SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549




FORM
10-Q




þQuarterly Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934




For the
quarterly period ended September 30, 2009.




or




oTransition Report Pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934




For the
transition period from ____________ to ____________.




Commission
File Number 001-33746




CHINA
MEDIAEXPRESS HOLDING, INC.


(Exact
name of registrant as specified in its charter)




Delaware
            
            20-8951489(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            
            (I.R.S.
      Employer
              Identification
      No.)




Room
2805, Central Plaza, Wanchai Hong Kong


(Address
of Principal Executive Offices including zip code)




+852 2827
6100


(Registrant’s
Telephone Number, Including Area Code)




Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months
(or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.


Yes þNo o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every, Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).


Yes þNo o




Indicate
by check mark if the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer or a smaller reporting company




Large
      Accelerated Filer o
            Accelerated
      Filer o
            Non-Accelerated
      Filer  þ
              (Do
      not check if a smaller reporting company)
            Smaller
      reporting company o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Securities Exchange Act).


Yes oNo þ




As of
November 13, 2009, 23,917,413 shares of the issuer’s common stock, par value
$0.001, were outstanding.












TABLE
OF CONTENTS





Part
      I. Financial Information
            
            
            1Item
      1. Financial Statements
            
            
            1Item
      2. Management’s Discussion and Analysis of Financial Condition and Results
      of Operations
            
            
            17Item
      3. Quantitative and Qualitative Disclosures About Market
    Risk
            
            
            26Item
      4. Controls and Procedures
            
            
            26Part
      II. Other Information
            
            
            27Item
      1. Legal Proceedings
            
            
            27Item
      1A. Risk Factors
            
            
            27Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
            
            
            27Item
      3. Defaults Upon Senior Securities
            
            
            27Item
      4. Submission of Matters to a Vote of Security Holders
            
            
            27Item
      5. Other Information
            
            
            27Item
      6. Exhibits
            
            
            27SIGNATURES
            
            
            28Exhibit
      31.1Exhibit
      31.2Exhibit
      32.1







PART
I





FINANCIAL
INFORMATION





ITEM
1.  FINANCIAL STATEMENTS





CHINA
      MEDIAEXPRESS HOLDINGS, INC.(f/k/a
      TM Entertainment and Media, Inc.)(A
      CORPORATION IN THE DEVELOPMENT STAGE)Condensed
      Balance Sheets




September
      30,
              2009
            
            
            December
      31,
              2008(unaudited)ASSETSCurrent
      assets:Cash
            
            $
            3,093
            
            
            $
            159,689Cash
      held in trust available for taxes
            
            
            -
            
            
            
            15,770Prepaid
      expenses
            
            
            5,898
            
            
            
            89,776Total
      current assets
            
            
            8,991
            
            
            
            265,235Cash
      held in trust  - restricted
            
            
            81,078,273
            
            
            
            81,119,299Total
      assets
            
            $
            81,087,264
            
            
            $
            81,384,534LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Note
      payable, Initial Stockholder
            
            $
            235,000
            
            
            $
            -Accounts
      payable and accrued liabilities (including related parties
      of  $115,777 and $46,350 respectively)
            
            
            1,302,010
            
            
            
            414,563Total
      current liabilities
            
            
            1,537,010
            
            
            
            414,563Deferred
      underwriting fee
            
            
            3,281,600
            
            
            
            3,281,600Total
      liabilities
            
            
            4,818,610
            
            
            
            3,696,163Commitments
      and contingenciesCommon
      stock, subject to possible conversion
      of  3,075,475  shares
            
            
            24,285,542
            
            
            
            24,285,542Interest
      income attributable to common stock, subject to possible conversion (net
      of taxes of $0 and $4,731 respectively)
            
            
            29,832
            
            
            
            42,136Stockholders’
      equity:Preferred
      stock — 1,000,000 shares authorized, $.001 par value, none
      issued and outstanding
            
            
            —
            
            
            
            —Common
      stock — 40,000,000 authorized, $.001 par value, 12,505,000
      issued and outstanding (which includes 3,075,475 shares subject to
      possible conversion)
            
            
            12,505
            
            
            
            12,505Additional
      paid-in capital
            
            
            53,575,335
            
            
            
            53,575,335(Deficit)
      accumulated during the development stage
            
            
            (1,634,560
            )
            
            
            (227,147
            )Total
      stockholders’ equity
            
            
            51,953,280
            
            
            
            53,360,693Total
      liabilities and stockholders’ equity
            
            $
            81,087,264
            
            
            $
            81,384,534





The
accompanying notes are an integral part of the condensed financial
statements.




1





CHINA
      MEDIAEXPRESS HOLDINGS, INC.(f/k/a
      TM Entertainment and Media, Inc.)(A
      CORPORATION IN THE DEVELOPMENT STAGE)Condensed
      Statements of Operations
(unaudited)




For
      the
                Three
      Months Ended
                September
      30,
                2009
              
              
              For
      the
                Three
      Months Ended
                September
      30,
                2008
              
              
              For
      the
                Nine
      Months Ended
                September
      30,
                2009
              
              
              For
      the
                Nine
      Months Ended
                September
      30,
                2008
              
              
              For
      the
                Period
      from
                May
      1, 2007
                (inception)
      to
                September
      30,
                2009Formation
      and operating expenses
              
              $
              (542,003
              )
              
              $
              (340,071
              )
              
              $
              (1,567,710
              )
              
              $
              (1,860,768
              )
              
              $
              (3,857,091
              )Interest
      expense
              
              
              (5,875
              )
              
              
              —
              
              
              
              (9,075
              )
              
              
              —
              
              
              
              (11,740
              )Interest
      income
              
              
              9,368
              
              
              
              421,588
              
              
              
              157,068
              
              
              
              1,227,687
              
              
              
              2,264,103(Loss)
      income before Taxes
              
              
              (538,510
              )
              
              
              81,517
              
              
              
              (1,419,717
              )
              
              
              (633,081
              )
              
              
              (1,604,728
              )Income
      taxes
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —
              
              
              
              —Net
      (loss) income
              
              
              (538,510
              )
              
              
              81,517
              
              
              
              (1,419,717
              )
              
              
              (633,081
              )
              
              
              (1,604,728
              )Less:
      interest attributable to common stock subject to possible conversion (net
      of taxes of $0, $0, $0, $0 and $0 respectively)
              
              
              16,915
              
              
              
              —
              
              
              
              12,304
              
              
              
              —
              
              
              
              (29,832
              )Net
      (loss) income attributable to common stock not subject to possible
      conversion
              
              $
              (521,595
              )
              
              $
              81,517
              
              
              $
              (1,407,413
              )
              
              $
              (633,081
              )
              
              $
              (1,634,560
              )Net(loss)
      income per share:Basic
              
              $
              (0.04
              )
              
              $
              0.01
              
              
              $
              (0.11
              )
              
              $
              (0.05
              )Diluted
              
              $
              (0.04
              )
              
              $
              0.01
              
              
              $
              (0.11
              )
              
              $
              (0.05
              )Weighted
      average shares outstanding:Basic
              
              
              12,505,000
              
              
              
              12,505,000
              
              
              
              12,505,000
              
              
              
              12,505,000Diluted
      - Pro-forma
              
              
              12,505,000
              
              
              
              12,505,000
              
              
              
              12,505,000
              
              
              
              12,505,000Weighted
      average shares outstanding subject to possible conversion
              
              
              3,075,475
              
              
              
              3,075,475
              
              
              
              3,075,475
              
              
              
              3,075,475Net
      (loss) income per share attributable to common stock not subject to
      possible conversion:Basic
              
              $
              (0.06
              )
              
              $
              0.01
              
              
              $
              (0.15
              )
              
              $
              (0.07
              )Diluted
      - Pro-forma
              
              $
              (0.06
              )
              
              $
              0.01
              
              
              $
              (0.15
              )
              
              $
              (0.07
              )





The
accompanying notes are an integral part of the condensed financial
statements.




2





CHINA
      MEDIAEXPRESS HOLDINGS, INC.(f/k/a
      TM Entertainment and Media, Inc.)(A
      CORPORATION IN THE DEVELOPMENT STAGE)Condensed
      Statement of Stockholders’ Equity
  For the Period from May 1, 2007 (inception)
      to September 30, 2009Common
                Stock
                Shares
              
              
              Common
                Stock
                Amount
              
              
              Additional
                Paid-In
                Capital
              
              
              (Deficit)
                Retained
                Earnings
      Accumulated
                During
                Development
                Stage
              
              
              Stockholders’
                EquityIssuance
      of common stock to initial stockholders on May 1, 2007 at $.011 per
      share
              
              
              2,250,000
              
              
              $
              2,250
              
              
              $
              22,750
              
              
              
              
              
              $
              25,000Sale
      of Private Placement Warrants
              
              
              
              
              
              
              
              
              
              
              2,100,000
              
              
              
              
              
              
              2,100,000Sale
      of 10,255,000 units through public offering (net of underwriter’s discount
      and offering expenses)Including  3,075,475
      shares subject to possible conversion
              
              
              10,255,000
              
              
              
              10,255
              
              
              
              75,738,027
              
              
              
              
              
              
              75,748,282Proceeds
      from sale of underwriters’ purchase option
              
              
              
              
              
              
              
              
              
              
              100
              
              
              
              
              
              
              100Proceeds
      subject to possible conversion
              
              
              
              
              
              
              
              
              
              
              (24,285,542
              )
              
              
              
              
              
              (24,285,542
              )Net
      Income
              
              
              
              
              
              
              
              
              
              
              
              
              
              $
              190,096
              
              
              
              190,096Balance
      at December 31, 2007
              
              
              12,505,000
              
              
              
              12,505
              
              
              
              53,575,335
              
              
              
              190,096
              
              
              
              53,777,936Accretion
      of trust fund relating to common stock subject to possible conversion (net
      of taxes of $4,731)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (42,136
              )
              
              
              (42,136
              )Net
      loss for the year ended December 31, 2008
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (375,107
              )
              
              
              (375,107
              )Balance
      at December 31, 2008
              
              
              12,505,000
              
              
              
              12,505
              
              
              
              53,575,335
              
              
              
              (227,147
              )
              
              
              53,360,693Accretion
      of trust fund relating to common stock subject to possible conversion (net
      of taxes of $0)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              12,304
              
              
              
              12,304Net
      loss for the nine  months ended September 30,
    2009
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (1,419,717
              )
              
              
              (1,419,717
              )Balance
      at September 30, 2009 (unaudited)
              
              
              12,505,000
              
              
              $
              12,505
              
              
              $
              53,575,335
              
              
              $
              (1,634,560
              )
              
              $
              51,953,280




The
accompanying notes are an integral part of the condensed financial
statements.




