UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

___________

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, ~~2013~~2014

Commission file number: 000-53027

V MEDIA CORPORATION

(Formerly China New Media Corporation)

(Exact name of registrant as specified in its charter)

Delaware		33-0944402
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
Dalian Vastitude Media Group 8th Floor, Golden Name Commercial Tower 68 Renmin Road, Zhongshan District, Dalian, P.R. China		116001
(Address of principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code: 86-0411-82728168
Registrant's telephone number, including area code: 86-0411-82728168

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.0001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Act.

Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’'s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “"large accelerated filer,”" “"accelerated filer”" and “"smaller reporting company”" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filero
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the registrant’'s common stock held by non-affiliates as of ~~September~~December 1031, 2013 was approximately $1,390,592.08 based upon the closing price of the common stock as quoted by the Over-the-Counter Bulletin Board (the “"OTC Bulletin Board”")

As of ~~September~~October 109, ~~2013~~2014, there were 27,590,001 shares of the registrant’'s common stock, par value $0.0001 per share, outstanding.

Table of Contents

PART I

ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	4
ITEM 1B.	UNRESOLVED STAFF COMMENTS	11
ITEM 2.	PROPERTIES	12
ITEM 3.	LEGAL PROCEEDINGS	12
ITEM 4.	~~(REMOVED~~MINE ~~AND~~SAFETY ~~RESERVED)~~DISCLOSURES	12

PART II

ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	13
ITEM 6.	SELECTED FINANCIAL DATA	14
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	14
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	2322
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	2322
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	2322
ITEM 9A.	CONTROLS AND PROCEDURES	2423
ITEM 9B.	OTHER INFORMATION	2524

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	2625
ITEM 11.	EXECUTIVE COMPENSATION	2928
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	3029
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	3129
ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	3130

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 3231

SIGNATURES

EXHIBIT INDEX

~~As used herein, “we,” “us,” “our” and the “Company” refers to V Media Corporation and its subsidiaries.~~i

As used herein, "we," "us," "our" and the "Company" refers to V Media Corporation and its subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this annual report contains “"forward-looking statements”" as defined by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are contained principally in the sections titled “"Risk Factors,”" “"Management’'s Discussion and Analysis of Financial Condition and Results of Operations”" and “"Business,”" and are generally identifiable by use of the words “"may,”" “"will,”" “"should,”" “"expect,”" “"anticipate,”" “"estimate,”" “"believe,”" “"intend”" or “"project”" or the negative of these words or other variations on these words or comparable terminology.

The forward-looking statements herein represent our expectations, beliefs, plans, intentions or strategies concerning future events, including, but not limited to: our future financial performance; the continuation of historical trends; the sufficiency of our cash balances for future needs; our future operations; our sales and revenue levels and gross margins, costs and expenses; the relative cost of our operation as compared to our competitors; new product introduction, entry and expansion into new markets and utilization of new sales channels and sales agents; improvements in, and the relative quality of, our technologies and the ability of our competitors to copy such technologies; our competitive technological advantages over our competitors; brand image, customer loyalty and expanding our client base; the sufficiency of our resources in funding our operations; and our liquidity and capital needs.

Our forward-looking statements are based on our current expectations and beliefs concerning future developments, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Moreover, our forward-looking statements are subject to various known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements.

Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

PART I

ITEM 1. BUSINESS.

Overview

We are one of the fastest growing outdoor advertising companies in China. We own and operate various outdoor media network and provide a full range of integrated outdoor advertising services to our clients, including art design, advertising publishing, daily maintenance and technical upgrading. We believe our well-diversified outdoor advertising media network and our ability to provide advertising services on an integrated basis allow us to target and satisfy client needs at all levels. Founded in 2000, we have grown steadily and expanded our media network into Shenyang, Tianjin, Beijing and Shanghai from our headquarters in Dalian.

Our principal executive offices are located at Golden Name Commercial Tower 8th floor, 68 Renmin Road, Zhongshan District, Dalian, P.R. China. Our telephone number is 86-411-82728168.

Our Corporate History

We were originally incorporated as Golden Key International, Inc. under the laws of the State of Delaware on February 18, 1999. Prior to a business combination transaction effected on December 8, 2009, we were a development stage company with no revenues or profits. We had nominal assets and no operations other than maintaining our public company status and searching for the opportunity of a merger or acquisition with a private entity. Management felt it was in the best interests of the Company to abandon our original business plan of becoming a leading cross-platform community portal provider and pursue a direction for the Company that would provide the best return on stockholder investment.

