The
amendment allows for the use of other-than-temporary impairment assessments
established in SFAS No. 115, “Accounting for Certain Investments in Debt and
Equity Securities”, for securities that had previously been subject to the
impairment assessment under EITF Issue No. 99-20. SFAS No. 115 allows a
reporting entity to assess an impaired security that is classified as either
available-for-sale or held-to-maturity debt in order to determine whether the
impairment should be recognized as other-than-temporary and recognized in
earnings.





SFAS No.
115 gives management more discretion than EITF Issue No. 99-20, in deciding
whether the loss is permanent. EITF Issue No. 99-20 required the use of market
prices to assess the impairments of debt securities that are beneficial
interests in some securitized financial transactions. Under the amended
guidance, management can base the value it reports in the financial statements
on its judgment of its ability to collect all the contracted amounts
due.





The
Company does not currently believe that adopting this FSP will have a material
impact on the Company’s financial statements.





(xv)
Interim Disclosures About Fair Value of Financial Instruments





In April
2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1 ("FSP FAS
107-1 and APB 28-1"), "Interim Disclosures about Fair Value of Financial
Instruments". The FSP amends SFAS 107, "Disclosure about Fair Value of Financial
Instruments”, and Accounting Principles Board Opinion No. 28, "Interim Financial
Reporting", to require disclosures about fair value of financial
instruments for interim reporting periods of publicly traded companies as well
as in annual financial statements. The Company is required to adopt FSP FAS
107-1 and APB 28-1 in the quarter ended July 31, 2009. The Company does not
currently believe that adopting this FSP will have a material impact on the
Company’s financial statements.





(xvi)
Recognition and Presentation of Other-Than-Temporary Impairments





In April
2009, the FASB issued FASB Staff Position No. FSP FAS 115-2 and FAS 124-2 ("FSP
FAS 115-2 and FAS 124-2"), "Recognition and Presentation of Other-Than-Temporary
Impairments". The FSP amends the other-than-temporary impairment guidance in
U.S. GAAP for debt securities to make the guidance more operational and to
improve the presentation and disclosure of other-than-temporary impairments on
debt and equity securities in the financial statements. This FSP does not amend
existing recognition and measurement guidance related to other-than-temporary
impairments of equity securities. The Company is required to adopt FSP FAS 115-2
and FAS 124-2 in the quarter ended July 31, 2009.  The Company does not
currently believe that adopting this FSP will have a material impact on the
Company’s financial statements.


In April
2009, the FASB issued FASB Staff Position No. FAS 157-4 ("FSP FAS 157-4"),
"Determining Fair Value When the Volume and Level of Activity for the Asset or
Liability Have Significantly Decreased and Identifying Transactions That Are Not
Orderly". The FSP provides additional guidance for estimating fair value in
accordance with FASB Statement No. 157, "Fair Value Measurements", when the
volume and level of activity for the asset or liability have significantly
decreased. This FSP also includes guidance on identifying circumstances that
indicate a transaction is not orderly. The Company is required to adopt FSP FAS
157-4 in the quarter ended July 31, 2009. The Company does not currently
believe that adopting this FSP will have a material impact on the Company’s
financial statements.





(xvii)
Accounting for Assets Acquired and Liabilities Assumed in a Business Combination
that Arise from Contingencies





In April
2009, the FASB issued Staff Position SFAS No. 141(R)-1 (“SFAS 141(R)-1”),
“Accounting for Assets Acquired and Liabilities Assumed in a Business
Combination That Arise from Contingencies” which amends and clarifies FASB
Statement No. 141 (revised 2007), “Business Combinations”, to address
application issues on initial and subsequent recognition and measurement arising
from contingencies in a business combination.  SFAS 141(R)-1 is
effective for assets or liabilities arising from contingencies in business
combinations beginning with the first annual period on or after December 15,
2008.  The adoption of SFAS 141(R)-1 did not have an impact on the
Company’s consolidated financial statements.





(xviii)
Subsequent Events





In
May 2009, the FASB issued FASB No. 165, “Subsequent Events” (“SFAS
165”). SFAS 165 establishes general standards of accounting for disclosing
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. It requires the disclosure of the date
through which an entity has evaluated subsequent events and the basis for
selecting that date, that is, whether that date represents the date the
financial statements were issued or were available to be issued. SFAS 165 is
effective for interim or annual financial periods ending after June 15,
2009. The adoption of the standard will not have a material impact on the
Company.





(xix)
Accounting for Transfers of Financial Assets





In
June 2009, the FASB issued FASB No. 166, “Accounting for Transfers of
Financial Assets - an amendment of FASB Statement No. 140” (“SFAS 166”).
SFAS 166 requires additional disclosures about the transfer and derecognition of
financial assets and eliminates the concept of qualifying special-purpose
entities under SFAS 140. SFAS 166 is effective for fiscal years beginning after
November 15, 2009. The adoption of the standard will not have a material
impact on the Company.





(xx)
Consolidation of Variable Interest Entities





In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)” (“SFAS 167”). SFAS 167 amends certain requirements of FASB
Interpretation No. 46 (revised December 2003), “Consolidation of Variable
Interest Entities”, to improve financial reporting by enterprises involved with
variable interest entities and to provide more relevant and reliable information
to users of financial statements. This Statement is effective as of the
beginning of each reporting entity’s first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual
reporting period, and for interim and annual reporting periods thereafter.
Earlier application is prohibited. The Company is currently assessing the impact
of the adoption of SFAS 167 on the Company’s financial condition, results of
operations and cash flows.





(xxi) The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles





In June
2009, the FASB issued Financial Accounting Standard No. 168, “The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles – a replacement of FASB Statement No. 162” (FAS 168).
In addition in June 2009, the FASB issued Accounting Standards Update
No. 2009-01, “Topic 205 – Generally Accepted Accounting Principles -
amendments based on Statement of Financial Accounting Standards No. 168 –
The FASB Accounting Standards Codification and the Hierarchy of Generally
Accepted Accounting Principles” (ASU 2009-1). Both FAS 168 and ASU 2009-1
recognize the FASB Accounting Standards Codification as the source of
authoritative U.S. generally accepted accounting principles to be utilized by
nongovernmental entities. FAS 168 and ASU 2009-1 are effective for interim and
annual periods ending after September 15, 2009. The adoption of this
pronouncement is not expected to have a material effect on the Company’s
financial statements.





All new
accounting pronouncements issued but not yet effective have been deemed to not
be applicable, hence the adoption of these new standards is not expected to have
a material impact on the consolidated financial statements.





Results of Operations - Comparison of
Year Ended April 30, 2009 and Year Ended April 30, 2008





Revenue.  Net sales
for the year ended April 30, 2009 were $1,296,570 while our net sales for the
period ended April 30, 2008 were zero.  We started sales activities
from the second half of 2008, therefore, there was no revenue generated for the
period ended April 30, 2008. Sales are primarily generated from distributions
made from the Chinese Advertisement Company pursuant to our Business Cooperation
Agreement.  The majority of this revenue came from advertising clients
who played their commercials on the screens in KTV lounges in
China.




Cost of goods and
services.  Cost of goods sold for the period ended April 30,
2009 was $2,118,414 while our cost of goods sold for the period ended April 30,
2008 was zero.  The increase was due to starting of sales in 2008.
There was no revenue for the period ended April 30, 2008, therefore no cost of
goods and services occurred. Costs primarily include costs associated with rent
and royalty fee for KTV lounges and equipment installation in KTV lounges in
China.





Selling, general, and administrative
expense.  Selling, general and administrative expense primarily
includes: salaries and benefits, travel expenses, and third-party professional
service fees. Selling, general, and administrative expense was $3,599,782 for
the year ended April 30, 2009 compared to $325,855 for the year ended April 30,
2008, an increase of $3,273,927.  This increase was mainly due to the
expansion of our business. More sales activities caused increase in payroll,
marketing and traveling expenses. We expect our selling, general, and
administrative expenses will keep the same over the course of the year. If our
revenue keeps increasing as we continue our efforts to expand our network, we
expect our selling, general, and administrative expenses will increase
accordingly. This increase will primarily be related to marketing expenses
necessary to support our growth and our efforts to build brand awareness through
advertising and promotional activities, and our network expansion.




Interest
income.  We recognized $30,751 of interest income
for fiscal 2009  compared to $9,070 for fiscal 2008, an increase
primarily due to the higher balances of short-term and long-term
investments held during fiscal 2009.




Net loss. As
a result of the above, our net loss is $4,414,829 in fiscal 2009 compared to
$389,133 in fiscal 2008.





Liquidity
and Capital Resources





As of
April 30, 2009, we had an aggregate of cash, cash equivalents, of $1,102,634
compared to $1,152,852 as of April 30, 2008. We received $4,593,836 net proceeds
from an offering of our common stock and warrants affected on July 17,
2008.





Accounts receivable is $580,440
compared to zero for the year ended April 30, 2008. The increase is due to the
fact that we started our sales activities in the second half of 2008, there were
no sales activities in the 2008 fiscal year.





Prepaid
expenses and other receivablesis$652,085 for
the year ended April 30, 2009 as compared to $91,033 for the year ended April
30, 2008, an increase of $561,052. Majority of the prepaid expenses were money
advanced to Company staffs and officers for the expenses to be incurred for the
Company. Please refer to note 3 of the Consolidated Financial Statements for
details.





During
the year ended April 30, 2009, the Company accrued $33,315 (2008: $24,549) in
consulting fees to a related party of the Company’s President and CEO. As of
April 30, 2009, the Company owes $3,942 (2008: $56,373) to this related party
for services rendered. Please refer to Note 7 to the Consolidated Financial
Statement for details about the related party transaction.





Inventory
was $107,066 for the year ended April 30, 2009 as compared to zero for the year
ended April 30, 2008. This is due to the fact that the Company started its sales
activities in the fiscal year of 2008. Majority inventory came from the barter
transaction.





Depreciation and amortization expense
was $8,185 for the year ended April 30, 2009 compared to $54 for the year ended
April 30, 2008. The majority of our equipment are computers and servers
were purchased in 2009 when we started our sales and expanded our
business.





Accounts payable and accrued
liabilities was $355,463 for the year ended April 30, 2009 as compared to
$98,226 for the year ended April 30, 2008, an increase of $257,237. Please refer
to Note 4 of the Consolidated Financial Statements for details.





Unearned revenue was $226,602 for the
year ended April 30, 2009 as compared to zero for the year ended April 30, 2008.
This is due to the fact that the Company started its sales activities by the
second half of 2008. There was no revenue for the year ended April 30, 2008.
Unearned revenue is recorded for the services that been signed and not yet been
provided, hence the revenue has been amortized over the period that the service
provide.





Operating
Activities




Net cash
used in operating activities was $4,195,093 in fiscal 2009 compared to $314,537
used in the same period of fiscal 2008, an increase of
$3,880,556.  The cash used in operations including employee
compensation, professional fees, facilities and advertising expense. The
increase was mainly due to the expansion of our KTV advertising business and
network, as well as a significant expense in the number of markets
served.





Investing
Activities





During
fiscal 2009, net cash used in investing activities was $47,728,
as compared to $6,793 net cash used in investing activities for fiscal 2008. The
increase of net cash flow used in investing activities was mainly due to the
purchase of fixed assets after the Company started its sales activities and
expansion of its business.





Financing
Activities





Net cash
provided by financing activities was $4,166,224 for fiscal 2009 compared to net
cash provided by financing activities of $1,457,624 fiscal 2008. During fiscal
2009, our financing activities consisted primarily of cash proceeds received
from the issuance of our equity securities stock to an accredited investor for
$5 million.





We do not
believe inflation had a significant negative impact on our results of operations
during 2009.





Off
Balance Sheet Arrangements




We do not
have any obligations that meet the definition of an off-balance-sheet
arrangement that have or are reasonably likely to have a material effect on our
financial statements, which has not been consolidated





ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.





Not
applicable.







ITEM
8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA







Index
to Consolidated Financial Statements





Report
      of Goldman Parks Kurland Mohidin LLP, Independent Registered Public
      Accounting Firm
            F-1Consolidated
      Balance Sheets as of April 30, 2008 and 2009
            F-2Consolidated
      Statements of Operations for the period from inception (June 18, 2007) to
      April 30, 2008 and Year Ending April 2009.
            F-3Consolidated
      Statement of Stockholders' Equity for the period from inception (June 18,
      2007) to April 30, 2009
            F-4Consolidated
      Statements of Cash Flows for the period from inception (June 18, 2007) to
      April 30, 2008 and Year Ending April 30, 2009
            F-5Notes
      to Financial Statements
            F-6








REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors


K’s
Media


Beijing,
China





We have
audited the consolidated balance sheet of K’s Media and its subsidiaries (the
“Company”) as of April 30, 2009 and the related consolidated statements of
operations, stockholders’ equity (deficiency) and cash flows for the year then
ended.  All of the financial statements referred to above are the
responsibility of the Company's management.  Our responsibility is to
express an opinion on all of these financial statements based on our
audit.





