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 1934For
      the fiscal year ended April 30, 2008OR[
       ]
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE
      ACT of 1934For 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.)









10/F Building A, G.T.
International Tower, ChaoYang District, Beijing, China





(Address
of Principal Executive Offices)  (Zip Code)








86-10-5921-2230





(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, 2008 was
approximately $98 million, and as of the end of the registrant's most
recently completed second fiscal quarter was approximately$98million.





The
number of shares of the registrant common stock issued and outstanding as of
August 4, 2008 was 33,303, 667 and 22,803,667 respectively.




TABLE
OF CONTENTS





PagePART
      IItem 1.
            Business.
            2Item 1A.
            Risk Factors.
            6Item 1B.
            Unresolved Staff Comments.
            13Item 2.
            Properties.
            13Item 3.
            Legal Proceedings.
            13Item 4.
            Submission of Matters to a Vote of Security
      Holders.
            13PART
      IIItem 5.
            Market Price for the Registrant's Common Equity, Related
      Stockholders Matters and Issuer Purchases of Equity
      Securities.
            14Item 6.
            Selected Financial Data.
            14Item 7.
            Management's Discussion and Analysis of Financial Condition
      and Results of Operation.
            15Item 7A.
            Quantitative and Qualitative Disclosures About Market
      Risk.
            17Item 8.
            Financial Statements and Supplementary
    Data.
            18Item 9.
            Changes in and Disagreements With Accountants on Accounting
      and Financial Disclosure.
            29Item 9A.
            Controls and Procedures.
            29Item 9B.
            Other
      Information.
            29PART
      IIIItem 10.
            Directors and Executive Officers, Promoters and Control
      Persons.
            30Item 11.
            Executive Compensation.
            31Item 12.
            Security Ownership of Certain Beneficial Owners and
      Management.
            31Item 13.
            Certain Relationships and Related Transactions, and
      Director Independence.
            32Item 14.
            Principal Accounting Fees and Services.
            32PART
      IVItem 15.
            Exhibits and Financial Statement
    Schedules.
            33




1







PART
I








ITEM 1. BUSINESS




Background and Business of the
Company




K]s Media
engages in media and advertising throughout the country of China, targeting
consumers by placing premium brand advertising in "KTV" clubs on behalf of
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 Mediaand 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 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 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, which we refer to as the 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 of the 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 issued and
outstanding stock.  Also as part of the share exchange, 10,500,000
shares of our common stock were newly issued and delivered to an escrow
agent.  A portion of these shares may be released on each of the three
subsequent anniversary dates of the share exchange 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 on the
three subsequent anniversary dates of the Escrow Agreement.  On the
first anniversary date, a maximum of 2,625,000 escrowed shares will be released
upon achievement of at least $1,900,000 in signed sales.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 equal to 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. On the second anniversary date,
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 on the first anniversary because signed sales were
less than $1,059,000, some of these shares may be released on the second
anniversary 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.  On the third anniversary date, 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
anniversary date, 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.  On the first anniversary date,
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.  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.





We do not
have a direct material equity interest in the Chinese Advertisement Company. In
order to meet ownership requirements under Chinese law, which restrict 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.




2


Under the
Business Cooperation Agreement, Orient Come has agreed to provide business
consulting services to the Chinese Advertisement Company in return for a
consulting services fee.  The consulting services 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.





Under the
Business Cooperation Agreement, the Company has also agreed to guarantee up to
$1.3 million of the Chinese Advertisement Company’s financial
obligations.





The
Equity Pledge Agreement is intended to secure payment of the consulting services
fee under the Business Cooperation Agreement.  Under the Equity Pledge
Agreement the shareholders of the Chinese Advertisement Company have pledged to
Orient Come all of their equity interest in the Chinese Advertisement Company as
security for the payment of the consulting services fee.  Among other
things, if the Chinese Advertisement Company (i) fails to pay the consulting
services 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 consulting services 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 has 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 have acquired 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:




Structure





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




3






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 April 2007 report, China Advertising Industry Forecast Report, 2007-2010,
issued by Research in China, in the first half of 2006 revenues generated in the
Chinese advertising sector were RMB 155.5 billion (approximately $20 billion per
half year, at the current exchange rate), and 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, we believe the
Chinese Advertisement Company will be able to offer a sustainable, highly
efficient, and measurable media system to its advertiser clients.  The
Chinese Advertisement Company will reach 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 of varying lengths,
generally 15 to 30 seconds each. We believe there are 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 after the conclusion of performances. With
our informal, internal research indicating that KTV sessions typically lasting
one hour or more, we believe 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 will also undertake promotional activities in
lobbies and common areas of KTV clubs. This may include 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.
According to Zenith Optimedia, advertising spending in China grew at a compound
annual growth rate (CAGR) of 16.4% between 2000 and 2005. 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 being 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.  As
reported by CTR Market Research Co., Ltd., total advertising funds spent by a
significant portion of our target market - cosmetics, automobiles, bank ads, and
alcohol - was approximately $3 billion in 2006. 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.




We
believe our business model offers advertisers an alternative media channel with
significant coverage of high-income consumers. As selling points to these
potential advertisers, we will 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 other large cities.




We will
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 income of $70,000 or greater.
We will 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 will bundle 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 will also install and maintain
advertisement equipment at the KTV clubs during the term of the service
cooperation agreement.  We will supplement Shine's marketing efforts
with our own team of KTV agents that will be responsible for signing up KTV
clubs, renewing contracts, and providing other follow-up services such as media
channel maintenance and ad placements.  Shine will receive a fee from
us for each contract executed and a monthly maintenance fee for services
provided by Shine over the term of each contract.




