MONTREAL, Quebec, May 20, 2004 (PRIMEZONE) -- China Xin Network Media Corp. (OTCBB: CXIN) released its quarterly filings for March 31, 2004.
CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED BALANCE SHEETS Unaudited March 31, 2004 ASSETS ----------- Current Assets: Cash $ 676 Sales Tax Receivable -- R&D Refundable Tax Credits 212,308 Total current assets 212,924 Fixed Assets 25,672 Goodwill 4,762,020 Total assets $ 5,000,616 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ -- Due to officers and employees 38,463 Loan payable -- Total current liabilities 38,463 Contingencies Stockholders' Equity: Common stock, $.001 par value; authorized 500,000,000 shares; 30,000,000 preferred issued and outstanding 337,865,401 shares and 140,395,401 shares, respectively 337,866 Paid-in capital deficiency 6,815,147 Accumulated deficit during development stage (2,190,860) Total stockholders' equity 4,962,153 Total liabilities and stockholders' equity $ 5,000,616 CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Unaudited For the Period For the Period Cumulative January 1, 2004 January 1, 2003 Oct. 19, 2000 March 31, 2004 March 31, 2003 March 31, 2004 --------------- --------------- -------------- Sales: Income $ -- $ -- $ 34,616 Expenses: Selling, general and administrative $ 50,002 $ 331,384 $ 2,225,476 Loss Before Provision for Income Taxes (50,002) (331,384) (2,190,860) Provision for Income Taxes Comprehensive Net (Loss) (50,002) (331,384) (2,190,860) Net Loss Per Common Share $ (0.00) (0.003) (0.006) Fully Diluted $ (0.00) (0.003) (0.006) Weighted Average Common Shares Outstanding 337,865,401 104,452,401 337,865,401 --------------- --------------- -------------- Fully Weighted Average Common Shares Outstanding 353,905,735 113,826,068 353,905,735 --------------- --------------- -------------- CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED INTERIM STATEMENTS OF STOCKHOLDERS' DEFICIENCY FOR THE PERIOD FROM OCTOBER 19, 2000 TO MARCH 31, 2004 Unaudited Accumulated Deficit Common Additional during the Stock Paid-in Development Stockholders' Shares Amount Capital Stage Deficiency ----------- -------- ---------- ----------- ---------- Balance at June 30, 2003 115,902,401 $115,903 $1,011,849 $(2,063,966) $ (936,214) ----------- -------- ---------- ----------- ---------- Loss for the Period July 1, 2003 to March 31, 2004 -- -- -- (126,894) (126,894) ----------- -------- ---------- ----------- ---------- Issuance of Common Stock for Debt & Services 121,963,000 121,963 969,792 -- 1,091,755 ----------- -------- ---------- ----------- ---------- Issuance of Common Stock for Acquisition of Bio- Tracking 100,000,000 100,000 4,833,506 -- 4,933,506 ----------- -------- ---------- ----------- ---------- 337,865,401 $337,866 $6,815,147 $(2,190,860) $4,962,153 ----------- -------- ---------- ----------- ---------- CHINA XIN NETWORK MEDIA CORPORATION AND SUBSIDIARY (A DEVELOPMENT STAGE COMPANY) CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS Unaudited For the Period ------------------------------------------- Jan. 1, 2004 Jan. 1, 2003 Oct. 19, 2000 Mar. 31, 2004 Mar. 31, 2003 Mar. 31, 2004 ------------- ------------- ------------- Cash Flows from Operating Activities: Net loss $ (50,002) $ (331,384) $(2,190,860) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization -- 15,675 -- (Increase) decrease in: R&D refundable tax credit -- -- (212,308) Sales tax receivable 6,388 7,860 -- Accrued expenses -- (4,875) -- Accrued expenses to related parties -- -- -- Accounts payable (302,872) 14,000 302,872 Prepaid and deposits -- 979 -- Amounts due to officers 135,505 38,334 38,463 Amounts due to officers and Employees -- 280,051 -- Loss on disposal of assets -- -- 121,153 Net cash and cash equivalents provided by (used in) operating activities (210,981) 21,090 (1,940,270) Cash Flows from Investing Activities: Purchase of Goodwill $(4,562,020) $ -- $(4,762,020) Purchase of Capital Assets -- (21,389) (25,672) Net Cash Used For Investing Activities $(4,562,020) $ (21,389) $(4,787,692) Cash Flows from Financing Activities: Write-off deficit to Paid-in Capital $ -- $ -- $ 139,877 Write-off comprehensive income to Paid Capital -- -- 10,807 Write-off stock subscription receivable -- -- 196,349 Decrease in short term loans -- -- -- (Decrease) in loans- related party (Decrease) Increase in loans payable (868,579) (643,892) -- Increase in capital stock 197,480 35,483 332,549 Increase in paid-in capital 5,439,716 608,409 6,048,996 Net Cash from Financing Activities 4,768,617 -- 6,728,578 Net (Decrease) Increase in Cash (4,384) (299) 616 Cash - Beginning of Period 5,000 469 -- Cash - End of Period 616 170 616 Supplemental Disclosure of Non-Cash Flow Information: Cash paid during the year for: Interest -- -- -- Income Taxes -- -- --