We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstance, but not for
the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  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 audit provides a reasonable basis for our opinion.





In our
opinion, based on our audit, the financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
April 30, 2009 and the results of its operations and its cash flows for the year
then ended, in conformity with accounting principals generally accepted in the
United States of America.





The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
financial statements,  the Company has incurred a net loss of
$4,414,829 and has an accumulated deficit of $4,803,962 that raise substantial
doubt about the Company’s ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.






Goldman
Parks Kurland Mohidin LLP





Encino,
California


July 23,
2009












K's
      Media(Previously
      known as Kinglake Resources Inc.)Consolidated
      Balance SheetsApril
      30, 2009 and 2008(Expressed
      in U.S. Dollars)
                
                2009
                
                2008ASSETSCurrent
      assetsCash
                $
                1,102,634
                $
                1,152,852Accounts
      receivable, net of allowance for doubtful accounts of $250,772 at April
      30, 2009
                
                580,440
                
                -Prepaid
      expenses and other receivables (Note 3)
                
                652,085
                
                91,033Inventory
                
                107,066
                
                -Amount
      due from related party
                
                249,232
                
                -Total
      current assets
                
                2,691,457
                
                1,243,885Equipment,
      net (Note 5)
                
                55,235
                
                15,019Total
      assets
                $
                2,746,692
                $
                1,258,904LIABILITIESCurrent
      liabilitiesAccounts
      payable and accrued liabilities (Note 4)
                $
                355,463
                $
                98,226Amount
      due to related parties
                
                8,086
                
                242,423Unearned
      revenue
                
                226,602
                
                -Total
      liabilities
                
                590,151
                
                340,649STOCKHOLDERS'
      EQUITYStockholders'
      Equity (Note 6)Preferred
      stock: $0.00001 par value;authorized
      100,000,000 shares,issued
      and outstanding 0 and 0 shares, respectively
                
                -
                
                -Common
      stock, $0.00001 par value;authorized
      100,000,000 shares,33,466,167
      and 31,637,000 issued and 22,916,167 and21,137,000
      outstanding , respectively
                
                335
                
                317Additional
      paid-in capital
                
                7,027,844
                
                1,507,776Deferred
      consulting services
                
                (116,250)
                
                (217,263)Accumulated
      other comprehensive loss
                
                48,574
                
                16,558Accumulated
      deficit
                
                (4,803,962)
                
                (389,133)Total
      stockholders' equity
                
                2,156,541
                
                918,255Total
      liabilities and stockholders' equity
                $
                2,746,692
                $
                1,258,904The
      accompanying notes are an integral part of these consolidated financial
      statements.





K's
      Media(Previously
      known as Kinglake Resources Inc.)Consolidated
      Statements of OperationsPeriod
      frominceptionYear
      ended
              
              (June
      18, 2007) to(Expressed
      in U.S. Dollars)
              
              April 30,
      2009
              
              April 30,
      2008RevenuesSales
              $
              1,296,570
              $
              -Cost
      of good sold
              
              (2,118,414)
              
              (42,777)Gross
      loss
              
              (821,844)
              
              (42,777)ExpensesAdministrative
      and general
              
              3,083,126
              
              325,855Selling
      expenses
              
              516,656
              
              -Total
      operating costs and expenses
              
              3,599,782
              
              325,855Loss
      from operations
              #
              (4,421,626)
              
              (368,632)Other
      income and expensesInterest
      income
              
              30,751
              
              9,070Foreign
      exchange loss
              
              (19,760)
              
              (28,777)Interest
      and bank charges
              
              (4,194)
              
              (794)6,797
              
              (20,501)Net
      Loss
              
              (4,414,829)
              
              (389,133)Other
      Comprehensive Income
              
              32,016
              
              16,558Comprehensive
      Loss
              $
              (4,382,813)
              $
              (372,575)Net
      loss per shareBasic
      and diluted
              $
              (0.19)
              $
              (0.02)Number
      of common shares used tocompute
      loss per shareBasic
      and diluted
              
              22,664,843
              
              21,099,145The
      accompanying notes are an integral part of these consolidated financial
      statements.







K's
      Media(Previously
      known as Kinglake Resources Inc.)Consolidated
      Statement of Stockholders' Equity (Deficiency)For
      the year ended April 30, 2009 and the period from Inception (June 18,
      2007) to April 30, 2008AccumulatedDeferred
              
              
              
              other
              
              TotalCommon
      Stock
              
              
              Additional
              
              Consulting
              
              Accumulated
              
              comprehensive
              
              Stockholders'(Expressed
      in U.S. Dollars)
              
              Shares
              
              Amount
              
              paid-in
      capital
              
              Services
              
              Deficit
              
              income
              
              EquityBalance,
      Inception (June 18, 2007)
              
              13,000,000
              $
              130
              $
              1,287,120
              $
              -
              $
              -
              $
              -
              $
              1,287,250Issuance
      of 2,000,000 shares for finder's feeto
      acquire Orient Come Holdings Limited
              
              2,000,000
              
              20
              
              (20)
              
              
              
              
              
              
              
              -Issuance
      of common stock for the acquisitionof
      K's Media Advertising
              
              10,500,000
              
              105
              
              (105)
              
              
              
              
              
              
              
              -Issuance
      of common stock pursuant toConsultancy
      Services Agreement
              
              50,000
              
              1
              
              274,499
              
              (274,450)
              
              
              
              
              
              50Amortization
      of deferred consulting services
              
              
              
              
              
              
              
              57,187
              
              
              
              
              
              57,187Recapitalization
      upon reverse acquisition of
              
              
              
              
              
              
              
              
              
              
              
              
              
              -Orient
      Come Holdings Limited
              
              6,087,000
              
              61
              
              (53,718)
              
              
              
              
              
              
              
              (53,657)Foreign
      translation adjustment
              
              
              
              
              
              
              
              
              
              
              
              16,558
              
              16,558Net
      loss for the period
              
              
              
              
              
              
              
              
              
              (389,133)
              
              
              
              (389,133)Balance,
      April 30, 2008
              
              31,637,000
              
              317
              
              1,507,776
              
              (217,263)
              
              (389,133)
              
              16,558
              
              918,255Common
      stock issued on private placementin
      July 2008 (at $3 per share)
              
              1,666,667
              
              16
              
              3,700,449
              
              
              
              
              
              
              
              3,700,465Issuance
      of warrants on private placementin
      July 2008
              
              
              
              
              
              893,371
              
              
              
              
              
              
              
              893,371Issuance
      of common shares as employee benefits
              
              112,500
              
              1
              
              641,249
              
              
              
              
              
              
              
              641,250Issuance
      of shares for service rendered
              
              50,000
              
              1
              
              284,999
              
              (285,000)
              
              
              
              
              
              -Amortization
      of deferred consulting services
              
              
              
              
              
              
              
              386,013
              
              
              
              
              
              386,013Foreign
      translation adjustment
              
              
              
              
              
              
              
              
              
              
              
              32,016
              
              32,016Net
      loss for the year ended April 30, 2009
              
              
              
              
              
              
              
              
              
              (4,414,829)
              
              
              
              (4,414,829)Balance,
      April 30, 2009
              
              33,466,167
              $
              335
              $
              7,027,844
              $
              (116,250)
              $
              (4,803,962)
              $
              48,574
              $
              2,156,541The
      accompanying notes are an integral part of these consolidated financial
      statements.


K's
      Media(Previously
      known as Kinglake Resources Inc.)Consolidated
      Statements of Cash FlowsPeriod
      frominceptionFor
      the year ended
              
              (June
      18, 2007) to(Expressed
      in U.S. Dollars)
              
              April 30,
      2009
              
              April 30,
      2008Cash
      flows used in operating activitiesNet
      loss
              $
              (4,414,829)
              $
              (389,133)Adjustment
      to reconcile net loss to net cash by operating activities:Depreciation
              
              8,086
              
              54Non-cash
      adminstrative and general expenses
              
              386,013
              
              57,188Non-cash
      employee benefits
              
              641,250
              
              -Changes
      in operating assets and liabilities:Accounts
      receivable
              
              (577,439)
              
              -Prepaid
      expenses and other receivable
              
              (557,052)
              
              (55,839)Inventory
              
              (106,513)
              
              -Accounts
      payable and accrued liabilities
              
              254,579
              
              16,820Amount
      due from related party
              
              (2,188)
              
              -Amount
      due to related parties
              
              (52,431)
              
              56,373Unearned
      revenue
              
              225,431
              
              -Net
      cash used in operating activities
              
              (4,195,093)
              
              (314,537)Cash
      flows used in investing activitiesPurchasing
      fixed assets
              
              (47,728)
              
              (15,073)Cash
      transferred in from recapitalization
              
              -
              
              8,280Net
      cash used in investing activities
              
              (47,728)
              
              (6,793)Cash
      flows provided by financing activitiesIssuance
      of common stock and warrants
              
              4,593,836
              
              1,287,250Loans
      from related parties
              
              -
              
              170,374Advance
      to related parties
              
              (3,790,023)
              
              -Repayment
      from related parties
              
              3,362,411
              
              -Net
      cash provided by financing activities
              
              4,166,224
              
              1,457,624Effect
      of foreign exchange rate charges
              
              26,379
              
              16,558Increase
      (decrease) in cash
              
              (50,218)
              
              1,152,852Cash,
      beginning of period
              
              1,152,852
              
              -Cash,
      end of period
              $
              1,102,634
              $
              1,152,852Supplemental
      disclosure of cash flow information:Interest
      paid
              $
              -
              $
              -Income
      tax paid
              $
              -
              $
              -Non-cash
      Investing and Financing Activities:Common
      stock issued for recapitalization
              $
              -
              $
              1,287,250Common
      stock issued for employee benefits
              $
              641,250
              $
              -Common
      stock issued for service rendered
              $
              285,000
              $
              -The
      accompanying notes are an integral part of these consolidated financial
      statements.












K'S MEDIA


(Previously
known as Kinglake Resources Inc.)


NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS


April 30,
2009





Note
1. Nature of Operations and Going Concern





Nature of
Operations





Kinglake
Resources Inc. (the "Company") was incorporated in the State of Nevada on April
14, 2006 and engaged in the business of conducting research in the form of
exploration of mineral property. In April 2006, the Company acquired a mining
claim in the Province of British Columbia. In September 2007, the Company wrote
down the property to $nil according to the recommendation of the Company's
geologist as the property had minimal value for mining. The mining claim expired
April 18, 2007. During the year ended April 30, 2009, the Company ceased to be a
development stage enterprise as it commenced its planned principal
operations.





On
January 18, 2008, the Company completed a Share Exchange Agreement (the "Share
Exchange Agreement") dated December 23, 2007 with Orient Come Holdings
Limited, a company organized under the laws of British Virgin Island ("Orient
Come") and Beijing K's Media Advertising Ltd. Co. ("K's Media"), a limited
liability company organized under the laws of the People's Republic of China
("China"). Pursuant to the terms of the Share Exchange Agreement, the
shareholders of Orient Come (the "Orient Come Shareholders") transferred to the
Company all of the Orient Come shares in exchange for the issuance of 13,000,000
shares of the Company's common stock (the "Acquisition"). As a result of the
Acquisition, Orient Come became the Company's wholly-owned subsidiary and the
Orient Come Shareholders and/or their designated third parties acquired in the
aggregate approximately 62% of the Company’s issued and outstanding stock. In
connection with the Share Exchange Agreement, the Company issued 2,000,000
shares of its common stock as a finder's fee to a third party. K's Media and
their shareholders have not received shares of the Company under the terms of
the of the Share Exchange Agreement as there were restrictions under the Chinese
laws with regards to foreign ownership of Chinese companies engaged in media
related activities. Upon such time that such laws are lifted, the shareholders
of K's Media may have a direct ownership stake in the Company.





Concurrent
with the Share Exchange Agreement, the Company entered into a series of
agreement with K's Media and the shareholders of K's Media (see Note 1(a) to (d)
for details). Included among these agreements is a Business Cooperation
Agreement. Under this agreement the Company effectively controls K's Media. As a
result of the Business Cooperation Agreement, K’s Media is deemed to be a
subsidiary of the Company under FASB Interpretations - FIN 46(R):
Consolidation of Variable Interest Entities (as amended) ("FIN 46 (R)")
and Emerging Issue Task Force
97-2 (“EITF 97-2”): Application of FASB Statement No. 94 and APB Opinion No. 16
to Physician Practice Management Entities and Certain Other Entities with
Contractual Management Arrangements.




On
February 22, 2008 Orient Come assigned its rights and obligations under the
Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's
Media Broadcasting") (see Note 1(b) for details). K's Media Broadcasting, a
company organized under the laws of China, is a wholly owned subsidiary of the
Company.