4




Competition




We face
significant competition in the Chinese advertising industry. We will 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 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 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 that is 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 internal review and verification of 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 10/F Building A, G.T. International Center,
ChaoYang District, Beijing, China.  We lease the premises at no cost
to the Company from Director Mr. Xin Wei. We will move to a new office building
after October 1, 2008 as during July 20 to September 20, 2008, due to Beijing
Olympic Games, we can not renovate the new office.





Employees




We
currently employ about 53 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 10/F Building A, G.T. International Center, ChaoYang
District, Beijing, China.  Our telephone number is: 86-10-5921-2230,
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 at an
early stage of development and business strategy implementation. We have
recorded a net loss in each reporting period since our inception, and we cannot
anticipate with certainty what our earnings, if any, will be in any future
period. However, we expect to continue to incur significant net losses as we
develop and deploy our network in new and existing markets, expand our services,
and pursue our business strategy. We intend to invest significantly in our
business before we expect cash flow from operations will be adequate to cover
our anticipated expenses. 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.




6




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 will be 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 will be 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.




7







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 will 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 a
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 that
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.




8







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 raise additional debt funding or sell additional equity securities to
make such acquisitions. The raising of additional debt funding 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 would
restrict our operations. The sale of additional equity securities would result
in additional 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 that 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 a variety of 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 that 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.















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 that 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 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 China’s laws and
regulations to monitor the advertising content that is 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 internal 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 that each
advertisement that an advertiser or advertising agency client provides to 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.




10




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 have 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
that 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
have 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, that 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.




11




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 10/F Building A, G.T. International Center,
ChaoYang District, Beijing, China, where we lease a total of 10,000 square feet
of office space.  We lease the premises at no cost to the Company from
Director Mr. Xin Wei.  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 2008, 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, 2008 and
2007:




Bid
      Price (U.S. $)High
            LowFiscal
      2008Quarter
      Ended April 30, 2008
            $
            5.49
            5.49Quarter
      Ended January 31, 2008
            $
            5.50
            5.50Quarter
      Ended October 31, 2007
            $
            N/A
            N/AQuarter
      Ended July 31, 2007
            $
            N/A
            N/AFiscal
      2007Quarter
      Ended April 30, 2007
            
            $
            N/A
            
            
            N/AQuarter
      Ended January 31, 2007
            
            $
            N/A
            
            
            N/AQuarter
      Ended October 31, 2006
            
            
            N/A
            
            
            N/AQuarter
      Ended July 31, 2006
            
            
            N/A
            
            
            N/A




The last
reported bid price of our common stock on the Over-the-Counter Bulletin Board on
July 17, 2008 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, 2008, the Company had approximately 65 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, 2008 and 2007 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.


15







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






In
September 2006, FASB issued Statement of Financial Accounting Standards No. 157,
“Fair Value
Measurements” (“SFAS 157”). This Statement defines fair value as used in
numerous accounting pronouncements, establishes a framework for measuring fair
value in generally accepted accounting principles and expands disclosure related
to the use of fair value measures in financial statements. The Statement is to
be effective for financial statements for fiscal years beginning after November
15, 2007, however, earlier application is permitted. We are currently evaluating
the potential impact of SFAS 157 on our consolidated financial statements. We do
not expect the impact will be material.






In
February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities-including an amendment of FAS 115”
(“SFAS 159”). SFAS 159 allows entities to choose, at specified election dates,
to measure eligible financial assets and liabilities at fair value that are not
otherwise required to be measured at fair value. If a company elects the fair
value option for an eligible item, changes in that item’s fair value in
subsequent reporting periods must be recognized in current earnings. SFAS 159 is
effective for fiscal years beginning after November 15, 2007. We are currently
evaluating the potential impact of SFAS 159 on our consolidated financial
statements. We do not expect the impact will be material.






In
December 2007, the FASB issued SFAS 141 (revised 2007), “Business Combinations”. SFAS
141R is a revision to SFAS 141 and includes substantial changes to the
acquisition method used to account for business combinations (formerly the
“purchase account” method), including broadening the definition of a business,
as well as revisions to accounting methods for contingent consideration and
other contingencies related to the acquired business, accounting for transaction
costs, and accounting for adjustments to provisional amounts recorded in
connection with acquisitions. SFAS 141R retains the fundamental requirement of
SFAS 141 that the acquisition method of accounting be used for all business
combinations and for an acquirer to be identified for each business combination.
SFAS 141R is effective for periods beginning on or after December 15, 2008, and
will apply to all business combinations occurring after the effective date. We
are currently evaluating the requirements of SFAS 141R.






In
December 2007, the FASB issued SFAS 160, “Non-controlling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51, Consolidated Financial Statements” (“ARB 51”). This Statement
amends ARB 51 to establish new standards that will govern the (1) accounting for
and reporting of non-controlling interests in partially owned consolidated
subsidiaries and (2) the loss of control of subsidiaries. Non-controlling
interest will be reported as part of equity in the consolidated financial
statements. Losses will be allocated to the non-controlling interest, and, if
control is maintained, changes in ownership interests will be treated as equity
transactions. Upon a loss of control, any gain or loss on the interest sold will
be recognized in earnings. SFAS 160 is effective for periods beginning after
December 15, 2008. We are currently evaluating the requirements of SFAS
160.




16





In
March 2008, the FASB issued SFAS 161, “Disclosures about Derivative
Instruments and Hedging Activities”. The new standard is intended to
improve financial reporting about derivative instruments and hedging activities
by requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. We are currently evaluating the impact of adopting SFAS 161 on our
consolidated financial statements.






