UNITED STATES
                                        SECURITIES AND EXCHANGE COMMISSION
                                               WASHINGTON, DC 20549

_______________

FORM 10-KSB/A

FOR ANNUAL AND
TRANSITION REPORTS                                       PURSUANT TO SECTIONS 13 OR 15(D)
OF THE                                           SECURITIES EXCHANGE ACT OF 1934

(Mark One)

|X| ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

| | For
the fiscal year ended December 31, 2005
| | -------------------------------------------

OR

|_| TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

| | For
the transition period from __________________ to _____________________
| | --------------------------------------------------------------------------

Commission file number
000-50340

NAVSTAR MEDIA HOLDINGS,
INC. (Exact name of registrant as specified in its charter)

|                                                                                  |                                                 
|--------------------------------------------------------------------------------- | ------------------------------------------------
|Nevada            
(State or other jurisdiction of
incorporation or organization) | 75-2980786
(I.R.S. Employer Identification  No.)

26, Chaowai Road, Suite
A2205,                                      Chaoyang District, Beijing, 100020, China
                                (Address of principal executive offices) (Zip Code)

Phone: 646.688.4413
                                                 Fax: 646.349.3864
                                            (Issuer's telephone number)

All Correspondence to:

Navstar Media Holdings,
Inc.                                              c/o Baker & McKenzie LLP
                                             Attn. Howard Jiang, Esq.
                                            1114 Avenue of the Americas
                                                New York, NY 10036
                                                  (212) 891 3982

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

Securities registered pursuant to
Section 12(g) of the Exchange Act:    Common stock, $0.001 Par Value

Check whether the issuer is not
required to file reports pursuant to Section 13 or Section 15(d) of the Exchange
Act.  G

Check whether the issuer: (1) filed
all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the
past 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 |_|

Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no
disclosure will be contained, to the best of the issuers knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |_|

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

The issuers revenues for the
fiscal year ended December 31, 2005 were $3,307,346.

The aggregate market value of the
voting and non-voting common equity held by nonaffiliates computed by reference to the
price at which the common equity was last sold as of the last business day of the
registrants most recently completed fiscal year-end (December 31, 2005) is
$28,379,241 based upon the closing sale price of $1.75 per share on December 31, 2005.

As of December 31, 2005, there
were 21,220,009 shares of our common stock issued and outstanding.

Transitional Small Business
Disclosure Format:  Yes:  [ ]    No:  |X|

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Explanatory Note

This filing amends Part II, Item 7
of the financial statements

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TABLE OF CONTENTS TO ANNUAL REPORT ON
FORM 10-KSB/A
FOR YEAR ENDED DECEMBER
31, 2005

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|PART I
Item 1. 
Item 2. 
Item 3. 
Item 4. PART II
Item 5. 
Item 6. 
Item 7. 
Item 8. 
        
Item 8A.
Item 8B.PART III
Item 9. 
        
Item 10.
Item 11.
        
Item 12.
Item 13.
Item 14. | Description of Business                                                   
Description of Property                                                   
Legal Proceedings                                                         
Submission of Matters to a Vote of Security Holders                       
Market for Common Equity and Related Stockholder Matters                  
Management's Discussion and Analysis or Plan of Operation                 
Financial Statements                                                      
Changes in and Disagreements with Accountants on Accounting and Financial 
Disclosure                                                                
Controls and Procedures                                                   
Other Information                                                         
Directors, Executive Officers, Promoters and Control Persons; Compliance  
with Section 16(a) of the Exchange Act                                    
Executive Compensation                                                    
Security Ownership of Certain Beneficial Owners and Management and 
Related Stockholder Matters                                               
Certain Relationships and Related Transactions                            
Exhibits                                                                  
Principal Accountant Fees and Services | Page
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CAUTION REGARDING
FORWARD-LOOKING INFORMATION

All statements contained in this Form
10-KSB/A, other than statements of historical facts, that address future activities, events
or developments are forward-looking statements, including, but not limited to, statements
containing the words believe, anticipate, expect and
words of similar import. These statements are based on certain assumptions and analyses
made by us in light of our experience and our assessment of historical trends, current
conditions and expected future developments as well as other factors we believe are
appropriate under the circumstances. However, whether actual results will conform to the
expectations and predictions of management is subject to a number of risks and
uncertainties that may cause actual results to differ materially.

Such risks include, among others, the
following: international, national and local general economic and market conditions: our
ability to sustain, manage or forecast our growth; raw material costs and availability;
new product development and introduction; existing government regulations and changes in,
or the failure to comply with, government regulations; adverse publicity; competition; the
loss of significant customers or suppliers; fluctuations and difficulty in forecasting
operating results; changes in business strategy or development plans; business
disruptions; the ability to attract and retain qualified personnel; the ability to protect
technology; and other factors referenced in this and previous filings.

Consequently, all of the
forward-looking statements made in this Form 10-KSB/A are qualified by these cautionary
statements and there can be no assurance that the actual results anticipated by management
will be realized or, even if substantially realized, that they will have the expected
consequences to or effects on our business operations.

As used in this Form 10-KSB/A, unless
the context requires otherwise, we or us or the
Company means Navstar Media Holdings, Inc. and its subsidiaries.

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PART I

# ITEM 1. DESCRIPTION OF
BUSINESS

INTRODUCTION

Navstar Media Holdings, Inc.
(Navstar or the Company) is a United States based corporation that
owns
100% of Navstar Communications Holdings, Ltd, a Hong Kong company, which in turns owns

 majority interests in firms specializing in media content production and distribution
in the Peoples Republic of China (PRC). Navstar subsidiaries generate
revenues through producing television serials and other programs for the PRC market and
through advertising revenues generated from the broadcast and distribution of such
programs.

CORPORATE HISTORY

Navistar Communications Holdings,
Ltd, a Hong Kong Corporation, (NCHL) was originally established as a Holding
Company for equity ownership investments in mainland China media companies. During 2004,
NCHL acquired a 55% equity ownership interest in Happy Times Media, Inc. (HTM.) During
2005, NCHL increased its ownership interest in HTM to 70%. Based in Beijing, HTM has
operated as a private entity since 1998 and produces content for government-owned
television stations in China, while acting as a distributor of television serials and
movies for the Chinese market.

Navstar Media Holdings, Inc.
(Navstar or the Company) was incorporated on January 28, 2002 as
Premier Document Services, Inc. (OTCBB: PDSV), a Nevada corporation, which provided
document preparation and signatory services to mortgage, real estate and other financial
services firms in the Las Vegas, Nevada market. On November 30, 2005, the Company acquired
100% of the capital stock of NCHL. Prior to the Merger, no director, officer or affiliate
of the Company had any material relationship with any director, officer or affiliate of
NCHL. Upon completion of the merger the officers and directors of Premier resigned and
were replaced by the Companys current management team and board of directors.

As a result of the Merger and a
simultaneous forward stock split, 19,000,009 shares of the Companys Common Stock
were issued to the shareholders of NCHL. As of December 31, 2005, there were 21,220,009
shares of Common Stock of the Company outstanding.

The Companys common stock is
registered under Section 12(g) of the Securities Act of 1934 and is currently listed on
the over the counter bulletin board under the symbol NVMH.OB.

DESCRIPTION OF
NAVSTARS BUSINESS

Navstar exists as a holding company
for various media companies that serve the PRC market. Consistent with PRC regulations,
the Companys ownership percentage of its PRC-based subsidiaries is limited to
seventy percent (70%.) Products of the Companys subsidiaries include production of
television programs, advertising and redistribution of American films that have been
modified for the PRC market. One hundred percent of the Companys revenues come from
these media sources.

HAPPY TIMES MEDIA, INC.

The Companys HappyTimes
subsidiary (HTM), based in Beijing, has operated as a private entity since
1998. Currently, HTM produces content for major national and regional TV stations, and
distributes television series and movies in China. HTM is also engaged in the production
of TV advertising, as well as the production and distribution of cultural events,
communications and exhibitions.

5

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HTM generates revenue from sales and
distribution of its proprietary content, third party programming, and imported TV and film
productions in China; and sales and distribution of advertisement programs produced by
others.

In addition, HTM distributes European
content from providers such as TVE (UK) and Strawberry Films from (France), as well as
American content from providers including Miramax. HTM has as a customer base of
approximately 300 Provincial and local TV stations throughout China, China Central TV
(CCTV) stations and has developed advertising relationships with various
Chinese and foreign firms.

CONTENT PRODUCTION

Content production is performed at
the HTM Production Center (Production Center) in Beijing. Its capabilities
include film creation, scene filming and post-production editing. Currently, HTM produces
various TV programs for CCTV, BTV, MTV and several other major TV channels in China. In
addition to TV programs, the Production Center has produced a large number of TV
advertisements, product promotion programming and related public relations services for
world brands such as Electrolux, Epson, and Xian-Janssen. HTMs production team
utilizes advanced post visual/audio production equipment, enabling provision of an
integrated service to customers, including screen shoots, broadcasting and post
visual/audio production.

SALES
AND DISTRIBUTION

Navstar subsidiaries sell and
distribute its media content throughout the PRC to various provincial television
authorities and the nationwide China Central Television (CCTV.) Primary offices for its
operating subsidiaries are located in Beijing, with selling efforts engaged in throughout
the country. Currently, Navstar subsidiaries only sell to customers in PRC.

CONCENTRATION OF CUSTOMERS

As of December 31, 2005, Navstar
subsidiaries sell their entire output of media content production to various governmental
broadcasting organizations within the PRC. The primary buyer is CCTV, followed by the
various provincial broadcasting authorities. Because of the credit-worthiness of these
governmental customers, there is a high level of confidence in the collectability of
outstanding receivables. The loss of any specific customer, including CCTV, could have a
material adverse effect on the financial performance of one or all of Navstars
subsidiaries.

BACKLOG

The Company has no backlog of orders.
Production of Television serials and movies are performed under contract from distributors
and state-owned entities.

INTELLECTUAL PROPERTY

The Company has registered trademarks
to protect various components of its media content, including series titles, scripts and
production outputs. Protection of the Companys intellectual property is very
important to our long-term success. It can not be assured, however, that any particular
intellectual property protection will prove sufficient in avoiding unauthorized copying or
the use of other illegal forms of distributing the Companys content.

COMPETITION

Although the market has increased
dramatically, the Chinese TV media industry is still in the early stages of development.
Like many industries Since there are so many gaps and opportunities in the market, most TV
media companies have enjoyed profitable operations. However, due to long-established state
ownership and control, the TV media industry has not been efficient. This resulted in many
of these newly created production companies to be niche oriented and to operate on a small
scale, with limited capacity and sophistication. Few companies are strong, fully
integrated competitors, with most lacking in one or more of the basic components of the
industry, including channel ownership and operation, production, distribution and
advertising.

6

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One of Navstars strategy is to
acquire the more successful and larger integrated producers as possible, in an attempt to
create a nationwide provider of quality content and other related services. While we were
able to execute on this strategy in the past, there can be no guarantee that we will be
able to acquire or negotiate successfully such companies in the future.

PRIVATE TELEVISION
PRODUCTION COMPANIES

In terms of program provision,
Navstar primarily competes with existing private program providers for the various TV
stations and networks and with distributors of overseas films. The industry is fragmented
and most are small operators and regionally-based.

STATE-OWNED TELEVISION
COMPANIES

Currently, Navstars main
competitors are state-owned entrenched companies. The key state-owned program providers
are TV Department of CRI (subordinated to State Ministry of Radio, Film and
Television) and Audio-Visual Center of Xinhua News Agency. These providers
specialize in international and domestic news. This is a tightly state-controlled sector
that has not demonstrated a history of profitable operations. Navstar is not in the
television news business and, as such, do not consider these providers to be full
competitors. The large state-owned content producers such as CCTV, CCID TV
and Perspective Orient (Hunan TV& Broadcast Intermediary), focus primarily on
IT and Financial News programming, also Hengyi TV and Guanghua Film &
TV.

OVERSEAS (FOREIGN TO
CHINA) MEDIA GROUPS

International media companies
currently produce highly specialized feature programming for export to China. Such
specialized content does not tend to encroach upon political and cultural sensitivities.
Through these channels, limited high-content programming is distributed through Chinese
media firms. Networks distributed through this method include ESPN, MTV, NGC and
Discovery Channel. One international organization that recently entered into a joint
venture to produce local content is Viacom,through a contract with Shanghai
Media, a large state-owned media content producer.

COMPETITIVE SUMMARY

While the Media content industry as a
whole in China is in a state of change and still dominated by state-owned entities, the
opportunities for companies such as ours to penetrate the market inefficiencies exist.
Through this period of tremendous growth and opportunity may not exist for an extended
period of time. To the extent, more nimble and better-funded organizations competing in
this market may have a materially adverse affect on our company. The Company plans to
continue acquiring content, assets and companies that would address the opportunities and
gaps that exist within markets it competes.

GOVERNMENTAL REGULATION

Our Company operates from facilities
that are located in the Peoples Republic of China. Accordingly, we must conform to
the governmental regulations and rules of China. In the case of media content produced for
viewing in China, stringent rules have been put in place by the government to ensure the
cultural and political appropriateness of films and shows. The Company must carefully obey
these rules so that it may continue to produce and distribute its content within the
Chinese market. To the extent that the Company violates these rules and regulations, it is
possible that major, state-owned customers will decline to continue purchasing the
Companys content. Such an event could have a materially adverse on the operations of
the Company and on its future prospects. Following is a general discussion of the unique
characteristics of the Chinese market

7

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DOING BUSINESS IN CHINA
AND GOVERNMENT REGULATIONS IN CHINA

GOVERNMENTAL REGULATION OF
OUR OPERATIONS IN CHINA

Our subsidiary companies operate from
facilities that are located in the Peoples Republic of China. Accordingly, our
subsidiaries operations must conform to the governmental regulations and rules of
China.

THE CHINESE LEGAL SYSTEM

The practical effect of the
Peoples Republic of China legal system on our business operations in China can be
viewed from two separate but intertwined considerations.

First, as a matter of substantive
law, the Foreign Invested Enterprise laws provide significant protection from government
interference. In addition, these laws guarantee the full enjoyment of the benefits of
corporate Articles and contracts to Foreign Invested Enterprise participants. These laws,
however, do impose standards concerning corporate formation and governance, which are not
qualitatively different from the General Corporation Laws of the several states.
Therefore, as a practical matter, a Foreign Invested Enterprise needs to retain or have
ready access to a local Chinese law firm for routine compliance purposes.

Similarly, the Peoples Republic
of China accounting laws mandate accounting practices, which are not co-existent with U.S.
Generally Accepted Accounting Principles. The China accounting laws require that an annual
statutory audit be performed in accordance with Peoples Republic of
China accounting standards and that the books of account of Foreign Invested Enterprises
are maintained in accordance with Chinese accounting laws. Article 14 of the Peoples
Republic of China Wholly Foreign-Owned Enterprise Law requires a Wholly Foreign-Owned
Enterprise to submit certain periodic fiscal reports and statements to designate Financial
and tax authorities, at the risk of business license revocation. As a practical matter, a
Foreign Invested Enterprise must retain a local Chinese accounting firm that has
experience with both the Chinese standards and U.S. Generally Accepted Accounting
Principles. This type of accounting firm can serve the dual function of performing the
annual Chinese statutory audit and preparing the Foreign Invested Enterprises
financial statements in a form acceptable for an independent U.S. certified public
accountant to issue an audit report in accordance with Generally Accepted Accounting
Auditing Standards.

Second, while the enforcement of
substantive rights may appear less clear than United States procedures, the Foreign
Invested Enterprises and Wholly Foreign-Owned Enterprises are Chinese registered companies
which enjoy the same status as other Chinese registered companies in business-to-business
dispute resolution. All business disputes pertaining to Foreign Invested Enterprises are
to be resolved by the Arbitration Institute of the Stockholm Chamber of Commerce in
Stockholm, Sweden applying Chinese substantive law. Any award rendered by this arbitration
tribunal is, by the express terms of the respective Articles of Association, enforceable
in accordance with the United Nations Convention on the Recognition and Enforcement
of Foreign Arbitral Awards (1958). Therefore, as a practical matter, although no
assurances can be given, the Chinese legal infrastructure, while different in operation
from its United States counterpart, should not present any significant impediment to the
operation of Foreign Invested Enterprises.