As a
result of the Share Exchange Agreement, the Company is involved in theadvertising business
that targets high end consumers in China by placing premium brand advertising in
"entertainment" clubs on behalf of top-tier consumer products clients.
Entertainment clubs are popular entertainment establishments in Asia that rent
private rooms containing karaoke singing equipment, typically to groups of
friends and business colleagues.





The Share
Exchange Agreement is considered a reverse acquisition with Orient Come
effectively assuming control of the Company. The Company (the legal acquirer of
Orient Come) in substance is the accounting acquiree and Orient Come (the legal
acquiree of the Company) is the accounting acquirer. The consolidated financial
statements presented are those of Orient Come, the accounting acquirer at
historical cost. Orient Come commenced operations on June 18, 2007. The
financial statements presented are from June 18, 2007 (inception) through April
30, 2008 (the “2008 period”).





On March
11, 2008, the Company changed its name to K's Media.





The
following agreements were entered into concurrent with the Share Exchange
Agreement:





(a) Escrow
Agreement





The
Company entered into an Escrow Agreement (“Escrow Agreement”) with K's Media and
shareholders of K's Media effective December 23, 2007. Pursuant to the Escrow
Agreement, the Escrow Shares will be deposited or held in an escrow account with
an escrow agent. 7,875,000 (75% of 10,500,000) of the Escrow Shares are being
held as securityupon achievement of
$2,118,789 of audited signed sales from K's Media's operations for K's Media
fiscal year ended December 31, 2008 (the "2008 Performance Threshold") and
$15,980,447 of the audited signed sales from K's Media's operations results for
K's Media fiscal year ended December 31, 2009 (the "2009 Performance
Threshold"),and
$36,929,605 of the audited signed sales from K's Media's operations results for
K's Media fiscal year ended December 31, 2010 (the "2010 Performance
Threshold"). If K's Media achieved each of the 2008, 2009 and 2010 Performance
Threshold, one third of the Escrow Shares will be released to shareholders of
K’s Media every year for a total of 3 years. If Performance Threshold is not
achieved, a number of Escrow Shares (such number to be determined by the formula
as set forth in the Escrow Agreement) will be returned to the Company for
cancellation. Upon the termination of the Escrow agreement, any and all Escrow
shares remaining in the Escrow account shall be returned to the Company for
cancellation.  The remaining 2,625,000 being held as security for K's
Media entering into advertising agreements with entertainment clubs facilitated
by the service provider. If at the end of fiscal year ended December 31, 2008
the service provider has signed up less than 300 entertainment clubs under
advertising agreements with K's Media, then 60% of the 2,625,000 shares
shall be cancelled.  If at the end of K's Media fiscal year ended
December 31, 2009 and K's Media fiscal year ended December 31, 2010 the service
provider has facilitated less than 600 advertising agreements per each year,
then 20% of the 2,625,000 shares shall be cancelled respectively.





On Jan
31, 2008 the Escrow Agreement was amended pursuant to Amendment No. 1 to the
Escrow Agreement to provide that, in addition to the original release terms, in
the event of a merger or consolidation of the Company on or prior to the end of
April of the fiscal year 2011, with or into another corporation or any other
entity or the exchange of substantially all of the outstanding stock of the
Company for shares of another entity or other property in which, after any such
transaction the prior shareholders of the Company own less than fifty percent
(50%) of the voting shares of the continuing or surviving entity, or in the
event of the sale of all or substantially all of the assets of the Company, then
all of the Escrowed Shares shall be released and distributed to the Shareholders
of the Chinese Advertising Company.





On
September 4, 2008 the Company entered into amendment 2 to the Escrow Agreement
made as of the 23rd day of December 2007 by and between K’s Media; Orient Come
Holdings Limited; Beijing K's Media Advertising Ltd. Co.; the Company’s
management personnel; and Arnstein & Lehr LLP, a law
firm.  Pursuant to the amendment Zhuang, Yan; Chang, Lin and Wu,
LiHong each transferred the right to receive 100,000 escrowed shares, and Lu,
Yong assigned the right to receive 300,000 escrowed shares, to Andy
Pang.  Mr. Pang currently serves as Chief Operating Officer of the
Company.The assigned
escrowed shares of common stock remain subject to the escrow agreement, as
amended.





On June
4, 2009, the Company entered into amendment 3 to the Escrow Agreement made as of
the 23rd day of December 2007 by and between K’s Media; Orient Come Holdings
Limited; Beijing K's Media Advertising Ltd. Co.; an affiliate of Shine
MultiMedia Co., Ltd. (“Shine”), a provider of services to the Company and
Arnstein & Lehr LLP, a law firm. The remaining 2,625,000 (25%) escrowed
shares are issuable to an affiliate of Shine Company and are being held pending
the Company’s entering into advertising agreements with KTV clubs as facilitated
by the affiliate.  Due to the change of the overall economic
environment during the second half of 2008, and under the new condition,
1,575,000 escrowed shares have been released to the affiliate of Shine in July
2009. On the second and third anniversaries, 525,000 (20% each year) of the
escrowed shares will be released if the affiliate has signed up more than 600
KTV clubs during the respective year under advertising agreements with the
Company. If between 300 and 600 KTV clubs have signed advertising
agreements during the year the number of shares to be released will be reduced
on a pro rata basis. If less than 300 KTV clubs have signed advertising
agreements with the Company during each of those years, then 525,000 (20% per
year) of the escrowed shares will be returned to the Company, and the affiliate
will no longer be entitled to the shares.




On August
4, 2009, the Company entered into amendment 4 to the Escrow Agreement to extend
the achievement of $2,118,789 of audited signed sales from K's Media's
operations for K's Media fiscal year ended December 31, 2008 to 16 months from
January 1, 2008 to April 30, 2009 (the "2009 Amended Performance Threshold") and
$15,980,447 of the audited signed sales from K's Media's operations results for
K's Media fiscal year ended April 30, 2010 (the "2010 Amended Performance
Threshold"),and
$36,929,605 of the audited signed sales from K's Media's operations results for
K's Media fiscal year ended April 30, 2011 (the "2011 Amended Performance
Threshold"). If K's Media achieved each of the 2009, 2010 and 2011 Amended
Performance Threshold, one third of the Escrow Shares will be released to
shareholders of K’s Media every performance period for a total of 3.33 years. If
Performance Threshold is not achieved, a number of Escrow Shares (such number to
be determined by the formula as set forth in the Escrow Agreement) will be
returned to the Company for cancellation within 30 days after the Company files
its Form 10-K with SEC. Upon the termination of the Escrow agreement, any and
all Escrow shares remaining in the Escrow account shall be returned to the
Company for cancellation.  The remaining 2,625,000 being held as
security for K's Media entering into advertising agreements with entertainment
clubs facilitated by the service provider. If at the end of 16 months ended
April 30, 2009 the service provider has signed up less than 300 entertainment
clubs under advertising agreements with K's Media, then 60% of the
2,625,000 shares shall be cancelled within 30 days after the Company files its
Form 10-K with SEC.  If at the end of K's Media fiscal year ended
April 30, 2010 and K's Media fiscal year ended April 30, 2011 the service
provider has facilitated less than 600 advertising agreements per each year,
then 20% of the 2,625,000 shares shall be cancelled respectively within 30 days
after the Company files its Form 10-K with SEC.




(b) Business
Cooperation Agreement





Pursuant
to the provisions of the Business Cooperation Agreement, K's Media retained the
services of Orient Come in relation to the current and proposed operations of
K's Media's business in China ("Orient Come's Services").  Under the
Business Cooperation Agreement, K's Media will remit a quarterly consulting fee,
equal to 80% of its quarterly revenues after deduction of direct operating
costs, expenses and taxes in consideration of Orient Come's
Services.





On
February 22, 2008 Orient Come assigned its rights and obligations under the
Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's
Media Broadcasting") pursuant to an Assignment Agreement dated February 22, 2008
(the "Assignment Agreement").  Under the Assignment Agreement Orient
Come assigned all of its right, title and interest in and to the Business
Cooperation Agreement and K’s Media Broadcasting agreed to assume all of Orient
Come's obligations under the Business Cooperation Agreement.  K's
Media Broadcasting, a company organized under the laws of China, is a wholly
owned subsidiary of the Company.





(c) Exclusive
Option Agreements





An
Exclusive Option Agreements entered into by and the Company, shareholders of K's
Media and K's Media effective as of December 23, 2007, the shareholders
of  K's Media, irrevocably granted to the Company or its designated
party an exclusive option to purchase, to the extent permitted by China law, a
portion or all of their respective equity interests in  K's Media for
a purchase price of $100. The Company or its designated party has the sole
discretion to decide when to exercise the option, whether in part or in full.
Each of these agreements has a twenty-year term, subject to renewal at the
Company's election.





(d) Equity
Pledge Agreements





A series
of Equity Pledge Agreements entered into by and among the Company, K's Media and
shareholders of K's Media dated December 23, 2007, the shareholders of K's Media
pledge, all of their equity interests in K's Media to guarantee the performance
of K's Media in its obligations under the Exclusive Business Cooperation
Agreement. If K's Media or any of its shareholders breaches his/her
respective contractual obligations under this agreement, or upon the occurrence
of one of the events regarded as an event of default under each such agreement,
the Company, as pledgee, will be entitled to certain rights, including the right
to dispose of the pledged equity interests. The shareholders of K's Media agree
not to dispose of the pledged equity interests or take any actions that would
prejudice the Company's interest, and to notify the Company of any events or
upon receipt of any notices which may affect the Company's interest in the
pledge. Each of the equity pledge agreements will be valid until all the
payments due under the Exclusive Business Cooperation Agreement have been
fulfilled.





Going
Concern





The
Company has incurred net operating losses since inception. The Company faces all
the risks common to companies that are relatively new, including under
capitalization and uncertainty of funding sources, high initial expenditure
levels, uncertain revenue streams, and difficulties in managing growth. At April
30, 2009, the Company has accumulated losses of $4,803,962 since inception.
The Company's recurring losses raise substantial doubt about its ability to
continue as a going concern. The Company's consolidated financial statements do
not reflect any adjustments that might result from the outcome of this
uncertainty. The Company expects to incur losses from its business operations
and will require additional funding during the year ended April 30, 2010. The
future of the Company hereafter will depend in large part on the Company's
ability to successfully raise capital from external sources to pay for planned
expenditures and to fund operations.





Management
believes that its current and future plans enable it to continue as a going
concern. The Company's ability to achieve these objectives cannot be determined
at this time. These financial statements do not give effect to any adjustments
which would be necessary should the Company be unable to continue as a going
concern and therefore be required to realize its assets and discharge its
liabilities in other than the normal course of business and at amounts different
from those reflected in the accompanying financial statements.





Note
2. Significant Accounting Policies





(a) Basis
of Presentation





These
consolidated financial statements and related notes are presented in accordance
with accounting principles generally accepted in the United States (“US GAAP”),
and are expressed in U.S. dollars.




(b)
Principles of Consolidation





The
accompanying consolidated financial statements of K's Media (Registrant,
formerly known as Kinglake Resources Inc.), Oriental Come Holdings Ltd (100%
owned subsidiary), Beijing K's Media Broadcasting Ltd. Co. (100% owned
subsidiary) and Beijing K's Media Advertising Ltd. Co., which is deemed to be
Variable Interest Entity of the Company through contractual relationship. This
consolidation is required by the standards of Accounting Research Bulletin 51,
Consolidated Financial Statements, Statement 94 of the Financial Accounting
Standards Board (FASB), Consolidation of All Majority-Owned Subsidiaries, FASB
Interpretation 46(R) Consolidation of Variable Interest Entities, Issue 04-05 of
the Emerging Issues Task Force of the FASB, Determining Whether a General
Partner, or the General Partners as a Group, Controls a Limited Partnership or
Similar Entity When the Limited Partners Have Certain Rights, and FASB Staff
Position SOP 78-9-1, Interaction of AICPA Statement of Position (SOP) 78-9 and
EITF Issue 04-05.





(c)
Estimates





The
consolidated financial statements were prepared in conformity with US GAAP
requires us 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 revenue and
expense. Actual results could differ from those estimates.





(d) Cash
and Cash Equivalents





The
Company considers all highly liquid investments with an original maturity of
three months or less to be cash equivalents. Cash equivalents include
investments in money market funds and are stated at cost, which approximates
market value.





(e)
Concentration of Credit Risk





The
Company maintains Chinese Renminbi cash balances in banks in China and U.S.
Dollar and Canadian Dollar cash balances in a Canadian bank, that are not
insured.





(f)
Accounts Receivable





The
Company extends unsecured credit to its customers in the ordinary course of
business but mitigates the associated risks by performing credit checks and
actively pursuing past due accounts. An allowance for doubtful accounts is
established and recorded based on management's assessment of the credit history
with the customer and current relationships with them. At April 30, 2009, the
Company made provision for doubtful accounts of $250,772.