3




CHINA
      MEDIAEXPRESS HOLDINGS, INC.(f/k/a
      TM Entertainment and Media, Inc.)(A
      CORPORATION IN THE DEVELOPMENT STAGE)Condensed
      Statement of Cash  Flows(unaudited)




For
      the Nine Months Ended
              September 30
      ,
              2009
            
            
            For
      the Nine Months Ended
              September
      30,
              2008
            
            
            For
      the Period from May 1, 2007 (inception) to
              September
      30,
              2009Cash
      flows from operating activities:Net
      (loss)
            
            $
            (1,419,717
            )
            
            $
            (633,081
            )
            
            $
            (1,604,728
            )Decrease
      (increase) in prepaid expenses
            
            
            83,878
            
            
            
            77,069
            
            
            
            (5,898
            )Increase
      in accounts payable and accrued liabilities
            
            
            887,447
            
            
            
            538,894
            
            
            
            1,302,010Net
      cash used in operating activities
            
            
            (448,392
            )
            
            
            (17,118
            )
            
            
            (308,616
            )Cash
      flows from investing activities:Cash
      placed in Trust
            
            
            41,026
            
            
            
            —
            
            
            
            (81,078,273
            )Net
      cash used in investing activities
            
            
            41,026
            
            
            
            —
            
            
            
            (81,078,273
            )Cash
      flows from financing activities:Proceeds
      from sale of shares of common stock to Initial
Stockholders
            
            
            —
            
            
            
            —
            
            
            
            25,000Proceeds
      from sale of units to public
            
            
            —
            
            
            
            —
            
            
            
            82,040,000Proceeds
      from private placement of warrants
            
            
            —
            
            
            
            —
            
            
            
            2,100,000Proceeds
      from note payable to Initial Stockholder
            
            
            235,000
            
            
            
            —
            
            
            
            335,000Repayment
      of note payable to Initial Stockholder
            
            
            —
            
            
            
            —
            
            
            
            (100,000
            )Proceeds
      from sale of underwriters’ purchase option
            
            
            —
            
            
            
            —
            
            
            
            100Payment
      of  deferred offering costs
            
            
            —
            
            
            
            —
            
            
            
            (3,010,118
            )Net
      cash provided by financing activities
            
            
            235,000
            
            
            
            —
            
            
            
            81,389,982Net
      (decrease) increase in cash
            
            
            (172,366
            )
            
            
            (17,118
            )
            
            
            3,093Cash
      at beginning of period
            
            
            175,459
            
            
            
            465,373
            
            
            
            —Cash
      at end of period
            
            $
            3,093
            
            
            $
            448,255
            
            
            $
            3,093Supplemental
      disclosure of non cash financing activitiesAccrual
      of deferred underwriting fee
            
            $
            —
            
            
            $
            —
            
            
            $
            3,281,600


The accompanying notes are an integral
part of the condensed financial statements




4




CHINA
MEDIAEXPRESS HOLDINGS, INC. (f/k/a TM Entertainment and Media,
Inc.)


(A
CORPORATION IN THE DEVELOPMENT STAGE)


Notes
to Condensed Financial Statements (unaudited)





1.  Organization
and Business Operations/Going Concern Considerations





China MediaExpress Holdings, Inc.
(f/k/a TM Entertainment and Media, Inc.) (the “Company”) was incorporated in
Delaware on May 1, 2007 for the purpose of effecting a merger, capital stock
exchange, asset acquisition or other similar business combination with an
operating business in the entertainment, media, digital and communications
industry.





At September 30, 2009, the Company had
not yet commenced any operations. All activity through September 30, 2009
relates to the Company’s formation and the public offering (the “Offering”)
described below, and activities relating to identifying and evaluating
prospective acquisition candidates and is subject to the risks associated with
activities of development stage companies. The Company has selected December 31
as its fiscal year-end.





On
October 15, 2009, pursuant to the terms of a Share Exchange Agreement, dated as
of May 1, 2009, as amended on September 30, 2009 (“Share Exchange Agreement”),
China MediaExpress Holdings, Inc. (f/k/a TM Entertainment and Media, Inc.)
(“TM”) acquired all of the issued and outstanding capital stock of Hong Kong
Mandefu Holding Limited (“CME”) and as a result, CME became a direct
wholly-owned subsidiary of TM (the “Transaction”).  The acquisition
has been treated as a recapitalization of CME and a reverse
merger.  All filings subsequent to the September 30, 2009 Quarterly
Report on Form 10-Q will include those of CME.




CME,
through contractual arrangements with Fujian Fenzhong, an entity majority owned
by CME’S former majority shareholder, operates the largest television
advertising network on inter-city express buses in China.  While CME
has no direct equity ownership in Fujian Fenzhong, through the contractual
agreements CME receives the economic benefits of Fujian Fenzhong’s
operations.





Pursuant
to the Share Exchange Agreement, TM purchased 100% of the outstanding equity of
CME and issued 20.915 million newly issued shares of common stock and paid
$10.0 million in three year, no interest promissory notes.  In addition,
the former shareholders of CME may earn up to an additional 15.0 million shares
of common stock subject to the achievement of the following net income targets
for 2009, 2010 and 2011:


Year
            
            Net
      Income (RMB)
            
            Net
      Income (US$)(1)
            
            Shares2009
            
            287.0 million
            
            $42.0
      million
            
            1.0
      million2010
            
            570.0 million
            
            $83.5
      million
            
            7.0
      million2011(2)
            
            889.0 million
            
            $130.2
      million
            
            7.0
      million




In
connection with the approval of the Transaction at the October 15, 2009 Special
Meeting of Stockholders of TM, the stockholders of TM also approved (i) an
amendment to TM’s Amended and Restated Certificate of Incorporation to remove
the prohibition on the consummation of a Business Combination (as defined
therein) if holders of an aggregate of 30% or more in interest of the shares of
TM’s common stock issued in its initial public offering (“IPO Shares”) exercise
their conversion rights, (ii) to amend TM’s Amended and Restated Certificate of
Incorporation to remove the requirement that only holders of the IPO Shares
who vote against the Transaction (as defined below) may convert their IPO Shares
into cash; (iii)  to amend TM’s Amended and Restated Certificate of
Incorporation to change TM’s corporate name to “China MediaExpress
Holdings, Inc.,” delete certain provisions that related to TM as a blank check
company and create perpetual existence; (iv) to amend TM’s Amended and Restated
Certificate of Incorporation to increase the number of shares authorized for
issuance; and (v) to elect six persons to CME’s board of directors to serve for
the respective term of office of the class to which the nominee is elected and
until their successors are duly elected and qualified.  Proxies
relating to such Special Meeting of Stockholders were solicited pursuant to TM’s
Definitive Proxy Statement on Schedule 14A dated October 2, 2009 (the “TM
Definitive Proxy”).





5





The registration statement for the
Company (described in Note 4) was declared effective October 17, 2007. The
Company consummated the Offering on October 23, 2007, and received net proceeds
of $77,848,282, including $2,100,000 of proceeds from the private placement (the
“Private Placement”) sale of 2,100,000 insider warrants to the officers and
directors of the Company, and their affiliates.  The insider warrants
purchased by these individuals and their affiliates are identical to the
warrants underlying the Units sold in the Offering (see Note 4), except that the
insider warrants will be exercisable on a cashless basis and will not be
redeemable by the Company so long as they are still held by the purchasers or
their affiliates. The purchasers of the insider warrants have agreed that they
will not sell or transfer the insider warrants (except in certain cases) until
60 days after the consummation of the Company’s business combination. The sale
of the warrants to management will not result in the recognition of any
stock-based compensation expense because they were sold above fair market
value.