Reduction of Loan Outstanding
There were 100,000,000 restricted Shares issued on January 4, 2004 to complete The acquisition of Bio-Tracking. At which time a note for $868,569 was cancelled Which was issued as collateral until the shares were ready for delivery from the Transfer agent. Furthermore the shares for the Agreement of the settlement of Debts of CXN with 3884368 Canada Inc. were issued in January 2004.
Goodwill
In July 2001, the FASB issued Statement No. 141, Business Combinations. and No. 142, Goodwill and Other Intangible Assets. Statement No. 141 supercedes the previous accounting standard on business combinations, Accounting Principles Board Opinion No. 16. and requires that all business combinations initiated after June 30, 2001 must be accounted by the purchase method. Statement No. 141 also changes the requirements for recognizing assets as assets apart from goodwill in business combinations accounted for by the purchase method for which the date of the acquisition is July 1, 2001 or later. Under Statement No. 142, goodwill acquired in a business combination for which the acquisition date is after June 30, 2001, should not be amortized, but should be tested for impairment in accordance for the provisions of this accounting standard.
Goodwill is the result of the acquisition of Bio-Tracking Security Inc. by the registrant on December 2, 2003. The closing price of the shares traded on December 2, 2003 was $0.05. The Goodwill is calculated as the excess of the fairvalue of the acquisition (the purchase method) over its tangible assets.
The Company
CHINA XIN NETWORK MEDIA CORPORATION is a Florida-registered corporation. As previously reported in press releases dated November 26, 2003 and December 2, 2003, the registrant, has concluded the acquisition of Montreal (Canada) based Bio-Tracking Security Inc. (Bio-Tracking). Under the terms of the transaction, CXN acquires 100% of the outstanding shares of the Bio- Tracking, in exchange for 100,000,000 shares of CXN. The closing of the transaction occurred December 2, 2003, as a result of which Bio-Tracking is now a wholly owned subsidiary of CXN.
Capital Needs
CXN anticipates that it will be required to raise an additional $4 million to fund the current plan of growth and existing operations through June 30, 2005. The principal source of capital has been equity financing from investors and founders. Meeting the future financing requirements is dependent on access to equity capital markets. CXN may not be able to raise additional equity when required or may have to borrow on terms that may be dilutive to existing shareholders.
Results of Operations
Three Months Ended March 31, 2004 2003 % Change Sales General & Administrative $50,002 $331,384 -84.9%
CXN has worked diligently to reduce overhead and expenses while building shareholder value. As of March 31, 2004, Sales General and Administrative expenses were $50,002 versus $331,384 for the year-ago period. This represents a reduction of expenses of 84.9%.
Three Months Ended March 31, 2004 December 31, 2003 % Change Total Liabilities $38,463 $1,345,419 -97.1%
On March 31, 2004 the liabilities of the corporation were reduced 97.1%. The loan payable of $868,579 which represents security for the acquisition of Bio-Tracking was settled for the issuance of shares for the acquisition. As well, shares were issued to 3884368 Canada Inc. as per the agreement dated November 7, 2003 for the settling of debt.
The end result of these transactions, the Shareholders' equity of CXN has increased to $4,962,153 from a deficit of $896,051.
For the complete 10-QSB please go to www.sec.gov or www.bio-tracking.com