On December 8, 2009, we acquired all of the outstanding capital stock of Hongkong Fortune-Rich Investment Co., Limited, a Hong Kong corporation (“"Fortune-Rich”"), through China New Media Corp., a Delaware corporation (the “"Merger Sub”") wholly owned by us (the “"Merger”"). Fortune-Rich is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Dalian Guo-Heng Management and Consultation Co., Ltd. (“"Dalian Guo-Heng”"), a limited liability company organized under the laws of the People’'s Republic of China. Substantially all of Fortune-Rich’'s operations are conducted in China through Dalian Guo-Heng, and through contractual arrangements with several of Dalian Guo-Heng’'s consolidated affiliated entities in China, including Dalian Vastitude Media Group Co., Ltd. (“"V-Media”") and its subsidiaries. V-Media is a fast-growing outdoor advertising company with major operations in Dalian, the commercial center of Northeastern China. Upon the completion of the Merger, our name was changed from Golden Key International, Inc. to China New Media Corp. 26,398,634 shares of the common stock of the Company were issued to the shareholders of Fortune-Rich, which constituted approximately 96% of the common stock of the Company. Effective December 28, 2009, our trading symbol on the OTC Bulletin Board was changed to CMDI.OB.

Through the contractual arrangements between Dalian Guo-Heng and V-Media, we operate one of the largest outdoor advertising networks in northeast China with strong market presence in Dalian and Shenyang, the two most popular commercial cities in Northeast China; and expanded presence in Beijing, Tianjin and Shanghai. We provide clients with advertising opportunities through our diverse media platforms, which include four major proprietary channels: (1) Street Fixture and Display Network, which includes bus and taxi shelters; (2) Mobile Advertisement which includes displays on mass city transit system such as city buses, metro-trains and train stations; (3) Billboard and Large LED displays along the city’'s streets and highways; and (4) our proprietary and patented multi-media system, “"City Navigator ® Network.”"

On July 17, 2012, our name was changed from China New Media Corp. to V Media Corporation through a short form merger pursuant to Section 253 of the General Corporation Law of the State of Delaware by merging a wholly owned subsidiary of the Company into the Company, with the Company as the surviving corporation in the merger. Our trading symbol on the OTC Bulletin Board remains to be CMDI.OB.

Subsidiaries of V-Media

The following table sets forth information concerning V-Media’'s subsidiaries:

Name of Subsidiary	V-Media’'s Ownership Percentage	Region of Operations	Primary Business
Shenyang Vastitude Media Co., Ltd.	100%	Shenyang	Advertising company
Tianjin Vastitude AD Media Co., Ltd.	100%	Tianjin	Advertising company
Dalian Vastitude Network Technology Co., Ltd.	100%	Dalian	Computer exploitation, technical service and domestic advertisement
Dalian Vastitude Engineering & Design Co., Ltd.	83%	Dalian	Engineering, design and construction
Dalian Vastitude & Modern Transit Media Co., Ltd.	70%	Dalian	Advertising company
Vastitude (Beijing) Technology Co.	60%	Beijing	Advertising company
Shanghai Vastitude Advertising & Media Co., Ltd.	80100%	Shanghai	Advertising company
Vastitude Media –US Corporation	100%	U.S.	Advertising company

Intellectual Property

As of June 30, ~~2013~~2014, Mr. Guojun Wang, our CEO and largest shareholder of V-Media, is the owner of 40 patents in the outdoor advertising display field. His innovations on billboards, bus and taxi shelters, newsstands and other street fixtures have been vastly used in our outdoor display networks. Mr. Wang has entered into licensing agreements with V-Media to allow V-Media to use his patents without charge.

Regulation

China’'s advertising laws and regulations require advertisers, advertising operators and advertising distributors, including businesses such as ours, to ensure that the content of the advertisements they prepare or distribute are fair and accurate and are in full compliance with applicable law. Outdoor advertisements in China must be registered with the local State Administration for Industry & Commerce (“"SAIC”") before dissemination. The content, format, specifications, periods and locations of dissemination of the outdoor advertisement must be submitted for filing with the local SAIC.

Violation of these laws or regulations may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the advertisements, and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the Chinese government may revoke a violator’'s license for advertising business operations. Furthermore, advertisers, advertising operators or advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties in the course of their advertising business.

As an advertising service provider, we are obligated under Chinese laws and regulations to monitor the advertising content shown on our platforms for compliance with applicable law. In addition, for advertising content related to certain types of products and services, such as food products, alcohol, cosmetics, pharmaceuticals and medical procedures, we are required to confirm that the advertisers have obtained the requisite government approvals, including the advertising client’'s operating qualifications, proof of quality inspection of the advertised products, government pre-approval of the contents of the advertisement and filing with the local authorities.

Marketing

Our marketing staff is trained to work closely with customers such as direct advertisers and advertising agencies. We provide professional and customizing advice to meet customers’' advertising needs. As of June 30, ~~2013~~2014, we had 46 dedicated sales and marketing personnel. We depend on our marketing staff to explain our service offerings to our existing and potential clients and to cover a large number of clients in a wide variety of industries.

Competition

We compete with some of the largest advertising companies in China that operate outdoor advertising networks such as JCDecaux China, Clear Media, CBS Outdoor (China) and TOM OMG. We compete primarily on the basis of network size and coverage, location, price, the range of services that we offer and our brand name. We also compete for overall advertising spending with other alternative advertising media companies, such as Internet, street furniture, billboard, frame and public transport advertising companies, and with traditional advertising media, such as newspapers, television, magazines and radio. The Company has entered into a one-year lease agreement commencing March 1, 2012 for a LED in Time Square, New York City, the lease agreement has been renewed till August 31, 2014. It is a big step for the company to expand overseas operations and become international. Management is negotiating with potential customers in New York, but competition is strong.