Going concern consideration – As
indicated in the accompanying financial statements, at September 30, 2009 the
Company had unrestricted cash of $3,093, and a note payable of $235,000 and
$1,302,010 of accounts payable and accrued liabilities. Additionally, the
Company has incurred and expects to incur additional significant costs in
pursuit of its acquisition plans which is in excess of its unrestricted cash
available at September 30, 2009





Through September 30, 2009 the Company
withdrew $1,500,000 of interest from the trust for operating expenses (excluding
$654,982 of interest earned and used to pay taxes). Since inception to September
30, 2009 the Company has incurred $3,202,109 of operating and interest expenses
(excluding taxes of $654,982) of which $1,302,010 was payable as of September
30, 2009. The Company had cash available at September 30, 2009 of $3,093 for
operating expenses. Therefore, at September 30, 2009, the Company has incurred
liabilities which exceed cash available. The Company expects to incur additional
significant costs in pursuit of its acquisition plans. The Company is seeking to
obtain deferrals of payables from its vendors, including its professional
advisors except for its independent accountants. In the event the Company is
unsuccessful in obtaining these deferrals, it may seek additional financing,
including loans from its Initial Stockholders. On May 4, 2009, Thoedore S.
Green, the Chairman, Co-CEO and interim CFO of the Company, loaned the Company
$200,000, and on July 1, 2009 an additional $35,000. These factors, among
others, raise substantial doubt about the Company’s ability to continue
operations as a going concern. The accompanying financial statements do not
include any adjustments that may result from the outcome of this
uncertainty.




6





2.  Summary
of Significant Accounting Policies





Basis of
Reporting





The accompanying unaudited condensed
financial statements have been prepared in accordance with generally accepted
accounting principles in the United Sates (“GAAP”) for interim financial
information and pursuant to the rules and regulations of the Securities and
Exchange Commission (the “SEC”). Accordingly, they do not include all the
information and footnotes required by GAAP for complete financial statements. In
the opinion of management, such statements include all adjustments (consisting
only of normal recurring items which are considered necessary for a fair
presentation of the financial position of China MediaExpress Holdings, Inc.
(f/k/a TM Entertainment and Media, Inc.) (the “Company”) and the results of
operations and cash flow for the periods presented). The results of operations
for the period ended September 30, 2009 are not necessarily indicative of the
operating results for the full year. It is suggested that these financial
statements be read in conjunction with the financial statements and related
disclosures for the period ended December 31, 2008 included in the Annual Report
of the Company on Form 10-K filed with the SEC on March 31, 2009. The Condensed
Balance Sheet at December 31, 2008 is derived from the December 31, 2008 audited
financial statements.





Cash and
cash equivalents





The
Company considers all highly liquid investments with maturities of three months
or less when purchased, to be cash equivalents.





Concentration
of Credit Risk





The
Company maintains cash in a bank deposit account which, at times, exceeds
federally insured (FDIC) limits. The Company has not experienced any losses on
this account. The Company’s Money Market account was guaranteed by the U.S.
Department of Treasury through September 18, 2009.





Net
(Loss) Income Per Share





Basic and
diluted net (loss) income per share is computed by dividing net (loss) income
applicable to common stockholders by the weighted average number of common
shares outstanding for the period.





Pro forma diluted EPS includes the
determinants of basic and diluted EPS plus to the extent dilutive, the
incremental number of shares of common stock to settle outstanding common stock
purchase warrants, as calculated using the treasury stock method. The 12,355,000
warrants outstanding for the period ended September 30, 2009 and 2008 were not
included in the computation of pro-forma dilutive loss per share because the net
effect would have been anti-dilutive.




7





Use of
Estimates





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





Fair
Value Measurements





The fair
values of the Company’s financial instruments reflect the estimates of amounts
that would be received from selling an asset in an orderly transaction between
market participants at the measurement date. The fair value estimates presented
in this report are based on information available to the Company as of September
30, 2009 and December 31, 2008.





In accordance with Statement of
Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS 157”)
(codified in FASB ASC Topic 820), the Company applies a fair value hierarchy
based on three levels of inputs, of which the first two are considered
observable and the last unobservable, that may be used to measure fair value.
The three levels are the following:




·
              Level
      1 – Quoted prices in active markets for identical assets or
      liabilities.·
              Level
      2 – Inputs other than Level 1 that are observable, either directly or
      indirectly, such as quoted prices for similar assets or liabilities,
      quoted prices in markets that are not active, or other inputs that are
      observable or can be corroborated by observable market data for
      substantially the full term of the assets or
  liabilities.·
              Level
      3 – Unobservable inputs that are supported by little or no market activity
      and that are significant to the fair value of the assets or
      liabilities.


The fair
value of cash and investments held in the trust account were estimated using
Level 1 inputs and approximates the fair value because of their nature and
respective duration.




Consideration
of Subsequent Events





The
Company evaluated all events and transactions occurring after September 30, 2009
through November 13, 2009, the date these condensed financial statements were
issued, to identify subsequent events which may need to be recognized or
non-recognizable events which would need to be disclosed. No recognizable events
were identified. See Note 12 for non-recognizable events identified for
disclosure.





Recently
Adopted Accounting Pronouncements





Noncontrolling Interest in Consolidated
Financial Statements – In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interest in Consolidated Financial Statements (“SFAS 160”)
(codified in Financial Accounting Standards (“FASB”) Accounting Standards
Codification (“ASC”) Topic 810.  SFAS 160 re-characterizes minority
interests in consolidated subsidiaries as non-controlling interests and requires
the classification of minority interests as a component of
equity.  Under SFAS 160, a change in control will be measured at fair
value, with any gain or loss recognized in earnings.  The effective
date for SFAS 160 is for annual periods beginning on or after December 15,
2008.  Early adoption and retroactive application of SFAS 160 to
fiscal years preceding the effective date are not permitted.  The
Company will evaluate the impact of SFAS 160 on the financial statements should
it complete a business acquisition within its required timeframe (prior to
October 24, 2009).





Business Combinations – In December
2007, FASB issued SFAS No. 141R, Business Combinations (“FASB 141R”). FASB 141R
replaces FASB Statement No. 141 Business Combinations but retains the
fundamental requirements in FASB 141. This statement defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. FASB 141R also requires that an acquirer recognize the assets
acquired, the liabilities assumed and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date.
In addition, this statement requires that the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the noncontrolling interest in the acquiree, at the full amounts of their
fair values. FASB 141R is applied prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply the standard before that date.  FASB 141R will be applied
prospectively for acquisitions beginning in 2009 or thereafter.




8





On April
1, 2009, the FASB issued FASB Staff Position (FSP) FAS 141(R) -1, Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies. This FSP provides additional guidance and disclosure
requirements regarding the recognition and measurement of contingent assets
acquired and contingent liabilities assumed in a business combination where the
fair value of the contingent assets and liabilities cannot be determined as of
the acquisition date. This FSP is effective for acquisitions occurring after
January 1, 2009. The adoption of this FSP did not have any impact on the
Company, and its future impact will be dependent upon the specific terms of
future business combinations, if any.





On April
9, 2009, the FASB simultaneously issued the following three FSPs:




·
              FSP
      FAS 157-4, Determining Fair Value When the Volume and Level of Activity
      for the Asset or Liability Have Significantly Decreased and Identifying
      Transactions That Are Not Orderly which is codified in FASB ASC Topics
      820-10-35-51 and 820-10-50-2, provides additional guidance to companies
      for determining fair values of financial instruments for which there is no
      active market or quoted prices may represent distressed transactions. The
      guidance includes a reaffirmation of the need to use judgment in certain
      circumstances.·
              FSP
      FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
      Instruments which is codified in FASB ASC Topic 825-10-50 , requires
      companies to provide additional fair value information for certain
      financial instruments in interim financial statements, similar to what is
      currently required to be disclosed on an annual basis.·
              FSP
      FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of
      Other-Than-Temporary Impairments which is codified in FASB ASC Topic
      320-10, amends the existing guidance regarding impairments for investments
      in debt securities. Specifically, it changes how companies determine if an
      impairment is considered to be other-than-temporary and the related
      accounting. This standard also provides for increased
      disclosures.





These
FSPs apply to both interim and annual periods and will be effective for the
Company beginning April 1, 2009. The Company has evaluated these standards and
believe they will have no impact on its financial condition and results of
operations.





In May
2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”) codified in
FASB ASC Topic 855-10-05. SFAS 165 establishes general standards of accounting
for and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. SFAS 165 sets
forth (1) The period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, (2) The
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements and (3) The
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. SFAS 165 is effective for interim or
annual financial periods ending after June 15, 2009. The Company adopted SFAS
165 and it had no impact on the financial statements except for disclosure of
consideration of subsequent events.




9





3.  Recent
Accounting Pronouncements, Not Effective





In June
2009, the FASB issued SFAS No. 166 “Accounting for Transfers of Financial
Assets—an amendment of FASB Statement No. 140” (“SFAS 166”) codified as FASB ASC
Topic 860. SFAS 166 improves the relevance, representational faithfulness, and
comparability of the information that a reporting entity provides in its
financial statements about a transfer of financial assets; the effects of a
transfer on its financial position, financial performance, and cash flows; and a
transferor’s continuing involvement, if any, in transferred financial assets.
SFAS 166 is effective as of the beginning of each reporting entity’s first
annual reporting period that begins after November 15, 2009, for interim periods
within that first annual reporting period and for interim and annual reporting
periods thereafter. The Company is evaluating the impact the adoption of SFAS
166 will have on its financial statements.