EARNINGS AND
DISTRIBUTIONS OF THE FIES

Foreign-Owned Enterprise laws provide
for and guarantee the distribution of profits to foreign investors in Chinese Foreign
Invested Enterprises. Article 19 of the Peoples Republic of China Wholly Foreign
Owned Enterprise Law provides that a foreign investor may remit abroad profits that are
earned by a Foreign Invested Enterprise, as well as other funds remaining after the
enterprise is liquidated.

8

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Because our Chinese businesses are
controlled foreign corporations, for U.S. federal income tax purposes, we may be required
to include in our gross income for U.S. tax purposes:

| | Those
companies' "Subpart F" income, which includes certain passive income and income from
         certain transactions with related persons, whether or not this income is
distributed to it; and
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Increases
in those companies' earnings invested in certain U.S. property.
|- | -------------------------------------------------------------------------

Based on the current and expected
income, assets, and operations of Chinese businesses, we believe that it will not have
significant U.S. federal income tax consequences under the controlled foreign corporation
rules.

POLITICAL AND TRADE
RELATIONS WITH THE UNITED STATES

Political and trade relations between
the United States and Chinese governments within the past five years have been volatile
and may continue to be in the future. Issues surrounding the sovereignty of Taiwan remain
within the public discourse. While none of these events have had a direct connection to
our organization, other issues, including the protection of intellectual property rights
within China and sensitivity to technology transfers from the United States to China have
closer potential connection to the Companys operations. There can be no assurance
that the political and trade ramifications of these issues or the emergence of new issues
will not cause future difficulties for our operations within China.

ECONOMIC REFORM ISSUES

Ever since the reform began 27 years
ago, the Chinese government has implemented economic reform measures that emphasize
decentralization and encourage private economic activity. Now most of the Chinese economy
is market driven. However, there are no assurances that:

| | We
will be able to capitalize on economic reforms;
|- | --------------------------------------------------

| | The
Chinese government will continue its pursuit of economic reform policies;
|- | -----------------------------------------------------------------------------

| | The
economic policies, even if pursued, will be successful;
|- | -----------------------------------------------------------

| | Economic
policies will not be significantly altered from time to time; and
|- | --------------------------------------------------------------------------

| | Business
operations in China will not become subject to the risk of nationalization.
|- | ------------------------------------------------------------------------------------

Negative impact upon economic reform
policies or nationalization could result in a total investment loss in our common stock.

Since 1978, the Chinese government
has been engaged in a reformation of its economic systems. Because many reforms are
unprecedented or experimental, they are expected to be refined and improved. Other
political, economic and social factors may result in fluctuations in the rate of economic
growth, increases in unemployment or inflation, or can engender wealth disparities
between regions within China.  Such outcomes could lead to further adjustment of the
reform measures and may negatively affect our operations.

Over more than two decades, China's
economy has registered a high growth rate.

To date, reforms to China's economic
system have not adversely impacted our company's operations and are not expected to
adversely impact operations in the foreseeable future. There can be no assurance,
however, that the reforms to China's economic system will continue or that we will not be
adversely affected by changes in China's economic and social conditions or by changes in
policies of the Chinese government.

9

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CURRENCY CONVERSION AND EXCHANGE

The currency in China is designated
as the Renminbi. Although the Renminbi/United States dollar exchange rate has been
relatively stable in the past five years and recently the Renminbi has been steadily
gaining against the dollar, there can be no assurance that the exchange rate will not
become volatile or that the Renminbi will not sharply appreciate or depreciate against
the United States dollar.

Exchange rate fluctuations may
adversely affect our financial performance because of our foreign currency denominated
assets and liabilities, and may reduce the value, translated or converted, as applicable
into United States dollars, of our net fixed assets and our earnings. We do not engage in
any hedging activities in order to minimize the effect of exchange rate risks.

ENVIRONMENTAL COMPLIANCE

Our Company is subject to the
People's Republic of China's National Environmental Protection Law, which was enacted on
December 26, 1989, as well as a number of other national and local laws and regulations
regulating air, water, and noise pollution and setting pollutant discharge standards.
Violation of such laws and regulations could result in warnings, fines, orders to cease
operations, and even criminal penalties, depending on the circumstances of such
violation. We believe that our operations are in compliance with all applicable
environmental laws, including those laws relating to air, water, and noise pollution. The
Company believes that the cost of compliance with the applicable environmental laws does
not have a material effect on the company's capital expenditures, earnings or the
Company's competitive position.

PRODUCT DEVELOPMENT

The Company plans to increase its
capacity to produce media content, subject only to market and logistical constraints.  To
be successful, it will be necessary for the Company to seek other sources of funding.
 Should such sources be unavailable or too costly, the Company could sustain a material
adverse impact upon its financial performance and a loss of competitive position within
the marketplace.

EMPLOYEES

As of the date of this filing,
Navstar and is subsidiaries have 56 full time employees plus three corporate officers,
consisting of the Chief Executive Officer, the Chief Financial Officer and the Corporate
Secretary.

AVAILABLE INFORMATION

We are subject to the informational
requirements of the Securities Exchange Act of 1934. Accordingly, we file annual,
quarterly and other reports and information with the Securities and Exchange Commission.
You may read and copy these reports and other information we file at the Securities and
Exchange Commission's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. You may obtain information on the operation of the Public Reference
Room by calling the SEC at 1-800-SEC-0330. Our filings are also available to the public
from commercial document retrieval services and the Internet worldwide website maintained
by the Securities and Exchange Commission at www.sec.gov . Public information (including
reports we file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act)
concerning the Company is also made available through our website at: www.cesv-inc.com.

10

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RISK FACTORS

The Company's commercial operations
are relatively young and exist solely in the People's Republic of China.  As a result, a
significant number of unique risk factors are associated with the Company's financial
prospects.

(1)     The
Company has a Limited Operating History and it is difficult to evaluate it operating
performance

The Company began offering its
products and services under Happytimes Media Ltd. in Beijing in 1996. Accordingly, it has
a limited operating history upon which investors can evaluate its performance.  In
addition, the Company's senior management and employees have worked together for only a
short period of time.  As an early stage company in the China media market, the Company
faces numerous risks and uncertainties. Some of these risks relate to its ability to:

| | -
increase advertising revenues and successfully build content production and distribution
services        businesses, given the early stage of development of the China media
industry; and
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | -
maintain current and develop new, strategic relationships to increase revenue streams, as
well as        product and service offerings.
| | -----------------------------------------------------------------------------------------------------------------------------------------

(2)    
          Violations of PRC Regulations Could Result in Severe Penalties

The PRC recently enacted regulations
applying to media-related services. While many aspects of these regulations remain
unclear, they purport to limit and require licensing and censoring of various aspects of
the provision of media services and media products. If Company operations or products are
found to be inconsistent with these regulations, business will be severely impaired and
the Company could be subject to severe penalties.

The Bureau of Broadcasting and
Television is the authority directly in charge of the media industry. However, as the
Company grows it may be subject to regulation by various PRC government authorities.
Various government authorities have stated publicly that they are in the process of
preparing new laws and regulations that will govern these activities. The areas of
regulation currently include movie production, local content, online advertising, online
publishing and content distribution that the Company may be involved. In addition, other
aspects of the business may be subject to regulation in the future.

Operations may not be consistent with
these new regulations when put into effect and, as a result, the Company could be subject
to severe penalties. The laws and regulations governing the Internet industry in China are
developing and subject to future changes, and substantial uncertainties exist as to the
interpretation and implementation of those laws and regulations.

In recent years, the PRC government
has begun to enact laws and regulations applicable to Internet-related services and
activities, many of which are relatively new and untested and subject to future changes.
In addition, various regulatory authorities of the central PRC government, such as the
State Council, the MII, the State Administration of Industry and Commerce, or SAIC, the
State News and Publication Administration, or SNPA, and the Ministry of Public Security,
are empowered to issue and implement regulations to regulate certain aspects of
Internet-related services and activities. See Regulation. Furthermore, some
local governments have also promulgated local rules applicable to Internet companies
operating within their respective jurisdictions. As the Internet industry itself is at an
early stage of development in China, there will likely be new laws and regulations adopted
in the future to address issues that arise from time to time. As a result of the
foregoing, substantial uncertainties exist regarding the interpretation and implementation
of current and future PRC Internet laws and regulations. While Navstar believes that is in
compliance with all applicable PRC laws and regulations currently in effect, it cannot
assure investors you that it will not be found in violation of any current or future PRC
laws and regulations due to these substantial uncertainties.

11

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(3)    
          Revenue of the Company is Dependent on a Customer Following.

The Company derives a significant
portion of its revenue from the production and sale of made-for-TV programs. The ability
of the Company to generate and maintain significant revenues will depend upon its products
and distribution partners products being attractive to its users and to advertisers.
The quality of its productions and the ability of the Companys distribution network
will determine revenue growth.

(4)    
          Operating Results May Differ From Market Expectations.

The Companys annual and
quarterly operating results may vary significantly in the future, due to a number of
factors which could have an adverse impact on the Company, such as a reliance on media.
The Chinese media industry is in an early stage of development and future growth of the
industry and the Company is not known and the Company will continue to be subject to
government regulations that may change at any time or without notice.

It is anticipated that year-to-year
and quarter-to-quarter comparisons of the Companys operating results will not be a
good indication of its future performance. It is likely that in some future quarter(s),
operating results will be below the expectations of public market analysts and investors.
In this event, the trading price of the Companys common stock may fall.

(5)    
          The Success of the Company is Dependent upon Content Providers.

In addition to the Companys own
production, success depends significantly on relationships with leading global content
producers. Competitors may seek to establish the same relationships as the Company, which
may adversely affect Navstar and/or its subsidiaries. The Company may be unable to
maintain these relationships or replace them on commercially attractive terms.

(6)    
          The Company depends on certain key executives and employees and business may be
          disrupted if it loses the services of key executives and employees.

The future success of the Company is
heavily dependent upon the continued service of its key executives and management
employees. The Company will be dependent on the expertise of key management and on their
relationships with the Company shareholders, the relevant regulatory authorities,
customers and suppliers. If one or more of these key executives and employees are unable
or unwilling to continue in their present positions, the Company may not be able to easily
replace them and it may face significant difficulties. Each of the executive officers of
Navstar and its subsidiaries has indicated a willingness to enter into an employment
agreement, confidentiality agreement, non-competition agreement and non-solicitation
agreement with the Company. However, the degree of protection afforded to an employer
pursuant to confidentiality and non-competition undertakings governed by PRC law may be
more limited when compared to the degree of protection afforded under the laws of other
jurisdictions. In addition, the Company does not and does not intend to maintain key-man
life insurance for any of its key executives. As such, the loss of key personnel may
significantly impact the performance of the Company in the future.

(7)    
          The Company will need Additional Management in order to meet Growth Expectations

The Company has an aggressive growth
strategy. This growth strategy is subject to matters beyond managements control
including, but not limited to, general economic conditions, launching new product
initiatives, and attracting qualified personnel. The success of its growth strategy will
depend in part on the Companys ability to observe and manage its future growth, if
any. To do so, the Company will be required to add personnel, expand and integrate its
management information and accounting control systems and carefully monitor and control
its operating expenses. If the Company is unable to manage its growth effectively, its
operating results could be adversely affected.

(8)    
          The Company has limited operational, administrative and financial resources,
          which may be inadequate to sustain the growth it wants to achieve.

12

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As its customer base increases, the
demands of the audience/customers will require the Company to increase the investment in
its facilities and other areas of operation. If the Company is unable to manage its growth
and expansion effectively, the quality of its services could deteriorate and business may
suffer. The future success of the Company will depend on, among other things, its ability
to:

| | -
adapt its services and maintain and improve the quality of its products and services;
| | ---------------------------------------------------------------------------------------

| | -
continue training, motivating and retaining its existing employees and attract and
integrate new            employees; and
| | ----------------------------------------------------------------------------------------------------------------------------

| | -
develop and improve its operational, financial, accounting and other internal systems and
controls.
| | -----------------------------------------------------------------------------------------------------

(9)    
          The Company may not be able to obtain additional capital on acceptable terms.

It is anticipated that additional
funding will be required to acquire other entities and to achieve desired growth
estimates. Should growth occurs at a more rapid pace than projected, there can be no
assurance that the Company will be able to obtain additional financing, or that such
financing can be obtained on conditions favorable to the Company and its shareholders.

Moreover, growth of any kind has
inherent costs associated with increased corporate infrastructure and facilities. If
growth does not materialize as planned, the financial operations of the Company could be
affected in a materially adverse manner,

(10)    
          There are risks associated with the Companys strategy of expansion through
          acquisitions, each of which may result in a material adverse effect on its
          operating or financial performance.

The Company is in the process of
acquiring other operating entities and intends to actively identify and acquire additional
assets, technologies and businesses in the future that are complementary to its existing
core media business. These acquisitions could result in the use of substantial amounts of
cash, potentially dilutive issuances of equity securities, significant impairment losses
related to goodwill or amortization expenses related to intangible assets and exposure to
undisclosed or potential liabilities of acquired companies. Moreover, the resources
expended in identifying and consummating acquisitions may be significant. Furthermore, any
acquisitions the Company decides to pursue may be subject to the approval of the relevant
PRC governmental authorities, as well as any applicable PRC rules and regulations. Such
acquisitions are subject to various Chinese governmental review and approval and detailed
capital contribution requirements. Therefore, there cannot be any assurance on the
complete compliance with all such requirements.

(11)     The
Company is Dependent on its Distribution Channels

The Company may have to rely on
dividends and other distributions on equity paid by its subsidiaries to fund any cash
requirements the Company may have. Navstar is a holding company with no operating assets
other than investments in Chinese operating entities, including Happytimes and other
acquisition targets that are being acquired. Furthermore, dividends received by
subsidiaries would be subject to taxation in China and the United States. Lastly, the
Company may not be able to obtain cash from distributions to the extent that such
distributions are restricted or may become restricted by PRC law or future debt covenants.

(12)    
          Intellectual property is important to the Companys Success and any
          unauthorized use of intellectual property by third parties may adversely affect
          the Company.

The Company regards its copyrights,
service marks, trademarks, trade secrets and other intellectual property as critical to
its success. Unauthorized use of intellectual property by third parties may adversely
affect its business and reputation. The Company relies on trademark and copyright law,
trade secret protection and confidentiality agreements with its employees, customers,
business partners and others to protect its intellectual property rights. Despite its
precautions, it may be possible for third parties to obtain and use the Companys
intellectual property without authorization. Furthermore, the validity, enforceability and
scope of protection of intellectual property in media and internet-related industries is
uncertain and still evolving. In particular, the laws of the PRC and other countries may
not protect intellectual property rights to the same extent as do the laws of the United
States. Moreover, litigation may be necessary in the future to enforce the Companys
intellectual property, to protect trade secrets or to determine the validity and scope of
the proprietary rights of others. As a result, future litigation could result in
substantial costs and diversion of resources from protecting the Companys
intellectual property.

13

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(13)    
          The companys performance is dependent on the ratings received by the
          channel with which it works.

In general, viewer interest in
programming offered on a television channel determines the audience ratings a channel
receives. Ratings are a significant factor in the amount of revenues Navstar generates as
ratings impact the pricing that Navstar can charge to its advertisers. Because television
stations generally make the final decision as to which programs they will broadcast, if
the television stations choose poor quality programming, or due to competitive forces are
unable to secure popular programs, their channel ratings could be negatively affected. The
failure by the television stations to achieve good ratings for their programs could have a
material adverse affect on the profitability of Navstar.

(14)    
          Fluctuations in the value of the Chinese Renminbi relative to foreign currencies
          could affect Navstars financial condition, results of operations and the
          price of Common Stock.

The value of the Renminbi against the
U.S. dollar and other currencies may fluctuate and is affected by, among other things,
changes in the PRCs political and economic conditions. Any significant revaluation
of the Renminbi may materially and adversely affect the Companys revenue, cash flow,
and common stock price. For example, to the extent the Company needs to convert U.S.
dollars it receives from an offering into Renminbi for its operations, appreciation of the
Renminbi against the U.S. dollar could have a material adverse effect on uses of funds.