On
June 16, 2008, the FASB issued final Staff Position (FSP) No. EITF 03-6-1,
“Determining Whether
Instruments Granted in Share-Based Payment Transactions Are Participating
Securities”, to address the question of whether instruments granted in
share-based payment transactions are participating securities prior to vesting.
The FSP determines that unvested share-based payment awards that contain rights
to dividend payments should be included in earnings per share calculations. The
guidance will be effective for fiscal years beginning after December 15, 2008.
We are currently evaluating the requirements of (FSP) No. EITF 03-6-1 and the
impact of adoption on our consolidated financial statements.







Results
of Operations - For the period from inception (June 18, 2007) to April 30,
2008





Revenue.  Revenue
is primarily generated from distributions made from the Chinese Advertisement
Company pursuant to our Business Cooperation Agreement.  Since
inception the Company hasn’t generated any revenue.





Cost of goods and
services.  Costs primarily include costs associated with rent
for KTV lounges and equipment installation in KTV lounges in China. Total cost
of goods and services was $42,777 during the period from inception to April 30,
2008. We expect to generate revenue in the foreseeable future from these types
of expenses. We expensed these expenses during this period as we may not be
able to generate revenue from these expenses that occurred during the period
from inception to April 30, 2008.




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 $355,426 for the
year ended April 30, 2008. We expect our selling, general, and administrative
expenses will increase over the course of the year as we continue our efforts to
expand our network.  We expect that any increases 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.





Depreciation and
amortization.  Depreciation and amortization expense was $54
for the year ended April 30, 2008. Majority of our equipment are computers
and servers which were purchased in 2008.





Interest
income.  We recognized $9,070 of interest income for the year
ended April 30, 2008 primarily due to the higher balances of short-term and
long-term investments held during fiscal 2008.




Net loss. As
a result of the above, our net loss is $389,133 in fiscal year
2008.





Liquidity
and Capital Resources





As of
April 30, 2008, we had an aggregate of cash, cash equivalents, of $1,152,852.By virtue of receipt
of the net proceeds of an offering of our common stock and warrants effected on
July 17, 2008, we had an aggregate of cash, cash equivalents, and marketable
securities as of July 17, 2008 of approximately $5,000,000.





Based
upon our current plans, we believe that our existing cash, cash equivalents, and
marketable securities as of July 17, 2008 will be sufficient to cover our
estimated liquidity needs for at least the next 12 months, although we may raise
additional capital during that period if available on terms we believe are
attractive. Our long-term model is designed to allow replicable, scalable
individual market builds so that we can increase or decrease our market
deployment schedule based on available funds. As a result, the amount and timing
of our long-term capital needs will depend on the extent of our network
deployment and the availability of KTV providers adopting our services. As our
business is in its early stages, we regularly evaluate our plans and strategy,
and these evaluations often result in changes, some of which may be material and
may significantly modify our cash requirements. These changes in our plans or
strategy may include the introduction of new features or services, significant
or enhanced distribution arrangements, investments in infrastructure,
acquisition of other companies, or any combination of the foregoing.
Additionally, as our operations grow and expand, it may become more difficult to
modulate our business plans and strategies based on the availability of funding.
We will likely seek significant additional debt financing or equity financing,
in both the short-term and the long-term, to continue to fund our liquidity
needs and capital resource requirements.





The
following table presents a summary of our cash flows for the years ended April
30, 2008:




2008Cash
      used in operating activities
            
            $
            (314,537)Cash
      used in investing activities
            
            
            (6,793)Cash
      provided by financing activities
            
            
            1,457,624Effect
      of foreign currency exchange rates on cash and cash
      equivalents
            
            
            16,558Net
      increase in cash and cash equivalents
            
            
            1,152,852Cash
      and cash equivalents at beginning of period
            
            
            -Cash
      and cash equivalents at end of period
            
            $
            1,152,852







Operating
Activities







Net cash
used in operating activities was $314,537 in the year ended April
30, 2008.  The cash used in operations including employee
compensation, professional fees and facilities and advertising expense, due to
the expansion of our KTV advertising network, as well as a significant expense
in the number of markets served.







Investing
Activities







During
the year ended April 30, 2008, net cash used in investing activities was $(6,793). The cash used was
primarily the result of purchase of fixed assets after offsetting cash
transferred in from recapitalization of the Company.







Financing
Activities







Net cash
provided by financing activities was $1,457,624 for the year ended
April 30, 2008. During fiscal 2008, our financing activities consisted primarily
of cash proceeds received from the issuance of our equity
securities.





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.




17





ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA







Index
to Consolidated Financial Statements





Report
      of Sherb & Co., Independent Registered Public Accounting
      Firm
            F-1Consolidated
      Balance Sheet as of April 30, 2008
            F-2Consolidated
      Statement of Operations for the period from inception (June 18, 2007) to
      April 30, 2008.
            F-3Consolidated
      Statement of Stockholders' Equity for the period from inception (June 18,
      2007) to April 30, 2008
            F-4Consolidated
      Statements of Cash Flows for the period from inception (June 18, 2007) to
      April 30, 2008
            F-5Notes
      to Financial Statements
            F-6











REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM





Board of
Directors


K's
Media





We have
audited the accompanying consolidated balance sheet of K’s Media and its
subsidiaries (the “Company”) as of April 30, 2008 and the related consolidated
statement of operations, stockholders’ equity (deficiency) and cash flows for
the period from June 18, 2007 (inception) to April 30, 2008. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on 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 audits 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 circumstances, 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 also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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, the financial statements referred to above present fairly, in all
material respects the financial position of   K’s Media as of
April 30, 2008 and the results of its operations and its cash flows for the
period from June 18, 2007 (inception) to April 30, 2008, in conformity with
accounting principles generally accepted in the United States of
America.





