x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Delaware
|
35-2089848
|
(State
or other jurisdiction of
incorporation
or organization)
|
(I.R.S.
Employer
Identification
No.)
|
6
North Twelfth Road
Country
Garden
Shunde
District
Foshan
City, Guangdong
China
528312
(Address
of principal executive offices) (Zip Code)
|
(86)
757 2663 9986
(Registrant’s
telephone number, including area code)
|
Large
accelerated filer o
|
Accelerated
filer o
|
Non-accelerated
filer o (Do not check if a smaller reporting
company)
|
Smaller
reporting company x
|
Page
|
|||
PART
I—FINANCIAL INFORMATION
|
|||
Item
1.
|
Financial
Statements.
|
||
Condensed
Consolidated Balance Sheets as of December 31, 2008 and September 30,
2008
|
3
|
||
Condensed
Consolidated Statements of Operations and Comprehensive Income for the
Three Months Ended December 31, 2008 and 2007
|
4
|
||
Condensed
Consolidated Statements of Cash Flows for the Three Months Ended December
31, 2008 and 2007
|
5
|
||
Notes
to Condensed Consolidated Financial Statements
|
6
|
||
Item
2.
|
Management's
Discussion and Analysis of Financial Conditions and Results of
Operations.
|
23
|
|
Item
4.
|
Controls
and Procedures.
|
32
|
|
PART
II—OTHER INFORMATION
|
|||
Item
1.
|
Legal
Proceedings.
|
33
|
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
33
|
|
Item
3.
|
Defaults
Upon Senior Securities.
|
33
|
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
33
|
|
Item
5.
|
Other
Information.
|
33
|
|
ITEM
6.
|
Exhibits.
|
33
|
|
Signatures
|
34
|
December
31,
2008
|
September
30,
2008
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
|
|||||||
Current
Assets
|
|
|||||||
Cash
|
$ | 794,452 | $ | 302,632 | ||||
Accounts
Receivable, Net of Allowances for Doubtful Accounts of $30,844 (September
30, 2008 - $30,767) (Note 3)
|
11,583,215 | 10,387,036 | ||||||
Inventory
|
101,070 | 126,256 | ||||||
Prepaid
Expenses
|
2,172,181 | 2,265,078 | ||||||
Prepaid
Sales Incentives (Note 4)
|
5,052,357 | - | ||||||
Other
Current Assets
|
386,068 | 623,567 | ||||||
Total
Current Assets
|
20,089,343 | 13,704,569 | ||||||
Property
& Equipment, Net of Accumulated Depreciation of $15,230,456
(September 30, 2008 - $13,644,708) (Note 8)
|
8,764,509 | 10,301,602 | ||||||
Intangible
Assets
|
||||||||
Copyrights,
Net of Accumulated Amortization of $1,666,442 (September 30, 2008 -
$1,550,443) (Note 6, 7)
|
13,039,585 | 13,118,866 | ||||||
Goodwill
(Note 5)
|
557,730 | 557,224 | ||||||
Total
Intangible Assets
|
13,597,315 | 13,676,090 | ||||||
TOTAL
ASSETS
|
$ | 42,451,167 | $ | 37,682,261 | ||||
LIABILITIES
& STOCKHOLDERS’ EQUITY
|
||||||||
Current
Liabilities
|
||||||||
Accounts
Payable
|
$ | 5,893,168 | $ | 4,422,172 | ||||
Customer
Deposits
|
314,214 | 308,096 | ||||||
Accrued
Liabilities
|
133,040 | 237,300 | ||||||
Short
Term Debt (Note 14)
|
1,167,168 | 1,043,424 | ||||||
Total
Current Liabilities
|
7,507,590 | 6,010,992 | ||||||
Total
Liabilities
|
7,507,590 | 6,010,992 | ||||||
Minority
Interest in Consolidated Subsidiaries (Note 12)
|
7,607,538 | 7,138,608 | ||||||
Commitment
and Contingencies (Note 13)
|
||||||||
Stockholders’
Equity (Note 10)
|
||||||||
