Xinhua C&D is presently primarily a book distribution enterprise.
Rise of Electronic Media/Shift. We had originally intended to help guide Xinhua
C&D through the modernization and growth of its systems and distribution
strategies. Realizing the large investment in real estate, equipment, fixed
assets requirements to achieve modernization and growth, as well as the shifting
of reading habits to a digital format and a dynamic and growing digital youth
(age 12-25) comprising over 50% of the population, our management, after very
careful consideration, effective May 31, 2006, revised our business focus to
instead concentrate on the growing opportunity in online content distribution,
co-publishing, and digital rights management. While executing this strategy, we
will continue to maximize our strategic position in the publishing industry by
utilizing the connections and channels we have established as a result of our
interest in Xinhua C&D.
http://www.sec.gov/Archives/edgar/data/1104904/000109230608000740/xinhuaform10ksb.txt
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