(g)
Inventories





Inventories,
which consist of golf equipment, t-shirts, wine and cosmetic gift cards that are
received through barter transactions, are valued at the lower of cost and net
realizable value, with cost being determined on a first-in-first-out
basis.





(h)
Property, Plant and Equipment





Property,
plant and equipment are recorded at cost. The Company provides for depreciation
using the straight-line method of accounting over the estimated useful lives
ranging from 3 to 7 years. Any gain or loss on disposal of property, plant or
equipment will be recorded in the income statement at the year of disposal.
Expenditures for betterments, renewals and additions are capitalized. Repairs
and maintenance expenses are charged to operations as incurred.





(i)
Impairment of Long-Lived Assets





Long-lived
assets of the Company are reviewed for impairment when changes in circumstances
indicate their carrying value has become impaired, pursuant to guidance
established in SFAS No. 144, Accounting for the Impairment or
Disposal ofLong-Lived
Assets. Management considers assets to be impaired if the carrying amount
of an asset exceeds the future projected cash flows from related operations
(undiscounted and without interest charges).  If impairment is deemed to
exist, the asset will be written down to fair value, and a loss is recorded as
the difference between the carrying value and the fair value. Fair values are
determined based on quoted market values, discounted cash flows or internal and
external appraisals, as applicable. Assets to be disposed of are carried at the
lower of carrying value or estimated net realizable value.





(j)
Foreign Currency Translation





The
Company’s reporting currency is the US dollar. All of the Company's operating
subsidiaries are located in China. They are considered to be self sustaining
operations and their functional currency is Renminbi(“RMB”). The parent
company’s functional currency is the U.S. dollar. Accordingly, the financial
statements are translated to the U.S. dollar using the current rate method.
Under the current rate method, assets and liabilities are translated using the
period end exchange rate, revenues and expenses for the period are translated
using the average rate for the period and shareholders equity is translated at
historical rates. Gains or losses resulting from these translation adjustments
are included in accumulated other comprehensive income.





(k)
Stock-based Compensation





The
Company accounts for stock based compensation in accordance with SFAS 123 and
SFAS 123 (R) under the fair value based method that measures compensation cost
at the grant date based on the value of the award and is recognized over the
service period, which is usually the vesting period. As of April 30, 2009, there
are no outstanding stock options or warrants.





(l)
Deferred Consultancy Services





When
shares of the common stock of the Company are issued for services provided over
a certain period of time, the fair value of the shares are recorded as deferred
consultancy services in the equity section of the balance sheet and will be
amortized as expenses over the period of services.





(m)
Income Taxes





The
Company accounts for income taxes under the provisions of SFAS No. 109, “Accounting for Income Taxes.”
Under SFAS No. 109, deferred income tax assets and liabilities are computed for
differences between the financial statements and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the future,
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary, to reduce deferred income tax assets to the amount
expected to be realized.





(n) Fair
Value of Financial Instruments





The
determination of fair value of financial instruments is made at a specific point
in time, based on relevant information about financial markets and specific
financial instruments. As these estimates are subjective in nature, involving
uncertainties and matters of significant judgement, they cannot be determined
with precision. Changes in assumptions can significantly affect estimated fair
values. The carrying value of cash and accounts payable, accrued liabilities and
notes payable approximates their fair value because of the short-term nature of
these instruments. The Company places its cash with high credit quality
financial institutions.





(o)
Related Party Transactions





A related
party is generally defined as (i) any person that holds 10% or more of the
Company’s securities and their immediate families, (ii) the Company’s
management, (iii) someone that directly or indirectly controls, is controlled by
or is under common control with the Company, or (iv) anyone who can
significantly influence the financial and operating decisions of the Company. A
transaction is considered to be a related party transaction when there is a
transfer of resources or obligations between related parties.





(p)
Revenue Recognition





The
Company recognizes revenue of advertising and promotion services when the
following criteria are met: persuasive evidence that an arrangement exists;
delivery has occurred or services have been rendered; the price to the customer
is fixed or determinable; and collectability is reasonably assured. If all of
the above criteria have been met, revenues are principally recognized when
services have been rendered. Amounts received from customers in advance of the
period in which service is rendered are deferred and recorded on the balance
sheet as a liability under "deferred revenues". For barter transactions, the
Company recognizes revenue at the fair value of the goods or services received
or surrendered in the exchange.





(q)
Advertising Expenses





The
Company expenses advertising costs as incurred. The Company did not incur any
advertising costs during the years ended April 30, 2009 and
2008.





(r)
Earnings (Loss) Per Share





Basic
earnings or loss per share is based on the weighted average number of common
shares outstanding. Diluted earnings or loss per share is based on the weighted
average number of common shares outstanding and dilutive common stock
equivalents. The computation of earnings (loss) per share is net earnings (loss)
available to common stockholders (numerator) divided by the weighted average
number of common shares outstanding (denominator) during the periods presented.
All earnings or loss per share amounts in the financial statements are basic
earnings or loss per share, as defined by SFAS No. 128, “Earnings Per Share”.
Diluted loss per share does not differ materially from basic loss per share for
all periods presented.  Convertible securities that could potentially
dilute basic loss per share in the future are not included in the computation of
diluted loss per share because to do so would be anti-dilutive. All per share
and per share information are adjusted retroactively to reflect stock
splits and changes in par value, when applicable.





(s)
Comprehensive Income (Loss)





The
Company follows SFAS No. 130, “Reporting Comprehensive
Income”, which establishes standards for reporting and display of
comprehensive income (loss), its components and accumulated balances. The
Company includes items of other comprehensive income (loss) by their nature,
such as foreign currency translation adjustments, in a financial statement and
displays the accumulated balance of other comprehensive income (loss) separately
from accumulated deficit in the equity section of the balance sheet. The Company
discloses total comprehensive income (loss), its components and accumulated
balances on its consolidated statement of stockholders’ equity
(deficiency).




(t)
Recent Accounting Pronouncements





(i)
Disclosure about Derivative Instruments and Hedging Activities





In
March 2008, the FASB issued SFAS 161, “Disclosure about Derivative
Instruments and Hedging Activities, an amendment of SFAS No.133”. This
statement requires that objectives for using derivative instruments be disclosed
in terms of underlying risk and accounting designation. The Company is required
to adopt SFAS 161 on January 1, 2009. The Company is currently evaluating
the potential impact of SFAS 161 on the Company’s consolidated financial
statements.


In
March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement
No. 133”. This statement is intended to improve transparency in
financial reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted. We are currently evaluating the disclosure
implications of this statement. The adoption of this statement is not expected
to have a material effect on the Company's financial statements.





(ii)
Determination of the Useful Life of Intangible Assets





In
April 2008, the FASB issued FSP FAS 142-3, “Determination of the Useful Life of
Intangible Assets”, which amends the factors that should be considered in
developing renewal or extension assumptions used to determine the useful life of
intangible assets under SFAS 142“Goodwill and Other Intangible
Assets”. The intent of this FSP is to improve the consistency between the
useful life of a recognized intangible asset under SFAS 142 and the period of
the expected cash flows used to measure the fair value of the asset under SFAS
141 (revised 2007) “Business
Combinations” and other U.S. generally accepted accounting principles.
 The Company is currently evaluating the potential impact of FSP FAS 142-3
on its consolidated financial statements.





(iii)
Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement)





In
May 2008, the FASB issued FSP APB 14-1, “Accounting for Convertible Debt
Instruments That May Be Settled in Cash upon Conversion (Including Partial
Cash Settlement).” The FSP clarifies the accounting for convertible debt
instruments that may be settled in cash (including partial cash settlement) upon
conversion. The FSP requires issuers to account separately for the liability and
equity components of certain convertible debt instruments in a manner that
reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when
interest cost is recognized. The FSP requires bifurcation of a component of the
debt, classification of that component in equity and the accretion of the
resulting discount on the debt to be recognized as part of interest expense in
our consolidated statement of operations. The FSP requires retrospective
application to the terms of instruments as they existed for all periods
presented. The FSP is effective for us as of January 1, 2009 and early
adoption is not permitted. The Company is currently evaluating the potential
impact of FSP APB 14-1 upon its consolidated financial statements.





(iv) The
Hierarchy of Generally Accepted Accounting Principles





In
May 2008, the FASB issued SFAS 162, "The Hierarchy of Generally Accepted
Accounting Principles". SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements. SFAS 162 is effective 60 days following the
SEC's approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, "The Meaning
of Present Fairly in Conformity with Generally Accepted Accounting
Principles". The implementation of this standard will not have a material
impact on the Company's consolidated financial position and results of
operations.





(v)
Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an
Entity's Own Stock





In
June 2008, the FASB ratified EITF 07-5, "Determining Whether an Instrument
(or an Embedded Feature) Is Indexed to an Entity's Own Stock". EITF 07-5
provides that an entity should use a two step approach to evaluate whether an
equity-linked financial instrument (or embedded feature) is indexed to its own
stock, including evaluating the instrument's contingent exercise and settlement
provisions. It also clarifies on the impact of foreign currency denominated
strike prices and market-based employee stock option valuation instruments on
the evaluation. EITF 07-5 is effective for fiscal years beginning after
December 15, 2008. The Company is currently assessing the impact of EITF
07-5 on its consolidated financial position and results of
operations.





(vi)
Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities





In
June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments
Granted in Share-Based Payment Transactions Are Participating
Securities.” The FSP addresses whether instruments granted in share-based
payment transactions are participating securities prior to vesting and,
therefore, need to be included in the earnings allocation in computing earnings
per share under the two-class method. The FSP affects entities that accrue
dividends on share-based payment awards during the awards’ service period when
the dividends do not need to be returned if the employees forfeit the award.
This FSP is effective for fiscal years beginning after December 15, 2008.
The Company is currently assessing the impact of FSP EITF 03-6-1 on its
consolidated financial position and results of operations.





(vii)
Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party
Credit Enhancement





In
September 2008, the FASB issued EITF 08-5 “Issuer’s Accounting for Liabilities
Measured at Fair Value with a Third-Party Credit Enhancement.” This FSP
determines an issuer’s unit of accounting for a liability issued with an
inseparable third-party credit enhancement when it is measured or disclosed at
fair value on a recurring basis. FSP EITF 08-5 is effective on a prospective
basis in the first reporting period beginning on or after December 15,
2008. The Company is currently assessing the impact of FSP EITF 08-5 on its
consolidated financial position and results of operations.





(viii)
Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of
SFAS 133 and FIN 45; and Clarification of the Effective Date of SFAS
161





In
September 2008, the FASB issued FSP FAS 133-1, “Disclosures about Credit
Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133
and FASB Interpretation No. 45; and Clarification of the Effective Date of
FASB Statement No. 161.” This FSP amends SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities,” to require disclosures by sellers of
credit derivatives, including credit derivatives embedded in a hybrid
instrument. The FSP also amends SFAS 45, “Guarantor’s Accounting and
Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others,” to require and additional disclosure about the
current status of the payment/performance risk of a guarantee. Finally, this FSP
clarifies the Board’s intent about the effective date of SFAS 161, “Disclosures about Derivative
Instruments and Hedging Activities.” FSP FAS 133-1 is effective for
fiscal years ending after November 15, 2008. The Company is currently
assessing the impact of FSP FAS 133-1 on its consolidated financial position and
results of operations.





(ix)
Determining the Fair Value of a Financial Asset When the Market for That Asset
is Not Active





In
October 2008, the FASB issued FSP FAS 157-3, “Determining the Fair Value of a
Financial Asset When the Market for That Asset is Not Active.” This FSP
clarifies the application of SFAS 157, “Fair Value Measurements,” in
a market that is not active. The FSP also provides examples for determining the
fair value of a financial asset when the market for that financial asset is not
active. FSP FAS 157-3 was effective upon issuance, including prior periods for
which financial statements have not been issued. The impact of adoption was not
material to the Company’s consolidated financial condition or results of
operations.





(x)
Accounting for Defensive Intangible Assets





In
November 2008, the FASB issued EITF 08-7, “Accounting for Defensive Intangible
Assets.” EITF 08-7 clarifies how to account for defensive intangible
assets subsequent to initial measurement. EITF 08-7 applies to all defensive
intangible assets except for intangible assets that are used in research and
development activities. EITF 08-7 is effective for intangible assets acquired on
or after the beginning of the first annual reporting period beginning on or
after December 15, 2008. The Company is currently assessing the impact of
EITF 08-7 on its consolidated financial position and results of
operations.





(xi)
Equity Method Investment Accounting Considerations





In
November 2008, the FASB issued EITF 08-6 “Equity Method Investment Accounting
Considerations.” EITF 08-6 clarifies accounting for certain transactions
and impairment considerations involving the equity method. Transactions and
impairment dealt with are initial measurement, decrease in investment value, and
change in level of ownership or degree of influence. EITF 08-6 is effective on a
prospective basis for fiscal years beginning on or after December 15, 2008.
The Company is currently assessing the impact of EITF 08-6 on its consolidated
financial position and results of operations.





