China Media1 Corp.
OTC Bulletin Board : CMDAE

China Media1 Corp.

June 05, 2006 16:30 ET

China Media1 Files 10-KSB for Fiscal 2005

IRVINE, CALIFORNIA--(CCNMatthews - June 5, 2006) - China Media1 Corp. (OTCBB:CMDAE) wishes to announce that the Company has filed its 10-KSB for year-ended 2005. The 10-QSB for the period ended March 31, 2006 has also been submitted to our auditors for review and will be filed with the Securities and Exchange Commission (SEC) as soon as it is ready. At that time, we can apply for removal of the "E" from our symbol. We would like to thank our loyal shareholders and the investment community's for their patience and support during this period.

One of the main reasons for our delay was a change in the reporting format. In this filing, we had to switch from reporting our revenue on a gross basis to a net basis. For the year 2005, we generated $1.4 million in revenue from the MTR (subway) contracts as reported in Note 10 of the financial statements. China operating costs resulted in a $582,898 loss, which was reported in our statement of operations. In North America, our operating loss for the whole year including all professional fees was $258,323, but loss the year was further compounded by the following non-cash accounting entries:

Discount on issuance of convertible promissory notes 77,435
Change in fair value of conversion feature of
promissory notes 408,076
Change in fair value of warrants 390,892

On a cash basis before Chuangrun's management fees:

Revenue from MTR Advertising $ 1,401,801
- Cost of Sales 142,550
- Sales Commission 210,270
- Rent 131,879
- North America Expenses 258,323

The officers have not taken a salary for the year, the figure would still be positive if we include that into our consideration in the future. When the airports (Guangzhou and Shenzhen) start to generate revenue, there will be ample revenue to cover Chuangrun's fixed management fees. Furthermore, the balance sheet for the year ended December 31, 2005 was also affected by the following non-cash accounting entries:

Other Assets
- Discount on issuance of convertible promissory notes 580,764

Current Liabilities
- Fair value of conversion feature of convertible
promissory note 599,657
- Fair value of warrants 857,510

About China Media1 Corp.:

China Media1 Corp. has obtained rights to premiere Chinese advertising media assets in China. Its affiliate, Guangzhou Chuangrun Advertising Company, operates the advertising space and advertising contracts with top-tier brand names and multi-national corporations as well as large advertising agencies. China Media1 has focused on providing its clients superior advertising locations based on viewership, exclusivity, and uniqueness through the use of its illuminated scrolling poster signs. China Media1's advertising locations include the Guangzhou and Shenzhen International Airports and the Guangzhou MTR (12 Subway Stations). China Media1's website is

Forward-Looking Statements:

Any forward-looking statement in this press release is made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertain-ties including, but not limited to, economic and political factors, technological developments, regulatory matters and increased competition. The Company disclaims any obligation to update any such factors or to publicly announce results of any revisions to the forward-looking statements contained herein to reflect future events or developments.

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