Conversely, if the Company decides to
convert its Renminbi into U.S. dollars for the purpose of making payments for dividends on
its common shares or for other business purposes and the U.S. dollar appreciates against
the Renminbi, the U.S. dollar equivalent of the Renminbi would be reduced. To date, the
Company has not engaged in transactions of either type. In addition, the depreciation of
significant U.S. dollar denominated assets could result in a charge to its income
statement and a reduction in the value of its assets.

Since 1994, the PRC has pegged the
value of the Renminbi to the U.S. dollar. The Company does not believe that this policy
has had a material effect on its business. However, there have been indications that the
PRC government may be reconsidering its monetary policy in light of the overall
devaluation of the U.S. dollar against the Euro and other currencies during the last two
years. If the pegging of the Renminbi to the U.S. dollar is loosened, it is anticipated
that the value of the Renminbi would likely appreciate against the dollar.

(15)    
          Restrictions on foreign currency exchange may limit the Companys ability
          to obtain foreign currency or to utilize Revenue effectively.

Substantially all of the
Companys revenue and operating expenses are denominated in Renminbi. The Renminbi is
freely convertible under the current account, which includes dividends, trade
and service related foreign exchange transactions. However, it is not freely convertible
under the capital account, which includes foreign direct investment.

Currently, Happytimes may purchase
foreign exchange for settlement of current account transactions, including
payment of dividends, without the approval of the State Administration for Foreign
Exchange, or SAFE. Happytimes may also retain foreign exchange in its current account
(subject to a ceiling approved by the SAFE) to satisfy foreign exchange liabilities or to
pay dividends. The relevant PRC governmental authorities may limit or eliminate the
Companys ability to purchase and retain foreign currencies in the future.

14

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Since a significant amount of future
revenue will be in the form of Renminbi, the existing and any future restrictions on
currency exchange may limit its ability to utilize revenue generated in Renminbi to fund
its business activities outside China, if any, or expenditures denominated in foreign
currencies. Foreign exchange transactions under the capital account are still subject to
limitations and require approvals from the SAFE.

(16)    
          The dividends and other distributions on equity Navstar may receive from its
          subsidiaries or other payments it may receive from future strategic partners are
          subject to restrictions under PRC law or agreements that these entities may
          enter into with third parties.

Navstar relies on dividends and other
distributions on equity paid by its subsidiaries and from future service fees from its
strategic partners. If any of the subsidiaries incurs debt in the future, the instruments
governing the debt may restrict the subsidiaries ability to pay dividends or make other
distributions to us. In addition, PRC law requires that payment of dividends by
subsidiaries that are incorporated in China can only be made out of its net income, if
any, determined in accordance with PRC accounting standards and regulations. Under PRC
law, those subsidiaries are also required to set aside a portion, of up to 10% of their
after-tax net income each year to fund certain reserve funds, and these reserves are not
distributable as dividends. Any limitation on the payment of dividends by its subsidiaries
could materially adversely affect Navstars ability to grow, fund investments, make
acquisitions, pay dividends, and otherwise fund and conduct business.

(17)    
          The Company may experience risks associated with currency exchange losses.

Although a majority of the
Companys revenue is denominated in Renminbi, its reporting currency is the U.S.
Dollar. The Companys revenue and earnings are expressed in its U.S. Dollar financial
statements and will decline in value if the Renminbi depreciates relative to the U.S.
Dollar. Very limited hedging transactions are available in China to reduce its exposure to
exchange rate fluctuations. To date, the Company has not entered into any hedging
transactions in an effort to reduce its exposure to foreign currency exchange risk. While
the Company may decide to enter into hedging transactions in the future, the availability
and effectiveness of these hedges may be limited and it may not be able to successfully
hedge its exposure, if at all. In addition, the Companys currency exchange losses
may be magnified by PRC exchange control regulations that restrict its ability to convert
Renminbi into U.S. Dollars.

(18)    
          Investors may experience difficulties in effecting service of legal process and
          enforcing judgments against Navstar and its management.

Although the Company is incorporated
in the State of Nevada, a significant portion of its assets are located in the PRC. As a
result, it may be difficult for investors to enforce any actions brought against the
Company outside the United States including actions predicated upon the civil liability
provisions of the federal securities laws of the United States or of the securities laws
of any state of the United States. In addition, certain directors and officers
(principally in the PRC) and all or a substantial portion of their assets may be located
outside the United States. As a result, it may not be possible to enforce any judgments
obtained in United States courts against directors and officers, including judgments
predicated upon the civil liability provisions of the federal securities laws of the
United States or of the securities laws of any state of the United States. The Company has
been advised by its PRC counsel that enforceability in the PRC is questionable, in
original actions or in actions for enforcement of judgments of United States courts, of
civil liabilities predicated solely upon the federal securities laws of the United States
or the securities laws of any state of the United States.

(19)If we fail to maintain an effective system of internal
          controls, we may not be able to accurately report our financial results or
          prevent fraud.

15

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We will be subject to reporting
obligations under the U.S. securities laws. The Securities and Exchange Commission, or the
SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules requiring
every public company to include a management report on such companys internal
controls over financial reporting in its annual report, which contains managements
assessment of the effectiveness of the companys internal controls over financial
reporting. In addition, an independent registered public accounting firm must attest to
and report on managements assessment of the effectiveness of the companys
internal controls over financial reporting. Our management may conclude that our internal
controls over our financial reporting are not effective. Moreover, even if our management
concludes that our internal controls over financial reporting are effective, our
independent registered public accounting firm may still decline to attest to our
managements assessment or may issue a report that is qualified if it is not
satisfied with our controls or the level at which our controls are documented, designed,
operated or reviewed, or if it interprets the relevant requirements differently from us.
Our reporting obligations as a public company will place a significant strain on our
management, operational and financial resources and systems for the foreseeable future.
Effective internal controls, particularly those related to revenue recognition, are
necessary for us to produce reliable financial reports and are important to help prevent
fraud. As a result, our failure to achieve and maintain effective internal controls over
financial reporting could result in the loss of investor confidence in the reliability of
our financial statements, which in turn could harm our business and negatively impact the
trading price of our stock. Furthermore, we anticipate that we will incur considerable
costs and use significant management time and other resources in an effort to comply with
Section 404 and other requirements of the Sarbanes-Oxley Act.

# ITEM 2.   DESCRIPTION OF
PROPERTY

The Companys subsidiaries lease
space for production and office activities, including from state-owned enterprises. Some
of the Companies leases include the use of CCTV production resources and facilities. In
the United States, the Company does not lease any facilities, relying instead on home
offices of Officers and temporary meeting facilities at our law firm.

As a general rule, we do not
anticipate investing in real estate, including but not limited to interests in real
estate, real estate mortgages, real estate investment trusts or interests in persons
primarily engaged in real estate activities. While we currently have no formal investment
policy, we do not intend to investment in real estate as a part of our normal operations
or for speculation.

# ITEM 3.   LEGAL PROCEEDINGS

We are not aware of any material
pending legal proceedings involving us or any of our subsidiaries.

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

No matters were submitted to a vote
of our security holders during the last quarter of the fiscal year ended December 31,
2005.

PART II

ITEM 5.   MARKET FOR THE COMPANY'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Common Stock was initially listed
on Over the Counter Bulletin Board (OTCBB) as of November 2, 2004. The following table
sets forth the high and low bid information for the Common Stock for each quarter since
the listing commenced.

16

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# TABLE 1

# QUARTERLY COMMON STOCK
PRICE RANGES

|QUARTER ENDED         | HIGH |  | LOW |  
|--------------------- | ---- |  | --- | -
|December 31, 2004 **  |      |  | $   | 0
|                      |      | 
|2005                  |      | 
|March 31, 2005  **    |      |  | $   | 0
|June 30, 2005  **     |      |  | $   | 0
|September 30, 2005 ** |      |  | $   | 0
|December 31, 2005     |      |  | $   | 9

** Note: No trading or published bid
or ask prices occurred during these quarters.

These quotations reflect inter-dealer
prices, without retail mark-up, mark-down or commission and may not represent actual
transactions. As of March 20, 2006, there were approximately 101 stockholders of record of
our Common Stock.

DIVIDEND POLICY

We have never paid any dividends on
the Common Stock. We currently anticipate that any future earnings will be retained for
the development of our business and do not anticipate paying any dividends on the Common
Stock in the foreseeable future.

SECURITIES AUTHORIZED FOR ISSUANCE
UNDER EQUITY COMPENSATION PLANS

While the Company plans to institute
an equity compensation plan, such a plan has not yet been developed or implemented.

SALES OF UNREGISTERED
SECURITIES

In December 2004, in connection with
a private placement of its Capital Stock, the Company entered into a Registration Rights
agreement wherein it agreed that it would prepare and file, within sixty (60) days
following the Reverse Merger with a public company, a registration statement covering the
resale of the Shares. The majority of such holders have agreed to a leak-out arrangement
which allows them to sell no more ten percent of their holdings in any calendar quarter
during the next eighteen months.

On August 9, 2005, the NVCH increased
its interest in Happy Times Media, Inc. from 55% to 70%. The Company subsequently issued
common stock equivalent to US $573,000 to HTMs original shareholders.

In September 2005, NVCH received
gross proceeds of $207,500 from sale of rights to purchase 415,000 shares of tracking
common stock at a price of $0.50 per share, which represent 4.15% of the shares of the
Companys capital stock, and 415,000 purchase warrants to purchase shares of common
stock of the Company or its successor or merged entity at a price of $1.00 per share. Don
B. Lee, the Chief Executive Officer of the Company, purchased $52,500 worth of the
tracking common stock rights. The proceeds were used for working capital purposes and for
movie purchases from Miramax.

On January 31, 2006, the company
issued $1,000,000 of 8% Convertible Subordinated Debentures (Notes) in the
form of forty $25,000 units. The proceeds will be used for working capital and acquisition
purposes.

17

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# ITEM 6. 
 MANAGEMENTS DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

RESULTS OF OPERATIONS:

NET SALES

Net sales for 2005 totaled $3,307,346
compared to $1,276,350 for 2004, an increase of $2,030,996 or approximately 159%. This
change was due in part from launching the Movie Channel Project as well as increased
demand for our media content products in China during 2005. The Movie Channel Project
represented nation-wide foreign movie programming, shown on approximately 70 TV stations
across the country of China. It was launched in early 2005 with Sinosphere who acted as
Universal Studios agent in supplying Universal Studios content according to a joint
venture contract arrangement, guaranteeing the supply of Universal Studios movie content
at a pre-agreed to price. This joint venture agreement was examined, reviewed , agreed to
and accepted by China International Television Corporation, a state monopoly company in
charge of distributing foreign movie content.

COST OF SALES

Cost of sales for 2005 totaled
$2,405,781 or 72.7% of net sales compared to $399,434 or 31.3% of net sales, for 2004.
This increase in cost of sales as a percentage of sales were due substantially to the cost
associated with the launch of the Movie Channel Project and also reflects licensing costs
for movies distributed by the Company from outside of China. Most of the cost increases
were associated with the launch of the Movie Channel. The Movie Channel contributed to an
increase in our breakeven point due to Sinosphere breaching the contract for content
supply, after we had completed the launch. Sinosphere, who acted as a distribution
agent of Universal Studios, claimed difficulties in carrying out
its duties under the contract and claimed an inability to supply the promised content. As
a result, the Company had to purchase content on the broadcasting spot market to cover the
gap, while giving Sinosphere more time to cure the breach. Sinosphere did not succeed in
curing the breach and caused major cost overruns for the Company in the joint venture
Movie Channel. The Company reserves the right to take legal action against Sinosphere to
recover the additional costs associated with the Movie Channel and other consequential
damages.

Toward the end of 2005, the Company
took measures to stop shouldering the costs of the content provision and stopped further
outlays on this project. We are carefully reviewing our cost structures in an attempt to
bring production costs more in line with sales levels. We believe that we have a very
strong case in any legal action against Sinosphere to recover the costs and damages.

18

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OPERATING EXPENSE

Selling, general and administrative expenses for 2005 totaled $965,996 or 29.2% of net sales, compared to
$126,905 or 9.9% for 2004. This increase in operating expense of $839,091 or 661% was due to two primary factors.
First, we geared up the Company by hiring additional production and marketing staff to service a contractual
commitment that has been terminated. That contract was related to the support of the sale of advertising in
connection with a Movie Channel that has been operated by one of the Company's suppliers. The ending of that
contractual relationship at the end of 2005 allowed us to normalize cost, reduce staffing and reduce other
production costs in excess of $200,000 per year. Second, a major customer is disputing our billings for a
contracted service provided to them. Based on generally accepted accounting principals, we have written down the
disputed amount of the receivable. We plan to pursue legal sanctions against the customer (an Agent of Universal
Studios) for breach of contract. While we believe we have a strong case, the outcome of such a legal action can
not be assured and we may not be able to collect much, if any more from this customer.

Additionally, administrative costs
associated with being a public company and other expenses such as legal and auditing fees
increased this past year. While the major causes of our operating loss have been addressed
as of this analysis and we believe is associated with specific events, we will continue to
aggressively find ways to reduce cost while addressing the rapidly expanding market for
media in China. There can be no guarantee, however, that we will be successful in reducing
such costs relative to our level of sales.

INCOME (LOSS) FROM
OPERATIONS

For 2005 the Company loss $64,431
from its continuing operations, compared with income from operations of $750,011 for 2004,
a decrease of $814,442 or 109%. The change from a profit to a loss was due to the
aforementioned activities and increased costs. The company began aggressively addressing
the issues associated with these costs and expenses during the 4th quarter of
2005, with the goal of improving operations measurably for 2006.

OTHER INCOME AND EXPENSE

During 2005, the company engaged in a
reverse merger whereby a public company (the former Premier Document Services, Inc.) was
essentially purchased by one of our subsidiaries. As the summary financial information
attest, this transaction had significant costs associated with it, including legal and
investment banking fees and, in total, increasing expenses by $70,373. Moreover, a careful
review of various assets and contracts within the Happy Times subsidiary revealed the need
to write off an additional $146,640. We believe that such significant costs should not
recur on a normal basis.

COMPREHENSIVE INCOME
(LOSS)

For the year of 2005, the Company's subsidiary in China, HTM, generated a tax liability in
the amount of $4,528.

 Also, since we own 70% of the Happy Times subsidiary, we assign a
portion of their net income to the minority (30%) that is owned by others. This
accommodation decreased our net loss by $20,479. Foreign currency conversion
adjustments netted a loss for us in the amount of $18,874. As an organization
that utilizes a non-US currency for the majority of its commercial operations,
it can be expected that gains or losses will be sustained on an annual basis. We
do not engage in hedging or the use of forward exchange contracts to mitigate
exposure to foreign exchange fluctuations. Thus, small gains or losses can be
all but assured as we account for foreign-based operations on an annual basis.

After accounting for the operating performance and the various single-event
occurrences of our Company, a Comprehensive loss was posted for the year,
totaling $273,601, compared with a comprehensive net income for 2004 of
$154,146, a decrease of $427,747 or 277%. As management, we are committed to
improving performance for the coming year and believe that we have already taken
steps to make the Company run more efficiently and effectively.

19

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LIQUIDITY AND CAPITAL
RESOURCES

While cash has historically been generated from operations, 2005 required an inflow of cash to complete the
funding of the Happy Times acquisition and to support the increased administrative costs of operating a public
company. Cash and cash equivalents were $195,578 at December 31, 2005 and current assets totaled $1,079,586 on
that same date. The Company's total current liabilities were $1,469,026 at December 31, 2005, making working
capital (current assets less current liabilities) a negative ($389,440).

Our negative working capital is
largely attributable to our inventory (licensed programming) being classified as a long-term asset.  We believe
that we currently generate sufficient cash from operating activities to support our operations.

Historically, the Companys
subsidiaries, particularly HPT, have never had an operating loss and, indeed, maintained
positive cash flows and profit margins independent of the Movie Channel Project. After the
stoppage of the Movie Channel outlays, it is expected that HPT will be more than
self-sufficient in cash flow and working capital needs. The acquisition in March of 2006
of Beijing Media will further add to the cash flow and profit-making capabilities of the
Company. Beijing Medias financials will be consolidated with the Companys in
the 2006 first quarter report of the Company. Beijing Media has already contributed to the
working capital needs of the Company. In addition, the Company anticipates raising
additional capital to meet its expansion objectives for 2006. In future expansion
projects, the Company will emphasize its own production capabilities rather than relying
on suppliers or partners assurances of supply of content.