The
accompanying 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 is a development stage company with minimal business
transactions since inception. This factor, among others, raises substantial
doubts 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 to the financial
statements. The accompanying financial statements do not include any adjustments
that might result should the Company be unable to continue as a going
concern.








/S/Sherb & Co.,
LLP


Certified
Public Accountants


Boca
Raton, Florida


July 29,
2008





18








K's Media(Previously
      known as Kinglake Resources Inc.)(A
      Development Stage Company)Consolidated
      Balance SheetApril
      30, 2008(Expressed
      in U.S. Dollars)ASSETSCurrent
      assetsCash
            $
            1,152,852Prepaid
      expenses
            
            308,296Total
      current assets
            
            1,461,148Fixed
      assets
            
            15,019Total
      assets
            $
            1,476,167LIABILITIESCurrent
      liabilitiesAccounts
      payable and accrued liabilities
            $
            98,226Amount
      due to related parties
            
            242,423Total
      liabilities
            
            340,649STOCKHOLDERS'
      EQUITYStockholders'
      EquityPreferred
      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,31,637,000
      and 21,137,000 issued and outstanding respectively
            
            317Additional
      paid-in capital
            
            1,507,776Accumulated
      other comprehensive loss
            
            16,558Deficit
            
            (389,133)Total
      stockholders' equity
            
            1,135,518Total
      liabilities and stockholders' equity
            $
            1,476,167The
      accompanying notes are an integral part of these consolidated financial
      statements.






19








K's Media(Previously
      known as Kinglake Resources Inc.)(A
      Development Stage Company)Consolidated
      Statement of OperationsFor
      the period from inception (June 18, 2007) to April 30,
  2008(Expressed
      in U.S. Dollars)RevenuesSales
            $
            -Cost
      of good sold
            
            (42,777)Gross
      profit (loss)
            
            (42,777)ExpensesAccounting
      and audit fees
            
            57,093Administrative
      and general
            
            58,014Consulting
      fees
            
            104,673Legal
      and professional fees
            
            39,171Salaries
      and benefits
            
            58,098Travel
      & promotion
            
            9,600Foreign
      exchange loss
            
            28,777Total
      operating costs and expenses
            
            355,426Loss
      from operations
            
            (398,203)Interest
      income
            
            9,070Net
      Loss
            $
            (389,133)Net
      loss per shareBasic
      and diluted
            $
            (0.02)Number
      of common shares used tocompute
      loss per shareBasic
      and diluted
            
            24,543,940The
      accompanying notes are an integral part of these consolidated financial
      statements.





20








K's Media(Previously
      known as Kinglake Resources Inc.)(A
      Development Stage Company)Consolidated
      Statement of Stockholders' Equity (Deficiency)For
      the period from Inception (June 18, 2007) to April 30,
  2008Accumulatedother
            
            TotalCommon
      Stock
            
            
            Additional
            
            
            
            comprehensive
            
            Stockholders'(Expressed
      in U.S. Dollars)
            Shares
            
            Amount
            
            paid-in
      capital
            
            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 fee
            
            
            
            
            
            
            
            
            
            
            -to
      acquire Orient Come Holdings Limited
            2,000,000
            
            20
            
            (20)
            
            
            
            
            
            -Issuance
      of common stock pursuant toescrow
      agreement
            10,500,000
            
            105
            
            (105)
            
            
            
            
            
            -Issuance
      of common stock pursuant toConsultancy
      Services Agreement
            50,000
            
            1
            
            274,499
            
            
            
            
            
            274,500Recapitalization
      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)Comprehensive
      loss
            
            
            
            
            
            
            
            
            
            
            (372,575)Balance,
      April 30, 2008
            31,637,000
            $
            317
            $
            1,507,776
            $
            (389,133)
            $
            16,558
            $
            1,135,518The
      accompanying notes are an integral part of these consolidated financial
      statements.







21








K's Media(Previously
      known as Kinglake Resources Inc.)(A
      Development Stage Company)Consolidated
      Statement of Cash FlowsFor
      the period from Inception (June 18, 2007) to April 30,
  2008(Expressed
      in U.S. Dollars)Cash
      flows provided by (used in) operating activitiesNet
      loss
            $
            (389,133)Depreciation
      expense
            
            54Non-cash
      consulting fees
            
            57,188Changes
      in operating assets and liabilities:Prepaid
      expenses and other receivable
            
            (55,839)Accounts
      payable and accrued liabilities
            
            16,820Amount
      due to related parties
            
            56,373Net
      cash used in operating activities
            
            (314,537)Cash
      flows provided by (used in) investing activitiesPurchasing
      fixed assets
            
            (15,073)Cash
      transferred in from recapitalization
            
            8,280Net
      cash used in investing activities
            
            (6,793)Cash
      flows provided by (used in) financing activitiesIssuance
      of common stock
            
            1,287,250Loans
      from related parties
            
            170,374Net
      cash provided by financing activities
            
            1,457,624Effect
      of foreign exchange rate
            
            16,558Increase
      in cash
            
            1,152,852Cash,
      beginning of period
            
            -Cash,
      end of period
            $
            1,152,852Supplemental
      disclosure of cash flow information:Interest
      paid
            $
            -Income
      tax paid
            $
            -Non-cash
      Investing and Financing Activities:Common
      stock issued for recapitalization
            $
            130Common
      stock issued for acquisition of K's Media Advertising
            $
            105Common
      stock issued for finder's fees
            $
            20The
      accompanying notes are an integral part of these consolidated financial
      statements.







