SOURCE: China Media Group Corporation

February 13, 2006 08:15 ET

China Media Group Corporation Announces Secured Funding of USD 1,250,000 Through Share Placement

CEDAR HILL, TX -- (MARKET WIRE) -- February 13, 2006 -- China Media Group Corporation (OTC BB: CHMD) ("CMG") announces today that it has entered into an agreement to place 4,166,665 shares for USD 1,250,000 with a private investor. The placement will be made in five USD 250,000 tranches with the first tranche made upon signing the agreement, and the remaining 4 tranches to be paid at 2-month intervals over the next 8 months. The placement shares will be priced at US $0.30 each, representing an approximate discount of 10% to the average over the last 5 days' closing price. Each shares issue will have a warrant attached to buy an additional 2 shares in CMG at the same price per share over a one-year period, commencing from the date of completion of the placement of US $1,250,000.

For the first tranche, the Company will issue 833,333 shares common stock at a price of US $0.30 per share, and issue warrants with a one-year exercisable period, for the purchase of 1,666,666 Company common shares, at the exercise price of US $0.30 per share.

This is the first of many financing initiatives that the Company has scheduled. Mr. Con Unerkov, Chairman of China Media Group, explained, "Our strategic financing plan is intended to simultaneously infuse capital while strengthening our balance sheet. In the short term, we will set out a series of small-to-mid size financings from multiple investor groups. We are careful to set our investment expectations at a reasonable level, and we have designed a program which allows us to diversify our investor base over a larger international audience."

The Company intends to apply this capital to working capital and to further recently announced initiatives and co-operations in China.

About China Media Group Corporation:

China Media Group Corporation (OTC BB: CHMD) is a "Next Generation" advertising / media company focusing on the very lucrative Chinese market. It has offices in China, Hong Kong and Texas, USA. The company was incorporated in Texas on October 1, 2002. The Company is currently entering the fast growing advertising industry in China and plans to expand its offices in key cities such as Shanghai, Guangzhou and Shenzhen. The Company will also cooperate with strategic partners in other cities to serve our clients for nationwide advertising coverage.

Additional information concerning other areas and topics of China Media Group can be found on our web site at

A number of statements contained in this Report are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Certain written statements in this press release constitute "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Words or phrases such as "should result," "are expected to," "we anticipate," "we estimate," "we project," "we intend," or similar expressions are intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in any forward-looking statements. These risks and uncertainties include demand for our services, product development, our ability to maintain acceptable margins and control costs, the impact of federal, state and local regulatory requirements on our business, the impact of competition and the uncertainty of economic conditions in general, including the timely development and market acceptance of products, competitive market conditions, successful integration of acquisitions, the ability to secure additional sources of financing, the ability to reduce operating expenses, and other factors. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. Readers are cautioned not to place undue reliance on forward-looking statements, since the statements speak only as of the date that they are made, and we undertake no obligation to publicly update these statements based on events that may occur after the date of this document.

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