Preferred
stock, $0.001 par value, authorized: 50,000,000 shares, zero shares issued
and outstanding at December 31, 2008 and September 30,
2008
|
- | - | ||||||
Common
stock, $0.001 par value, authorized: 300,000,000 shares, 163,364,316 and
151,014,316 shares issued and outstanding at December 31, 2008 and
September 30, 2008
|
163,364 | 156,014 | ||||||
Additional
Paid in Capital
|
24,644,719 | 24,301,719 | ||||||
Shares
to be Issued
|
- | 350 | ||||||
Deferred
Stock-Based Compensation
|
(1,324,272 | ) | (1,285,362 | ) | ||||
Accumulated
Other Comprehensive Income
|
48,993 | 30,251 | ||||||
Retained
Earnings
|
3,803,235 | 1,329,689 | ||||||
Total
Stockholders’ Equity
|
27,336,039 | 24,532,661 | ||||||
TOTAL
LIABILITIES & STOCKHOLDERS’ EQUITY
|
$ | 42,451,167 | $ | 37,682,261 |
2008
|
2007
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Revenue
|
||||||||
Licensing
and Royalty Revenues
|
$ | 1,311,422 | $ | 1,323,962 | ||||
Online
Membership Services
|
5,248,668 | - | ||||||
Import
and Export Sales
|
2,854,428 | 4,364,812 | ||||||
Software
Sales
|
441,234 | 1,722,279 | ||||||
Media
and Marketing Management
|
- | 300,900 | ||||||
Total
Revenue
|
9,855,752 | 7,711,953 | ||||||
Costs
of Sales
|
6,139,344 | 5,785,142 | ||||||
Gross
Profit
|
3,716,408 | 1,926,811 | ||||||
Operating
Expenses
|
||||||||
Salaries
and Wages
|
70,100 | 63,007 | ||||||
Stock
Based Compensation
|
311,090 | 363,869 | ||||||
Bad
Debt Recovery
|
- | (185,440 | ) | |||||
Other
Selling, General and Administrative Expenses
|
401,576 | 658,591 | ||||||
Total
Operating Expenses
|
782,766 | 900,027 | ||||||
Income
From Operations
|
2,933,642 | 1,026,784 | ||||||
Other
Income and Expenses
|
12,311 | 8,443 | ||||||
Net
Income Before Income Taxes
|
2,945,953 | 1,035,227 | ||||||
Provision
for Income Taxes
|
(1,793 | ) | (1,051 | ) | ||||
Net
Income Before Minority Interest
|
2,944,160 | 1,034,176 | ||||||
Minority
Interest in Income of Subsidiaries
|
(470,614 | ) | (263,615 | ) | ||||
Net
Income
|
2,473,546 | 770,561 | ||||||
Foreign
Currency Translation Adjustment
|
18,742 | (26,355 | ) | |||||
Comprehensive
Income
|
$ | 2,492,288 | $ | 744,206 | ||||
Basic
and Diluted Net Income Per Common Share
|
$ | 0.02 | $ | 0.01 | ||||
Number
of Common Shares Used to Compute Basic and Diluted Weighted
Average
|
161,762,686 | 148,675,128 |
2008
|
2007
|
|||||||
(Unaudited)
|
(Unaudited)
|
|||||||
Cash
Flows From Operating Activities
|
|
|
||||||
Net
Income
|
$ | 2,473,546 | 770,561 | |||||
Adjustments
to Reconcile Net Income to Net Cash Provided by (Used In) Operating
Activities:
|
||||||||
Depreciation
and Amortization
|
1,670,101 | 1,020,330 | ||||||
Bad
Debt Expense
|
- | 25,014 | ||||||
Recovery
of Bad Debts
|
- | (185,431 | ) | |||||
Minority
Interests
|
470,614 | 263,615 | ||||||
Amortization
of Prepaid Advertising
|
- | 262,515 | ||||||
Amortization
of Stock Based Compensation
|
311,090 | 363,869 | ||||||
Changes
in Operating Assets and Liabilities:
|
||||||||
Accounts
Receivable
|
(1,196,257 | ) | (3,276,343 | ) | ||||
Inventory
|
25,186 | (76,386 | ) | |||||
Prepaid
Expenses
|
92,897 | (31,134 | ) | |||||
Prepaid
Sales Incentive