22








K'S MEDIA


(Previously
known as Kinglake Resources Inc.)


(A
Development Stage Company)


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


For the
period from inception (June 18, 2007) to April 30, 2008






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 located in the Province of British Columbia. In September 2007, the
Company wrote down the property to 0 according to the recommendation of the
Company’s geologist as the property had minimal value for mining. The mining
claim expired April 18, 2007.





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 at high end consumers in China by placing premium brand advertising
in "KTV" clubs on behalf of top-tier 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.





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.




23







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 (25% of 10,500,000) of the
Escrow Shares are issuable to a third party service provider and are being held
as security for K's Media entering into advertising agreements with KTV 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 KTV 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.




(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, 2008, the Company has accumulated losses of $389,133 since inception.
The Company’s recurring losses raise substantial doubt about its ability to
continue as a going concern. The Company’s 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, 2009. 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.




24







2.
Summary of Significant Accounting Policies





(a) Principles of
consolidation





The
accompanying consolidated financial statements include the accounts of Orient
Come Holdings Limited, K’s Media, Beijing K's Media Advertising Ltd. Co. and K's
Media Broadcasting Cultural Co. Ltd. (collectively, the “Company”). All
significant inter-company transactions and accounts have been eliminated in
consolidation.





(b) Basis of
Presentation




These
financial statements and related notes are presented in accordance with
accounting principles generally accepted in the United States, and are expressed
in U.S. dollars.





(c) Use of
Estimates





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





(d) Basic and Diluted Net
Income (Loss) Per Share





The
Company computes net earnings (loss) per share in accordance with SFAS No. 128,
"Earnings per Share".
SFAS No. 128 requires presentation of both basic and diluted earnings per share
(“EPS”) on the face of the income statement. Basic EPS is computed by dividing
net income (loss) available to common shareholders (numerator) by the weighted
average number of shares outstanding (denominator) during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period using the treasury stock method and convertible preferred stock using the
if-converted method. In computing Diluted EPS, the average stock price for the
period is used in determining the number of shares assumed to be purchased from
the exercise of stock options or warrants. Diluted EPS excludes all dilutive
potential shares if their effect is anti dilutive.





(e) Cash and Cash
Equivalents





The
Company considers all highly liquid instruments with a maturity of three months
or less at the time of issuance to be cash equivalents. At April 30, 2008, the
Company did not have any cash equivalents.





(f) 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.





(g) Fixed
assets





Fixed
assets are stated of cost and are depreciated using the straight line method
over the estimated useful lives of the respective assets.





All fixed
assets as of April 30, 2008 consisted of office equipment with useful lives of
fives years. Total fixed assets as of April 30, 2008 were $15,073. Depreciation
expense for the year ended April 30, 2008 was $54.





(h) Financial
Instruments





The fair
values of financial instruments, which include cash, accounts payable and
accrued liabilities, and due to related party, approximate their carrying values
due to the immediate or short-term maturity of these financial instruments. The
Company’s operations are in Canada which results in exposure to market risks
from changes in foreign currency rates. The financial risk is the risk to the
Company’s operations that arise from fluctuations in foreign exchange rates and
the degree of volatility of these rates. Currently, the Company does not use
derivative instruments to reduce its exposure to foreign currency
risk.




25







(i) 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, 2008, there
are no outstanding stock options or warrants.





(j) Revenue
recognition





The
Company follows the guidance of the Securities and Exchange Commission's Staff
Accounting Bulletin No. 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 Company has
not recorded any revenues in the 2008 Period.





(k) Cost of goods
sold





Costs of
goods sold primarily include costs associated with rent for KTV lounges and
equipment installation in KTV lounges in China. Total cost of goods and services
was $42,777 during the period from inception to April 30, 2008. The Company
expects to generate revenue in the foreseeable future from these types of
expenses. We expensed these expenses during this period as the Company may not
be able to generate revenue from these expenses that occurred during the period
from inception to April 30, 2008.





(l) Advertising
costs





Advertising
costs are expensed as incurred. The Company did not incur any advertising costs
for the 2008 period.





(m) Income
Taxes





Potential
benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted SFAS No. 109 “Accounting for Income Taxes”
as of its inception. Pursuant to SFAS No. 109 the Company is required to compute
tax asset benefits for net operating losses carried forward. Potential benefit
of net operating losses have not been recognized in these financial statements
because the Company cannot be assured it is more likely than not it will utilize
the net operating losses carried forward in future years.





(n) Foreign currency
translation





The
functional currency of Kinglake Resources Inc. and Orient Come Holdings Limited
is the United States dollar. The functional currency of Beijing K's Media
Advertising Ltd. Co. and K's Media Broadcasting Cultural Co. Ltd are the Chinese
Renminbi (“RMB”). The reporting currency of the Company is the United States
dollar.





Beijing
K's Media Advertising Ltd. Co. and K's Media Broadcasting Cultural Co. Ltd.’s
assets and liabilities are translated into United States dollars at period end
exchange rates (0.14314 at April 30, 2008). Beijing K's Media Advertising Ltd.
Co. revenues and expenses are translated into United States dollars at weighted
average exchange rates for the periods (0.14127 for the year ended April 30,
2008). Resulting translation adjustments are recorded as a component of
accumulated other comprehensive income (loss) within stockholders’ equity. The
accumulated translation adjusted and effect of exchange rate on cash for the
2008 period was $16,558.