During 2005, net cash provided by operating activities was $435,083. Cash received from financing activities was
$407,500 for 2005 and cash used in investing activities was $896,170. The net effect of exchange rates added
$9,934 to cash during 2005.

WORKING CAPITAL
REQUIREMENTS

Historically operations and short
term financing have been sufficient to meet our cash needs. We believe that we will be
able to generate net working capital from our operations and through a planned private
placement offering of equity securities. Together, these components should provide the
necessary cash flow to meet the Companys requirements over the coming year and
beyond. It should be noted, however, that our actual working capital needs for the long
and short term will depend upon numerous factors, including operating results,
competition, and the availability of credit facilities, none of which can be predicted
with certainty. Future expansion and operating plans may be limited by less than optimal
operating performance and/or any limitation of our ability to raise additional capital.

OFF BALANCE SHEET
ARRANGEMENTS

We have not entered into any
off-balance sheet financing arrangements and have not established any special purpose
entities. We have not guaranteed any debt or commitments of other entities or entered into
any options on non-financial assets.

20

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CRITICAL ACCOUNTING
POLICES

The preparation of consolidated
financial statements requires us to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosure of
contingent assets and liabilities. We evaluate our estimates on an on-going basis. We base
our estimates on current information, historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources. Actual results may differ
from the estimates we used under different assumptions or conditions. We believe the
following concentrations and critical accounting policies relate to our more significant
judgments and estimates used in the preparation of our consolidated financial statements.

REVENUE RECOGNITION

Revenue from the sales or licensing
of proprietary content, third party programming, imported TV and films, and sales and
distribution of advertisement programs are recognized upon meeting all recognition
requirements of Statement of Position (SOP) 00-2 Accounting by Producers or
Distributors of Films.

Revenue from sales of advertisement
designs and products are recognized when the products are delivered and title has passed.

Cash payments received are recorded as
deferred revenue until all the conditions of revenue recognition have been met.

EFFECTS OF INFLATION

The company is not subject to
measurable risks from inflation. It is, however, subject to changes in relative values of
currencies.

EFFECT OF FLUCTUATION IN
FOREIGN EXCHANGE RATES

Our operating subsidiaries are
located in China, and our Company pays for its operational costs in China and sells
virtually all its products in China, utilizing Chinese Renminbi as the functional
currency. Based on China government regulations, all foreign currencies under the category
of current accounts are allowed to be freely exchanged with hard currencies. During the
past three years of operation, there were no significant changes in exchange rates;
however, unforeseen developments may cause a significant change in exchange rates.

The following table summarizes our
contractual obligations (including interest expense) and commitments as of December 31,
2005:

# TABLE 3
                                              CONTRACTUAL OBLIGATIONS

|                      |  |  |          |  | 
|--------------------- |  |  | -------- |  | 
|Contractual           |  |  | Total    |  | 
|Obligations           |  | 
|                      |  | 
|Long-Term Debt        |  |  | N/A      |  | 
|Obligations           |  | 
|                      |  | 
|Capital Lease         |  |  | N/A      |  | 
|Obligations           |  | 
|                      |  | 
|Operating Lease       |  |  | $ 67,199 |  | 
|Obligations           |  | 
|                      |  | 
|Purchase Obligations  |  |  | N/A      |  | 
|                      |  | 
|Other Long-Term       |  |  | N/A      |  | 
|Liabilities Reflected |  | 
|on the Registrant's   |  | 
|Balance Sheet under   |  | 
|GAAP                  |  | 

21

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# TABLE 4
                                                        SELECTED FINANCIAL DATA

|                                             | For the Year Ended
December 31, | 2005 vs. 2004 |  
|-------------------------------------------- | ------------------------------- | ------------- | -
|
|
|Sales                                        |                                 |               | $
|                                             |                                 |               |  
|Cost of sales                                |                                 |               |  
|                                             |                                 |               |  
|Gross Profit                                 |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Operating expenses                           |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Income (Loss) from operations                |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Merger transaction expense                   |                                 |               |  
|                                             |                                 |               |  
|Other expense, net of other income           |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Income (Loss) before provision               |                                 |              
|for income taxes and minority interest       |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Provision for Income Taxes                   |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Net Income (Loss) before Minority Interest   |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Minority Interest                            |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Net Income (Loss)                            |                                 |               |  
|                                             |                                 |               |  
|Other Comprehensive Income                   |                                 |              
|(Loss) Effect of Foreign Currency Conversion |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Comprehensive Income (Loss)                  |                                 |               |  
|                                             |                                 |               |  
|                                             |                                 |               |  
|Earnings (Loss) per share, basic             |                                 |              
|and diluted                                  |                                 |               | $
|                                             |                                 |               |  

22

---



# ITEM 7.    FINANCIAL
STATEMENTS

Our financial statements appear at the
end of this report beginning with the Index to Financial Statements on page F-1 of this
report.

# ITEM 8.    CHANGES IN
AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On January 3, 2006 the Company
dismissed Beckstead and Watts, LLP, (Beckstead) the principal independent
accountant in connection with the audit of our consolidated financial statements.

The audit reports of Beckstead on our
consolidated financial statements as of and for the years ended December 31, 2004 and
2003, did not contain any adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope, or accounting principles.

In connection with the audit of the
consolidated financial statements prepared for the fiscal years ended December 31, 2004
and December 31, 2003 and to the date of resignation, we had no disagreements with
Beckstead with respect to accounting principles or practices, financial statement
disclosure, or auditing scope or procedures of the type discussed in Item 304(a)(iv) of
Regulation S-B.

We have engaged Moore Stephens Wurth
Frazer and Torbet, LLP, (Moore Stephens) as the new principal independent
accountant for the Company and its subsidiaries, replacing Beckstead. The board of
directors has approved the change of accountants.

During the fiscal years ending
December 31, 2004 and December 31, 2003, including the subsequent interim periods through
January 3, 2006 the date of Becksteads dismissal, and prior to the appointment of
Moore Stephens, neither we, nor anyone on our behalf, consulted with Moore Stephens
regarding any of the accounting or auditing concerns stated in Item 304(a)(2) of
Regulation S-B.

There have been no disagreements with
auditors for any and all of the fiscal years hereby presented.

# ITEM 8A.   CONTROLS
AND PROCEDURES

# Managements Report
on Assessment of Internal Control Over Financial Reporting

Evaluation of Disclosure
Controls and Procedures

The Company maintains disclosure
controls and procedures that are designed to ensure that information required to be
disclosed in the Companys reports that it files or submits under the Securities
Exchange Act of 1934 is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms, and
that such information is accumulated and communicated to the Companys management,
including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.

As of the end of the period covered
by this report, the Company carried out an evaluation, with the participation of
management, including its Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the disclosure controls and procedures pursuant to the Exchange Act
Rule 13a-15(b). Based upon this evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures were not effective
as of December 31, 2005 because of the material weaknesses disclosed below in
Managements Report on Internal Control over Financial Reporting.

23

---



In light of these material
weaknesses, the Company performs additional analyses and other pre and post-closing
procedures to ensure that our consolidated financial statements are presented fairly in
all material respects in accordance with generally accepted accounting principles in the
United States. These procedures include monthly business reviews led by our Chief
Executive Officer and monthly operating and financial statement reviews by various levels
of our management team, including our executive officers. Accordingly, management believes
that the consolidated financial statements and schedules included in this Form 10-KSB
fairly present in all material respects our financial position, results of operations and
cash flows for the periods presented.

Managements Report
on Internal Control over Financial Reporting

Management is responsible for establishing
and maintaining adequate internal control over financial reporting as defined in Exchange
Act Rule 13a-15(f). The Companys internal controls over financial reporting are
designed to provide reasonable assurance concerning the reliability of financial data used
in the preparation of our financial statements. All internal control systems, no matter
how well designed, have inherent limitations and may not prevent or detect misstatements.
Controls considered to be operating effectively in one period may become inadequate in
future periods because of changes in conditions or deterioration in the degree of
compliance with policies or procedures.

Management assessed the effectiveness
of the Companys internal control over financial reporting as of December 31, 2005
using the criteria described in Internal ControlIntegrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission. As a
result of our assessment, Management has identified two material weaknesses, as described
below, and therefore has concluded that our internal controls over financial reporting
were not effective as of December 31, 2005.

A material weakness is defined within
the Public Company Accounting Oversight Boards Auditing Standard No. 2 as a
control deficiency or combination of control deficiencies that results in a more than
remote likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected.

In the process of its assessment, our
management identified the following material weaknesses in our internal control over
financial reporting:

| | 1. | Accounting
and Finance Personnel Weaknesses The operation of the                Chinese
subsidiaries is in China, hence the presentation of their financial
               statements does not fully comply with the USGAAP. The Company had
insufficient                resources to perform the accounting and financial reporting
functions and such                resources lacked the appropriate level of accounting
knowledge, experience and                training in the application of accounting
principles generally accepted in the                United States of America and were
inadequately supervised. The lack of                sufficient and adequately trained
accounting and finance personnel resulted in                an ineffective segregation of
duties relative to key financial reporting                functions.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Accounting
Policies and Procedures Weaknesses The company had                inadequate
documentation regarding the appropriate application of accounting
               principles generally accepted in the United States of America, as well
               inadequate written documentation regarding the Companys accounting
               policies and procedures and application of those policies and procedures.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

24

---



The Company has tested the
internal control structure and has identified several controls, including those controls
listed above as material weaknesses that require further remediation. The Company will
continue the implementation of policies, processes and procedures regarding the review of
complex, non-routine transactions and the hiring of additional accounting personnel.

Management believes that the
controls and procedures will continue to improve as a result of the further implementation
of these measures.

The Companys management has
identified the steps necessary to address the material weaknesses existing in 2005
described above, as follows:

| | 1. | Hiring
additional accounting and operations personnel and engaging outside
               contractors with technical accounting expertise, as needed, and
reorganizing the                accounting and finance department to ensure that
accounting personnel with                adequate experience, skills and knowledge
relating to complex, non-routine                transactions are directly involved in the
review and accounting evaluation of                our complex, non-routine transactions;
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Involving
both internal accounting and operations personnel and outside                contractors
with technical accounting expertise, as needed, early in the                evaluation of
a complex, non-routine transaction to obtain additional guidance                as to the
application of generally accepted accounting principles to such a                proposed
transaction;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | Documenting
to standards established by senior accounting personnel and the                principal
accounting officer the review, analysis and related conclusions with
               respect to complex, non-routine transactions; and
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | Requiring
senior accounting personnel and the principal accounting officer to                review
complex, non-routine transactions to evaluate and approve the accounting
               treatment for such transactions.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | Interviewing
prospective new Directors for our Board including a member who is
               appropriately credentialed as a financial expert with a goal to establish
both                an Audit and Compensation committee as well as sufficient independent
Directors.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 6. | Evaluating
the internal audit function in relation to the Companys                financial
resources and requirements.
| | -- | ------------------------------------------------------------------------------------------------------------------------

The Securities and Exchange
Commission, or the SEC, as required by Section 404 of the Sarbanes-Oxley Act of 2002,
adopted rules requiring every public company to include a management report on such
companys internal controls over financial reporting and we are required to be
compliant with Section 404 by July 2007. The Company will begin to execute the
remediation plans identified above in the first fiscal quarter of 2006 and will attempt to
be compliant with Section 404 by July 2007.

There was no change in our internal
control over financial reporting during the year ended December 31, 2005 that has
materially affected, or is reasonably likely to materially affect, our internal control
over financial reporting, other than the remediation measures which are described above.

25

---



# ITEM 8B.   OTHER
INFORMATION

None.

PART III

ITEM 9.   DIRECTORS, EXECUTIVE
OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT

The following table sets forth the
names, ages, and positions of our directors and officers.

# TABLE 4

|                                                                                |                            |                                                                                               
|------------------------------------------------------------------------------- | -------------------------- | ----------------------------------------------------------------------------------------------
|Directors
Ranny Liang 
Don Lee 
Lester Schecter 
Jeffrey B. Spear 
Yang Wenquan | Age
 49 
 46 
 71 
 48
 42 | Position
Chairman
Chief Executive Officer, Director
Director
Chief Financial Officer 
Director

The directors named above will serve
until the next annual meeting of our stockholders or until their successors are duly
elected and have qualified. Directors will be elected for one-year terms at the annual
stockholders meeting. Officers will hold their positions at the pleasure of the board of
directors, absent any employment agreement. There is no arrangement or understanding
between any of our directors or officers and any other person pursuant to which any
director or officer was or is to be selected as a director or officer, and there is no
arrangement, plan or understanding as to whether non-management stockholders will exercise
their voting rights to continue to elect the current board of directors. There are also no
arrangements, agreements or understandings between non-management stockholders that may
directly or indirectly participate in or influence the management of our affairs.

There are no family relationships
among the foregoing directors and executive officers. None of the directors or executive
officers has, during the past five years: (a) had any bankruptcy petition filed by or
against any business of which such person was a general partner or executive officer
either at the time of the bankruptcy or within two years prior to that time; (b) been
convicted in a criminal proceeding or subject to a pending criminal proceeding; (c) been
subject to any order, judgment, or decree, not subsequently reversed, suspended or
vacated, of any court of competent jurisdiction, permanently or temporarily enjoining,
barring, suspending or otherwise limiting his involvement in any type of business,
securities, futures, commodities or banking activities; and (d) been found by a court of
competent jurisdiction (in a civil action), the Securities and Exchange Commission or the
Commodity Futures Trading Commission to have violated a Federal or state securities or
commodities law, and the judgment has not been reversed, suspended, or vacated.

BIOGRAPHICAL INFORMATION

Ranny Liang,Chairman
of Navistar Communications Holdings, Ltd. Ms. Liang was the original founder of Navistar
and is responsible for overall strategy and Chinese investor relations. She formerly
served as the General Manager of The SinoAmerican Times and the Executive Director of
Asian Cultural Enterprises, Inc. where she is responsible for print and TV media program
production. Prior to this position, Ms. Liang was an Account Executive at the New York
Daily Times and a reporter for The World Journal, a major newspaper and magazine in China.
In addition, Ms. Liang was a teacher of Guangzhou College and at the same time served as a
free lance columnist for several major newspapers and magazines in China. Ms. Liang holds
a Bachelor of Arts in Chinese Literature and Language from The South China Normal
University.

26

---



Don Lee: CEO of Navstar. Prior
to joining Navstar, Mr. Lee held several positions with Computer Associates International,
including Product Manager, Director of Strategy and Partner Development, Business
Development Owner, and Managing Consultant. Prior to joining Computer Associates, he
worked for the City of New York as the CIO and then Operations Director for the NYC
Department of Business Services, Senior Contract Analyst/Mayoral Program Coordinator for
the NYC Office of the Mayor Contracts, Programmer Analyst/Project Planner for the NYC
office of the Mayor, and Auditor/Contract Specialist for the NYC Office of the Mayor. Mr.
Lee is a graduate of New York University and holds a Bachelor of Science in Accounting.

Lester Schecter, President of
LS Public Relations, a New York based public relations agency that specializes in the
entertainment industry. Mr. Schecter has created and executed public relations campaigns
on behalf of many Broadway and Off Broadway productions, television series and specials.
He has publicized more than 30 Broadway, and Off Broadway productions including Irene,
starring Debbie Reynolds; Athol Fugards Sizwe Banzi Is Deadand The Island;and Oh! Calcutta!. Mr. Schecter has won two special Emmy Awards for his
contributions in helping to produce and market national primetime Emmy Awards telecasts
and has introduced and publicized many classic public television series, including Live
From Lincoln Center(ten years), Nature(ten years) and American Playhouse(14 years). He has also supervised the marketing for a number of public television
childrens series, among them The Adventures of Dudley, the Dragon and
The Hug-A-Bug Club. Mr. Schecter holds a Bachelor of Science in Mechanical
Engineering from City College of New York and has been a guest lecturer on theatrical
marketing and publicity at New York University.