(xii)
Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount
That is Based on the Stock of an Entity’s Consolidated Subsidiary





In
November 2008, the FASB issued FSP EITF 08-8, “Accounting for an Instrument (or an
Embedded Feature) with a Settlement Amount That is Based on the Stock of an
Entity’s Consolidated Subsidiary.” EITF 08-8 clarifies whether a
financial instrument for which the payoff to the counterparty is based, in whole
or in part, on the stock of an entity’s consolidated subsidiary is indexed to
the reporting entity’s own stock. EITF 08-8 also clarifies whether or not stock
should be precluded from qualifying for the scope exception of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities,”or from being within the scope of
EITF 00-19, “Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company’s Own Stock.” EITF 08-8 is effective for fiscal years beginning
on or after December 15, 2008, and interim periods within those fiscal
years. The Company is currently assessing the impact of EITF 08-8 on its
consolidated financial position and results of operations.





(xiii)
Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets
and Interests in Variable Interest Entities





In
December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R) -8, “Disclosures by Public Entities
(Enterprises) about Transfers of Financial Assets and Interests in Variable
Interest Entities.” This FSP amends SFAS 140, “Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities,” to
require public entities to provide additional disclosures about transfers of
financials assets. FSP FAS 140-4 also amends FIN 46(R)-8, “Consolidation of Variable Interest
Entities”, to
require public enterprises, including sponsors that have a variable interest
entity, to provide additional disclosures about their involvement with a
variable interest entity. FSP FAS 140-4 also requires certain additional
disclosures, in regards to variable interest entities, to provide greater
transparency to financial statement users. FSP FAS 140-4 is effective for the
first reporting period (interim or annual) ending after December 15, 2008,
with early application encouraged. The adoption of this statement is not
expected to have a material effect on the Company's financial
statements.





(xiv)
Recognition of Interest Income and Impairment on Purchased Beneficial Interests
and Beneficial Interests that Continue to be Held by a Transferor in Securitized
Financial Assets





In
January 2009, The FASB released FASB Staff Position (FSP) No. EITF 99-20-1,
“Amendments to the Impairment
Guidance of EITF Issue No. 99-20”. The guidance, which
modifies Emerging Issues Task Force (EITF) Issue No. 99-20, “Recognition of Interest Income and
Impairment on Purchased Beneficial Interests and Beneficial Interests That
Continue to Be Held by a Transferor in Securitized Financial Assets”, is
effective for interim and annual reporting periods ending after December 15,
2008, and should be applied prospectively, the FASB said. Application to a prior
reporting period is not permitted.





The
amendment allows for the use of other-than-temporary impairment assessments
established in SFAS No. 115, “Accounting for Certain Investments
in Debt and Equity Securities”, for securities that had previously been
subject to the impairment assessment under EITF Issue No. 99-20. SFAS No. 115
allows a reporting entity to assess an impaired security that is classified as
either available-for-sale or held-to-maturity debt in order to determine whether
the impairment should be recognized as other-than-temporary and recognized in
earnings.





SFAS No.
115 gives management more discretion than EITF Issue No. 99-20, in deciding
whether the loss is permanent. EITF Issue No. 99-20 required the use of market
prices to assess the impairments of debt securities that are beneficial
interests in some securitized financial transactions. Under the amended
guidance, management can base the value it reports in the financial statements
on its judgment of its ability to collect all the contracted amounts
due.





The
Company does not currently believe that adopting this FSP will have a material
impact on the Company’s financial statements.





(xv)
Interim Disclosures About Fair Value of Financial Instruments





In April
2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1 ("FSP FAS
107-1 and APB 28-1"), "Interim
Disclosures about Fair Value of Financial Instruments". The FSP amends
SFAS 107, "Disclosure about
Fair Value of Financial Instruments”, and Accounting Principles Board
Opinion No. 28, "Interim
Financial Reporting", to require disclosures about fair value of
financial instruments for interim reporting periods of publicly traded companies
as well as in annual financial statements. The Company is required to adopt FSP
FAS 107-1 and APB 28-1 in the quarter ended July 31, 2009. The Company does not
currently believe that adopting this FSP will have a material impact on the
Company’s financial statements.





(xvi)
Recognition and Presentation of Other-Than-Temporary Impairments





In April
2009, the FASB issued FASB Staff Position No. FSP FAS 115-2 and FAS 124-2 ("FSP
FAS 115-2 and FAS 124-2"), "Recognition and Presentation of
Other-Than-Temporary Impairments". The FSP amends the
other-than-temporary impairment guidance in U.S. GAAP for debt securities to
make the guidance more operational and to improve the presentation and
disclosure of other-than-temporary impairments on debt and equity securities in
the financial statements. This FSP does not amend existing recognition and
measurement guidance related to other-than-temporary impairments of equity
securities. The Company is required to adopt FSP FAS 115-2 and FAS 124-2 in the
quarter ended July 31, 2009.  The Company does not currently believe that
adopting this FSP will have a material impact on the Company’s financial
statements.


In April
2009, the FASB issued FASB Staff Position No. FAS 157-4 ("FSP FAS 157-4"), "Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly". The FSP
provides additional guidance for estimating fair value in accordance with FASB
Statement No. 157, "Fair Value
Measurements", when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. The
Company is required to adopt FSP FAS 157-4 in the quarter ended July 31,
2009. The Company does not currently believe that adopting this FSP will
have a material impact on the Company’s financial statements.





(xvii)
Accounting for Assets Acquired and Liabilities Assumed in a Business Combination
that Arise from Contingencies





In April
2009, the FASB issued Staff Position SFAS No. 141(R)-1 (“SFAS 141(R)-1”), “Accounting for Assets Acquired and
Liabilities Assumed in a Business Combination That Arise from
Contingencies” which amends and clarifies FASB Statement No. 141
(revised 2007), “Business
Combinations”,to address application issues on initial and subsequent
recognition and measurement arising from contingencies in a business
combination.  SFAS 141(R)-1 is effective for assets or liabilities
arising from contingencies in business combinations beginning with the first
annual period on or after December 15, 2008.  The adoption of SFAS
141(R)-1 did not have an impact on the Company’s consolidated financial
statements.





(xviii)
Subsequent Events





In
May 2009, the FASB issued FASB No. 165, “Subsequent Events” (“SFAS
165”). SFAS 165 establishes general standards of accounting for disclosing
events that occur after the balance sheet date but before financial statements
are issued or are available to be issued. It requires the disclosure of the date
through which an entity has evaluated subsequent events and the basis for
selecting that date, that is, whether that date represents the date the
financial statements were issued or were available to be issued. SFAS 165 is
effective for interim or annual financial periods ending after June 15,
2009. The adoption of the standard will not have a material impact on the
Company.





(xix)
Accounting for Transfers of Financial Assets





In
June 2009, the FASB issued FASB No. 166, “Accounting for Transfers of
Financial Assets - an amendment of FASB Statement No. 140” (“SFAS
166”). SFAS 166 requires additional disclosures about the transfer and
derecognition of financial assets and eliminates the concept of qualifying
special-purpose entities under SFAS 140. SFAS 166 is effective for fiscal years
beginning after November 15, 2009. The adoption of the standard will not
have a material impact on the Company.





(xx)
Consolidation of Variable Interest Entities





In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)”(“SFAS 167”). SFAS 167 amends certain requirements of
FASB Interpretation No. 46 (revised December 2003), “Consolidation of Variable Interest
Entities”, to improve financial reporting by enterprises involved with
variable interest entities and to provide more relevant and reliable information
to users of financial statements. This Statement is effective as of the
beginning of each reporting entity’s first annual reporting period that begins
after November 15, 2009, for interim periods within that first annual
reporting period, and for interim and annual reporting periods thereafter.
Earlier application is prohibited. The Company is currently assessing the impact
of the adoption of SFAS 167 on the Company’s financial condition, results of
operations and cash flows.





(xxi) The
FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles







In June
2009, the FASB issued Financial Accounting Standard No. 168, “The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles – a
replacement of FASB Statement No. 162” (FAS 168). In addition in
June 2009, the FASB issued Accounting Standards Update No. 2009-01, “Topic 205 – Generally Accepted
Accounting Principles - amendments based on Statement of Financial Accounting
Standards No. 168 – The FASB Accounting Standards Codification and the
Hierarchy of Generally Accepted Accounting Principles” (ASU 2009-1). Both
FAS 168 and ASU 2009-1 recognize the FASB Accounting Standards Codificationas
the source of authoritative U.S. generally accepted accounting principles to be
utilized by nongovernmental entities. FAS 168 and ASU 2009-1 are effective for
interim and annual periods ending after September 15, 2009. The adoption of
this pronouncement is not expected to have a material effect on the Company’s
financial statements.





All new
accounting pronouncements issued but not yet effective have been deemed to not
be applicable, hence the adoption of these new standards is not expected to have
a material impact on the consolidated financial statements.




Note
3. Prepaid expenses and other receivables





As of
April 30, 2009 and 2008, prepaid expenses and other receivables consist of the
following:




2009
              
              2008Prepaid
      trade expenses
              $
              13,968
              $
              43,495Prepaid
      consultants and corporate expenses
              
              40,000
              
              47,488Money
      advanced to offices and staff for expensesto
      be incurred for the Company
              
              598,117
              
              50$
              652,085
              $
              91,033
  Note
4. Accounts Payable and Accrued Liabilities





As of
April 30, 2009 and 2008, accounts payable and accrued liabilities consist of the
following:





2009
              
              2008Accounts
      payable
              $
              325,180
              $
              55,293Others
      payable
              
              30,283
              
              -Accrued
      salary
              
              -
              
              42,933$
              355,463
              $
              98,226


Note
5. Equipment





Equipment
as of April 30, 2009 and 2008 is summarized as follows:


2009
              
              2008Computer
      equipment
              $
              54,556
              $
              15,075Office
      equipment
              
              8,864
              
              -63,420
              
              15,075Less:
      accumulated depreciation
              
              -8185
              
              -56$
              55,235
              $
              15,019
  The
depreciation expense incurred during the year ended April 30, 2009 and from
inception (June 18, 2007) to April 30, 2008 were $8,086 and $54
respectively.





Note
6. Capital Stock





(a)
Preferred Stock





The
Company is authorized to issue up to 100,000,000 shares of Preferred Stock with
a par value of $0.00001 per share under terms and conditions as set forth in
their Articles of Incorporation. At April 30, 2009, the Company did not have any
outstanding preferred stock.





(b)Common
Stock





The
Company is authorized to issue up to 100,000,000 shares of Common Stock with a
par value of $0.00001 per share under terms and conditions as set forth in their
Articles of Incorporation.




On
December 10, 2007, the Company effectuated a 3 for 1 forward stock split. The
financial statements have been retroactively adjusted to reflect this stock
split.





In
December 2007, the Company issued 10,500,000 shares into escrow pursuant to a
Share Exchange Agreement and an Escrow Agreement. See Note 1(b) for
details.





Prior to
the Share Exchange Agreement, the Company had 6,087,000 issued and outstanding
shares of common stock that have been presented as a recapitalization upon the
reverse acquisition of Orient Come Holdings Limited.





In
October 2007, Orient Come raised $1,287,250 through the issuance of 2 of their
corporate shares. Pursuant to the terms of the Share Exchange Agreement, the
shareholders of Orient Come (the "Orient Come Shareholders") transferred to the
Company all of the Orient Come shares in exchange for the issuance of 13,000,000
shares of the Company's common stock (the "Acquisition"). As a result of the
Acquisition, Orient Come became the Company's wholly-owned subsidiary. In
connection with the Share Exchange Agreement, the Company issued 2,000,000
shares of its common stock as a finder's fee to a third party.




In
February 2008 the Company entered into a business advisory agreement for one
year. Under this agreement the Company issued 50,000 shares of common stock
valued at market totaling $274,500, which has been expensed by the
Company.





On July
17, 2008, the "Company" completed the sale of 1,666,667 units of its securities
(the "Units"), with each Unit consisting of (a) one share of the Company's
Common Stock, par value $0.00001 per share (the "Common Stock"), (b) a warrant
to purchase one share of Common Stock at a purchase price of $6.00 per share of
Common Stock (the "Group A Warrant"), and (c) a warrant to purchase one share of
Common Stock at a purchase price of $9.00 per share of Common Stock (the "Group
B Warrant"), for a purchase price of $3.00 per Unit. The aggregate proceeds from
the sale of the Units, prior to expenses incurred in connection with the offer
and sale of the Units, was $5,000,000. The Company sold the Units to a single
investor pursuant to applicable exemptions from registration under the
Securities Act of 1933, as amended, and the offering of the Units is now
terminated. The Company used the net proceeds from the sale of the Units for
working capital and general corporate purposes. The total cost for the
$5,000,000 private placement was $406,164, resulting in net proceeds of
$4,593,836. The proceeds from the issuance of the units were allocated between
the warrants and the common shares on the basis of relative fair values. The
fair value of the warrants of $893,371 was calculated using the Black-Scholes
model using the following assumptions: Volatility of 14.25%, expected term of 5
years, risk free interest rate of 3.35%.