In June
2009, the FASB issued SFAS No. 167 “Amendments to FASB Interpretation No. 46(R)”
(“SFAS 167”) codified as FASB ASC Topic 810-10. SFAS 167 improves financial
reporting by enterprises involved with variable interest entities and to address
(1) the effects on certain provisions of FASB Interpretation No. 46 (revised
December 2003), “Consolidation of Variable Interest Entities”, as a result of
the elimination of the qualifying special-purpose entity concept in SFAS 166 and
(2) constituent concerns about the application of certain key provisions of
Interpretation 46(R), including those in which the accounting and disclosures
under the Interpretation do not always provide timely and useful information
about an enterprise’s involvement in a variable interest entity. SFAS 167 is
effective as of the beginning of each reporting entity’s first annual reporting
period that begins after November 15, 2009, for interim periods within that
first annual reporting period, and for interim and annual reporting periods
thereafter. The Company is evaluating the impact the adoption of SFAS 167 will
have on its financial statements.





On July
1, 2009, the Company adopted Accounting Standards Update (“ASU”) No.
2009-01, “Topic 105 - Generally Accepted Accounting Principles - amendments
based on Statement of Financial Accounting Standards No. 168 , “The FASB
Accounting Standards CodificationTM and the Hierarchy of Generally Accepted
Accounting Principles” (“ASU No. 2009-01”).  ASU No. 2009-01
re-defines authoritative US GAAP for nongovernmental entities to be only
comprised of the FASB Accounting Standards CodificationTM (“Codification”) and,
for SEC registrants, guidance issued by the SEC.  The Codification is
a reorganization and compilation of all then-existing authoritative US GAAP for
nongovernmental entities, except for guidance issued by the SEC.  The
Codification is amended to effect non-SEC changes to authoritative US
GAAP.  Adoption of ASU No. 2009-01 only changed the referencing
convention of US GAAP in  Notes to the Consolidated Financial
Statements.




4.  Initial
Public Offering





On October 17, 2007 the Company sold
10,255,000 Units in the Offering at a price of $8.00 per Unit, including
1,255,000 Units of their over-allotment option. Each Unit consists of one share
of the Company’s common stock and one redeemable common stock purchase Warrant.
Each Warrant will entitle the holder to purchase from the Company one share of
common stock at an exercise price of $5.50 commencing on the later of the
completion of a Business Combination and one year from the effective date of the
Offering (October 17, 2007) and expiring four years from the effective date of
the Offering. The Company may redeem the Warrants, at a price of $.01 per
Warrant upon 30 days’ notice, while the Warrants are exercisable only in the
event that the last sale price of the common stock is at least $11.50 per share
for any 20 trading days within a 30 trading day period ending on the third day
prior to the date on which notice of redemption is given. In accordance with the
warrant agreement relating to the Warrants sold and issued in the Offering, the
Company is only required to use its best efforts to maintain the effectiveness
of the registration statement covering the Warrants. The Company will not be
obligated to deliver securities, and there are no contractual penalties for
failure to deliver securities, if a registration statement is not effective at
the time of exercise. Additionally, in the event that a registration is not
effective at the time of exercise, the holder of such Warrant will not be
entitled to exercise such Warrant and in no event (whether in the case of a
registration statement not being effective or otherwise) will the Company be
required to net cash settle the warrant exercise. Consequently, the Warrants may
expire unexercised, unredeemed and worthless.




10





The Company sold to Pali Capital, Inc.
(“Pali”), as representatives of the underwriters, for $100, an option to
purchase up to a total of 700,000 Units at $10.00 per Unit. The Units issuable
upon the exercise of this option are identical to those sold  in the
Offering. This option is exercisable at $10.00 per Unit, and may be exercised on
a cashless basis, commencing on the later of the consummation of a Business
Combination and one year from the date of the effectiveness of the Offering and
expiring five years from the date of the effectiveness of the Offering. The
estimated fair value of this option is approximately $2,207,000, $3.15 per Unit,
using a Black-Scholes option-pricing model. The fair value of the option granted
is estimated as of the date of the grant using the following assumptions: (1)
expected volatility of 45.2%, (2) risk-free discount rate of 4.95%, (3) expected
life of five years and (4) dividend rate of zero. The volatility is based on the
average five year daily volatility of the 20 smallest (by market capitalization)
media companies in the Russell 2000 Index.  Although an expected life
of five years was used in the calculation, if the Company does not consummate a
Business Combination within the prescribed time period and automatically
dissolves and subsequently liquidates the trust account, the option will become
worthless.




11


5.  Related
Party Transactions





The Company may occupy office space
provided by the Initial Stockholders, or an affiliate of one of the Initial
Stockholders, or a third party. The Initial Stockholders agreed that, until the
Company consummates a Business Combination, it will make such office space, as
well as certain office and secretarial services, available to the Company, as
may be required by the Company from time to time. The Company has agreed that it
will pay up to $7,500 per month for such services commencing on the effective
date of the Offering. However, such Initial Stockholders have elected to receive
$6,400 per month instead. For the nine months ended September 30, 2009, the
Company has incurred $57,600 of expense relating to this agreement, which is
included in formation and operating expenses in the accompanying Statements of
Operations, which was payable as of September 30, 2009.  For the
period from May 1, 2007 (inception) through September 30, 2009 the Company has
incurred $150,297 of expense relating to this agreement, which is included in
formation and operating expenses in the accompanying Statement of Operations, of
which $102,400 was payable as of September 30, 2009.





Pursuant to letter agreements, which
the Initial Stockholders have entered into with the Company and the
underwriters, the Initial Stockholders waived their right to receive
distributions with respect to their initial shares upon the Company’s
liquidation.





The Company’s officers and directors
purchased a total of 2,100,000 Warrants (“Insider Warrants”) at $1.00 per
Warrant (for an aggregate purchase price of $2,100,000) concurrently with the
consummation of the Offering pursuant to a private placement agreement with the
Company. All of the proceeds received from these initial purchases were placed
in the Trust Account. The Insider Warrants are identical to the Warrants
underlying the Units included in the Offering except that the Insider Warrants
may not be called for redemption and the Insider Warrants are exercisable on a
“cashless basis,” at the holder’s option, so long as such securities are held by
such purchaser or his affiliates. Furthermore, the purchasers have agreed that
the Insider Warrants will not be sold or transferred by them, except for estate
planning purposes, until after the Company has completed a Business Combination.
The sale of the warrants to management did not result in the recognition of any
stock-based compensation expense because they were sold above fair market value.
The holder of these Insider Warrants will not have any right to any liquidation
distributions with respect to shares underlying these warrants if the Company
fails to consummate a Business Combination, in which event these warrants will
expire worthless.





The Initial Stockholders and the
holders of the Insider Warrants (or underlying securities) will be entitled to
registration rights with respect to their initial shares or Insider Warrants (or
underlying securities) pursuant to an agreement signed  on the date of
the Offering. The holders of the majority of these securities may elect to
exercise these registration rights with respect to such securities at any time
after the Company consummates a Business Combination. The holders have certain
“piggy-back registration rights” with respect to registration statements filed
after the Company’s consummation of a Business Combination. The Insider Warrants
may be exercisable for unregistered shares of common stock even if no
registration relating to the common stock issuable upon exercise of the warrants
is effective and current.





12


6.   Note
Payable




On May 4,
2009, Theodore S. Green, the Chairman and Co-CEO and interim CFO and initial
stockholder of the Company,  loaned the Company $200,000 (the “Loan”)
as evidenced by a promissory note issued by the Company (the “Note”). On July 1,
2009, Mr. Green loaned the Company an additional $35,000. Mr. Green may lend the
Company up to an additional $65,000 in his discretion (see Note 10). The
principal balance of the Note outstanding plus accrued interest was repaid on
October 16, 2009. The principal balance of the Note bears interest at a rate of
10% per year, compounded semiannually.  The proceeds of the loans were
used to fund certain expenses incurred in connection with the proposed
transaction with CME and the balance for working capital.




7.
Commitments and contingencies





The
Company paid the underwriters in the Offering an underwriting discount of 7% of
the gross proceeds of the Offering. However, the underwriters have agreed that
4% of the gross proceeds will be held in the Trust Account and will not be
payable unless and until the Company completes a Business
Combination.





8.  Income
Taxes





Deferred income tax assets and
liabilities are computed for differences between the financial statements and
tax basis of assets and liabilities that will result in future taxable or
deductible amounts and are based on enacted tax laws and rates applicable to the
periods in which the differences are expected to effect taxable income.
Valuation allowances are established when necessary to reduce deferred income
tax assets to the amount expected to be realized.





Significant
components of the Company’s deferred tax assets are as follows:





September
      30,
              2009
            
            
            December
      31,
              2008(unaudited)Deferred  tax
      benefit
            
            $
            1,710,000
            
            
            $
            1,020,000Less:
      valuation allowance
            
            
            (1,710,000
            )
            
            
            (1,020,000
            )Total
            
            $
            -
            
            
            $
            -





The Company is considered in the
development stage for income tax reporting purposes. Federal income tax
regulations require that the Company defer certain expenses for tax purposes.
Therefore, the Company has recorded a deferred income tax asset of $1,710,000
for deferred expenses. The Company believes that it is not more likely than not
that it will be able to realize this deferred tax asset in the future and,
therefore, it has provided a valuation allowance against this deferred tax
asset.





The effective tax rate differs from the
statutory rate of 34% due to state and local taxes and deferred start up costs,
an increase in the valuation allowance and permanent differences relating to tax
free interest income.