Jeffrey B. Spear,CFO of
Navstar. Since 1997, Mr. Spear served as VP Finance and Treasurer of Houghton College and
served as CEO of Willard J. Houghton Foundation, in Houghton, NY. During his tenure at
Houghton College, Mr. Spear initiated the recapitalization for this 120 year-old Christian
liberal arts institution, resulting in construction of a new Center for the Arts, athletic
fields and renovation of the library. He designed a simplified (no fee) pricing model that
reduced tuition discounts by $1.2 mm. Jeff supervised the technology services operation
and on behalf of the Foundation, acquired local commercial facilities, renovating them and
attracting businesses to the college community. Prior to Houghton, Mr. Spear was the CFO
of Sayett Group, Inc. and later as partner in Sayett Acquisition Corp. Mr. Spear helped
orchestrate an IPO for Sayett, an Eastman Kodak spin-off. He was the primary interface
with the investing public, resulting in frequent involvement with the press and analysts.
In 1995, Jeff and a partner purchased the main subsidiary of Sayett Acquisition Corp,
eventually selling the business (LCD projection) in 1997. From 1986  1991, Jeff
served as Controller of Thomas James Associates, Inc., an NASD broker-dealer and
investment banker that included up to 15 branch offices and over 400 retail brokers.

Prior to 1986 Jeff was a Staff
Auditor and Tax Specialist at Peat Marwick Mitchell and Co. (now KPMG) where he audited
varied clients including Fortune 500, non-profit and regional firms. Jeff has also served
as a guest professor at the Higher School of Economics, Perm, Russia and serves as Adjunct
Associate Professor of Accounting at Houghton. Mr. Spear is a CPA and holds an MS in
Accountancy from Rochester Institute of Technology and a BS in Business Administration
from Houghton College.

Yang Wenquan, a
major shareholder of Beijing Media, has been elected to the board of directors
of the Company. He serves as Chairman of Beijing Ruixing Shiji Investment Co.,
Ltd. He also served respectively as the Marketing Manager of Beijing Industry
Development Group and prior to that as the General Manager of Beijing Yuixing
Advertisement Co., Ltd. and as an official in the Beijing Municipal Government
Foreign Affairs Service. Mr. Yang majored in law at the Central Party School. He
has produced many TV series, TV programs and movies, such as the 30 episode
"Fenglin Pavilion", the movie "The Person Loving Me is Gone" and a daily TV show
"At Your Service". Mr.Yang brings with him extensive experience in dealing with
media and content in China and insight on management and operation control.

BOARD OF DIRECTORS

The Company's Board of Directors is comprised of Don Lee, CEO, Ranny Liang, Chairman of
Navistar, Mr. Lester Schecter and Mr. Yang Wenquan. The company anticipates nominating a fifth director during
2006. The Board of Directors will meet approximately four times annually and on an as needed basis. Outside
Directors will be compensated $15,000 annually, plus a one-time stock grant of 30,000 common shares. The Board of
Directors does not currently have a specifically-designated audit committee. Issues related to the audit are
administered by the two outside Directors at the moment.

27

---



MANAGEMENT INCENTIVE
STOCK OWNERSHIP PLAN

Management is currently deriving an
incentive stock ownership program to give incentive to management and employees.

RELATED PARTY TRANSACTIONS

In September 2005, NVCH received
gross proceeds of $207,500 from sale of rights to purchase 415,000 shares of tracking
common stock at a price of $0.50 per share, which represent 4.15% of the shares of the
Companys capital stock, and 415,000 purchase warrants to purchase shares of common
stock of the Company or its successor or merged entity at a price of $1.00 per share. Don
B. Lee, the Chief Executive Officer of the Company, purchased $52,500 worth of the
tracking common stock rights.

In December 2004, In connection with
a private placement of 10% of the its Capital Stock, the Company entered into a
Registration Rights agreement wherein it agreed that it would prepare and file, within
sixty (60) days following the Reverse Merger with a public company, a registration
statement covering the resale of the Shares. The majority of such holders have agreed to a
leak-out arrangement (described above) which allows them to sell no more ten percent of
their holdings in any calendar quarter during the next eighteen months. (See Description
of Securities  Registration Rights)

On August 9, 2005, the NVCH increased
its interest in Happy Times Media, Inc. from 55% to 70%. The Company subsequently issued
common stocks equivalent to US $573,000 to HTMs original shareholders.

SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities
Exchange Act of 1934 (the Exchange Act) requires our directors and executive
officers, and persons who beneficially own more than ten percent of a registered class of
our equity securities, to file with the Securities and Exchange Commission (the
Commission) initial reports of beneficial ownership and reports of changes in
beneficial ownership of our Common Stock. The rules promulgated by the Commission under
Section 16(a) of the Exchange Act require those persons to furnish us with copies of all
reports filed with the Commission pursuant to Section 16(a). The information in this
section is based solely upon a review of Forms 3, Forms 4, and Forms 5 received by us. Our
Chief Executive Officer Don Lee was not able to timely file his Form 5. In addition, the
following persons were not able to file their Form 3 within 10 days after he/she was
elected an officer or director of the Company or became a more than 10% shareholder of the
Company: Ranny Liang, Lester Schecter and Jeffrey Spear.

The following table sets forth
information regarding the beneficial ownership of Navstar Media Holdings, Inc. as of
December 31, 2005 and is adjusted to reflect:

| | each
 person or entity  known to be the  beneficial  owner of more  than 5% of the
 outstanding  shares of      common stock;
|- | -----------------------------------------------------------------------------------------------------------------------------

| | each
of its officers and directors; and
|- | ---------------------------------------

| | all
of its officers and directors as a group
|- | --------------------------------------------

Unless otherwise indicated, all
persons named in the table have sole voting and investment power with respect to all
shares of common stock beneficially owned by them.

28

---



# TABLE 5
                                              PRINCIPAL STOCKHOLDERS

|Name and Address of Beneficial Owner (1)                        |  | Title |  | Amount and
Nature of
Beneficial
Ownership |  | Approximate
Percentage of
Outstanding
Common Stock
|--------------------------------------------------------------- |  | ----- |  | ----------------------------------------- |  | --------------------------------------------------
|
|Ranny Liang                                                     |  |       |  | Chairman                                  |  |                                                   
|Don B. Lee                                                      |  |       |  | CEO / Director                            |  |                                                   
|Lester Schecter                                                 |  |       |  | Director                                  |  |                                                   
|Jeffrey B. Spear                                                |  |       |  | CFO                                       |  |                                                   
|Yang Wenquan                                                    |  |       |  | Director                                  |  |                                                   
|                                                                |  |       |  |                                          
|All directors and executive officers as a group (5 Individuals) |  |       |  |                                           |  |                                                   
|Other restricted and/or accredited investors                    |  |       |  |                                           |  |                                                   
|Navstar Media Holdings Inc. Public Float                        |  |       |  |                                           |  |                                                   
|                                                                |  |       |  |                                          
|Total Shares Outstanding - December 31, 2005                    |  |       |  |                                           |  |                                                   
|                                                                |  |       |  |                                          

CODE OF BUSINESS ETHICS
AND CONDUCT

Pursuant to the requirements of
Section 406 of the Sarbanes-Oxley Act of 2002 and related SEC rules, we have adopted a
Code of Business Ethics and Conduct, or Code of Ethics. Our Code of Ethics has been filed
herewith as Exhibit 14.

Our Code of Ethics contains written
standards designed to deter wrongdoing and to promote:

| | honest
and  ethical  conduct,  including  the  ethical  handling  of actual or  apparent
 conflicts  of  interest between  personal and professional relationships;
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | full,
fair,  accurate,  timely, and understandable  disclosure in reports and documents filed
with the SEC and in other public announcements;
|- | ---------------------------------------------------------------------------------------------------------------------------------------------

| | compliance
with applicable governmental laws, rules and regulations;
|- | --------------------------------------------------------------------

| | the
 prompt  internal  reporting  of  violations  of our Code of  Ethics  to an  appropriate
 person  or  persons identified in our Code of Ethics; and
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------

| | accountability
for adherence to our Code of Ethics.
|- | ---------------------------------------------------

# ITEM 10.   EXECUTIVE COMPENSATION

The following executive compensation
disclosure reflects all compensation awarded to, earned by or paid to the executive
officers below, for the fiscal years ended December 31, 2005, 2004, and 2003. None of our
executive officers received compensation in excess of $100,000 for the fiscal years 2005,
2004 or 2003, respectively. The following table summarizes all compensation received by
our Chief Executive Officer(s) and Chief Financial Officer for the fiscal years 2005, 2004
and 2003. Misters Lee and Spear were not associated with the Company prior to 2005.

29

---



# TABLE 6
                                              EXECUTIVE COMPENSATION

|          |  | Annual Compensation |      | Long-Term Compensation |  | Payouts |       
|--------- |  | ------------------- | ---- | ---------------------- |  | ------- | ------
|
|Don Lee   |  |                     | 2005 |                        |  |         | 25,000
|CEO       |  |                    
|          |  |                    
|Crystal   |  |                    
|Kim Han   |  |                     | 2005 |                        |  |         | 0     
|President |  |                    
|/ CEO     |  |                     | 2004 |                        |  | $       | 3,000 
|          |  |                     | 2003 |                        |  |         | 0     
|          |  |                    
|Jeffrey   |  |                    
|Spear CFO |  |                     | 2005 |                        |  |         | 0     

30

---



OPTIONS/SAR GRANTS IN FISCAL YEAR
ENDED DECEMBER 31, 2005

We did not grant any options/stock
appreciation rights during the fiscal year ended December 31, 2005.

COMPENSATION OF DIRECTORS

Effective January 1, 2006, Directors
receive compensation of $15,000 per year and a one-time grant of common stock in the
amount of 30,000 shares.

EMPLOYMENT AGREEMENTS, TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS

We currently have no employment
agreements with any of our executive officers, nor any compensatory plans or arrangements
resulting from the resignation, retirement or any other termination of any of our
executive officers, from a change-in-control, or from a change in any executive
officers responsibilities following a change-in-control.

# ITEM 11.   SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

SECURITIES AUTHORIZED FOR ISSUANCE
UNDER EQUITY COMPENSATION PLANS

The Company has not established an equity
compensation plan and, as such, has yet to authorize any shares for issuance under such a
plan.

BENEFICIAL OWNERSHIP

Reference is made to TABLE 5 above
where beneficial ownership of shares is disclosed. That table sets forth certain
information regarding beneficial ownership of our common stock as of March 15, 2006,
determined in accordance with Rule 13d-3 and 13d-5 of the Exchange Act by (i) each person
who is known by us to own beneficially more than five percent (5%) of the outstanding
shares of our voting securities, (ii) each of our directors and officers, and (iii) all of
our directors and executive officers as a group. Unless otherwise indicated on said table,
to our knowledge, all persons listed therein have sole voting and investing power with
respect to their shares of common stock, except to the extent authority is shared by
spouses under applicable community property laws.

# ITEM 12.   CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS

In December 2004, in connection with
a private placement of 10% of the its Capital Stock, the Company entered into a
Registration Rights agreement wherein it agreed that it would prepare and file, within
sixty (60) days following the Reverse Merger with a public company, a registration
statement covering the resale of the Shares. The majority of such holders have agreed to a
leak-out arrangement (described above) which allows them to sell no more ten percent of
their holdings in any calendar quarter during the succeeding eighteen month period.

31

---



On August 9, 2005, the NVCH increased
its interest in Happy Times Media, Inc. (HTM) from 55% to 70%. The Company
subsequently issued common stocks equivalent to US $573,000 to HTMs original
shareholders.

In September 2005, NVCH received
gross proceeds of $207,500 from sale of rights to purchase 415,000 shares of tracking
common stock at a price of $0.50 per share, which represent 4.15% of the shares of the
Companys capital stock, and 415,000 purchase warrants to purchase shares of common
stock of the Company or its successor or merged entity at a price of $1.00 per share. Don
B. Lee, the Chief Executive Officer of the Company, purchased $52,500 worth of the
tracking common stock rights.

On November 30, 2005, and pursuant to
the reverse merger with Premier, the holders of 1,633,519 Shares (700,000 pre-split)
agreed with the Placement Agent that for the eighteen months following the Offering they
will sell no more than ten (10.0%) percent of their holdings in any calendar quarter. In
addition, as part of earlier investments in NCHL, 2,738,566 shares and 415,000 warrants to
purchase shares were issued with demand registration rights. However, the shareholders of
2,379,366 common stock shares and warrants agreed, for the benefit of the Company, to not
sell, assign, hypothecate, pledge or otherwise dispose of, directly or indirectly, more
than 10% of the shares of the common stock of the Company owned by them individually, or
subsequently acquired through the exercise of any options, warrants or rights, or by
reason of any stock split or other distribution of stock or grant options, rights or
warrants with respect to any such shares of Common Stock, during the eighteen (18) month
period commencing on the closing date of any future issuance of stock through private
placement or otherwise.

# ITEM 13.   EXHIBITS

The following documents are filed as
part of this report:

(1)    
            Financial Statements  See Index to Consolidated Financial
          Statements on page F-1 of this report.

(2)    
            Exhibits  See Index to Exhibits.

|Exhibit Number | Description
|-------------- | -----------

---

|3.1 | Certificate
of Incorporation (1)
|--- | --------------------------------

|3.2 | Bylaws (1)
|--- | ----------

|14 | Code
of Business Ethics (2)
|-- | ---------------------------

|21.1 | Subsidiaries
of Registrant (2)
|---- | ------------------------------

|23.1 | Consent
of Moore Stephens LLP *
|---- | -------------------------------

|31.1 | Certification
of Chief Executive Officer Pursuant to 302 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|31.2 | Certification
of Chief Financial Officer Pursuant to 302 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|32.1 | Certification
of Chief Executive Officer Pursuant to 906 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|32.2 | Certification
of Chief Financial Officer Pursuant to 906 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|(1) | Incorporated
by reference to the exhibits to the Company's General Form For Registration Of Securities
Of Small Business Issuers on Form 10-SB.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated
by reference from Form 10-KSB filed on April 17, 2006.
|--- | -------------------------------------------------------------------

|* | Filed
herewith
|- | --------------

32

---



# ITEM 14.   PRINCIPAL
ACCOUNTANT FEES AND SERVICES

AUDIT FEES

The aggregate fees billed for each of
Fiscal Year 2004 and Fiscal Year 2005 for professional services rendered by our principal
accountants for the audit of our annual financial statements, review of financial
statements included in our Form 10-QSBs and other services provided by the accountant in
connection with statutory and regulatory filings are as follows:

Fiscal Year 2004: $47,033;Fiscal
 Year 2005: $90,000

AUDIT RELATED FEES

The aggregate fees billed for each of Fiscal
Year 2004 and Fiscal Year 2005 for assurance and related services by our principal
accountant that are reasonably related to the performance of the audit or review of our
financials statements are as follows:

Fiscal Year 2004: $0;Fiscal
Year 2005: $0

TAX FEES

The aggregate fees billed for each of
Fiscal Year 2004 and Fiscal Year 2005 for professional services rendered by our principal
accountants for tax compliance, tax advice and tax planning are as follows:

Fiscal Year 2004: $0; Fiscal
Year 2005: $0;

ALL OTHER ACCOUNTANT
FEES

The aggregate fees billed for each of
Fiscal Year 2004 and Fiscal Year 2005 for other professional services rendered by our
principal accountants are as follows:

Fiscal Year 2004: $0;Fiscal
Year 2005: $0.