The Group
A Warrant has an exercise price of $6.00 per share, is exercisable for a
five-year period commencing on July 17, 2008, to purchase 1,666,667 shares of
Common Stock in the aggregate. In the event the Company issues Common Stock or
certain Common Stock derivatives during the six month period following the
issuance of the Class A Warrant, excluding specified excluded shares, at a
purchase price or conversion or exercise price, as applicable, less than $3.00
per share of Common Stock, the Company must either, at its option (a) repurchase
the Units at a repurchase price of $3.00 per Unit issued, or (b) reduce the
exercise price of the Group A Warrant (but not the number of shares of Common
Stock issuable upon exercise of the Group A Warrant) on a weighted-average
basis, in accordance with the formula set forth in the Group A Warrant. The
Group A Warrant is also subject to proportional adjustment for stock splits,
stock dividends, recapitalizations, reclassifications, and similar corporate
events. The Group A Warrant may not be exercised on a cashless
basis.





The
Company may redeem the Group A Warrant at its option at a price of $0.05 per
share if the closing bid price of the Company's Common Stock on the Nasdaq OTCBB
on which it is traded exceeds $8.00 per share for a period of 20 consecutive
trading days, provided that the Company's redemption right will not be in effect
during any period during which the Company does not have in place an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act"), registering the shares of Common Stock issuable upon exercise
of the Group A Warrant.





The Group
B Warrant is exercisable to purchase 1,666,667 shares of Common
Stock.  The terms of the Group B Warrant is identical to the Group A
Warrant, except that the exercise price is $9.00 per share of Common Stock, and
the price per share of Common Stock initiating the Company's repurchase rights
is $12.00 per share.





The
Units, including the shares of Common Stock and Group A Warrant and Group B
Warrant included therein, were issued without registration under the Securities
Act in reliance upon the exemption from registration set forth in Rule 506 of
Regulation D ("Regulation D"), promulgated pursuant to Section 4(2) of the
Securities Act, Regulation S promulgated under the Securities Act, and Section
4(6) of the Securities Act. The Company based such reliance upon representations
made by the purchaser of the Units to the Company regarding such purchaser's
investment intent, sophistication, and status as an "accredited investor," as
defined in Regulation D, and on the investor's representations as to its
residency and the offshore purchase of the Units, among other things. The Units,
including the shares of Common Stock and Group A Warrant and Group B Warrant
included therein, and the shares of Common Stock issuable upon exercise of the
Group A Warrant and Group B Warrant, may not be offered or sold in the United
States absent registration pursuant to the Securities Act or an applicable
exemption from the registration requirements of the Securities Act. The share
certificates for the Common Stock and the Group A Warrant and Group B Warrant
bear restrictive legends permitting the transfer of the securities only in
compliance with applicable securities laws.





On
October 8, 2008, the Company issued 112,500 shares of Common Stock at a fair
market value of $641,250 to employees, and the amount was recorded as
compensation expense.





In
November 2008, the Company entered into a financing and investor relations
agreement for eight months. Under this agreement the Company issued 900,000
shares of Common Stock valued at market totaling $5,130,000 and $25,000 in cash.
The agreement was cancelled in February 2009 and 850,000 shares issued were
returned for cancellation. The Company has expensed $193,750 of this agreement
and $116,250 is included in deferred consulting service as at April 30,
2009.





Note
7. Related Party Balances/Transactions




During
the year ended April 30, 2009, the Company accrued $33,315 (2008: $24,549) in
consulting fees to a related party of the Company’s President and CEO. As of
April 30, 2009, the Company owes $3,942 (2008: $56,373) to this related party
for services rendered.





At April
30, 2009, the balance of the expenses that the Company’s President and CEO paid
on behalf of the Company is $4,144 (2008: $186,050), which is non-interest
bearing, unsecured, and due on demand. The Company’s President and CEO totally
advanced $6,726 to the Company for business purposes during the year and
$175,180 was repaid during the year.





At April
30, 2009, the balance that the Company advanced to an officer of the Company for
expenses to be incurred for the Company is $2,200 (2008: $nil). The Company
totally advanced $4,546 to the officer for business purpose during the year and
$2,346 was repaid or reported as operating expenses during the
year.





For the
purpose of currency conversion, the Company sends foreign currency to an agent
in China which is a related party to the Company, and then receives Renminbi
back from the agent right after the conversion. The shareholder of the agent is
the father of the Company’s CFO and one of its shareholders. During the year
ended April 30, 2009, the Company sent $3,783,875 to the agent, and the agent
returned $3,538,129 to the Company. The remaining balance of $247,032 (2008:
$nil) has not yet been returned to the Company by the filing date.





Note
8. Income Taxes





There is
no current or deferred tax expense for the year ended April 30, 2009 and period
ended April 30, 2008 due to the Company’s loss position. The benefits of
temporary differences have not been previously recorded. The deferred tax
consequences of temporary differences in reporting items for financial statement
and income tax purposes are recognized, as appropriate. Realization of the
future tax benefits related to the deferred tax assets is dependent on many
factors, including the Company’s ability to generate taxable income. Management
has considered these factors in reaching its conclusion as to the valuation
allowance for financial reporting purposes and has recorded a full valuation
allowance against the deferred tax asset.





The
Company's subsidiaries in China are governed by the Income Tax Law of China
concerning Foreign Investment Enterprises and Foreign Enterprises and local
income tax laws (the "China Income Tax Law"). Pursuant to the China Income Tax
Law, since January 1, 2008, wholly-owned foreign enterprises are subject to tax
at a statutory rate of 25%. Prior to January 1, 2008, the rate was 33% (30%
state income tax plus 3% local income tax).





The
components of net loss consist of the following:





From
      the periodfrom
      inceoptionYear
      ended
              (June
      18, 2007)April
      30, 2009
              to
      April 30, 2008U.S.
      Operations
              $1,297,732
              $161,585Chinese
      Operations
              3,117,097
              227,548$4,414,829
              $389,133


Due to
the uncertainty of the realization of the tax benefits from the net loss, no tax
benefit was recorded.





The table
below summarizes the reconciliation of the Company's income tax provision
(benefit) computed at the statutory U.S. Federal rate and the actual tax
provision:




From
      the periodfrom
      inceoptionYear
      ended
              
              (June
      18, 2007)April
      30, 2009
              
              to
      April 30, 2008Income
      tax provision (benefit) at Federalstatutory
      rate
              $
              -1,501,000
              $
              -137,000State
      income taxes, net of Federal Benefit
              
              0
              
              17,000U.S.
      tax rate in excess of foreign tax rate
              
              281,000
              
              33,000Increase
      in valuation allowance
              
              1,220,000
              
              121,000$
              0
              $
              0


The
Company has a net operating loss ("NOL") carryforward for United States income
tax purposes at April 30, 2009 expiring through the year
2029.  Management estimates the NOL as of April 30, 2009 to be
approximately $1,654,000. The utilization of the Company's NOL's may be limited
because of a possible change in ownership as defined under Section 382 of
Internal Revenue Code.





The
Company has a net operating loss ("NOL") carryforward for China income tax
purposes at April 30, 2009 expiring through the year 2012.  Management
estimates the NOL as of April 30, 2009 to be approximately
$3,285,000.





Deferred
income taxes reflect the net tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The Company has recognized, a
valuation allowance for those deferred tax assets for which it is more likely
than not that realization will not occur. The Company's deferred tax assets as
of April 30, 2009 and 2008 are as follows:




January
      31,
              
              April
      30,2009
              
              2008NOL
      carryforwards
              $
              1,383,000
              $
              64,000Valuation
      allowance
              
              (1,383,000)
              
              (64,000)Deferred
      tax asset, net of allowance
              $
              0
              $
              0


Note
9. Concentrations and Credit Risk





The
Company operates principally in China and grants credit to its customers in this
geographic region. Although China is economically stable, it is always possible
that unanticipated events in foreign countries could disrupt the Company’s
operations.





During
the year period ended April 30, 2009, the Company has 2 customers,Beijing Wing of
Martin Trading Co., Ltd. and Beijing ZhongShiKanDian Advertising Co.,
Ltd., representing 9% and 18% of the net total sales
respectively.





During
the year ended April 30, 2009, the Company had sales revenue of $412,758 with
related cost of sales of $nil arising from barter transactions with 7 customers.
The barter revenue and offsetting expense are recognized at the fair value of
the services rendered by customers as determined by similar cash transaction.
The related goods and services from the above 7 customers were received by
the Company.





Note
10. Statutory Reserve





Pursuant
to Chinese regulations and laws, the Company is required to make appropriations
to the reserve funds and staff welfare fund, based on after tax net income
determined in accordance with generally accepted accounting principles of the
People’s Republic of China (the “China GAAP”). Appropriations to the reserve
funds should be at least 10% of the after tax net income determined in
accordance with the China GAAP until the reserve is equal to 50% of the
Company’s registered capital. The reserve funds are established for covering
corporate obligations in the event of business liquidation. Any additional
appropriations to the reserve funds over the 10% requirement are made at
the discretion of the Board of Directors. The reserve funds and staff welfare
funds are recorded as part of the retained earnings but are not available for
distribution to the owners of the Company other than in liquidation.
Appropriations to the staff welfare fund are at a percentage, as determined
by the Board of Directors, of the after tax net income determined in accordance
with the China GAAP. The staff welfare fund is established for the purpose of
providing employee facilities and other collective benefits to the employees.
The appropriations are made on an annual basis.





Due to
the Company’s losses, no reserve funds and staff welfare fund were
appropriated.





Note
11. Commitments





The
Company entered into agreements with various KTVs and night clubs for rental of
space in karaoke rooms and broadcasting fees for advertisements. The total
rental and fees to be paid for the next five years are summarized as
follows:




Year
      ended April 30,2010
              
              $
              3,308,9502011
              
              
              3,223,4782012
              
              
              2,565,4382013
              
              
              2,365,2832014
              
              
              399,053after
      2014
              
              
              -$
              11,862,202


Note
12. Reclassification





At April
30, 2008, $217,263 was reclassified from prepaid expenses to deferred consulting
services to conform with the current year presentation.










ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE




Our financial
statements for the period from November, 2007 to October 31,2008 were audited by
Sherb & Co., an independent registered firm of Certified Public
Accountants.  On February 18, 2009, we engaged Goldman Parks Kurland
Mohidin LLP, an independent registered firm of Certified Public Accountants, as
our principal independent accountant with the approval of our board of
directors. Our termination of our relationship with Sherb & Co. and our
engagement of Goldman Parks Kurland Mohidin LLP was not the result of any
disagreement on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.





ITEM  9A. CONTROLS AND
PROCEDURES.





Disclosure
Controls and Procedures





Under the supervision and
with the participation of the Company's management, including the Company’s
Chief Executive Officer and Chief Financial Officer, the Company has evaluated
the effectiveness of the design and operation of its disclosure controls and
procedures pursuant to applicable rules under the Exchange Act as of April 30,
2009. Based on that evaluation, the Company’s Chief Executive Officer and Chief
Financial Officer have concluded that these disclosure controls and procedures
are effective.





Internal
Control Over Financial Reporting





Management’s
Report on Internal Control over Financial Reporting





Our management is responsible for
establishing and maintaining adequate internal control over financial reporting,
as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal
control over financial reporting is a process designed to provide reasonable
assurance to our management and board of directors regarding the reliability of
financial reporting and the preparation of the financial statements for external
purposes in accordance with accounting principles generally accepted in the
United States of America.





Our internal control over financial
reporting includes those policies and procedures that (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of the Company’s assets that could have a
material effect on the financial statements.





Because of its inherent limitations,
internal controls over financial reporting may not prevent or detect
misstatements. All internal control systems, no matter how well designed, have
inherent limitations, including the possibility of human error and the
circumvention of overriding controls. Accordingly, even effective internal
control over financial reporting can provide only reasonable assurance with
respect to financial statement preparation. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.





Our management assessed the
effectiveness of our internal control over financial reporting as of April 30,
2009. In making this assessment, it used the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated
Framework. Based on our assessment, we believe that, as of April 30,
2009, the Company’s internal control over financial reporting was effective
based on those criteria.





This annual report does not include an
attestation report of our registered public accounting firm regarding internal
control over financial reporting. Management’s report was not subject to
attestation by our registered public accounting firm pursuant to temporary rules
of the Securities and Exchange Commission that permit us to provide only
management’s report in this annual report.





Changes
in Internal Controls





There
were no changes in the Company’s internal control over financial reporting (as
such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.