The Company has adopted the provisions
of the Financial Accounting Standards Board (“FASB”) Interpretation (FIN) No.
48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB
Statement No. 109. FIN 48 contains a two-step approach to recognizing and
measuring uncertain tax positions accounted for in accordance with SFAS No. 109,
Accounting for Income Taxes. The first step is to evaluate the tax position for
recognition by determining if the weight of available evidence indicates it is
more likely than not that the position will be sustained on audit, including
resolution of related appeals or litigation processes, if any. The second step
is to measure the tax benefit as the largest amount which is more than 50%
likely of being realized upon ultimate settlement. The Company considers many
factors when evaluating and estimating its tax positions and tax benefits, which
may require periodic adjustments and which may not accurately anticipate actual
outcomes. Accordingly, the Company reports a liability for unrecognized tax
benefits resulting from the uncertain tax positions taken or expected to be
taken in a tax return and recognizes interest and penalties, if any, related to
uncertain tax positions in income tax expense. The Company intends to classify
any future expense for income tax related interest and penalties as component of
tax expense. The adoption of FIN 48 had no impact on the Company’s financial
position.




13





9.  Common
Stock Subject to Possible Redemption





As of September 30, 2009 the Company
was prohibited from proceeding with a Business Combination if Public
Stockholders owning 30% or more of the shares sold in the Offering vote against
the Business Combination and exercise their redemption
rights.  Accordingly, the Company was only permitted to complete a
Business Combination only if stockholders owning less than 29.99% of the shares
sold in this Offering exercise their redemption rights.  If this
occurred, the Company would be required to redeem for cash up to 29.99% of the
10,255,000 shares of common stock sold in the Offering, or 3,075,475 shares of
common stock, at an initial per-share redemption price of $7.90 (plus a portion
of the interest earned on the trust account, but net of (i) taxes payable on
interest earned and (ii) up to $1,500,000 of interest income released to the
Company to fund its working capital), which includes $0.32 per share of deferred
underwriting discount and commissions.





The actual per-share redemption price
will be equal to:




·
              the
      initial amount in the trust account which includes the amount attributable
      to deferred underwriting discounts and commissions and including all
      accrued interest (less taxes payable and up to $1,500,000 of interest
      income released to the Company to fund its working capital), as of two
      business days prior to the proposed consummation of the Business
      Combination, divided by·
              the
      number of shares of common stock sold in the
  Offering.




The dissenting stockholders will
receive their proportionate share of the deferred underwriting discounts and
commissions and the underwriters will be paid the full amount of the deferred
underwriting fees at the time of the consummation of the initial business
combination. The Company will be responsible for such payments to both the
converting stockholders and underwriters.





As
discussed in Note 1, certain restrictions on exercising conversion rights were
removed.  Holders of 9,602,587 shares exercised their conversion
rights and $ 75,920,089 were returned.




10.   Preferred
Stock





The Company is authorized to issue
1,000,000 shares of preferred stock with such designations, voting and other
rights and preferences as may be determined from time to time by the Board of
Directors.




14





The agreement with the underwriters
prohibits the Company, prior to a Business Combination, from issuing preferred
stock which participates in the proceeds of the Trust Account or which votes as
a class with the Common Stock on a Business Combination.





11.   Acquisition




On
May 1, 2009, the Company and the shareholders of privately-held Hong Kong
Mandefu Holdings Limited (d/b/a China MediaExpress) (“CME”) entered into a
definitive share exchange agreement whereby the Company will acquire 100% of the
outstanding equity of CME, subject to approval of  the Company’
stockholders. Upon the closing of the transaction, which is anticipated in the
fourth quarter of 2009, the Company will change its name to China MediaExpress
Holdings, Inc.




Under the
terms of the transaction as amended on September 30, 2009, the CME’s
shareholders will receive 20,915,000  newly issued shares of the
Company’s common stock and $10.0 million in notes payable upon the closing of
the transaction. CME shareholders may earn up to an additional 15.0 million
shares of the Company’s common stock, subject to the achievement of the
following net income targets for 2009 - 2011:




Year
            
            Net
      Income (RMB)
            
            Net
      Income (US$)1
            
            Shares2009
            
            287.0
      million
            
            $42.0
      million
            
            1.0
      million2010
            
            570.0
      million
            
            $83.5
      million
            
            7.0
      million2011
            
            889.0
      million
            
            $130.2
      million
            
            7.0
      million




(1) 
Based on exchange rate of 6.83 RMB/USD.




In
addition, CME shareholders are entitled to receive up to $20.9 million of the
cash proceeds from the exercise of the Company’s publicly held common stock
purchase warrants.




CME
generates revenue by selling advertisements on its network of television
displays installed on express buses originating in nine of China’s regions,
including the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin
and Chongqing and eight provinces, namely Guangdong, Jiangsu, Fujian, Sichuan,
Hubei, Anhui, Hebei and Shandong.




The
transaction will be accounted for as a reverse acquisition in which CME is the
accounting acquirer, equivalent to a recapitalization. The net monetary assets
of the Company will be recorded as of the closing date of the transaction at
their respective historical costs, which is considered to be the equivalent of
fair value. No goodwill or intangible assets will be recorded as a result of the
transaction. The Company has filed a definitive proxy statement with the
Securities and Exchange Commission (the “SEC”) with respect to the proposed
transaction. Upon the approval by the SEC, the proxy statement was sent to
stockholders in connection with a meeting to approve of the proposed
transaction.




15




12.  Subsequent
Events





On
October 15, 2009 at a Special Meeting of stockholders of the Company the
following were approved:


·
              Amended
      and Restated Certificate of Incorporation to remove the prohibition on the
      consummation of a Business Combination if holders of an aggregate of 30%
      or more in interest of the shares of our common stock issued in our
      initial public offering (“IPO Shares”) exercise their conversion
      rights;·
              Amended
      and Restated Certificate of Incorporation to remove the requirement that
      only holders of the IPO Shares who vote against the Transaction (as
      defined below) may convert their IPO Shares into cash;·
              Approved
      the purchase by TM of CME pursuant to the Share Exchange Agreement and the
      transactions contemplated thereby;·
              Approved
      the issuance of shares of TM Common Stock pursuant to the Share Exchange
      Agreement to the Sellers (whereby the number of shares of TM Common Stock
      that will be issued to the Sellers is 20.915 million and up to an
      additional 15.0 million shares if certain net income targets are
      met;·
              Amended
      and Restated Certificate of Incorporation to change TM’s corporate name to
      “China MediaExpress Holdings, Inc.,” increase the number of shares
      authorized for issuance, delete certain provisions that relate to us as a
      blank check company and create perpetual existence;·
              Amended
      and Restated Certificate of Incorporation to increase the number of shares
      authorized for issuance;·
              Elected
      six persons to TM’s board of directors to serve for the respective term of
      office of the class to which the nominee is elected and until their
      successors are duly elected and qualified.
                
                Following
      the closing of the Transaction, Pali Capital waived its deferred
      underwriting fee of $3,281,600. The Trustee liquidated the Trust Fund
      paying all shareholders that requested to exercise their conversion rights
      and the balance of the Trust was paid to the Company. The Company paid all
      transaction expenses and other outstanding liabilities including the Note
      Payable to Mr. Green of $235,000 plus accrued interest.
                
                On
      November 6, 2009 the Company repurchased and retired a total of 1.9
      million of its publicly-traded warrants in a private transaction, for an
      aggregate purchase price of $950,000 ($0.50 per warrant). The repurchase
      of these warrants, which represent approximately 19% of all of CME’s
      publicly-traded warrants, was made pursuant to a warrant repurchase
      agreement dated October 12, 2009, which was amended on November 1, 2009.
      All of the terms of the remaining publicly-traded warrants remain the
      same.




16




ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS




The
following discussion should be read in conjunction with the condensed financial
statements and footnotes thereto contained in this report.




Forward
Looking Statements




This
quarterly report on Form 10-Q, and the information incorporated by reference in
it, include “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933 (the “Securities Act”), as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). The forward-looking statements include, but are not limited to
statements regarding the Company’s expectations, hopes, beliefs, intentions or
strategies regarding the future. In addition, any statements that refer to
projections, forecasts or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,”
“expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,”
“project,” “should,” “would” and similar expressions may identify
forward-looking statements, but the absence of these words does not mean that a
statement is not forward-looking. Forward-looking statements in this report may
include, for example, statements about the Company’s:




·
            Ability
      to complete a combination with one or more target
    businesses;




·
            Success
      in retaining or recruiting, or changes required in, our management or
      directors following a business
combination;




·
            Potential
      inability to obtain additional financing to complete a business
      combination;




·
            Limited
      pool of prospective target
businesses;




·
            Potential
      change in control if we acquire one of more target businesses for
      stock;




·
            Public
      securities’ limited liquidity and
trading;




·
            The
      delisting of our securities from the American Stock Exchange or an
      inability to have our securities listed on the American Stock Exchange
      following a business combination;




·
            Use
      of proceeds not in trust or available to us from interest income on the
      trust account of the Company (“Trust Account”) balance;
  or




·
            Financial
      performance.




The
forward-looking statements contained or incorporated by reference in this
quarterly report on Form 10-Q are based on our current expectation and beliefs
concerning future developments and their potential effects on us and speak only
as of the date of such statements. There can be no assurance that future
developments affecting us will be those that we have anticipated. These
forward-looking statements involve a number of risks, uncertainties (some of
which are beyond our control) or other assumptions that may cause actual results
or performance to be materially different from those expressed or implied by
these forward-looking statements. These risks and uncertainties include, but are
not limited to, those factors described under the heading “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2008. Should one
or more of these risks or uncertainties materialize, or should any of our
assumptions prove incorrect, actual results may vary in material respects from
those projected in these forward-looking statements. We undertake no obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except as may be required under
applicable securities laws.