|
(2,670,095 | ) | - | |||||
Other
Current Assets
|
237,499 | 261,008 | ||||||
Copyrights
|
- | (582,519 | ) | |||||
Accounts
Payable and Accrued Expenses
|
(1,009,408 | ) | 712,856 | |||||
Net
Cash Provided By (Used In) Operating Activities
|
405,173 | (472,045 | ) | |||||
Cash
Flows From Investing Activities:
|
||||||||
Purchase
of Equipment
|
(4,797 | ) | - | |||||
Cash
Proceeds From Acquisition of MGI
|
- | 2,834 | ||||||
Net
Cash (Used In) Provided By Investing Activities
|
(4,797 | ) | 2,834 | |||||
Cash
Flows From Financing Activities
|
||||||||
Cash
Proceeds From Short Term Debt Financing
|
123,744 | - | ||||||
Net
Cash Flows Provided by Financing Activities:
|
123,744 | - | ||||||
Effect
of Exchange Rate Changes on Cash
|
(32,300 | ) | (151,644 | ) | ||||
Net
Increase (Decrease) in Cash
|
491,820 | (620,855 | ) | |||||
Cash
- Beginning of Period
|
302,632 | 1,150,422 | ||||||
Cash
- End of Period
|
$ | 794,452 | $ | 529,567 | ||||
Supplemental
Disclosure of Cash Flow Information:
|
||||||||
Taxes
Paid
|
$ | 1,793 | $ | - | ||||
Interest
Paid
|
$ | - | $ | - | ||||
Non
Cash Investing and Financing Activities:
|
||||||||
Acquisition
of MGI Through Issuance of Common Stock
|
$ | - | $ | 200,000 | ||||
Issuance
of Stock for Services, Deferred Compensation
|
$ | 350,000 | $ | 577,550 | ||||
Issuance
of Stock for Services by Subsidiary, Deferred Compensation
|
$ | - | $ | 840,000 |
Subsidiaries
|
Countries Registered In
|
Percentage of
Ownership
|
||||
MyStarU
Ltd.
|
Hong
Kong, The People’s Republic of China
|
100.00 | % | |||
3G
Dynasty Inc.
|
British
Virgin Islands
|
100.00 | % | |||
Subaye.com
|
United
States of America, Delaware
|
69.03 | % | |||
Subaye
IIP Limited
|
British
Virgin Islands
|
69.03 | % | |||
Guangzhou
Panyu Metals & Materials Limited
|
The
People’s Republic of China
|
100.00 | % | |||
Guangzhou
Subaye Computer Tech Limited
|
The
People’s Republic of China
|
69.03 | % | |||
Media
Group International Limited
|
Hong
Kong, The People’s Republic of China
|
69.03 | % |
Description
|
Useful Lives
|
|
Computer
Hardware
|
3
years
|
|
Computer
Software
|
3
years
|
|
Websites
|
3
years
|
|
Motor
Vehicles
|
3
years
|
|
Furniture
and Fixtures
|
5
and 7 years
|
|
Leasehold
Improvements
|
5
years
|
December 31,
2008
|
September 30,
2008
|
|||||||
Trade
Accounts Receivable
|
$ | 11,614,059 | $ | 10,417,803 | ||||
Allowance
For Doubtful Accounts
|
(30,844 | ) | (30,767 | ) | ||||
Accounts
Receivable, Net
|
11,583,215 | 10,387,036 |
December 31,
2008
|
September 30,
2008
|
|||||||
Beginning
Allowance for Doubtful Accounts
|
$ | 30,767 | $ | 413,036 | ||||
Direct
Write-offs of Bad Debts
|
- | (196,829 | ) | |||||
Recovery
of Accounts Charged to Bad Debt Expense in 2006 and 2005
|
- | (185,440 | ) | |||||
Foreign
Currency Translation Adjustment
|
77 | - | ||||||
Ending
Allowance for Doubtful Accounts
|
$ | 30,844 | $ | 30,767 |
December
31,
2008
|
September 30,
2008
|
|||||||
QXS Enterprise
|
12 | % | 18 | % | ||||
SSTH
|
58 | % | 46 | % | ||||
Fengcun Shangmao
|
5 | % | - | % | ||||
Fenglin Qimao
|
- | % | 9 | % | ||||
Fengcun Electronic
|
- | % | 19 | % | ||||
Stareast Net Ltd.