Limitations
on the Effectiveness of Controls





Our
management, including our Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls and internal controls will prevent
all errors and all fraud. A control system, no matter how well conceived and
operated, can provide only reasonable, not absolute, assurance that the
objectives of the control system are met. Further, the design of a control
system must reflect the fact that there are resource constraints, and the
benefits of controls must be considered relative to their costs. Because of the
inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that all control issues and instances of fraud, if
any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty, and that
breakdowns can occur because of a simple error or mistake. Additionally,
controls can be circumvented by the individual acts of some persons, by
collusion of two or more people, or by management or board override of the
control.





The
design of any system of controls also is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential future
conditions; over time, controls may become inadequate because of changes in
conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be
detected.





ITEM  9B.  OTHER INFORMATION





None.




PART
III





ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE.





Officers
and Directors




Each of our
directors serves until his or her successor is elected and qualified. Each of
our officers is elected by the board of directors to a term of one (1) year and
serves until his or her successor is duly elected and qualified, or until he or
she is removed from office.





The name, age
and position of our officers and director is set forth below:





Name
              
              Age
              
              PositionKe
      Wang
              
              28
              
              ChairmanJake
      Wei
              
              39
              
              Chief
      Financial Officer and DirectorJames
      Wei
              
              35
              
              DirectorBernard
      Chan
              
              44
              
              Independent
      DirectorJie
      Wang
              
              53
              
              Independent
      DirectorPeng
      Jin
              
              33
              
              Independent
      DirectorQing
      Ren
              
              29
              
              Independent
      DirectorLeslie
      Lou
              
              60
              
              Independent
      Director





The
persons named above have held their offices/positions since our
inception.  The business experience of each of the directors for at
least the past five years includes the following:





Ke
Wang.Mr. Wang founded and was the majority major shareholder
of Evers Motion Technology from June 2001 through December
2005.  Evers Motion Technology was a motion picture company located in
Beijing, China.  He was also the founder and majority shareholder
of  Denis & Ke Consulting, a business consulting firm in China
from November 2003 through December 2006.  Since March 2007, he has
served as Managing Director and Chief Investment Officer for Protégé Capital
Ltd., an investment company located in Beijing, China.  Mr. Wang has a
Bachelor degree with First Class Honors from Dublin Business School in
Ireland.







Jake
Wei.Mr. Wei has an
extensive background in the management of information technology and media
companies located in China.  From 1992 through 1997, Mr. Wei was the
President of Beijing Xinhai Technology Development Corp. From 2002 to 2006, Mr.
Wei served as president of Beijing Quicknet Technology Development Corp., a
mobile service provider. Since 2006, Mr. Wei has served as the President of
Greater China Media and Entertainment Corp., a media and entertainment company
in China. In his role as president, he oversaw a team of over 200 employees,
supervising sales/distribution channels, marketing plans and initiatives,
product and application development, customer service and system
operations.  Mr. Wei has a Bachelors of Science degree in
Computer Science from Beijing University of Technology in 1991.  Jake
Wei is the brother of James Wei.





James
Wei.Mr. Wei has
served as director and president of China YOUTV Corp., an international company
located in Beijing, China since March 2007.  Since 2005 Mr. Wei has
served as CEO and chairman of the board of directors of HuaJu NetMedia, an
Internet company that provides online video viewing services, located in
Beijing, China.  Mr. Wei served as Vice President for Beijing XinHai
Technology Development Corp., one of the first Internet Service Providers in
China, from 2000 to 2004.  James Wei is the brother of Jake
Wei.





Bernard
Chan.  Mr. Chan has over 18 years of experience in the areas of
financial advisory, direct private investments and corporate finance. Between
2003 and 2007, he was the chief financial officer for US companies, Asia Payment
Systems, Inc. and China World Trade Corporate, which was listed on OTC Bulletin
Board, where he oversaw M&A and financial projects. He also served as
Managing Partner of a Hong Kong corporate finance providing advisory of U.S.
listing and capital raising. Prior to that, Mr. Chan was a member of senior
management for several listed companies in Hong Kong and one of the largest
private landowner in Hawaii, focusing on direct investments and assets
management. He is also a Registered Investment Advisor. Mr. Chan earned his
Master of Business Administration Degree in International Management and
Investment Finance, Master of Science Degree in Applied Econometrics, and
Bachelor of Business Administration Degree in Investment Finance, all from the
University of Hawaii.




Jie Wang. Mr. Wang has
been working as Partner and Managing Director of Hi-Gold Consultants Limited
since 2001. Hi-Gold is a consulting firm located in Hong Kong. He currently also
serves as Independent Director of a Shanghai listed public company and as
Director in two other private companies in China. Positions previously held by
Mr. Wang include Managing Director of Beijing based Orient Century Securities
Investment Consultation, Senior Advisor to the Chairman and CEO of Guangxi
Yuchai Machinery Company Ltd and China Yuchai International (a NYSE listed
company), Deputy Director of Fund Management Department of Stock Exchange
Executive Council (SEEC, Beijing), and Trader in Forex Funding Department of
CITIC Industrial Bank. Wang Jie graduated from Concordia University in Montreal,
Canada with a MBA degree and from the People’s University of China in Beijing of
China with BA economics. He also studied in the programs and received
certificates of Chinese Securities Course for Independent Directors at the
Securities Association of China/School of Economics and Management, Tsinghua
University in Beijing, and the Canadian Securities Course at the Canadian
Securities Institute in Toronto of Canada.




Peng Jin.Mr. Jin is the
founder and CEO of Shanghai Dingbiao Internet Technology Co., Ltd. He also found
Shanghai Sihan Culture Communication Co., Ltd. in 2006. The Company was sold to
a third party in 2007. Previous positions of Mr. Jin included Vice President of
Shanda Corporation, and Deputy Director of Shanda Family Strategy. Mr. Jin
earned his PhD from School of International Relations and Public Affairs, Fudan
University in Shanghai, China.




Qing Ren. Mr. Ren, is
currently the Vice Chairman of China Enterprises National Energy Group, a
position he has held since 2007. He served as director of KaiRong National
Trading Ltd. and Vice President of Hong Kong MingHua Electronic Ltd. Mr. Ren
graduated from University of British Columbia with BA in economics.




Leslie Lou. Mr. Lou has over
30 years of experience in business operation and management. Since 2002, he has
been consultant director for Group Fame International Limited (GFI) and GFI
Korea, which is in the Chartered Private aircraft business in Asia. Prior to
joining GFI, he was Operations Manager for TSI Manufacturing LLC (HK) Limited,
Managing Director of Advanced Technology Production Limited (ATP)- Hong Kong,
Operations Manager for Esprit Systems (Hong Kong) Limited and Hazeltine
Corporation. Mr. Lou has earned a MBA in Marketing from New York University, New
York.





Committees
of the Board of Directors





On Nov.
24, 2008, Mr. Bernard Chan, Mr. Jie Wang, Mr. Peng Jin, Mr. Qing Ren and Mr.
Leslie Lou have been appointed as independent directors of the Board of
Directors of K's Media (the "Company") for a term commencing on Nov. 24, 2008,
and expiring at the Company's next Annual Meeting of
Stockholders.





The
Company has established an Audit Committee, a Compensation Committee, and a
Nominating and Corporate Governance Committee.




The Audit
Committee composed of three independent directors: Mr. Bernard Chan, Mr. Jie
Wang and Mr. Qing Ren; the Compensation Committee composed of two independent
directors: Mr. Bernard Chan and Mr. Jie Wang, and the Nominating and Corporate
Governance Committee composed of three independent directors: Mr. Bernard Chan,
Mr. Jie Wang and Mr. Qing Ren.





Code
of Ethics





We
adopted a code of ethics that applies to all of our employees, including our
principal executive officer, principal financial officer, and principal
accounting officer, and the members of our board of directors. We expect all of
our officers, directors, and employees to act in accordance with the highest
standards of personal and professional integrity in all aspects of their
activities, to comply with all applicable laws, rules, and regulations, to deter
wrongdoing, and abide by the policies and procedures we have
adopted.  Any waiver of the code of ethics for any director or
executive officer may be made only by our board of directors.  If we
make any substantive amendments to the code of ethics or grant any waiver from a
provision of the code of ethics to any executive officer or director, we will
promptly file a current report on Form 8-K disclosing the amendment or waiver or
disclose the nature of the amendment or waiver on our website, or
both.





A copy of
our code of ethics is filed as an exhibit to this Annual Report on Form
10-K.





Section
16(a) Beneficial Ownership Reporting Compliance





Section 16(a)
of the Exchange Act requires the Company’s directors and executive officers, and
persons who own more than 10% of a registered class of the Company’s equity
securities to file with the SEC initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the Company.
Based on information available to us during fiscal year 2008, we believe that
all applicable Section 16(a) filing requirements were met.




ITEM 11. EXECUTIVE
COMPENSATION





The
following table sets forth the compensation paid to our Chief Executive Officer
and those executive officers that earned in excess of $100,000 during fiscal
years ended April 30, 2009 and 2008 (collectively, the “Named Executive
Officers”):





SUMMARY
COMPENSATION TABLE





Name
      and Principal Position
                  
                  Year
                  
                  
                  Salary
                    ($)
                  
                  
                  Bonus
                    ($)
                  
                  
                  Stock
      Awards
                    ($)
                  
                  
                  Option
      Awards ($)
                  
                  
                  Non-Equity
      Incentive Plan Compensation
                    ($)
                  
                  
                  Non-Qualified
      Deferred Compensation Earnings
                    ($)
                  
                  
                  All
      Other Compensation
                    ($)
                  
                  
                  Total
                    ($)Yan
      Zhuangprior
                  
                  2007/2008
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  $
                  -0-
                  
                  
                  $
                  -0-President
      and CEO (1)
                  
                  2008/2009
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  $
                  -0-
                  
                  
                  $
                  -0-Andy
      Pangcurrent
      President and CEO (2)
                  
                  2007/2008
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  $
                  -0-
                  
                  
                  $
                  -0-2008/2009
                  
                  
                  $85,784
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  $
                  -0-
                  
                  
                  $
                  -0-Xin
      WeiCFO
                  
                  2007/2008
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  $
                  -0-
                  
                  
                  $
                  -0-2008/2009
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  -0-
                  
                  
                  $
                  -0-
                  
                  
                  $
                  -0-





(1)
            Mr.
      Zhuang resigned as our President/Chief Executive Officer effective as of
      May 7, 2009.





(2)
            Mr.
      Pang was appointed as our President/Chief Executive Officer effective as
      of May 7, 2009.






STOCK
OPTIONS/SAW GRANTS IN FISCAL YEAR ENDED APRIL 30, 2009





The following table sets forth
information as at April 30, 2009 relating to options that have been granted to
the Named Executive Officer:





OUTSTANDING
      EQUITY AWARDS AT FISCAL YEAR-ENDOPTION
      AWARDS
                
                
                STOCK
      AWARDSName
                
                Number
      of Securities Underlying Unexercised Options
                  Exercisable
                  (#)
                
                
                Number
      of Securities Underlying Unexercised Options
                  Unexercisable
                  (#)
                
                
                Equity
      Incentive Plan Awards: Number of Securities Underlying Unexercised
      Unearned Options
                  (#)
                
                
                Option
      Exercise Price
                  ($)
                
                
                Option
      Expiration Date
                
                
                Number
      of Shares or Units of Stock That Have Not Vested
                  (#)
                
                
                Market
      Value of Shares or Units of Stock That Have Not Vested
                  ($)
                
                
                Equity
      Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
      That Have Not Vested
                  (#)
                
                
                Equity
      Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
      Other Rights That Have Not Vested
                  (#)Yan
      Zhuang prior  President/CEO
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                n/a
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Andy
      Pang President/CEO
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                n/a
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-Xin
      Wei
                  CFO
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                n/a
                
                
                -0-
                
                
                -0-
                
                
                -0-
                
                
                -0-





The following table sets forth
information relating to compensation paid to our directors during fiscal year
ended April 30, 2009:





DIRECTOR
COMPENSATION TABLE





Name
              
              Fees
                Earned
      or
                Paid
      in
                Cash
                ($)
              
              
              Stock
                Awards
                ($)
              
              
              Option
                Awards
                ($)
              
              
              Non-Equity
                Incentive
                Plan
                Compensation
                ($)
              
              
              Change
      in
                Pension
                Value
      and
                Nonqualified
                Deferred
                Compensation
                Earnings
                ($)
              
              
              All
                Other
                Compensation
                ($)
              
              
              Total
                ($)Ke
      Wang
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Xin
      Wei
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Yan
      Zhuang (1)
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Kun
      Wei
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Bernard
      Chan
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Qing
      RenPeng
      Jin
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Jie
      Wang
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-Leslie
      Lou
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-
              
              
              -0-(1)
              Mr.
      Zhuang resigned as our President/Chief Executive Officer effective as of
      May 7, 2009.