(o) Comprehensive income
(loss)





The
Company has adopted 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).





(p) Related party
transactions





A related
party is generally defined as (a) any person that holds 10% or more of the
Company’s securities and their immediate families, (b) the Company’s management,
(c) someone that directly or indirectly controls, is controlled by, or is under
common control with the Company, or (d) 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.





(q) Recent Accounting
Pronouncements





In
September 2006, the FASB issued SFAS No. 157; "Fair Value Measurements".
This statement defines fair value, establishes a framework for measuring fair
value in generally accepted accounting principles (GAAP), and expands
disclosures about fair value measurements. This statement applies under other
accounting Pronouncements that require or permit fair value measurements, the
FASB having previously concluded in those accounting pronouncements that fair
value is a relevant measurement attribute. Accordingly, this statement does not
require any new fair value measurements. However, for some entities, the
application of this Statement will change current practices. This Statement is
effective for financial statements for fiscal years beginning after November 15,
2007. Earlier application was permitted provided that the reporting entity has
not yet issued financial statements for that fiscal year.  The Company
is currently evaluating the requirements of SFAS 157.





In
February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial
Assets and Financial Liabilities-including an amendment of FAS
115".  SFAS 159 allows entities to choose, at specified
election dates, to measure eligible financial assets and liabilities at fair
value that are not otherwise required to be measured at fair value. If a company
elects the fair value option for an eligible item, changes in that item's fair
value in subsequent reporting periods must be recognized in current earnings.
SFAS 159 is effective for fiscal years beginning after November 15,
2007.  The Company is currently evaluating the requirements of SFAS
159.





In
December 2007, the FASB issued SFAS 141 (revised 2007), “Business
Combinations”.  SFAS 141R is a revision of SFAS 141 and
includes substantial changes to the acquisition method used to account for
business combinations (formerly the “purchase accounting” method), including
broadening the definition of a business, as well as revisions to accounting
methods for contingent consideration and other contingencies related to the
acquired business, accounting for transaction costs, and accounting for
adjustment to provisional amounts recorded in connection with
acquisitions.  SFAS 141R retains the fundamental requirement of SFAS
141, that the acquisition method of accounting be used for all business
combinations and for an acquirer to be identified for each business
combination.  SFAS 141R is effective for periods beginning on or after
December 15, 2008, and will apply to all business combinations occurring after
the effective date.  The Company is currently evaluating the
requirements of SFAS 141R.





In
December 2007, the FASB issued SFAS 160, “Non-controlling Interests in
Consolidated Financial Statements – an amendment of Accounting Research Bulletin
No. 51, Consolidated Financial Statements” (“ARB 51”).  This
Statement amends ARB 51 to establish new standards that will govern the (1)
accounting for and reporting of non-controlling interests in partially owned
consolidated subsidiaries and (2) the loss of control of
subsidiaries.  Non-controlling interest will be reported as part of
equity in the consolidated financial statements.  Losses will be
allocated to the non-controlling interest, and, if control is maintained,
changes in ownership interests will be treated as equity
transactions.  Upon a loss of control, any gain or loss on the
interest sold will e recognized in earnings.  SFAS 160 is effective
for periods beginning after December 15, 2008.  The Company is
currently evaluating the requirements of SFAS 160.




26







In
December 2007, the FASB ratified EITF No. 07-1, Accounting for
Collaborative Arrangements that discusses how parties to a collaborative
arrangement (which does not establish a legal entity within such arrangement)
should account for various activities. The consensus indicates that costs
incurred and revenues generated from transactions with third parties (i.e.
parties outside of the collaborative arrangement) should be reported by the
collaborators on the respective line items in their income statements pursuant
to EITF Issue No. 99-19, Reporting Revenue Gross as a Principal Versus Net
as an Agent., Additionally, the consensus provides that income statement
characterization of payments between the participants in a collaborative
arrangement should be based upon existing authoritative pronouncements; analogy
to such pronouncements if not within their scope; or a reasonable, rational, and
consistently applied accounting policy election. EITF Issue No. 07-1 is
effective for financial statements beginning after December 15, 2008 and is to
be applied retrospectively to all periods presented for collaborative
arrangements existing as of the date of adoption. The Company is evaluating the
impact, if any, the adoption of this consensus will have on the results of
operations, financial position or cash flows.





In March
2008, the FASB issued SFAS 161, “Disclosures about Derivative
Instruments and Hedging Activities”.  The new standard is
intended to improve financial reporting about derivative instruments and hedging
activities by requiring enhanced disclosures to enable investors to better
understand their effects on an entity’s financial position, financial
performance and cash flows.  It is effective for financial statements
issued for fiscal years and interim periods beginning after November 15, 2008,
with early application encouraged. The Company is currently evaluating the
requirements SFAS 161.







3.
Prepaid expenses





As of
April 30, 2008 prepaid expenses consist of the following:





Prepaid
      trade expenses
            $
            43,495Prepaid
      consultants and corporate expenses
            
            264,751$
            308,246





4.
Accounts Payable and Accrued Liabilities





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





Trade
      debt
            $
            55,292Accrued
      salaries
            
            42,933$
            98,226





5.
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, 2008, the Company did not have any
outstanding preferred stock.





(b)Common
Stock





The
Company is authorized to issued 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.