[SIGNATURES PAGE
FOLLOWS]

33

---



# SIGNATURES

In accordance with Section 13 or
15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

|                                                                                       |                                                                                                                                                                                   
|-------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Date:  June 6, 2006 
                      
                      
Date:  June 6, 2006 | NAVSTAR MEDIA HOLDINGS, INC.
(Registrant)
By: /s/ Don Lee
     Don B. Lee
     Chief Executive Officer
By: /s/ Jeffrey B. Spear
     Jeffrey B. Spear
     Chief Financial Officer

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

|                                                                                                                                                                |                                                                                                                                                                                      |                                                                      
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------
|Name /s/ Don Lee
Don B. Lee /s/ Jeffrey B. Spear
Jeffrey B. Spear /s/ Lester Schecter
Lester Schecter /s/ Ranny Liang
Ranny Liang /s/ Yang Wenquan
Yang Wenquan | Title                                
Chief Executive Officer / Director   
Chief Financial Officer              
Corporate Secretary / Director       
Chairman / Director
Director | Date
June 6, 2006
June 6, 2006
June 6, 2006
June 6, 2006
June 6, 2006

34

---



EXHIBIT INDEX

|Exhibit Number | Description
|-------------- | -----------

---

|3.1 | Certificate
of Incorporation (1)
|--- | --------------------------------

|3.2 | Bylaws (1)
|--- | ----------

|14 | Code
of Business Ethics (2)
|-- | ---------------------------

|21.1 | Subsidiaries
of Registrant (2)
|---- | ------------------------------

|23.1 | Consent
of Moore Stephens LLP *
|---- | -------------------------------

|31.1 | Certification
of Chief Executive Officer Pursuant to 302 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|31.2 | Certification
of Chief Financial Officer Pursuant to 302 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|32.1 | Certification
of Chief Executive Officer Pursuant to 906 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|32.2 | Certification
of Chief Financial Officer Pursuant to 906 of the Sarbanes-Oxley Act of 2002 *
|---- | --------------------------------------------------------------------------------------------

|(1) | Incorporated
by reference to the exhibits to the Company's General Form For Registration Of Securities
Of Small Business Issuers on Form 10-SB.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Incorporated
by reference from Form 10-KSB filed on April 17, 2006.
|--- | -------------------------------------------------------------------

|* | Filed
herewith
|- | --------------

35

---



NAVSTAR MEDIA HOLDINGS,
INC. AND SUBSIDIARIES                                 (Formerly known as Premier Document
Services, Inc.)

INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS

|                                                                            | Page
|--------------------------------------------------------------------------- | ----
|
|Report of Independent Registered Public Accounting Firm                     |     
|                                                                            |     
|Report of Independent Registered Public Accounting Firm                     |     
|                                                                            |     
|Consolidated Balance Sheets                                                 |     
|                                                                            |     
|Consolidated Statements of Operations and Other Comprehensive Income (Loss) |     
|                                                                            |     
|Consolidated Statement of Stockholders' Equity                              |     
|                                                                            |     
|Consolidated Statements of Cash Flows                                       |     
|                                                                            |     
|Footnotes                                                                   |     

F-1

---



REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
and  Stockholders of Navstar
Media Holdings, Inc. and subsidiaries


(Formerly known as Premier Document Services, Inc.)

We have audited the accompanying consolidated balance sheet of Navstar Media
Holdings, Inc. and subsidiaries as of December 31, 2005, and the related
consolidated statements of operations and other comprehensive income (loss),
stockholders' equity and cash flows for the year then ended. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit. The financial statements of Navstar Media
Holdings, Inc. and subsidiaries as of December 31. 2004 in the accompanying
financial statements was audited by other auditors whose report dated November
10, 2005 expressed an unqualified opinion on that statement.

We conducted our audit in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
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 provide a reasonable basis for
our opinion.

In our opinion, the consolidated
financial statements referred to above present fairly, in all material respects, the
financial position of Navstar Media Holdings. Inc. and subsidiaries as of December 31,
2005, and the results of its operations and its cash flows for the year then ended in
conformity with accounting principles generally accepted in the United States of America.

/s/ Moore Stephens Wurth Frazer
and Torbet, LLPWalnut, California April 12, 2006

F-2

---



KEMPISTY & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS, P.C.

---

15 MAIDEN LANE - SUITE
1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212) 513-1930

INDEPENDENT AUDITOR'S
REPORT

Board of DirectorsNavistar
Communications Holdings Limited

We have audited the accompanying
consolidated balance sheet of           Navistar Communications Holdings Limited as of
December 31, 2004 and           the related consolidated statements of income,
stockholders' equity,           and cash flows for the year then ended. 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 audits in
accordance with auditing standards generally accepted in the United States of America.
 Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement.  An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation.  We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial
statements referred to above present fairly, in all material respects, the consolidated
financial position of Navistar Communications Holdings Limited at December 31, 2004 and
the consolidated results of its operations and consolidated cash flows for the year then
ended in conformity with accounting principles generally accepted in the United States of
America.

/s/ Kempisty  & Company CPA's PC
Kempisty  & Company Certified Public Accountants PC New York, New YorkNovember 10, 2005

F-3

---



NAVSTAR MEDIA HOLDINGS, INC. AND
SUBSIDIARIES                       (FORMERLY KNOWN AS PREMIER DOCUMENT SERVICES, INC.)

CONSOLIDATED BALANCE SHEET
                                    AS OF DECEMBER 31, 2005

|                                                                        | 2005 | 
|----------------------------------------------------------------------- | ---- | 
|
|ASSETS                                                                  |      | 
|CURRENT ASSETS:                                                         |      | 
|Cash                                                                    |      | 
|Accounts receivable, net of allowance for doubtful accounts of $224,154 |      | 
|Other receivables                                                       |      | 
|Other receivables - related parties                                     |      | 
|Prepaid expenses                                                        |      | 
|                                                                        |      | 
|Total current assets                                                    |      | 
|                                                                        |      | 
|EQUIPMENT, net                                                          |      | 
|                                                                        |      | 
|OTHER ASSETS:                                                           |      | 
|Other assets - held for sale                                            |      | 
|Licensed programming, net                                               |      | 
|                                                                        |      | 
|Total other assets                                                      |      | 
|                                                                        |      | 
|Total assets                                                            |      | 
|                                                                        |      | 
|LIABILITIES AND SHAREHOLDERS' EQUITY                                    |      | 
|CURRENT LIABILITIES:                                                    |      | 
|Accounts payable and accrued expenses                                   |      | 
|Other payables                                                          |      | 
|Taxes payable                                                           |      | 
|Deferred revenue                                                        |      | 
|                                                                        |      | 
|Total current liabilities                                               |      | 
|                                                                        |      | 
|MINORITY INTEREST                                                       |      | 
|                                                                        |      | 
|SHAREHOLDERS' EQUITY:                                                   |      | 
|Common Stock, $.001 par value, 60,000,000 shares authorized,            |      | 
|21,220,009 shares issued and outstanding                                |      | 
|Paid-in-capital                                                         |      | 
|Retained earnings                                                       |      | 
|Statutory reserves                                                      |      | 
|Accumulated other comprehensive income (loss)                           |      | 
|                                                                        |      | 
|Total shareholders' equity                                              |      | 
|                                                                        |      | 
|Total liabilities and shareholders' equity                              |      | 
|                                                                        |      | 

See report of independent registered
public accounting firm. The accompanying notes are an integral part of this statement.

F-4

---



NAVSTAR MEDIA HOLDINGS,
INC. AND SUBSIDIARIES                          (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

CONSOLIDATED STATEMENTS
OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)                   FOR THE YEARS ENDED
DECEMBER 31, 2005 AND 2004

|                                                | 2005 |  | 2004 |           
|----------------------------------------------- | ---- |  | ---- | ----------
|
|SALES REVENUE                                   |      |  | $    | 3,307,346 
|                                                |      |  |      |           
|COST OF SALES                                   |      |  |      | 2,405,781 
|                                                |      |  |      |           
|GROSS PROFIT                                    |      |  |      | 901,565   
|                                                |      |  |      |           
|SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES   |      |  |      | 965,996   
|                                                |      |  |      |           
|INCOME (LOSS) FROM OPERATIONS                   |      |  |      | (64,431   
|                                                |      |  |      |           
|MERGER TRANSACTION EXPENSE                      |      |  |      | (70,373   
|OTHER EXPENSE, NET OF OTHER INCOME              |      |  |      | (135,874  
|                                                |      |  |      |           
|INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES |      | 
|AND MINORITY INTEREST                           |      |  |      | (270,678  
|                                                |      |  |      |           
|PROVISION FOR INCOME TAXES                      |      |  |      | 4,528     
|                                                |      |  |      |           
|NET INCOME (LOSS) BEFORE MINORITY INTEREST      |      |  |      | (275,206  
|                                                |      |  |      |           
|MINORITY INTEREST                               |      |  |      | 20,479    
|                                                |      |  |      |           
|NET INCOME (LOSS)                               |      |  |      | (254,727  
|                                                |      |  |      |           
|OTHER COMPREHENSIVE INCOME (LOSS):              |      | 
|Foreign currency translation adjustment         |      |  |      | (18,874   
|                                                |      |  |      |           
|COMPREHENSIVE INCOME (LOSS)                     |      |  | $    | (273,601  
|                                                |      |  |      |           
|EARNINGS (LOSS) PER SHARE, BASIC AND DILUTED    |      |  | $    | (0.01     
|                                                |      |  |      |           
|WEIGHTED AVERAGE NUMBER OF SHARES               |      |  |      | 21,220,009
|                                                |      |  |      |           

See report of independent registered
public accounting firm. The accompanying notes are an integral part of this statement.

F-5

---



NAVSTAR MEDIA HOLDINGS,
INC. AND SUBSIDIARIES   (FORMERLY KNOWN AS PREMIER DOCUMENT SERVICES, INC.)

CONSOLIDATED STATEMENTS
OF SHAREHOLDERS' EQUITY      FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

|                                                 | Number
of shares |  | Common
stock |             | Paid-in
capital |   | Statutory
reserves |   | Retained
earnings |          | Subscriptions
receivable |   | Accumulated other
comprehensive
income |  | Totals |         
|------------------------------------------------ | ---------------- |  | ------------ | ----------- | --------------- | - | ------------------ | - | ----------------- | -------- | ------------------------ | - | -------------------------------------- |  | ------ | --------
|BALANCE, January 1, 2004                         |                  |  |              | 2           |                 | $ | 1                  |   | $                 | 399      |                          | $ |                                       |  | $      | (395    
|                                                 |                  |  |              |             |                 |   |                    |  
|Sales of common stock                            |                  |  |              | 0.2222      |                 |   |                   |   |                   | 390,240  |                          |   |                                       |  |        |        
|Subscription receivable                          |                  |  |              |            |                 |   |                   |   |                   |         |                          |   |                                       |  |        |        
|Net income                                       |                  |  |              |            |                 |   |                   |   |                   |         |                          |   |                                       |  |        | 154,146 
|Recapitalization on reverse acquisition          |                  |  |              |            |                
|2.333598463 to 1 forward split                   |                  |  |              | 18,535,196  |                 |   | 18,535             |   |                   | (18,535  | )                        |   |                                       |  |        |        
|Rescission from prior shareholders               |                  |  |              | (15,751,790 | )               |   | (15,752            | ) |                   | (9,248   | )                        |   |                                       |  |        |        
|Rescission from prior shareholders               |                  |  |              | (583,399    | )               |   | (583               | ) |                   | (248,366 | )                        |   |                                       |  |        |        
|Shares issued in connection with acquisitions of |                  | 
|NAVISTAR COMMUNICATIONS                          |                  |  |              | 19,020,000  |                 |   | 19,020             |   |                   | 254,930  |                          |   |                                       |  |        |        
|                                                 |                  |  |              |             |                 |   |                    |  
|                                                 |                  |  |              |             |                 |   |                    |   |                   |          |                          |   |                                        |  |        |         
|BALANCE, December 31, 2004                       |                  |  |              | 21,220,009  |                 | $ | 21,220             |   | $                 | 369,420  |                          | $ |                                       |  | $      | 153,751 
|                                                 |                  |  |              |             |                 |   |                    |  
|Adjustment to statutory reserve                  |                  |  |              |            |                 |   |                   |   |                   |         |                          |   | 30,250                                 |  |        | (30,250 
|Sales of rights to purchase common stock         |                  |  |              |            |                 |   |                   |   |                   | 207,500  |                          |   |                                       |  |        |        
|Subscription receivable received                 |                  |  |              |            |                 |   |                   |   |                   |         |                          |   |                                       |  |        |        
|Net loss                                         |                  |  |              |            |                 |   |                   |   |                   |         |                          |   |                                       |  |        | (254,727
|Business combination adjustment                  |                  |  |              |            |                 |   |                   |   |                   | 67,040   |                          |   |                                       |  |        |        
|Foreign currency translation loss                |                  |  |              |            |                 |   |                   |   |                   |         |                          |   |                                       |  |        |        
|                                                 |                  |  |              |             |                 |   |                    |  
|                                                 |                  |  |              |             |                 |   |                    |   |                   |          |                          |   |                                        |  |        |         
|BALANCE, December 31, 2005                       |                  |  |              | 21,220,009  |                 | $ | 21,220             |   | $                 | 643,960  |                          | $ | 30,250                                 |  | $      | (131,226
|                                                 |                  |  |              |             |                 |   |                    |   |                   |          |                          |   |                                        |  |        |         
|                                                 |                  |  |              |             |                 |   |                    |  
|                                                 |                  |  |              |             |                 |   |                    |  

See report of independent registered
public accounting firm. The accompanying notes are an integral part of this statement.

F-6

---



NAVSTAR MEDIA HOLDINGS,
INC. AND SUBSIDIARIES                     (FORMERLY KNOWN AS PREMIER DOCUMENT SERVICES,
INC.)

CONSOLIDATED STATEMENTS
OF CASH FLOWS                       FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

|                                                       | 2005 |  | 2004 |         
|------------------------------------------------------ | ---- |  | ---- | --------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                  |      |  |      |         
|Net income (loss)                                      |      |  | $    | (254,727
|Adjustments to reconcile net income (loss) to cash     |      | 
|provided by (used in) operating activities:            |      | 
|Minority interest                                      |      |  |      | (20,479 
|Depreciation                                           |      |  |      | 80,151  
|Amortization                                           |      |  |      | 280,043 
|Loss on long term investment                           |      |  |      | 146,640 
|Acquisition of subsidiary                              |      |  |      |        
|(Increase) decrease in assets:                         |      | 
|Accounts receivable                                    |      |  |      | (798,625
|Other receivables                                      |      |  |      | (4,967  
|Other receivables - related parties                    |      |  |      | 45,017  
|Inventories                                            |      |  |      | 6,044   
|Deferred expense                                       |      |  |      | (25,000 
|Prepaid expense - current                              |      |  |      | 9,469   
|Other assets                                           |      |  |      | 36,360  
|Increase (decrease) in liabilities:                    |      | 
|Accounts payable                                       |      |  |      | 724,640 
|Other payables                                         |      |  |      | 13,874  
|Dividend payable                                       |      |  |      | (10,000 
|Accrued liabilities                                    |      |  |      | 40,469  
|Customer deposits                                      |      |  |      | 57,883  
|Deferred revenue                                       |      |  |      | 13,289  
|Taxes payable                                          |      |  |      | 95,002  
|                                                       |      |  |      |         
|Net cash provided by operating activities              |      |  |      | 435,083 
|                                                       |      |  |      |         
|CASH FLOWS FROM INVESTING ACTIVITIES:                  |      | 
|Payment for long-term investment                       |      |  |      |        
|Proceeds from long term investment                     |      |  |      | 49,400  
|Additions to equipment                                 |      |  |      | (24,273 
|Additions to licensed programing                       |      |  |      | (921,297
|                                                       |      |  |      |         
|Net cash used in investing activities                  |      |  |      | (896,170
|                                                       |      |  |      |         
|CASH FLOWS FROM FINANCING ACTIVITIES:                  |      | 
|Proceeds from sales of rights to purchase common stock |      |  |      | 207,500 
|Proceeds from subscription receivable                  |      |  |      | 200,000 
|Dividends paid to minority shareholders                |      |  |      |        
|Loans to shareholders                                  |      |  |      |        
|                                                       |      |  |      |         
|Net cash provided by financing activities              |      |  |      | 407,500 
|                                                       |      |  |      |         
|EFFECTS OF EXCHANGE RATE CHANGE IN CASH                |      |  |      | 9,934   
|                                                       |      |  |      |         
|INCREASE (DECREASE) IN CASH                            |      |  |      | (43,653 
|                                                       |      |  |      |         
|CASH, beginning of year                                |      |  |      | 239,231 
|                                                       |      |  |      |         
|CASH, end of year                                      |      |  | $    | 195,578 
|                                                       |      |  |      |         

See report of independent registered
public accounting firm. The accompanying notes are an integral part of this statement.

F-7

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 1 
ORGANIZATION AND NATURE OF OPERATIONS

Navstar Media Holdings, Inc.
(Navstar or the Company) is a United States based corporation that
owns majority interests in firms specializing in media content production and distribution
in the Peoples Republic of China (PRC). Navstar subsidiaries generate
revenues through producing television serials and movies for the PRC market and through
advertising revenues generated from the broadcast and distribution of such programs and
movies.