|
7 | % | - | % | ||||
PanYu HuiQiang Economic and
Trade
|
7 | % | 7 | % |
Cash
|
$ | 2,834 | ||
Fixed
assets, net
|
$ | 653 | ||
Goodwill
|
$ | 202,453 | ||
Due
to related party
|
$ | (5,940 | ) | |
Net
assets acquired
|
$ | 200,000 | ||
Purchase
consideration
|
$ | 200,000 | ||
Net
assets acquired
|
$ | 200,000 | ||
Net
cash inflow from acquisition of MGI
|
$ | 2,834 |
Gross
proceeds from the sale of Copyright - First Open: internet
rights
|
$
|
279,824
|
||
Adjusted
cost basis
|
(332,291
|
)
|
||
Net
loss
|
$
|
(52,467
|
)
|
December 31,
2008
|
September 30,
2008
|
|||||||
|
|
|||||||
Copyrights
- Motion Picture, Television, Internet and DVD Productions
|
$ | 14,706,027 | $ | 14,669,309 | ||||
Accumulated
Amortization
|
(1,666,442 | ) | (1,550,443 | ) | ||||
Copyrights,
net
|
$ | 13,039,585 | $ | 13,118,866 |
December 31,
2008
|
September 30,
2008
|
|||||||
Com
Computer Software
& Equipment
|
$ | 14,490,952 | $ | 14,467,374 | ||||
Websi
Websites
|
9,355,996 | 9,338,719 | ||||||
Motor
Vehicles
|
84,223 | 84,012 | ||||||
Furni
Furniture &
Fixtures
|
63,794 | 56,205 | ||||||
|
23,994,965 | 23,946,310 | ||||||
Less:
Accumulated
Depreciation and Amortization
|
(15,230,456 | ) | (13,644,708 | ) | ||||
Total
Property & Equipment
|
$ | 8,764,509 | $ | 10,301,602 |
December
31,
2008
|
December
31,
2007
|
|||||||
|
|
|||||||
Depreciation
Included in Operating Expenses
|
$ | 7,310 | $ | 20,213 | ||||
Amortization
of Copyrights Included Within Cost of Sales
|
115,388 | - | ||||||
Amortization
of Websites Included Within Cost of Sales
|
763,258 | 685,747 | ||||||
Amortization
of Software Included Within Cost of Sales
|
784,145 | 314,370 | ||||||
Total
Depreciation and Amortization
|
$ | 1,670,101 | $ | 1,020,330 |
a.
|
The
new standard EIT rate of 25% will replace the 33% rate currently
applicable to both DES and FIEs, except for “high tech companies” who pay
a reduced rate of 15%. The Company currently believes it will qualify as a
high tech company under the rule.
|
b.
|
Companies
established before March 16, 2007 will continue to enjoy tax holiday
treatment approved by local government for a grace period of the next five
years or until the tax holiday term is completed, whichever is
sooner.
|
2008
|
2007
|
|||||||
U.S.