Prior to
the Share Exchange Agreement to Company had issued and outstanding 6,087,000
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. The Company has expensed $57,188 of this
agreement as consulting expense for the 2008 Period. The unamortized portion of
this stock issuance is 217,312 and is included in prepaid expenses as of April
30, 2008.





6.
Related Party Balances/Transactions





At April
30, 2008, the Company is indebted to a director of the company for $186,050,
which is non-interest bearing, unsecured, and due on demand.





During
the 2008 Period the Company received $80,922 in consulting fees from a related
party of the Company’s President and CEO. As of April 30, 2008 the Company owes
$56,373 to this related party for services rendered.





7. Commitment





On May
1, 2007, the Company signed a lease agreement for office space at monthly
rentals of $300 plus taxes expiring May 31, 2008. Total rental expense
for the 2008 period was $1,323.The lease agreement was
automatically extended for an additional year to May 31,
2009.





8.
Operating Risk





The
Company has determined that there are risks associated with entering into
transactions with entities based in China, where K's Media operations are
conducted. Such risks include:





China
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 PRC government may revoke a
violator's license for advertising business operations.




27







Substantially
all of the Company's operations, post acquisition, are conducted through their
contractual arrangements with K's Media. Though China 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, China regulations currently prohibit
foreign investment in the production and operation of any non-advertising
content. The Company does not currently directly operate an advertising business
outside of China and thus cannot qualify under China regulations until three
years after the Company commences any such operations outside of China or until
the Company acquires a company that has directly operated an advertising
business outside of China for the required period of time. Accordingly, the
Company, which is a foreign enterprise, is currently ineligible to directly
apply for the required licenses for providing advertising servicesin China.





Under the
Equity Pledge Agreements, the shareholders of K's Media pledged their equity
interests of the Company. This pledge was duly created by recording the pledge
on the Company's register of shareholders in accordance with the U.S.
regulations. According to China 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 in China. The Company anticipates
registering such pledge when the administration for industry and commerce
implements registration procedures in accordance with the China Property Rights
Law in the future. Although the Company believes that they will be able to
register the pledge, there can be no assurance that it will be able to do
so.





If the
Company or Chinese Advertisement Company is found to be in violation of any
existing or future China laws or regulations, or fail to obtain or maintain any
of the required permits or approvals, the relevant China regulatory authorities,
including those that which regulates advertising companies would have broad
discretion in dealing with such violations, including:





(i)         revoking
the business and operating licenses of K's Media and their
affiliates;





(ii)        discontinuing
or restricting the China subsidiaries' and affiliates' operations;





(iii)
            imposing
      conditions or requirements with which the Company, K's Media and their
      affiliates may not be able to comply
with;





(iv)
            requiring
      the Company, K's Media and their affiliates to restructure the relevant
      ownership structure or
operations




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




Many of
these contractual arrangements are governed by China law and provide for the
resolution of disputes through either arbitration or litigation in China.
Accordingly, these contracts would be interpreted in accordance with China law
and any disputes would be resolved in accordance with PRC 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 China legal system could
limit the Company's ability to enforce these contractual arrangements, which may
make it difficult to exert effective control over ourChina subsidiary, K's
Media.





Under the
China law, arrangements and transactions among related parties may be audited or
challenged by the China tax authorities. If any of the transactions that the
Company has entered into with K's Media are found not to be on an arm's-length
basis, or to result in an unreasonable reduction in tax under PRC law, the PRC
tax authorities have the authority to assess penalties.





Substantially
all of the Company's assets subsequent to the Share Exchange Agreement will be
located in China and substantially all of the Company's revenues will be derived
from operations in China.





Accordingly,
the Company's business, financial condition, results of operations and prospects
are affected significantly by economic, political and legal developments of
China. The Chinese economy differs from the economies of most developed
countries in many respects, including: (i) the amount of government involvement,
(ii) the level of development, (iii) the growth rate, (iv) the control of
foreign exchange, and (v) the allocation of resources





The
Company and K's Media operate in China. Fluctuations in exchange rates with
Chinese Renmenbi (“RMB”) may have a material adverse effect on the Company's
financial position. 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. On July 21, 2005, the China government changed its
decade-old policy of pegging the value of the RMB to the U.S. dollar. Under the
new policy, the RMB is permitted to fluctuate within a narrow and managed band
against a basket of certain foreign currencies. While the international reaction
to the RMB revaluation has generally been positive, there remains significant
international pressure on the China government to adopt an even more flexible
currency policy, which could result in a further and more significant
appreciation of the RMB against the U.S. dollar.





9.
Income Taxes





There is
no current or deferred tax expense for the years ended April 30, 2008 and 2007
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, wholly-owned foreign enterprises are subject to tax at a statutory rate of
33% (30% state income tax plus 3% local income tax). Starting from January 1,
2008, the rate was reduced to 25%.





The
components of net loss consist of the following:





For
      the period from inception (June 18, 2007) to April 30,
  2008U.S.
      Operations
            $
            161,585Chinese
      Operations
            
            227,548$
            389,133





As the
Company incurred a loss for the 2008 period, no provision was record. Due to the
uncertainty of the realization of the tax benefits from the net loss, no tax
benefit was recorded for the 2008 period.





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:





For
      the period from inception (June 18, 2007) to April 30,
  2008Income
      tax provision (benefit) at Federal statutory rate
            $
            (137,000)State
      income taxes, net of Federal Benefit
            
            (17,000)U.S.
      tax rate in excess of foreign tax rate
            
            33,000Increase
      in valuation allowance
            
            121,000$
            -





The
Company has a net operating loss ("NOL") carryforward for United States income
tax purposes at April 30, 2008 expiring through the year
2028.  Management estimates the NOL as of April 30, 2008 to be
approximately $162,000. 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.