Navistar Communications Holdings,
Ltd, a Hong Kong Corporation, (NCHL) was originally established as a Holding
Company for equity ownership investments in mainland China media companies. During 2004,
NCHL acquired a 55% equity ownership interest in Happy Times Media, Inc.
(HTM). During 2005, NCHL increased its ownership interest in HTM to 70%. Based
in Beijing, HTM has operated as a private entity since 1998 and produces content for
government-owned television stations in China, while acting as a distributor of television
serials and movies for the Chinese market.

Navstar Media Holdings, Inc. was
incorporated on January 28, 2002 as Premier Document Services, Inc. (OTCBB: PDSV), a
Nevada corporation, which provided document preparation and signatory services to
mortgage, real estate and other financial services firms in the Las Vegas, Nevada market.
On November 30, 2005, the Company acquired 100% of the capital stock of NCHL. In
conjunction with the merger, Premiers former Secretary and President, Crystal Kim
Han, purchased Premiers existing document services business, including all assets
and liabilities. Prior to the Merger, no director, officer or affiliate of the Company had
any material relationship with any director, officer or affiliate of NCHL. Upon completion
of the merger, the officers and directors of Premier resigned and were replaced by the
Companys current management team and board of directors.

As a result of the Merger and a
simultaneous forward stock split, 19,000,009 shares of the Companys Common Stock
were issued to the shareholders of NCHL. As of December 31, 2005, there were 21,220,009
shares of common stock of the Company outstanding.

Under the terms of the Agreement,
NCHL will remain a 100% owned subsidiary of the Company. The transaction contemplated by
the Agreement was intended to be a tax-free reorganization pursuant to the
provisions of Section 351 and 368(a) (1) (A) of the Internal Revenue Code of 1986, as
amended. The stockholders of NCHL, as of the closing date of the merger own approximately
90% of the Companys common stock.

The accounting for these transactions
is identical to that resulting from a reverse-acquisition, except that no goodwill or
other intangible assets is recorded. Accordingly, the financial statements of NCHL are the
historical financial statements of the Company, formerly the operations of HTM.

The Companys common stock is
registered under Section 12(g) of the Securities Act of 1934 and is currently listed on
the over the counter bulletin board under the symbol NVMH.OB.

See report of independent registered
public accounting firm

F-8

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 1 
ORGANIZATION AND OPERATIONS (Continued)

HTM generates revenue from sales and
distribution of its proprietary content, third party programming, and imported TV and
films productions in China.

In addition, HTM distributes European
content from providers such as TVE (UK) and Strawberry Films from (France), as well as
American content from providers including Miramax. HTM has as a customer base,
approximately 300 Provincial and local TV stations throughout China, China Central TV
(CCTV) stations and has developed advertising relationships with various
Chinese and foreign firms.

In January 2005, Happy Times has
contributed a total of RMB 500,000 for the investment in Beijing Hui Ying International
Advertising Co. Ltd. (BHYIA). BHYIA is considered a variable interest entity
under FASB Interpretation number 46(R), Consolidation of Variable Interest
Entities, which requires consolidation of business enterprises of variable interest
entities which meet certain characteristics. HTM is the primary beneficiary of BHYIA
business operations and qualifies to be consolidated under FIN 46(R).

BHYIA was established on December 15,
2004, in Beijing, Peoples Republic of China by four Chinese citizens (the
Registered Shareholders) as a Chinese limited liability company. The duration
of the operation is 20 years. BHYIA generates revenue from sales and distribution of
advertisement programs produced by others and sales of advertisement designs and products.
BHYIA also acting as a sales agent for advertisement air time to be broadcast on various
television stations. Its principal markets for these sales are in the Peoples
Republic of China

To comply with China laws and
regulations that prohibits or restrict foreign ownership of companies that provide
advertising services, HTM established BHYIA which is legally owned by the Registered
Shareholders. In which, Mr. Yang Xiao Bin and Mr. Kang Sui Jin are the legal shareholders
of HTM. Mr. Liu Zhu Jiu and Mr. Shi Rian are the local Chinese citizens. Mr. Liu Zhu Jiu
is the companys legal representative. The arrangements with the Registered
Shareholders have been undertaken solely to satisfy China regulations, which prohibits
foreign companies from owning or operating advertising businesses in China.

HTM also invested in promotion
activities associated with a Chinese movie channel during 2005.  In          December,
2005, it was decided not to continue with the investment relationship, resulting in a
loss on          investment.  The movie channel was treated by the Happy Times subsidiary
as one of its long-term          investments and, as such, was not a reportable or
operating segment to be separated out.  Therefore the          related loss associated
with its curtailment has been classified as a loss from a long-term investment.

Furthermore, the movie channel
operation that was curtailed has been and continues to be operated by one          of the
Company's major suppliers. According to the contract with that supplier, our company had
hoped to          generate net revenues through sales of advertising airtime between
movie clips.  In 2005, the Company          decided to discontinue this sales contract,
after a careful evaluation of the arrangement determined it          to be an
unprofitable endeavor. In consideration of the Commission's observations and comment, the
         company has revised its disclosures (Footnote 1 and MD &A discussion) relative to
the ending of this          contractual relationship to more accurately describe the
ending of a supplier contract and the          curtailing of selling advertising airtime
through that contract.

Note 2  SIGNIFICANT ACCOUNTING
POLICIES

Economic and Political
Risks

The Company faces a number of risks
and challenges since its assets are located in the PRC and its revenues are derived from
its operations therein. The PRC is a developing country with an early stage market
economic system, overshadowed by the state. Its political and economic systems are very
different from the more developed countries and are in a state of change.

See report of independent registered
public accounting firm

F-9

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING POLICIES,
(continued)

Economic and Political
Risks

The PRC also faces many social,
economic and political challenges that may produce major shocks and instabilities and even
crises, in both its domestic arena and in its relationships with other countries,
including the United States. Such shocks, instabilities and crises may in turn
significantly and negatively affect the Companys performance.

The Company may also find it
difficult to retrieve funds from its Chinese-based operations due to restrictions by the
government of China on dividend payments from Chinese subsidiaries to a non-Chinese
parent.  Any inability to so transfer funds may make it difficult for the company to
sufficiently fund the general and administrative costs associated with operating a public
entity in the United States whose commercial operations exist solely in China.

Basis of Presentation

The consolidated financial statements
include the accounts of the Company and all its majority-owned subsidiaries which require
consolidation. Inter-company transactions have been eliminated in the consolidation.

The accompanying financial statements
are prepared in accordance with generally accepted accounting principles in the United
States of America (US GAAP). This basis of accounting differs from that used
in the statutory accounts of the Company, which are prepared in accordance with the
Accounting Standards for Business Enterprises and Accounting system for
Business Enterprises in the PRC (PRC GAAP).

Certain accounting principles, which
are stipulated by US GAAP, are not applicable in the PRC. The difference between PRC GAAP
accounts of the Company and its US GAAP financial statements is immaterial.

Revenue Recognition

Revenue from the sales or licensing
of proprietary content, third party programming, imported TV and films, and sales and
distribution of advertisement programs are recognized upon meeting all recognition
requirements of Statement of Position (SOP) 00-2 Accounting by Producers or
Distributors of Films.

Revenue from sales of advertisement
designs and products are recognized when the products are delivered and title has passed.

Cash payments received are recorded as
deferred revenue until all the conditions of revenue recognition have been met.

Cash and Cash Equivalents

All highly liquid investments with
original maturities of three months or less are considered cash equivalents.

See report of independent registered
public accounting firm

F-10

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING POLICIES,
(continued)

Cash and Concentration of
Risk

Cash includes cash on hand, demand
deposits and trusts in accounts maintained with state-owned banks within the Peoples
Republic of China. Total cash in state-owned banks in the PRC at December 31, 2005
amounted to $170,171, of which no deposits are covered by insurance. The Company has not
experienced any losses in such accounts and believes it is not exposed to any risks on its
cash in bank accounts.

Use of Estimates

The preparation of financial
statements in conformity with US GAAP 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 revenue and expenses during the reporting period. Actual results, when
ultimately realized could differ from those estimates.

Recently issued accounting
pronouncements

In March 2005, the Financial
Accounting Standards Board (FASB) published FASB Interpretation No. 47,
Accounting for Conditional Asset Retirement Obligations, which clarifies that
the term, conditional asset retirement obligations, as used in SFAS No. 143,
Accounting for Asset Retirement Obligations, refers to a legal obligation to
perform an asset retirement activity in which the timing and (or) method of
settlement are conditional on a future event that may or may not be within the control of
the entity. The uncertainty about the timing and (or) method of settlement of a
conditional asset retirement obligation should be factored into the measurement of the
liability when sufficient information exists. The interpretation also clarifies when an
entity would have sufficient information to reasonably estimate the fair value of an asset
retirement obligation. This interpretation is effective no later than the end of the
Companys fiscal 2006. The adoption of this Interpretation is not expected to have a
material effect on the Companys consolidated financial position or results of
operations.

In June 2005, the FASB issued
SFAS No. 154, Accounting Changes and Error Corrections (SFAS
No. 154). SFAS No. 154 replaces APB No. 20 (APB 20)
and SFAS No. 3, Reporting Accounting Changes in Interim Financial
Statements, and applies to all voluntary changes in accounting principle, and
changes the requirements for accounting for and reporting of a change in accounting
principle. APB 20 previously required that most voluntary changes in accounting
principle be recognized by including in net income of the period of change a cumulative
effect of changing to the new accounting principle whereas SFAS No. 154 requires
retrospective application to prior periods financial statements of a voluntary
change in accounting principle, unless it is impracticable. SFAS No. 154 enhances the
consistency of financial information between periods. SFAS No. 154 will be effective
beginning with the Companys first quarter of fiscal year 2006. The Company does not
expect that the adoption of SFAS No. 154 will have a material impact on its results
of operations, financial position or cash flows.

See report of independent registered
public accounting firm

F-11

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING POLICIES
(continued)

Recently issued accounting
pronouncements (continued)

In June 2005, the FASBs
Emerging Issues Task Force (EITF) reached a consensus on Issue No. 05-06,
Determining the Amortization Period for Leasehold Improvements (EITF 05-06).
EITF 05-06 provides guidance for determining the amortization period used for leasehold
improvements acquired in a business combination or purchased after the inception of a
lease, collectively referred to as subsequently acquired leasehold improvements. EITF
05-06 provides that the amortization period used for the subsequently acquired leasehold
improvements to be the lesser of (a) the subsequently acquired leasehold
improvements useful lives, or (b) a period that reflects renewals that are
reasonably assured upon the acquisition or the purchase. EITF 05-06 is effective on a
prospective basis for subsequently acquired leasehold improvements purchased or acquired
in periods beginning after the date of the FASBs ratification, which was on June 29,
2005. The Company does not anticipate that EITF 05-06 will have a material impact on its
consolidated results of operations.

In July 2005, the FASB issued an
Exposure Draft of a proposed Interpretation Accounting for Uncertain Tax
Positionsan interpretation of FASB Statement No. 109. Under the proposed
Interpretation, a company would recognize in its financial statements its best estimate of
the benefit of a tax position, only if the tax position is considered probable of being
sustained on audit based solely on the technical merits of the tax position. In evaluating
whether the probable recognition threshold has been met, the proposed Interpretation would
require the presumption that the tax position will be evaluated during an audit by taxing
authorities. The proposed Interpretation would be effective as of the end of the first
fiscal year ending after December 15, 2005, with a cumulative effect of a change in
accounting principle to be recorded upon the initial adoption. The proposed Interpretation
would apply to all tax positions and only benefits from tax positions that meet the
probable recognition threshold at or after the effective date would be recognized. The
Company is currently analyzing the proposed Interpretation and has not determined its
potential impact on our Consolidated Financial Statements. While we cannot predict with
certainty the rules in the final Interpretation, there is risk that the final
Interpretation could result in a cumulative effect charge to earnings upon adoption,
increases in future effective tax rates, and/or increases in future interperiod effective
tax rate volatility.

In October 2005, FASB Staff Position
(FSP) FAS 13-1, Accounting for Rental Costs Incurred during a Construction
Period was issued. This FSP concluded that rental costs associated with ground or
building operating leases that are incurred during a construction period should be
expensed. The guidance in the FSP is required to be applied to the first reporting period
beginning after December 15, 2005. The Companys adoption of this pronouncement is
not expected to have a material impact on the Companys financial position or results
of operations.

See report of independent
register public accounting firm

F-12

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING
POLICIES (continued)

Licensed Programming Cost

Purchased programming costs are
capitalized and carried as an asset. Such costs are charged to expense when the
programming is sold. Licensed programming costs are amortized over the life of the
licensing period, but not more than three years.

Employees Benefits

Mandatory contributions are made for
the PRCs health, retirement benefit and unemployment costs at the statutory rates in
force during the period, based on gross salary payments. The cost of these payments is
charged to the statement of income in the same period as the related salary cost.

Concentration of Credit
Risk

Financial instruments which subject
the Company to concentrations of credit risk consist principally of accounts receivable.
Exposure to losses on receivables is dependent on each customers financial
condition. The Company controls its exposure to credit risk through a process of credit
approvals, credit limits and monitoring procedures, establishing allowances for
anticipated losses.

Fair Value of Financial
Instruments

Statement of Financial Accounting
Standards No. 107 (SFAS 107), Disclosures About Fair Value of Financial
Instruments requires disclosure of the fair value of financial instruments held by
the Company. SFAS 107 defines the fair value of financial instruments as the amount at
which the instrument could be exchanged in a current transaction between willing parties.

The carrying amount of accounts
receivable, accounts payable, and other items included on the accompanying balance sheets
approximate their fair value due to their short-term nature.

Income Taxes

The Company has adopted Statement of
Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS
109). SFAS 109 requires the recognition of deferred income tax liabilities and assets for
the expected future tax consequences of temporary differences between income tax basis and
financial reporting basis of assets and liabilities. Provision for income taxes consist of
taxes currently due plus deferred taxes. There are no deferred taxes at December 31, 2005.

The charge for taxation is based on
the results for the year as adjusted for items, which are non-assessable or disallowed. It
is calculated using tax rates that have been enacted or substantively enacted by the
balance sheet date.

See report of independent
register public accounting firm

F-13

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING
POLICIES (continued)

Income Taxes (continued)

Deferred tax is accounted for using
the balance sheet liability method in respect of temporary differences arising from
differences between the carrying amount of assets and liabilities in the financial
statements and the corresponding tax basis used in the computation of assessable tax
profit. In principle, deferred tax liabilities are recognized for all taxable temporary
differences, and deferred tax assets are recognized to the extent that it is probably that
taxable profit will be available against which deductible temporary differences can be
utilized.

Deferred tax is calculated at the tax
rates that are expected to apply to the period when the asset is realized or the liability
is settles. Deferred tax is charges or credited in the income statement, except when it
related to items credited or charged directly to equity, in which case the deferred tax is
also dealt with in equity.

Deferred tax assets and liabilities
are offset when they related to income taxes levied by the same taxation authority and the
Company intends to settle its current tax assets and liabilities on a net basis.

The Companys subsidiary, HTM,
is governed by the Income Tax Law of the Peoples Republic of China (PRC) concerning
Foreign Investment Enterprises and Foreign Enterprises and various local income tax laws
(the Income Tax Laws). Under the Income Tax Laws, foreign investment enterprises (FIE)
generally are subject to an income tax at an effective rate of 33% (30% state income taxes
plus 3% local income taxes) on income as reported in their statutory financial statements
after appropriate tax adjustments.

HTM is also subject to business taxes
of 5% of its total gross sales. HTMs business taxes are accounted-for-as a reduction
of revenues.

The Companys variable interest
entity, BHYIA is not subject to income tax because, under PRC regulations, a newly formed
advertising company is exempt from income tax for two years. They are, however, subject to
business taxes of 5% on taxable non-agency sales including sales and distribution of
advertisement programs produced by others and sales of advertisement designs and products.
In addition, BHYIA is also subject to business taxes of 5% of its taxable agency net
income generated from sale of advertisement air time to be broadcast on television
stations. All business taxes paid represent a reduction of revenues.