17




References
in this report as to “we,” “us” or “our Company” refer to China MediaExpress
Holdings, Inc. (f/k/a TM Entertainment and Media, Inc.) References to “public
stockholders” refer to holders of shares of common stock, $0.001 par value
(“Common Stock”), sold as part of the units in our initial public offering,
including any of our stockholders existing prior to our initial public offering
to the extent that they purchased or acquired such shares.




Overview




We were
formed under the laws of the State of Delaware on May 1, 2007 to serve as a
vehicle to effect a merger, capital stock exchange, asset acquisition or other
similar business combination with an operating business in the entertainment,
media and communication industries. We intend to utilize cash derived from the
proceeds of our initial public offering, our capital stock, debt or a
combination of cash, capital stock and debt, in effecting a business
combination.




On
October 17, 2007, our initial public offering of 9,000,000 units at $8.00
per unit was declared effective and we sold an additional aggregate 1,255,000
units pursuant to the underwriters’ over-allotment option of the initial public
offering. Simultaneously with the consummation of our initial public offering we
sold an aggregate of 2,100,000 insider warrants to certain initial shareholders
including Theodore S. Green, Malcolm Bird, Jonathan F. Miller and the John W.
Hyde Living Trust, at a price of $1.00 per warrant, for an aggregate price of
$2,100,000. The total gross proceeds from the initial public offering, excluding
the warrants sold on a private placement basis but including the over-allotment,
amounted to $82,040,000. After the payment of offering expenses, inclusive of
the deferred underwriting fees, the net proceeds to us amounted to
$75,748,282.Each unit consists of one share of the Company’s common stock,
$0.001 par value, and one redeemable common stock purchase warrant. Each warrant
entitles the holder to purchase from us one share of common stock at an exercise
price of $5.50 commencing the later of the completion of an initial business
combination or one year from the effective date of the initial public offering
(October 17, 2008) and expiring four years from the effective date of the
initial public offering (October 17, 2011). Accordingly, the warrants are
currently exercisable by their terms. However, there is not currently an
effective registration statement with respect to the exercise of such warrants
and accordingly the warrants could not be exercised.




In
connection with our initial public offering, we issued an option, for $100, to
the representatives of the underwriters in our initial public offering, to
purchase 700,000 units. This option is exercisable at $10.00 per unit, and may
be exercised on a cashless basis, commencing on the later of the consummation of
a business combination and one year from the date of our initial public offering
and expiring five years from the date of our initial public offering. The option
and the 700,000 units, the 700,000 shares of common stock and the 700,000
warrants underlying such units, and the 700,000 shares of common stock
underlying such warrants, have been deemed compensation by the NASD and are
therefore subject to a 180-day lock-up pursuant to Rule 2710(g)(1) of the
NASD Conduct Rules. The underwriters will not sell, transfer, assign, pledge, or
hypothecate this option or the securities underlying this option, nor will they
engage in any hedging, short sale, derivative, put, or call transaction that
would result in the effective economic disposition of this option or the
underlying securities for a period of 360 days from the effective date of
our initial public offering.




We
estimate that the value of the representative’s unit purchase option is
approximately $2,207,000 using a Black-Scholes option pricing model. The fair
value of the representative’s unit purchase option is estimated as of the date
of the grant using the following assumptions: (1) expected volatility of 45.2%,
(2) risk-free discount rate of 4.95%, (3) contractual life of five
years and (4) dividend rate of zero. Additionally, the option may not be
sold, transferred, assigned, pledged or hypothecated for a one-year period
(including the foregoing 180-day period) following the date of our initial
public offering except to any underwriter and selected dealers participating in
the offering and their bona fide officers or partners. Although the purchase
option and its underlying securities have been registered under the registration
statement of which our initial public offering forms a part, the option grants
to holders demand and “piggy back” rights for periods of five and seven years,
respectively, from the date of our initial public offering with respect to the
registration under the Securities Act of the securities directly and indirectly
issuable upon exercise of the option. We will bear all fees and expenses
attendant to registering the securities, other than underwriting commissions
which will be paid for by the holders themselves. The exercise price and number
of units issuable upon exercise of the option may be adjusted in certain
circumstances including in the event of a stock dividend, or our
recapitalization, reorganization, merger or consolidation. However, the option
will not be adjusted for issuances of common stock at a price below its exercise
price.




18




Since our
initial public offering, we have been actively searching for a suitable business
combination candidate. We have met with service professionals and other
intermediaries to discuss our company, the background of our management and our
combination preferences. In the course of these discussions, we have also spent
time explaining the capital structure of the initial public offering, the
combination approval process and the timeline within which we must either enter
into a letter of intent or definitive agreement for a business combination, or
return the proceeds of the initial public offering held in the trust account to
investors.




We are
not presently engaged in, and will not engage in, any substantive commercial
business until we consummate an initial transaction. We intend to utilize cash
derived from the proceeds of our initial public offering, the private placement,
our capital stock, debt or a combination of cash, capital stock and debt, in
effecting an initial transaction. The issuance of additional shares of our
capital stock:




·
            may
      significantly reduce the equity interest of our current
      stockholders;




·
            may
      subordinate the rights of holders of common stock if preferred stock is
      issued with rights senior to those afforded to our common
      stock;




·
            may
      cause a change in control if a substantial number of our shares of common
      stock or preferred stock are issued, which may affect, among other things,
      our ability to use our net operating loss carry forwards, if any, and most
      likely also result in the resignation or removal of one or more of our
      present officers and directors; and




·
            could
      enhance or adversely affect prevailing market prices for our
      securities.




Similarly,
if we issued debt securities, it could result in:




·
            default
      and foreclosure on our assets, if our operating revenues after an initial
      transaction were insufficient to pay our debt
  obligations;




·
            acceleration
      of our obligations to repay the indebtedness, even if we have made all
      principal and interest payments when due, if the debt security contained
      covenants that required the maintenance of certain financial ratios or
      reserves and any such covenant were breached without a waiver or
      renegotiation of that covenant;




·
            our
      immediate payment of all principal and accrued interest, if any, if the
      debt security was payable on demand;
and




·
            our
      inability to obtain additional financing, if necessary, if the debt
      security contained covenants restricting our ability to obtain additional
      financing while such security was
outstanding.




19




We
anticipate that we would only consummate such a financing simultaneously with
the consummation of a business combination, although nothing would preclude us
from raising more capital in anticipation of a possible business
combination.




We may
use all or substantially all of the proceeds held in trust other than the
deferred portion of the underwriter’s fee to acquire one or more target
businesses. We may not use all of the proceeds held in the trust account in
connection with a business combination, either because the consideration for the
business combination is less than the proceeds in trust or because we finance a
portion of the consideration with capital stock or debt securities that we can
issue. In that event, the proceeds held in the trust account as well as any
other net proceeds not expended will be used to finance the operations of the
target business or businesses. The operating businesses that we acquire in such
business combination must have, individually or collectively, a fair market
value equal to at least 80% of our net assets (all of our assets, including the
funds held in the trust account, less our liabilities) at the time of such
acquisition. If we consummate multiple business combinations that collectively
have a fair market value of 80% of our net assets, then we would require that
such transactions are consummated simultaneously.




If we are
unable to find a suitable target business by October 17, 2009, we will be
forced to liquidate. If we are forced to liquidate, the per share liquidation
amount may be less than the initial per unit offering price because of the
underwriting commissions and expenses related to our initial public offering and
because of the value of the warrants in the per unit offering price.
Additionally, if third parties make claims against us, the initial public
offering proceeds held in the trust account could be subject to those claims,
resulting in a further reduction to the per share liquidation price. Under
Delaware law, our stockholders who have received distributions from us may be
held liable for claims by third parties to the extent such claims have not been
paid by us. Furthermore, our warrants will expire worthless if we liquidate
before the completion of a business combination.




On
May 1, 2009, the Company and privately-held Hong Kong Mandefu Holdings
Limited (d/b/a China MediaExpress) (“CME”) entered into a definitive share
exchange agreement whereby the Company will acquire 100% of the outstanding
equity of CME, subject to approval of shareholder of the Company. Upon the
closing of the transaction, the Company changed its name to China MediaExpress
Holdings, Inc.




CME
generates revenue by selling advertisements on its network of television
displays installed on express buses originating in nine of China’s regions,
including the five municipalities of Beijing, Shanghai, Guangzhou,Tianjin and Chongqing and eight provinces, namely Guangdong, Jiangsu,
Fujian, Sichuan, Hubei,
Anhui, Hebei and Shandong.


On
October 15, 2009, pursuant to the terms of a Share Exchange Agreement, dated as
of May 1, 2009, as amended on September 30, 2009 (“Share Exchange Agreement”),
China MediaExpress Holdings, Inc. (f/k/a TM Entertainment and Media, Inc.)
(“TM”) acquired all of the issued and outstanding capital stock of Hong Kong
Mandefu Holding Limited (“CME”) and as a result, CME became a direct
wholly-owned subsidiary of TM (the “Transaction”).  The acquisition
has been treated as a recapitalization of CME and a reverse
merger.  All filings subsequent to the September 30, 2009 Quarterly
Report on Form 10-Q will include those of CME.




CME,
through contractual arrangements with Fujian Fenzhong, an entity majority owned
by CME’S former majority shareholder, operates the largest television
advertising network on inter-city express buses in China.  While CME
has no direct equity ownership in Fujian Fenzhong, through the contractual
agreements CME receives the economic benefits of Fujian Fenzhong’s
operations.




