CURRENT BUSINESS OPERATIONS
Our Board of Directors has made the decision to terminate business operations in the digital media industry. As of June 30, 2012, we had no working capital but current liabilities exceeding current assets by $2,664,994 and an accumulated deficit of $28,641,040 due to the fact that we continued to incur losses over the past several years. Management took several certain actions to implement changes designed to improve our financial results and operating cash flows. The actions involved certain cost-saving initiatives and growing strategies, including: (a) reduction in headcount and corporate overhead expenses; and (b) development of e-commerce business. However, as of current date, management believes that these actions will not enable us to improve future profitability and cash flow and thus has made the decision to discontinue business operations. Therefore, management of the Company has terminated all business operations involving the digital media industry.
In the future, management intends to identify prospective individuals and/or companies with which to acquire or enter into a joint venture relationships regarding their respective business operations in order to enter new business industries. The analysis of new business opportunities will be undertaken by or under the supervision of the Company’s management. As of the date of this Annual Report, the Company has not entered into any definitive agreement with any party, nor have there been any specific discussions with any potential business combination candidate regarding business opportunities for the Company. The Company has unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, the Company will consider the following kinds of factors:
(a) Potential for growth, indicated by new technology, anticipated market expansion or new products;
(b) Competitive position as compared to other firms of similar size and experience within the industry segment as well as within the industry as a whole;
(c) Strength and diversity of management, either in place or scheduled for recruitment;
(d) Capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements or from other sources;
(e) The cost of participation by the Company as compared to the perceived tangible and intangible values and potentials;
(f) The extent to which the business opportunity can be advanced;
(g) The accessibility of required management expertise, personnel, raw materials, services, professional assistance and other required items; and
(h) Other relevant factors.
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