Statutory rates
|
35.0 | % | 35.0 | % | ||||
Foreign
income
|
(35.0 | ) | (35.0 | ) | ||||
China
tax rates
|
25.0 | 33.0 | ||||||
China
income tax exemption
|
(25.0 | ) | (33.0 | ) | ||||
Effective
income tax rates
|
0 | % | 0 | % |
December 31,
2008
|
September 30,
2008
|
|||||||
Minority
interest in consolidated subsidiaries
|
$ | 7,607,538 | $ | 7,138,608 |
Twelve
Months Ended December 31,
|
||||
2009
|
$
|
57,744
|
||
2010
|
57,744
|
|||
2011
|
28,872
|
|||
$
|
144,360
|
December 31,
2008
|
September 30,
2008
|
|||||||
8.64%
Bank Loan, Due September 18, 2009
|
$ | 1,021,272 | $ | 1,021,138 | ||||
7.92% Bank Loan, Due December 31, 2009 | 145,896 | - | ||||||
Short
Term Non-Interest Bearing Bank Advance
|
- | 22,286 | ||||||
Total
Debt Obligations
|
1,167,168 | 1,043,424 | ||||||
Less:
Current Maturities
|
1,167,168 | 1,043,424 | ||||||
Total
Long-Term Debt
|
$ | - | $ | - |
Twelve Months Ended December
31,
|
||||
2009
|
$
|
1,167,168
|
||
2010
|
-
|
|||
2011
|
-
|
|||
2012
|
-
|
|||
2013
|
-
|
|||
Subsequent
to 2013
|
-
|
|||
Total
scheduled debt payments
|
$
|
1,167,168
|
Three Months Ended
December 31, 2008
|
Investments in
Entertainment Arts
Productions
|
Online
Membership
Services
|
Software Sales
|
Importing and
Exporting of
Goods
|
Media &
Marketing
Management
|
Consolidated
Total
|
||||||||||||||||||
Net
sales
|
$ | 1,311,422 | $ | 5,248,668 | $ | 441,234 | $ | 2,854,428 | - | $ | 9,855,752 | |||||||||||||
Cost
of sales
|
254,201 | 2,307,482 | 784,145 | 2,793,516 | - | 6,139,344 | ||||||||||||||||||
Segment
income (loss) before minority interest
|
951,155 | 2,368,746 | (366,934 | ) | 5,816 | (14,623 | ) | 2,944,160 | ||||||||||||||||
Segment
assets
|
15,456,423 | 16,283,188 | 6,102,736 | 3,503,815 | 1,105,005 | 42,451,167 | ||||||||||||||||||
Expenditures
for segment assets
|
4,797 | - | - | - | - | 4,797 |
Three Months Ended
December 31, 2007
|
Investments in
Entertainment Arts
Productions
|
Online
Membership
Services
|
Software Sales
|
Importing and
Exporting of
Goods
|
Media &
Marketing
Management
|
Consolidated
Total
|
||||||||||||||||||
Net
sales
|
$
|
1,323,962
|
$
|
-
|
$
|
1,722,279
|
$
|
4,364,812
|
300,900
|
$
|
7,711,953
|
|||||||||||||
Cost
of sales
|
551,948
|
466,090
|
314,370
|
4,202,241
|
250,493
|
5,785,142
|
||||||||||||||||||
Segment
income (loss) before minority interest
|
99,664
|
|
(412,657
|
)
|
1,227,912
|
78,472
|
40,785
|
1,034,176
|
||||||||||||||||
Segment
assets
|
13,220,968
|
7,933,186
|
4,587,782
|
3,952,199
|
264,928
|
29,959,063
|
||||||||||||||||||
Expenditures
for segment assets
|
914,810
|
-
|
-
|
-
|
200,000
|
1,114,810
|
Subsidiaries
|
Countries Registered In
|
Percentage of
Ownership
|
||||
MyStarU
Ltd.
|
Hong
Kong, The People’s Republic of China
|
100.00 | % | |||
3G
Dynasty Inc.