20





Pursuant
to the Share Exchange Agreement, TM purchased 100% of the outstanding equity of
CME and issued 20.915 million newly issued shares of common stock and paid
$10.0 million in three year, no interest promissory notes.  In addition,
the former shareholders of CME may earn up to an additional 15.0 million shares
of common stock subject to the achievement of the following net income targets
for 2009, 2010 and 2011:


Year
            
            Net
      Income (RMB)
            
            Net
      Income (US$)(1)
            
            Shares2009
            
            287.0 million
            
            $42.0
      million
            
            1.0
      million2010
            
            570.0 million
            
            $83.5
      million
            
            7.0
      million2011
            
            889.0 million
            
            $130.2
      million
            
            7.0
      million




In
addition, CME shareholders are entitled to receive up to $20.9 million of
the cash proceeds from the exercise of the Company’s publicly held common stock
purchase warrants.





In
connection with the approval of the Transaction at the October 15, 2009 Special
Meeting of Stockholders of TM, the stockholders of TM also approved (i) an
amendment to TM’s Amended and Restated Certificate of Incorporation to remove
the prohibition on the consummation of a Business Combination (as defined
therein) if holders of an aggregate of 30% or more in interest of the shares of
TM’s common stock issued in its initial public offering (“IPO Shares”) exercise
their conversion rights, (ii) to amend TM’s Amended and Restated Certificate of
Incorporation to remove the requirement that only holders of the IPO Shares
who vote against the Transaction (as defined below) may convert their IPO Shares
into cash; (iii)  to amend TM’s Amended and Restated Certificate of
Incorporation to change TM’s corporate name to “China MediaExpress
Holdings, Inc.,” delete certain provisions that related to TM as a blank check
company and create perpetual existence; (iv) to amend TM’s Amended and Restated
Certificate of Incorporation to increase the number of shares authorized for
issuance; and (v) to elect six persons to CME’s board of directors to serve for
the respective term of office of the class to which the nominee is elected and
until their successors are duly elected and qualified.  Proxies
relating to such Special Meeting of Stockholders were solicited pursuant to TM’s
Definitive Proxy Statement on Schedule 14A dated October 2, 2009.




Liquidity
and Capital Resources




$80,978,800
of the net proceeds of our initial public offering, over-allotment exercise,
private sale of warrants, and a portion of the underwriters’ discounts and
expense allowance were deposited in trust, with the remaining net proceeds being
placed in our operating account. Since inception, we used the interest income
earned on the trust proceeds of $1,500,000 to identify, evaluate and negotiate
with prospective acquisition candidates as well as cover our ongoing operating
expenses until a transaction is approved by our shareholders or the trust funds
are returned to them.




We will
use substantially all of the net proceeds of the initial public offering to
acquire a target business, including identifying and evaluating prospective
acquisition candidates, selecting the target business, and structuring,
negotiating and consummating the business combination. To the extent that our
capital stock is used in whole or in part as consideration to effect a business
combination, the proceeds held in the trust fund as well as any other net
proceeds not expended will be used to finance the operations of the target
business. We may need to raise additional funds through a private or public
offering of debt or equity securities if such funds are required to consummate a
business combination that is presented to us. We would only consummate such a
financing simultaneously with the consummation of a business combination. There
can be no assurance, however, that adequate financing will be available at all
or upon terms and conditions acceptable to us. At September 30, 2009, we
had cash outside of the trust fund of $3,093 and other current assets of $5,898
and total liabilities of $4,818,610 (including $3,281,600 of deferred
underwriting fees). Therefore, at September 30, 2009, the Company has
incurred liabilities, which exceed cash available. The Company is seeking to
obtain deferrals of payables from its vendors, including its professional
advisors, except its independent accountants.




21




On
May 4, Theodore S. Green, the Chairman and Co-CEO and interim CFO of the
Company, loaned the Company $200,000 (the “Loan”) as evidenced by a promissory
note issued by the Company (the “Note”). On July 1, 2009 Mr. Green
loaned the Company an additional $35,000. Mr. Green may lend the Company up
to an additional $65,000 in his discretion. The principal balance of the Note
outstanding is payable on the earlier of (i) October 17, 2009 and
(ii) the date on which the Company consummates a business combination as
contemplated by its prospectus for its initial public offering. The principal
balance of the Note bears interest at a rate of 10% per year, compounded
semiannually. The proceeds of the loans were used to fund certain expenses
incurred in connection with the proposed transaction with CME and the balance
for working capital.




Upon the
failure of the Company to repay the Note within 1 business day of when it is
due, Mr. Green may declare the entire amount due under the Note (including
interest) due and payable. Upon the filing of a voluntary bankruptcy by the
Company or an involuntary bankruptcy which is not dismissed within 60 days,
the entire amount due under the Note will automatically become due and
payable.




In
connection with the Loan, Mr. Green and Mr. Malcolm Bird, a director
and Co-CEO of the Company, have entered into an agreement pursuant to which
Mr. Bird has agreed to reimburse Mr. Green for 7/18ths of the amount of the
Loan and corresponding interest thereon in the event the Company does not
consummate a business combination by October 17, 2009 and is
dissolve.




The
$3,281,600 of the funds attributable to the deferred underwriting discount and
commissions in connection with the offering and private placement will be
released to the underwriters upon completion of a business combination as such
term is defined in our prospectus filed on Form 424B4 on October 18,
2007 with the Securities and Exchange Commission.




Commencing
on October 17, 2007 we began incurring a fee of $6,400 per month for
certain administrative services. In addition, in 2007, one of our initial
stockholders loaned to us an aggregate of $100,000 for payment of offering
expenses on our behalf. This loan plus interest was repaid on December 12,
2007 from the proceeds of the initial public offering that were allocated to pay
offering expenses.




Going
      Concern




Going concern consideration – As
indicated in the accompanying financial statements, at September 30, 2009,
the Company had unrestricted cash of $3,093 and a note payable of $235,000 and
$1,302,010 in accounts payable and accrued liabilities. Additionally, the
Company has incurred and expects to incur additional significant costs in
pursuit of its acquisition plans. The Company’s Chairman of the Board and
Co-Chief Executive Officer, and the Company’s Co-Chief Executive Officer have
agreed that they will be liable under certain circumstances to ensure that the
proceeds in the Trust Account are not reduced by the claims of target businesses
or claims of vendors or other entities that are owed money by the Company for
services rendered or contracted for or products sold to the Company. However,
there can be no assurance that they will be able to satisfy those obligations.
Furthermore, they will not have any personal liability as to any claimed amounts
owed to a third party who executed a waiver.




22





As ofSeptember 30,
2009 the Company withdrew $1,500,000 of interest from the trust for operating
expenses (excluding $654,982 of interest earned and used to pay taxes). Since
inception to September 30, 2009 the Company has incurred $3,202,109 of operating
and interest expenses (excluding taxes of $654,982) of which $1,302,010 was
payable as of September 30, 2009. The Company had cash available at September
30, 2009 of $3,093 for operating expenses. Therefore, at September 30, 2009, the
Company has incurred liabilities which exceed cash available. The Company
expects to incur additional significant costs in pursuit of its acquisition
plans. The Company is seeking to obtain deferrals of payables from its vendors,
including its professional advisors except for its independent accountants. As
noted above on May
4, 2009, Theodore S. Green, the Chairman and Co-CEO and interim CFO of the
Company, loaned the Company $200,000, and on July 1, 2009, an additional
$35,000.These factors, among others, raise substantial doubt about the
Company’s ability to continue operations as a going concern. The accompanying
financial statements do not include any adjustments that may result from the
outcome of this uncertainty.




Results
      of Operations




We have neither engaged in any
operations nor generated any revenues to date, other than in connection with our
initial public offering. Our entire activity since inception has been to prepare
for and consummate our initial public offering and to identify and investigate
targets for a potential business combination. We will not generate any operating
revenues until we are successful consummating a business combination. We will
generate non-operating income in the form of interest income on cash and cash
equivalents from the funds held in our trust account which we invested mainly in
a New York Tax Free Money Market.




Net loss
for the three month period ended September 30, 2009 was $(538,510), excluding ($16,915)
reduction of interest income net of taxes, attributable to stockholders subject
to possible conversion, consisting of interest income
of  $9,368 earned predominantly on the trust account, offset by a
$65,770 provision for New York State, New York City, and Delaware Franchise and
Capital Taxes  and $482,109 of general and administrative expenses
(primarily attributable to $180,921 of due diligence and acquisition related
expenses, $23,000 of legal and accounting expenses, $25,036 of insurance
expense, $19,200  of fees for a monthly administrative services
agreement, $5,875 of interest expense, and approximately $4,500 of travel and
business expenses).




Net loss
for the nine month period ended September 30, 2009 was $(1,419,717) excluding ($12,304)
reduction of interest income net of taxes, attributable to stockholders subject
to possible conversion, consisting of interest income
of  $157,068 earned predominantly on the trust account, offset by a
$198,431 provision for New York State, New York City, and Delaware Franchise and
Capital Taxes  and $1,378,354 of general and administrative expenses
(primarily attributable to $729,000 of due diligence and acquisition related
expenses, $193,900 of legal and accounting expenses, $80,611 of insurance
expense, $57,600 of fees for a monthly administrative services agreement, $9,075
of interest expense and approximately $19,300 of travel and business
expenses).