See report of independent
register public accounting firm

F-14

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING
POLICIES (continued)

Income Taxes (continued)

The provision for income taxes for
the year ended December 31 consisted of the following:

|                                 | 2005 |  | 2004 |      
|-------------------------------- | ---- |  | ---- | -----
|
|Provision for US Income Tax      |      |  | $    |     
|Provision for China Income Tax   |      |  |      | 4,116
|Provision for China Local Tax    |      |  |      | 412  
|                                 |      |  |      |      
|Total provision for income taxes |      |  | $    | 4,528
|                                 |      |  |      |      

The provision for income tax is
solely from the Companys 70% subsidiary HTM.

The following table reconciles the
U.S. statutory rates to the Companys effective tax rate:

|                                     | 2005 |  | 2004 |      
|------------------------------------ | ---- |  | ---- | -----
|
|U.S. Statutory rate                  |      |  |      | 34.0 
|Foreign income not recognized in USA |      |  |      | (34.0
|China income taxes                   |      |  |      | 1.5  
|                                     |      |  |      |      
|Total provision for income taxes     |      |  |      | 1.5  
|                                     |      |  |      |      

The estimated tax savings for the
year ending December 31, 2005 amounted to $65,298. The net effect on (loss) per share if
the income tax had been applied would increase losses per share from $0.01 to $0.02

The Company has a net operating loss
carry forward of $295,685 for US income tax purposes that will expire during the year
2025. The Company has recorded a valuation allowance for the entire amount of the loss
carry forward. Since the Companys main operations are located in the PRC and any
income subject to US income taxes will be dependent upon the Company having operations in
the US or other US taxable events will have to occur. Since the Company is not sure at
this time that the Company will be able utilize the tax benefits of this operating loss
management has decided to record a valuation allowance for the entire amount of the
operating loss.

Foreign Currency
Translation

The reporting currency of the Company
is US dollar. The Company uses their local currency, Renminbi, as their functional
currency. Results of operations and cash flow are translated at average exchange rates
during the period, and assets and liabilities are translated at the unified exchange rate
as quoted by the Peoples Bank of China at the end of each reporting period. This
quotation of the exchange rates does not imply free convertibility of RMB to other foreign
currencies.

See report of independent
register public accounting firm

F-15

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING
POLICIES (continued)

Foreign Currency
Translation, (continued)

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. Approval of foreign currency payments by the Bank of China or
other institutions requires submitting a payment application form together with invoices,
shipping documents and signed contracts.

Translation adjustments resulting
from this process are included in accumulated other comprehensive income (loss) in the
consolidated statement of shareholders equity and amounted to $(18,874) and $0 as of
December 31, 2005 and 2004, respectively. The balance sheet amounts with the exception of
equity at December 31, 2005 were translated at 8.06 RMB to $1.00 USD as compared to 8.26
RMB at December 31, 2004. The equity accounts were stated at their historical rate. The
average translation rate of 8.18 RMB for the year ended December 31, 2005 was applied to
income statement accounts.

Transaction gains and losses that
arise from exchange rate fluctuations on transactions denominated in a currency other than
the functional currency are included in the results of operations as incurred. These
amounts are not material to the consolidated financial statements.

Equipment

Equipment is carried at cost less
accumulated depreciation. The costs of repairs and maintenance are expensed as incurred;
major replacements and improvements are capitalized.

When assets are retired or disposed
of, the cost and accumulated depreciation are removed from the accounts, and any resulting
gains or losses are included in the income statement in the year of disposition.

Depreciation is calculated on a
straight-line basis over the estimated useful life of the assets. Estimated useful lives
of the assets are as follows:

|                         | Estimated
Useful life
|------------------------ | ---------------------
|
|Machinery and equipment  |                      
|Office equipment         |                      
|Transportation equipment |                      

See report of independent
register public accounting firm

F-16

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 2  SIGNIFICANT ACCOUNTING
POLICIES (continued)

Valuation of Long-Lived
assets

The Company annually analyzes its
long-lived assets for potential impairment, assessing the appropriateness of lives and
recoverability of unamortized balances through measurement of undiscounted operating cash
flows on a basis consistent with US GAAP. The Company also re-evaluates the periods of
amortization to determine whether subsequent events and circumstances warrant revised
estimates of useful lives. As of December 31, 2005, the Company expects these assets to be
fully recoverable.

Earnings (Loss) Per Share

The Company reports earnings per
share in accordance with the provisions of SFAS No. 128, Earnings Per Share.
SFAS No. 128 requires presentation of basic and diluted earnings per share in conjunction
with the disclosure of the methodology used in computing such earnings per share. Basic
earnings (loss) per share excludes dilution and is computed by dividing income available
to common stockholders by the weighted average common shares outstanding during the
period. Diluted earnings (loss) per share takes into account the potential dilution that
could occur if securities or other contracts to issue common stock were exercised and
converted into common stock.

The weighted average number of shares
used to calculate earnings (loss) per share for the years ended December 31, 2005
(21,220,009) and 2004 (21,220,009) reflect only the shares outstanding for those periods.

Note 3 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Interest expense paid amounted to $4
and $285 for the years ended December 31, 2005 and 2004, respectively.

Income tax payments amounted to
$2,087 and $1,504 for the years ended December 31, 2005 and 2004, respectively.

During 2005, the company received
certain licensed programming as the payment for an accounts receivable. The fair market
value of the licensed programming received was $156,897.

See report of independent
register public accounting firm

F-17

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 4  ACCOUNTS
RECEIVABLE

Accounts receivable consist of the
following at December 31:

|                                      | 2005 | 
|------------------------------------- | ---- | 
|
|Accounts receivable                   |      | 
|Less: allowance for doubtful accounts |      | 
|                                      |      | 
|Total                                 |      | 
|                                      |      | 

Allowance for doubtful accounts
represents the bad debt that the company reserves against its accounts receivable. The
company currently reserves 0.5% for its allowance for doubtful accounts. As of December
31, 2005, $205,840 from its $224,154 allowance for doubtful accounts were from one
customer. The balance was reserved against accounts receivable because the customer
disputed the amount owed. However, the company is still in the process of attempting to
collect the balance from its customers.

Note 5  EQUIPMENT

Equipment consists of the following:

|                               | December 31,
2005 | 
|------------------------------ | ----------------- | 
|
|Machinery and equipment        |                   | 
|Furniture and office equipment |                   | 
|Vehicle                        |                   | 
|                               |                   | 
|                               |                   | 
|Less: Accumulated depreciation |                   | 
|                               |                   | 
|                               |                   | 
|                               |                   | 

Depreciation expense for the years
ended December 31, 2005 and 2004 was $80,151 and $31,190, respectively.

Note 6  LICENSED
PROGRAMMING

Licensed programming consists of the
following:

|                               | December 31,
2005 | 
|------------------------------ | ----------------- | 
|
|Copyrights of programming      |                   | 
|Less: Accumulated amortization |                   | 
|                               |                   | 
|                               |                   | 
|                               |                   | 

Amortization expense for the years
ended December 31, 2005 and 2004 was $280,043 and $54,299, respectively.

See report of independent
register public accounting firm

F-18

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 7  COMMON STOCK

In December 2003, the Company
(through its subsidiary NCHL) issued 2 shares of common stock at a par value of HK$1.00
per share to its founder.

In December 2004, the Company
(through its subsidiary NCHL) issued 0.2222 shares of common stock, representing 10% of
the shares of the Companys capital stock. Per the share purchase agreements, the
Company was to become publicly traded on the US OTC Bulletin Board market within seven
months, starting from the date of the signed purchase agreements. In the event that the
Company did not achieve such listing within the prescribed period, the Purchasers were to
be issued an additional number of shares of the Companys common stock, as a penalty
for the delay, so that the Purchasers equity stake in the Company would be increased
100% of their original shares issued. Since the Company did not become publicly traded by
August 2005, the Purchasers were authorized to receive an additional 0.2778 shares of
common stock. The value of such shares estimated to be $400,000 and has been charged to
other expense during the nine months ended September 30, 2005 and reported on an 8K filed
by the Company.

In September 2005, the Company
 received gross proceeds of $207,500 from sale of rights to purchase  415,000 shares of
 tracking  common  stock at a price of $0.5 per share,  which  represent  4.15% of the
 shares of the  Company's capital stock, and 415,000 purchase warrants to purchase shares
of common stock of the Company,  its successor,  or merged entity at a price of $1.00 per
share.

In November 2005, the Company and the
Purchasers reached a settlement wherein the Purchasers relinquished their rights to
receive the additional 0.2778 shares. As a result the Company reversed the charge for this
penalty. No shares were issued in association with the proposed penalty.

On November 30, 2005, Navistar
acquired 6,750,000 pre forward split shares (15,751,790 post forward split shares) of
Premier Document Services Incs common stock from Crystal Kim Han for $25,000. The
prior operations, assets and liabilities of Premier Document Services, Inc were
transferred to Crystal Kim Han in exchange for 250,000 pre forward split shares (583,399
post forward split shares).

Simultaneous with the merger
transaction, a forward split was affected, exchanging one share of common stock of
2.333598463 shares of Navstar Media Holdings, Inc. The number of shares authorized for
issuance was increased to sixty million.

Note 8  BUSINESS
COMBINATIONS

On June 30, 2004, the Company
completed the acquisition of 55% of HTM, which was established in Beijing, PRC in 1998 and
is in the business of buying, selling and producing TV programming and films. The Company
has agreed to invest US$1,500,000 into HTM in three installment payments, and to issue
shares of common stock equivalent to US$600,000 to HTMs original shareholders
(OS) when the Companys common stock trades on the US OTC Bulletin Board
stock market.

On August 9, 2005, the Company
increased its interest in HTM from 55% to 70%. The Company will issue common shares
equivalent to US$573,000 to HTMs OS in connection with the increased ownership.
These transactions resulted in the Company recording goodwill of approximately $1,250,984
on its unaudited financial statements included in form 8K filed on October 28, 2005.

See report of independent
register public accounting firm

F-19

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 8  BUSINESS COMBINATIONS,
(continued)

In November 2005, the Company and the
HTM OS agreed to amend all previous agreements, whereby, the HTM OS agreed to waive any
and all other payment obligations payable from NCHL to HTMs OS. The parties agreed
to keep the additional working capital contribution of US$1,100,000. As of December 31,
2005, the Company has contributed $448,500; the remaining balance of $651,500 will be paid
within two years upon the renewal of business license of HTM. If the Company does not
fulfill the payment terms within two years after the renewal of the business license, the
agreement to increase ownership to15% will be revoked. The value of the common stock
issued has been discounted to approximately $1,041,122. These agreements resulted in a
write down of goodwill and equity during the fourth quarter of 2005.

On November 30, 2005, pursuant to the
terms of a Merger Agreement, 100% of the outstanding shares of Navistar Communications
Holdings Limited (Navistar HK), a Hong Kong Corporation, were exchanged for 10% of the
outstanding shares of Premier Nevada, the sole subsidiary of Premier Document Services,
Inc.. Prior to this time, Premier Document Services, Inc. had operated as a public shell,
with no meaningful commercial activities. Thereafter, the Premier Nevada subsidiary was
merged into its parent and 17,988,434 shares of the Premiers common stock, were
distributed to the previous holders of Navistar HK.

Also on November 30, 2005, the
Company changed its name from Premier Document Services, Inc. to Navstar Media Holdings,
Inc (Navstar). The officers and directors of Navistar HK became the officers and directors
of Navstar. The company maintains no residual operations or assets from the former Premier
Document Services, Inc.

On December 18, 2005, the Company
entered into a Master Agreement with the shareholders of Dong Fang Zheng Yi Film & TV
Communication Co., Ltd. and Beijing Dong Fang Zheng Yi Film Investment Consulting Co.,
Ltd. (collectively, Dong Fang Group) to acquire operational control of Dong
Fang Group and acquire a 70% ownership interest in Dong Fang Group. Pursuant to the Master
Agreement, the Company, contingent upon the results of due diligence, agreed to issue 6.2
million shares of its common stock to existing shareholders of Dong Fang Group and also
agreed to pay $800,000 to such shareholders, while committing to invest another $1.6
million into Dong Fang Group operations. On March 31, 2006, the agreement was rescinded
(see note 12 below.)

Note 9  COMMITMENTS AND
CONTINGENCIES

The Companys business
operations exist solely in the PRC and are subject to significant risks not typically
associated with companies in North America and Western Europe. These include risks
associated with, among others, the political, economic and legal environments and foreign
currency limitations.

See report of independent
register public accounting firm

F-20

---



NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 9  COMMITMENTS AND
CONTINGENCIES (continued)

The Companys results may thus
be adversely affected by changes in the political and social conditions in the PRC, and by
changes in governmental policies, laws, regulations, anti-inflationary measures, currency
conversion and remittance limitation, and rates and methods of taxation, among other
things.

Leases

The Company has a noncancelable lease
for office space that expires in 2006. Additionally, the Company has a noncancelable lease
for production space that expires in 2007. Rent expense amounted to $38,320 and $22,188
for the years ended December 31, 2005 and 2004, respectively. At December 31, 2005, future
minimum lease payments for the leases are as follows:

|Year Ended December 31, | 
|----------------------- | 
|
|2006                    | 
|2007                    | 
|Thereafter              | 

Note 10  MINORITY
INTEREST

Minority interest represents the
outside shareholders 30% interest in Happy Times Media Inc.

Note 11  LOSS OF MAJOR CONTRACT

At the end of 2005, HTM discontinued a contractual relationship with one of its major suppliers, after an
evaluation of the arrangement determined it to be an unprofitable endeavor.  The contract related to sales of
advertising airtime in connection with a Movie Channel that has been operated by a PRC TV station. As a result of
the discontinuance, HTM's ongoing operating expenses will be reduced by approximately 50%. Management believes
that HTM will now operate on a self  sufficient basis, with positive cash flows.

Note 12  SUBSEQUENT
EVENTS

On March 11, 2006, the Company entered
into an Agreement with the shareholders of Beijing Broadcasting and Television Media Co.,
Ltd. (Beijing Media) to acquire operational control of Beijing Media and
acquire a 70% ownership interest in Beijing Media. Pursuant to the Agreement, the Company
is issuing 2,400,000 shares of its common stock valued at $1.00 per share to the existing
shareholders of Beijing Media out of which 900,000 shares of the common stock of Company
are for securing a pre-Olympics 2008 Beijing Games sport mini-series featuring top Chinese
athletes. The 900,000 shares shall be returned back to the Company and cancelled if the
show cannot be secured.

See report of independent
register public accounting firm

F-21

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NAVSTAR MEDIA HOLDINGS,
INC AND SUBSIDIARIES                                 (FORMERLY KNOWN AS PREMIER DOCUMENT
SERVICES, INC.)

NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS

Note 12  SUBSEQUENT EVENTS,
(continued)

On March 31, 2006, the Company has
decided to terminate in its entirety the Master Agreement between the Company and
shareholders of Dong Fang Zheng Yi Film & TV Communication Co., Ltd. and Beijing Dong
Fang Zheng Yi Film Investment Consulting Co., Ltd. (collectively, Dong Fang
Group) and not to complete the acquisition of Dong Fang Group.

The Company made the decision to
terminate the Master Agreement based on due diligence efforts that uncovered potential
liabilities associated with the Dong Fang Group and in view of other superior investment
opportunities existing in the market. The terminated Master Agreement was intended to
acquire a 70% ownership interest in the Dong Fang Group.

Pursuant to the terminated Master
Agreement, the Company was to issue 6.2 million shares of its common stock to existing
shareholders of the Dong Fang Group and was to pay $800,000 to such shareholders, while
committing to invest another $1.6 million into Dong Fang Group operations. In view of the
termination, the 6.2 million shares of common stock will not be issued to the shareholders
of the Dong Fang Group and will be cancelled.

The Company also acquired a 70%
interest in Beijing Media in March of 2006. Beijing Media produces popular programming
content for the Chinese market, with its largest customer being CCTV, the national
television network of China. Beijing Media is also self-sufficient in generating positive
cash-flow from its operations.

The Company completed a private
placement of convertible debt securities in January of 2006 for gross proceeds of
$1,000,000 and is under contract with the same investment banking firm to complete a
private equity capital raise of up to $5 million during 2006. Management thus believes
that the Company has made the necessary adjustments to its commercial operations and has
the access to capital funding to sustain it for the longer term. Ultimately, management
believes that the strength of the Chinese market for media content and the creative
resources of its two major subsidiaries will be the primary source for increased working
capital and business success.

See report of independent
register public accounting firm

F-22

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