|
British
Virgin Islands
|
100.00 | % | |||
Subaye.com
|
United
States of America, Delaware
|
69.03 | % | |||
Subaye
IIP Limited
|
British
Virgin Islands
|
69.03 | % | |||
Guangzhou
Panyu Metals & Materials Limited
|
The
People’s Republic of China
|
100.00 | % | |||
Guangzhou
Subaye Computer Tech Limited
|
The
People’s Republic of China
|
69.03 | % | |||
Media
Group International Limited
|
Hong
Kong, The People’s Republic of China
|
69.03 | % |
Three Months
Ended
December 31,
2008
|
||||
Big
Movie: Subaye
|
$
|
369,321
|
||
Big
Movie 2
|
176,270
|
|||
The
11 Movies
|
220,424
|
|||
The
113 Movies
|
163,182
|
|||
Total
|
$
|
929,197
|
Subaye.com Members
|
Subaye.com Company Profiles
|
|||||||||||||||
As of the
End of
Month
|
Month Over
Month
Growth
|
As of the
End of
Month
|
Month Over
Month
Growth
|
|||||||||||||
January 31, 2007
|
6,562 |
|
9,807 |
|
||||||||||||
February 28, 2007
|
9,230 | 41 | % | 12,101 | 23 | % | ||||||||||
March
31,2007
|
10,625 | 15 | % | 21,204 | 75 | % | ||||||||||
April
30, 2007
|
11,447 | 8 | % | 26,323 | 24 | % | ||||||||||
May
31, 2007
|
11,699 | 2 | % | 27,989 | 6 | % | ||||||||||
June
30, 2007
|
11,968 | 2 | % | 29,821 | 7 | % | ||||||||||
July
31, 2007
|
12,500 | 4 | % | 32,560 | 9 | % | ||||||||||
August
31, 2007
|
12,876 | 3 | % | 36,999 | 14 | % | ||||||||||
September
30, 2007
|
15,121 | 17 | % | 38,123 | 3 | % | ||||||||||
October
31, 2007
|
15,903 | 5 | % | 39,400 | 3 | % | ||||||||||
November
30, 2007
|
16,023 | 1 | % | 40,995 | 4 | % | ||||||||||
December
31, 2007
|
16,348 | 2 | % | 45,243 | 10 | % | ||||||||||
January
31, 2008
|
18,859 | 15 | % | 53,343 | 18 | % | ||||||||||
February
29, 2008 *
|
19,015 | 1 | % | 40,301 | (24 | )% | ||||||||||
March
31,2008
|
19,659 | 3 | % | 46,233 | 15 | % | ||||||||||
April
30, 2008
|
23,788 | 21 | % | 49,112 | 6 | % | ||||||||||
May
31, 2008
|
26,442 | 11 | % | 64,410 | 31 | % | ||||||||||
June
30, 2008
|
29,323 | 11 | % | 68,894 | 7 | % | ||||||||||
July
31, 2008
|
29,743 | 1 | % | 69,996 | 2 | % | ||||||||||
August
31, 2008
|
30,127 | 1 | % | 70,889 | 1 | % | ||||||||||
September
30, 2008
|
32,366 | 7 | % | 71,884 | 1 | % | ||||||||||
October
31, 2008
|
34,121 | 5 | % | 73,298 | 2 | % | ||||||||||
November
30, 2008
|
34,545 | 1 | % | 73,999 | 1 | % | ||||||||||
December
31, 2008
|
35,989 | 4 | % | 75,435 | 2 | % | ||||||||||
January
31, 2009
|
36,169 | 1 | % | 75,685 | 0 | % |
·
|
largest
user base of users seeking videos produced by
SMEs;
|
·
|
first
video uploading service provider in the PRC with an extensive customer
base across industries;
|
·
|
local
market experience and expertise in introducing and expanding our services
across the PRC and operating in the PRC’s rapidly evolving internet
industry;
|
·
|
leading
technology with a proven platform, providing users with relevant video
showcase and customers with a cost-effective way to reach potential
consumers; and
|
·
|
extensive
and effective nationwide network of over 100 regional distributors,
providing high-quality and consistent customer
services.
|
·
|
growing
our online video marketing business by attracting potential customers and
increasing per-customer spending on our services, enhancing user
experience;
|
·
|
increasing
traffic through the development and introduction of new video-related
features and functions;
|
·
|
expanding
Subaye Alliance by leveraging our brand and offering competitive economic
arrangements to Subaye Alliance members;
and
|
·
|
pursuing
selective strategic acquisitions and alliances that will allow us to
increase user traffic, enlarge our customer base, expand our product
offerings and reduce customer acquisition
costs.
|
·
|
offer
new and innovative products and services to attract and retain a larger
user base;
|
·
|
attract
additional customers and increase per-customer
spending;
|
·
|
increase
awareness of our brand and continue to develop user and customer
loyalty;
|
·
|
respond
to competitive market conditions;
|
·
|
respond
to changes in our regulatory
environment;
|
·
|
manage
risks associated with intellectual property
rights;
|
·
|
maintain
effective control of our costs and
expenses;
|
·
|
raise
sufficient capital to sustain and expand our
business;
|
·
|
attract,
retain and motivate qualified personnel;
and
|
·
|
upgrade
our technology to support increased traffic and expanded
services.