For the period from May 1, 2007
(inception) to September 30, 2009, we had a net loss of $(1,604,728), excluding
$29,832 of interest income net of taxes, attributable to stockholders subject to
possible conversion, consisting of $2,264,103 of interest income earned
predominantly on the trust account, less $3,868,831 of formation and operating
expenses. The main components of the formation and operating expenses include
approximately $1,761,000 of due diligence and acquisition related expenses,
$660,170 of New York State, New York City and Delaware Capital and Franchise
Taxes, $126,500 of travel and business expense, and $551,900 of legal
and  accounting fees.




23




Interest
income in for the nine month period ended September 30, 2009, and fiscal 2008
and 2007 was primarily earned on the net proceeds from our initial public
offering which was placed in a trust account.




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.




Contractual
Obligations




We do not
have any long-term debt, capital lease obligations, operating lease obligations,
purchase obligations or other long-term liabilities.




Critical
Accounting Estimates




Our
discussion and analysis of our financial condition and results of operations are
based upon our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses. On an ongoing basis, we re-evaluate all of our estimates. We base our
estimates on 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 materially
differ from these estimates under different assumptions or conditions as
additional information becomes available in future periods.




Management
has discussed the development and selection of critical accounting estimates
with the Audit Committee of the Board of Directors and the Audit Committee has
reviewed our disclosure relating to critical accounting estimates in this
Quarterly Report on Form 10-Q. We believe the following sets forth the more
significant judgments and estimates used in the preparation of our consolidated
financial statements.




Recently
Adopted Accounting Pronouncements





Noncontrolling Interest in Consolidated
Financial Statements – In December 2007, the FASB issued SFAS No. 160,
Noncontrolling Interest in Consolidated Financial Statements (“SFAS 160”)
(codified in Financial Accounting Standards (“FASB”) Accounting Standards
Codification (“ASC”) Topic 810.  SFAS 160 re-characterizes minority
interests in consolidated subsidiaries as non-controlling interests and requires
the classification of minority interests as a component of
equity.  Under SFAS 160, a change in control will be measured at fair
value, with any gain or loss recognized in earnings.  The effective
date for SFAS 160 is for annual periods beginning on or after December 15,
2008.  Early adoption and retroactive application of SFAS 160 to
fiscal years preceding the effective date are not permitted.  The
Company will evaluate the impact of SFAS 160 on the financial statements should
it complete a business acquisition within its required timeframe (prior to
October 24, 2009).





Business Combinations – In December
2007, FASB issued SFAS No. 141R, Business Combinations (“FASB 141R”). FASB 141R
replaces FASB Statement No. 141 Business Combinations but retains the
fundamental requirements in FASB 141. This statement defines the acquirer as the
entity that obtains control of one or more businesses in the business
combination and establishes the acquisition date as the date that the acquirer
achieves control. FASB 141R also requires that an acquirer recognize the assets
acquired, the liabilities assumed and any noncontrolling interest in the
acquiree at the acquisition date, measured at their fair values as of that date.
In addition, this statement requires that the acquirer in a business combination
achieved in stages to recognize the identifiable assets and liabilities, as well
as the noncontrolling interest in the acquiree, at the full amounts of their
fair values. FASB 141R is applied prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008. An entity may not
apply the standard before that date.  FASB 141R will be applied
prospectively for acquisitions beginning in 2009 or thereafter.




24





On April
1, 2009, the FASB issued FASB Staff Position (FSP) FAS 141(R) -1, Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise
from Contingencies. This FSP provides additional guidance and disclosure
requirements regarding the recognition and measurement of contingent assets
acquired and contingent liabilities assumed in a business combination where the
fair value of the contingent assets and liabilities cannot be determined as of
the acquisition date. This FSP is effective for acquisitions occurring after
January 1, 2009. The adoption of this FSP did not have any impact on the
Company, and its future impact will be dependent upon the specific terms of
future business combinations, if any.





On April
9, 2009, the FASB simultaneously issued the following three FSPs:




·
              FSP
      FAS 157-4, Determining Fair Value When the Volume and Level of Activity
      for the Asset or Liability Have Significantly Decreased and Identifying
      Transactions That Are Not Orderly which is codified in FASB ASC Topics
      820-10-35-51 and 820-10-50-2, provides additional guidance to companies
      for determining fair values of financial instruments for which there is no
      active market or quoted prices may represent distressed transactions. The
      guidance includes a reaffirmation of the need to use judgment in certain
      circumstances.·
              FSP
      FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial
      Instruments which is codified in FASB ASC Topic 825-10-50 , requires
      companies to provide additional fair value information for certain
      financial instruments in interim financial statements, similar to what is
      currently required to be disclosed on an annual basis.·
              FSP
      FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of
      Other-Than-Temporary Impairments which is codified in FASB ASC Topic
      320-10, amends the existing guidance regarding impairments for investments
      in debt securities. Specifically, it changes how companies determine if an
      impairment is considered to be other-than-temporary and the related
      accounting. This standard also provides for increased
      disclosures.





These
FSPs apply to both interim and annual periods and will be effective for the
Company beginning April 1, 2009. The Company has evaluated these standards and
believe they will have no impact on its financial condition and results of
operations.





In May
2009, the FASB issued SFAS No. 165 “Subsequent Events” (“SFAS 165”) codified in
FASB ASC Topic 855-10-05. SFAS 165 establishes general standards of accounting
for and disclosure of events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. SFAS 165 sets
forth (1) The period after the balance sheet date during which management of a
reporting entity should evaluate events or transactions that may occur for
potential recognition or disclosure in the financial statements, (2) The
circumstances under which an entity should recognize events or transactions
occurring after the balance sheet date in its financial statements and (3) The
disclosures that an entity should make about events or transactions that
occurred after the balance sheet date. SFAS 165 is effective for interim or
annual financial periods ending after June 15, 2009. The Company adopted SFAS
165 and it had no impact on the financial statements except for disclosure of
consideration of subsequent events.




25




ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




Market
risk is a broad term for the risk of economic loss due to adverse changes in the
fair value of a financial instrument. These changes may be the result of various
factors, including interest rates, foreign exchange rates, commodity prices
and/or equity prices. Our exposure to market risk is limited to interest income
sensitivity with respect to the funds placed in the Trust Account. Since the
funds held in our Trust Account have been invested in only high-quality
commercial paper, municipal bonds, and municipal notes, including tax and
revenue authorization notes, tax anticipation notes, with maturities of
397 days or less and a dollar-weighted average portfolio maturity of
90 days or less, we are subject to market risk primarily through the effect
of changes in interest rates and the pricing of government securities. The
effect of other changes, such as foreign exchange rates, commodity prices and/or
equity prices, does not pose significant market risk to us.




ITEM
4T. CONTROLS AND PROCEDURES.




We
maintain “disclosure controls and procedures,” as such term is defined under
Exchange Act Rule 13a-15(e), that are designed to ensure that information
required to be disclosed in our Exchange Act reports is recorded, processed,
summarized, and reported within the time periods specified in the SEC’s rules
and forms, and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Principal Financial
Officer, as appropriate, to allow timely decisions regarding required
disclosures. In designing and evaluating the disclosure controls and procedures,
our management recognized that any controls and procedures, no matter how well
designed and operated, can provide only reasonable assurance of achieving the
desired control objectives and in reaching a reasonable level of assurance our
management necessarily was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures. We have carried
out an evaluation  as required by Rule 13a-15(d) under the supervision
and with the participation of our management, including our Chief Executive
Officer and Principal Financial Officer, of the effectiveness of the design and
operation of our disclosure controls and procedures as of September 30, 2009.
Based upon their evaluation and subject to the foregoing, the Chief Executive
Officer and Principal Financial Officer concluded that as of September 30, 2009
our disclosure controls and procedures were effective in ensuring that material
information relating to us, is made known to the Chief Executive Officer and
Principal Financial Officer by others within our company during the period in
which this report was being prepared.




There
were no changes in our internal controls over financial reporting identified in
connection with the evaluation that occurred during the quarter ended September
30, 2009 that has materially affected, or is reasonably likely to materially
affect, our internal controls over financial reporting.




26




PART
II




OTHER
INFORMATION




ITEM
1: LEGAL PROCEEDINGS




None.




ITEM
1A: RISK FACTORS




There
have been no material changes to the risk factors previously disclosed in our
Annual Report on Form 10-K for the year ended December 31, 2008 in response
to Item 1A. to Part 1 of Form 10-K.




ITEM
2: UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS




None




ITEM
3: DEFAULTS UPON SENIOR SECURITIES




Not
applicable.




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




Not
applicable.




ITEM
5: OTHER INFORMATION




Not
applicable.




ITEM
6: EXHIBITS




(a) Exhibits:




31.1
            Certification
      by Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
            Certification
      by Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
            Certification
      by Chief Executive Officers and Principal Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.




27




SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.


Dated:
      November 16, 2009CHINA
      MEDIAEXPRESS HOLDINGS, INC.
              (f/k/a
      TM Entertainment and Media, Inc.)By:
            
            /s/
      Cheng ZhengName:
      Cheng ZhengTitle:
      Chairman and Chief Executive Officer




28




EXHIBIT
INDEX





Exhibit
      No.
            
            Description31.1
            
            Certification
      by Chief Executive Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.31.2
            
            Certification
      by Principal Financial Officer pursuant to Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
            
            Certification
      by Chief Executive Officers and Principal Financial Officer pursuant to 18
      U.S.C. Section 1350, as adopted pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002.




29