On April 2, 2009, we filed K’s Media
2009 Stock Incentive Plan. This information is incorporated by reference into
this Annual Report on Form 10-K.





EMPLOYMENT
AND CONSULTING AGREEMENTS





As of the date of this Annual Report,
we have entered into employment agreement with Mr. Andy Pang for a term of 39
months effective October 1, 2008. We have not entered into any contractual
agreements with our other executive officers or directors.




Indemnification
of Officers and Directors




Under our
Bylaws, we are permitted to indemnify any person who was or is a party or is
threatened to be made a party to any proceeding, whether civil, criminal,
administrative, or investigative (other than an action by or in the right of the
Corporation) by reason of the fact that such person is or was a director,
officer, employee, or agent of the Company, or is or was serving at our request
as a director, officer, employee, or agent of another entity or organization,
against expenses and damages actually and reasonably incurred in connection with
such action, suit, or proceeding. This indemnification is available only if the
person seeking indemnification acted in good faith and in a manner reasonably
believed to be in or not opposed to our best interests, and with respect to any
criminal action or proceeding, the person had no reasonable cause to believe his
or her conduct was unlawful.  Similarly, we must indemnify such
persons in connection with any action or suit brought by or in the right of the
Company to procure a judgment in the Company’s favor, provided that no
indemnification may be made for any claim to which the person is determined to
be liable for gross negligence or willful misconduct in the performance of his
or her duties to the Company, unless a court determines the person should be
entitled to indemnification.  The indemnification provisions in our
Bylaws are not meant to be exclusive of rights our directors and officers may
have to indemnification under applicable law, including under the corporate laws
of the state of Nevada, our state of incorporation.





Our
Bylaws also provide that we may purchase and maintain insurance on behalf of any
persons who are or were a director, officer, employee, or agent, or was serving
at our request in such capacity, against any liability arising in connection
with such position, whether or not we have the power to indemnify that
person.  We do not currently maintain any such policies, but we may
purchase them in the future.




Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling us under the foregoing
provisions, we have been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable.






ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.





The
following table sets forth certain information regarding beneficial ownership of
our common stock as of the date of this report by (i) each person (or group of
affiliated persons) who is known by us to own more than five percent (5%) of the
outstanding shares of our common stock, (ii) each director, executive officer
and director nominee, and (iii) all of our directors, executive officers and
director nominees as a group. As of August 1, 2009, we had 33,466,167 shares of
common stock outstanding, which excludes 89,250,000 shares of our common stock
held pursuant to the Escrow Agreement and subject to issuance.  Unless
otherwise provided below, addresses for each shareholder is Rm.1909,Tower A, The
Spaces International Center.No.8,Dongdaqiao Road, Chaoyang District, Beijing,
China.  Beneficial ownership is determined in accordance with SEC
rules and generally includes voting or investment power with respect to
securities.  The information below excludes 89,250,000 shares held in
escrow subject to the Escrow Agreement executed in connection with the January
2008 share exchange, described under “Business - Background and Business of the
Company” above.





Name
      and Address of Beneficial Owner
              Number
      of Shares
                Beneficially
      Owned
              Percentage
      of Outstanding Shares of Common StockExecutive
      Officers and Directors:Ke
      Wang(1)
              
              2,400,000
              
              11.4
              %Jake
      Wei
              
              -0-
              
              -0-
              %James
      Wei
              
              1,500,000
              
              7.1
              %Yan
      Zhuang
              
              -0-
              
              -0-
              %5%
      Stockholders:Team
      Step Investment Limited(2)
              
              1,800,000
              
              8.5
              %Chance
      Smart Holdings Limited(3)
              
              1,700,000
              
              8.1
              %Progress
      Mind Holdings Limited(4)
              
              2,100,000
              
              10
              %Market
      Group Limited(5)
              
              1,700,000
              
              8.1
              %High
      Grow Development Group Limited(6)
              
              1,800,000
              
              8.5
              %Sino
      Return Holdings Limited(7)
              
              2,000,000
              
              9.5
              %Ample
      Sun Development(8)
              
              1,500,000
              
              7.1
              %Pride
      Dragon Group Limited(9)
              
              1,500,000
              
              7.1
              %All
      directors and executive officers as a group (4 persons)
              
              3,900,000
              
              18.5
              %








(1)
            Includes
      900,000 shares of common stock held by Protégé Capital Limited, Room 810,
      Tower C2, Oriental Plaza, 1 East Chang An Avenue, Beijing
      China.  Ke Wang is the majority shareholder of Protégé Capital
      Limited.(2)
            Address
      is 5A-56, No. 21 Lane, WuYi Garden, TongZhou, Beijing,
    China.





(3)
            The
      address of such stockholder is Room A506, Tian Yuan Apartment, Jian Gong
      Xi Li, Xuan Wu District, Beijing, P.R. China.(4)
            The
      address of such stockholder is Room F, 1st
      Floor, Building No. 4, Xi Meng Peng Yuan, No. 2 Bei Jia Di Road, Feng Tai
      District, Beijing, China.





(5)
            The
      address of such stockholder is Blk B, 251 Des Veoux Road West, Sai Ying
      Pun, Hong Kong.(6)
            The
      address of such stockholder is Room 2302, 23/F, Carnival Commercial
      Building, 18 Java Road, North Point, Hong
Kong.





(7)
            The
      address of such stockholder is Room 1610, 16/F Wellborne Commercial
      Center, 8 Java Road, North Point, Hong Kong.(8)
            The
      address of such stockholder is Flt B, 19/F TungHip Commercial Building,
      244-252 Des Voeux Road, Central, Hong
Kong.





(9)
            The
      address of such stockholder is 3-3-502 PuAnli, FengTai, Beijing,
      China.







ITEM 13. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS.




Ke Wang
and James Wei were shareholders of Orient Come, our wholly-owned subsidiary,
prior to the closing of the January 2008 share exchange transaction, and in
their capacity of shareholders of Orient Come received no share of our common
stock pursuant to the share exchange.  Ke Wang and James Wei currently
serve as directors and officers of Orient Come.  James Wei is also a
shareholder and officer of the Chinese Advertisement Company.




QingYa
Wang may receive up to 2,625,000 shares of the Company's Common Stock under the
Escrow Agreement executed in connection with the share exchange
transaction.  QingYa Wang is the founder, vice general manager and
financial controller of Shine MultiMedia Co., Ltd.  A critical
component of our marketing and distribution to KTV clubs is our partnership with
Shine under the Service Agreement.  Ms. Wang has over 20 years
extensive and deep experience in business management and marketing in the area
of information technology, telecom, and media business.  Ms. Wang has
been general manager for several companies in the last 20 years.  Ms.
Wang founded Shine in 2001 and currently serves as Vice General Manager and
Financial Controller of Shine.  Ms. Wang holds a Bachelor of History
from Beijing University and was honored of the Master of business administration
(MBA) from Beijing University of Posts and Telecommunications in 2006. QingYa
Wang is currently served as manager of the Chinese Advertisement
Company.




None of
our directors are considered independent as independence is defined by the
Marketplace Rules of The NASDAQ Stock Market.





ITEM 14. PRINCIPAL
ACCOUNTING FEES AND SERVICES




During fiscal 2009, we incurred
approximately $40,000 in fees to our principal independent accountant: Goldman
Parks Kurland Mohidin LLP for professional services rendered in connection with
the audit of our financial statements for fiscal 2009 and for the review of our
financial statements for the quarter ended January 31, 2009. We incurred
approximately $6,000 in fees to our previous principal independent accountant:
Sherb & Co. for professional services rendered in connection with the review
of our financial statements for the quarters ended July 31, 2008 and October 31,
2008.





During fiscal 2008, we incurred
approximately $25,000 in fees to our previous principal independent accountants:
Sherb & Co. for professional services rendered in connection with the audit
of our financial statements for fiscal 2008.





During fiscal year ended April 30,
2009, we did not incur any other fees for professional services rendered by our
principal independent accountant for all other non-audit services which may
include, but is not limited to, tax-related services, actuarial services or
valuation services.




PART
IV




ITEM 15. EXHIBITS.





(a) Financial
Statements and Schedules.







The
financial statements are set forth under Item 8 of this Annual Report on
Form 10-K.







(b) Exhibit Listing





See the
Exhibit Index immediately following the signature page of this Annual Report on
Form 10-K.

















SIGNATURES





Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the registrant has duly caused this Report on Form 10-K to be signed on
its behalf by the undersigned, thereunto duly authorized, as of August 13,
2009.





K's
      MediaBy:
            /s/ Ke
      WangKe
      WangChairman










Pursuant
to the requirements of the Securities Exchange Act of 1934, this Report on Form
10-K has been signed below by the following persons on behalf of the registrant
and in the capacities indicated as of August 13, 2009.







Signature
            
            Title/s/
      Ke Wang
              Ke
      Wang
            
            Chairman/s/
      Jake Wei
              Jake
      Wei
            
            Chief
      Financial Officer and Director/s/
      James Wei
              James
      Wei
            
            Director







EXHIBIT
INDEX





Exhibit
      No.
            
            Description2.1
            
            Share
      Exchange Agreement dated as of December 23, 2007 (Incorporated by
      reference to Exhibit 2.1 of the registrant’s Current Report on Form 8-K
      filed January 18, 2008).3.1
            
            Articles
      of Incorporation (Incorporated by reference to Exhibit 3.1 to the
      registrant’s registration statement on Form SB-2 filed with Commission on
      July 20, 2006).3.2
            
            Certificate of Amendment to Articles of
      Incorporation filed with the Secretary of State of the state of Nevada on
      February 15, 2008.3.3
            
            Bylaws
      (Incorporated by reference to Exhibit 3.2 to the registrant’s registration
      statement on Form SB-2 filed with Commission on July 20,
      2006).10.1
            
            Escrow
      Agreement, dated as of December 23, 2007, among the Company and Orient
      Come Holdings Limited, Arnstein & Lehr LLP, Beijing K’s Media
      Advertising Ltd. Co., Yan Zhuang, Yong Lu, Lin Chang, LiHong Wu, and Qing
      Ya Wang (Incorporated by reference to Exhibit 10.1 of the registrant’s
      Current Report on Form 8-K filed January 18, 2008).10.2
            
            Option
      Agreement, dated as of December 23, 2007 among Orient Come Holdings
      Limited, Beijing K’s Media Advertising Ltd. Co., Kun Wei, and Yong Lu
      (Incorporated by reference to Exhibit 10.2 of the registrant’s Current
      Report on Form 8-K filed January 18, 2008).10.3
            
            Business
      Cooperation Agreement, dated as of December 23, 2007, among the Company
      and Orient Come Holdings Limited and Beijing K’s Media Advertising Ltd.
      Co. (Incorporated by reference to Exhibit 10.3 of the registrant’s Current
      Report on Form 8-K filed January 18, 2008).10.4
            
            Equity
      Pledge Agreement, dated as of December 23, 2007, among Orient Come
      Holdings Limited, Beijing K’s Media Advertising Ltd. Co., Kun Wei, and
      Yong Lu (Incorporated by reference to Exhibit 10.4 of the registrant’s
      Current Report on Form 8-K filed January 18, 2008).10.5
            
            Service
      Agreement between K's Media and Shine Multimedia Co., Ltd., dated as of
      December 23, 2007 (Incorporated by reference to Exhibit 10.5 of the
      registrant’s Current Report on Form 8-K filed January 18,
      2008).10.6
            
            Subscription
      Agreement between the Company and Fu, Song Yang (Incorporated by reference
      to Exhibit 10.6 of the registrant’s Current Report on Form 8-K filed July
      18, 2008).10.7
            
            Form
      of Group A Warrant (Incorporated by reference to Exhibit 10.7 of the
      registrant’s Current Report on Form 8-K filed July 18,
    2008).10.8
            
            Form
      of Group B Warrant (Incorporated by reference to Exhibit 10.8 of the
      registrant’s Current Report on Form 8-K filed July 18,
    2008).10.9
            
            K’s
      Media 2009 Stock Incentive Plan (Incorporated by reference to Exhibit 10.1
      of the registrant’s Current Report on Form 8-K filed April 2,
      2009)14.1
            
            Code
      of Ethics.21.1
            
            List
      of subsidiaries.23.1
            
            Consent
      of Sherb & Co.23.2
            
            Consent
      of Michael T. Studer CPA P.C.31.1*
            
            Certification of
      Principal Executive Officer pursuantto Rule 13a-14 and Rule 15d-14(a), promulgated
      under the Securities and Exchange Act of 1934, as
      amended.31.2*
            
            Certification of
      Principal Financial Officer pursuant to Rule 13a-14 and Rule 15d-14(a),
      promulgated under theSecurities and
      Exchange Act of 1934, as amended.32.1*
            
            Certification pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 (Chief Executive
      Officer).32.2*
            
            Certification pursuant
      to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002 (Chief Financial
      Officer).





*
            Filed
      herewith.