|
Webshops
|
||||||||
As of the
End of
Month
|
Month Over
Month
Growth
|
|||||||
February 29, 2008
|
14,301 |
|
||||||
March 31,2008
|
16,213 | 13 | % | |||||
April
30, 2008
|
19,205 | 18 | % | |||||
May
31, 2008
|
19,986 | 4 | % | |||||
June
30, 2008
|
20,641 | 3 | % | |||||
July
31, 2008
|
25,690 | 24 | % | |||||
August
31, 2008
|
27,108 | 6 | % | |||||
September
30, 2008
|
31,887 | 18 | % | |||||
October
31, 2008
|
32,981 | 3 | % | |||||
November
30, 2008
|
33,785 | 2 | % | |||||
December
31, 2008
|
34,359 | 2 | % | |||||
January
31, 2009
|
35,590 | 4 | % |
|
December 31,
2008
|
December 31,
2007
|
$ Increase
(Decrease)
|
% Increase
(Decrease)
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
|
|
||||||||||||
Net
Revenues
|
$ | 9,855,752 | $ | 7,711,953 | $ | 2,143,799 | 28 | % | ||||||||
Cost
of Sales
|
6,139,344 | 5,785,142 | 354,202 | 6 | % | |||||||||||
Gross
Profit
|
3,716,408 | 1,926,811 | 1,789,597 | 93 | % | |||||||||||
Operating
Expenses
|
782,766 | 900,027 | (117,261 | ) | (13 | )% | ||||||||||
Income
From Operations
|
2,933,642 | 1,026,784 | 1,906,858 | 186 | % | |||||||||||
Other
Income
|
12,311 | 8,443 | 3,868 | 46 | % | |||||||||||
Income
From Operations Before Income Taxes
|
2,945,953 | 1,035,227 | 1,910,726 | 185 | % | |||||||||||
Provision
for Income Taxes
|
(1,793 | ) | (1,051 | ) | (742 | ) | (71 | )% | ||||||||
Minority
Interest in Income of Subsidiary
|
(470,614 | ) | (263,615 | ) | (206,999 | ) | (79 | )% | ||||||||
Net
Income
|
2,473,546 | 770,561 | 1,702,985 | 221 | % | |||||||||||
Other
Comprehensive Income (Loss)
|
18,742 | (26,355 | ) | 45,097 | N/A | |||||||||||
Comprehensive
Income
|
2,492,288 | 744,206 | 1,748,082 | 235 | % | |||||||||||
|
||||||||||||||||
Earnings
per Common Shares
|
||||||||||||||||
-
Basic
|
$ | 0.02 | $ | 0.01 | ||||||||||||
-
Fully Diluted
|
$ | 0.02 | $ | 0.01 | ||||||||||||
|
||||||||||||||||
Weighted
Average Common Share Outstanding
|
||||||||||||||||
-Basic
|
161,762,686 | 148,675,128 | ||||||||||||||
-
Fully Diluted
|
161,762,686 | 148,675,128 |
a.
|
The
new standard EIT rate of 25% replaced the 33% rate that had been
applicable to both DES and FIEs, except for High Tech companies who pay a
reduced rate of 15%. The Company believes it qualifies as a “High Tech
Company.”
|
b.
|
Companies
established before March 16, 2007 will continue to enjoy tax holiday
treatment approved by local government for a grace period of five years or
until the tax holiday term is completed, whichever is
sooner.
|
2008
|
2007
|
|||||||
U.S.
Statutory rates
|
35.0
|
%
|
35.0
|
%
|
||||
Foreign
income
|
(35.0
|
)
|
(35.0
|
)
|
||||
China
tax rates
|
25.0
|
33.0
|
||||||
China
income tax exemption
|
(25.0
|
)
|
(33.0
|
)
|
||||
Effective
income tax rates
|
0.0
|
%
|
0.0
|
%
|
MYSTARU.COM,
INC.
|
||
|
||
Date:
February 23, 2009
|
By:
|
/s/
Alan R. Lun
|
Alan
R. Lun
Chief
Executive Officer and President
(Principal
Executive Officer)
|
Date:
February 23, 2009
|
By:
|
/s/
James T. Crane
|
James
T. Crane
|
||
Chief
Financial Officer
(Principal
Financial and Accounting
Officer)
|