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, 2008 are as follows:





NOL
      carryforwards
            $
            64,000Valuation
      allowance
            
            (64,000)Deferred
      tax asset, net of allowance
            $
            -




28





10.
Subsequent Event





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 $0.0001 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 expects to use the net proceeds from the sale of the
Units for working capital and general corporate purposes.




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. 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 implicating 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.








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




Our financial
statements for the period from inception to October 30, 2007 were audited by
Michael T. Studer, C.P.A., P.C., an independent registered firm of Certified
Public Accountants.  On November 9, 2007, we engaged Sherb & Co.,
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 Michael T. Studer and our engagement of
Sherb & Co. 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,
2008. 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,
2008. 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,
2008, 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 have not been any 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.




29





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
            
            27
            
            ChairmanYan
      Zhuang
            
            44
            
            Chief
      Executive Officer and DirectorJake
      Wei
            
            38
            
            Chief
      Financial Officer and DirectorJames
      Wei
            
            34
            
            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.





Yan
Zhuang.Mr. Zhuang has
over 20 years of marketing and general management experience with both
entrepreneur and multi-national companies in the areas of consulting, telecom
and media business.  Since 2005 Mr.  Zhuang has served as the
Senior Vice President of Hands-On Mobile Ltd. in Asia.  From 2000
through June 2005 Mr. Zhuang served Motorola for five years as the Director of
marketing for Asia.  Mr. Zhuang received a Bachelor's degree in
Telecom from University of Northern Jiao Tong in China and also holds a PhD
degree in Statistics and a Master's degree in Marketing from University of
Guelph in Canada.  Mr. Zhuang also serves as the Chief Executive
Officer and a member of the board of directors of the Chinese Advertisement
Company.




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.





Committees
of the Board of Directors





The board
of directors currently has no nominating, audit, compensation, or any other
committees.





Code
of Ethics





We have 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.




30





ITEM 11. EXECUTIVE
COMPENSATION




Compensation
of Executive Officers





Since
inception and through April 30, 2008, we have not paid any salary, made any
bonus payment, or granted any equity or non-equity incentives to any of our
executive officers, other than reimbursement of actual expenses incurred by our
executive officers in connection with the performance of their duties on behalf
of the Company.  We anticipate that we will begin compensating our
executive officers during fiscal year 2008, or such later or earlier date as is
deemed advisable by our board of directors.  Our executive officers
are not a party to employment or other agreements with us regarding employment
or compensation.  None of our executive officers are a party to any
agreement or arrangement pursuant to which they are entitled to compensation
upon termination of employment or a change in control of the
Company.




Outstanding Equity Awards at Fiscal
Year-End




As of
April 30, 2008, we had not granted any equity compensation, including stock
options, restricted stock, or stock appreciation rights, to our executive
officers.  We are not a party to, and our board of directors has not
approved, any form of equity compensation plan or agreement for our executive
officers.




Compensation
of Directors





Our directors do not receive
compensation for their service as members of our board of directors, other than
reimbursement of expenses incurred by out directors in connection with the
performance of their duties on behalf of the
Company.  Our  Bylaws provide that, by resolution of the
members of the board of directors, the directors may be paid their expenses, if
any, of attendance at each meeting of our board of directors, or paid a fixed
sum for attendance at each meeting of the board of directors or a stated
salary.




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 July 17, 2008, we had 21,087,000 shares of
common stock outstanding, which excludes 10,500,000 shares of our common stock
held pursuant to the Escrow Agreement and subject to issuance.  Unless
otherwise provided below, addresses for each shareholder is 10/F Building A,
G.T. International Center, 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 10,500,000 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.




31









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




Audit
Fees





The
aggregate fees billed for professional services rendered by our principal
accountant for the audit of our annual financial statements and review of
financial statements included in our Form 10-QSB filings, and services that are
normally provided by our accountant in connection with statutory and regulatory
filings or engagements for those fiscal years were as follows:




2008
            $
            25,000
            Sherb
      & Co.2007
            $
            5,000
            Michael
      T. Studer CPA P.C.




Audit-Related
Fees




The
aggregate fees billed in each of the last two fiscal years for assurance and
related services by the principal accountants that are reasonably related to the
performance of the audit or review of our financial statements and are not
reported in the preceding paragraph were as follows:




2008
            $
            0
            Sherb
      & Co.2007
            $
            0
            Michael
      T. Studer CPA P.C.




Tax
Fees




The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning were as follows:




2008
            $
            0
            Sherb
      & Co.2007
            $
            0
            Michael
      T. Studer CPA P.C.




All
Other Fees




The
aggregate fees billed in each of the last tow fiscal yeas for the products and
services provided by the principal accountant, other than the services reported
above were:




2008
            $
            0
            Sherb
      & Co.2007
            $
            0
            Michael
      T. Studer CPA P.C.




We do not
have an audit committee of our board of directors.  Our board of
directors must pre-approve the engagement of and all accounting-related
activities of our accountants and auditors prior to the performance of any
services by such accountants or auditors.  None of the services
described above were approved by an audit committee pursuant to paragraph
(c)(7)(i)(B) of Rule 2-01 of Regulation S-X under the Exchange Act, to the
extent that rule was applicable during fiscal years 2008 and
2007.  However, the services were approved by our full board of
directors.




32







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 12,
2008.





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 July __, 2008.







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







33





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).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
      pursuant to 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 the
      Securities 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.





34