Customers

For the fiscal year ended June 30, ~~2013~~2014, we do not have any individual customers accounting for more than 10% of our total revenues. Although our revenues from these advertising clients generally constitute a substantial part of our total revenues, we believe our business is not dependent on any individual advertising client.

Employees

V-Media currently has 153 full-time employees as of June 30, ~~2013~~2014, including 21 in manufacturing, 8 in research and development, 39 in administration and financial department, and 46 in sales, purchasing and marketing.

Recent Developments

Recognition of a “"China Well-know Trademark”" by the SAIC

On January 10, 2012, our trademark “" Vastitude Media”" has been recognized by the State Administration for Industry and Commerce (SAIC) as a “"China Well-known Trademark”". This is the first Well-known trademark that has ever been given in the outdoor media industry and entitles the Company to an additional RMB 50 million credit line.

ITEM 1A. RISK FACTORS.

Investing in our common stock involves a high degree of risk. The risks we have described are not the only ones facing our Company. Additional risks not presently known to us or that we currently deem immaterial may also affect our business operations. Any of these risks could materially and adversely affect our business, results of operations and financial condition, which in turn could materially and adversely affect the trading price of our common stock. You should not invest in our securities unless you can afford to lose all of your investment.

RISKS RELATED TO OUR BUSINESS

We depend on the availability of additional human resources for future growth.

We have recently experienced a period of significant growth in our advertising platforms . We believe that continued expansion is essential for us to remain competitive and to capitalize on the growth potential of our business. Such expansion may place a significant strain on our management and operations and financial resources. As our operations continue to grow, we will have to continually improve our management, operational and financial systems, procedures and controls, and other resources infrastructure and expand our workforce. There can be no assurance that our existing or future management, operating and financial systems, procedures and controls will be adequate to support our operations, or that we will be able to recruit, retain and motivate our personnel. Further, there can be no assurance that we will be able to establish, develop or maintain the business relationships beneficial to our operations, or to do so or to implement any of the above activities in a timely manner. Failure to manage our growth effectively could have a material adverse effect on our business and the results of our operations and financial condition.

Our results could be adversely impacted by product quality and performance.

We provide advertising service based on specific requirements of each of our customers. We believe that future orders of our products or services will depend on our ability to maintain the performance, reliability and quality standards required by our customers. If our products or services have performance, reliability or quality problems, we may experience delays in the collection of accounts receivables, higher manufacturing or installation costs, additional warranty and service expense, and reduced, cancelled or discontinued orders. Additionally, performance, reliability or quality claims from our customers, with or without merit, could result in costly and time-consuming litigation that could require significant time and attention of management and involve significant monetary damages.

We may require additional capital in the future, which may not be available on favorable terms or at all.

Our future capital requirements will depend on many factors, including industry and market conditions, our ability to successfully implement our branding and marketing initiatives and expansion of our production capabilities. We may need to raise additional funds in order to grow our business and implement our business strategy. We anticipate that any such additional funds would be raised through equity or debt financings. In addition, we may enter into a revolving credit facility or a term loan facility with one or more syndicates of lenders. Any equity or debt financing, if available at all, may be on terms that are not favorable to us. Even if we are able to raise capital through equity or debt financings, as to which there can be no assurance, the interest of existing stockholders in our Company may be diluted, and the securities we issue may have rights, preferences and privileges that are senior to those of our common stock or may otherwise materially and adversely affect the holdings or rights of our existing stockholders. If we cannot obtain adequate capital, we may not be able to fully implement our business strategy, and our business, results of operations and financial condition would be adversely affected. In addition, if we raise additional capital through private placements or registered offerings, it is likely that broker-dealers will be engaged. The activities of such broker-dealers are highly regulated and we cannot assure that the activities of such broker-dealers will not violate relevant regulations and generate liabilities despite our expectation otherwise.

Our success depends on our management team and other key personnel, the loss of any of whom could disrupt our business operations.

Our future success will depend in substantial part on the continued service of our senior management, including Mr. Guojun Wang, our Chief Executive Officer and Chairman. The loss of the services of one or more of our key personnel could impede implementation of our business plan and result in reduced profitability. We do not carry key man life or other insurance in respect of any of our officers or employees. Our future success will also depend on the continued ability to attract, retain and motivate highly qualified technical sales and marketing customer support personnel. Because of the rapid growth of the economy in the PRC, competition for qualified personnel is intense. We cannot guarantee that we will be able to retain our key personnel or that we will be able to attract, assimilate or retain qualified personnel in the future.

We have limited business insurance coverage.

The insurance industry in China is at an early stage of development. Insurance companies in China offer limited business insurance products, and do not, to our knowledge, offer business liability insurance. As a result, we do not have business liability insurance coverage for our operations. Moreover, while business disruption insurance is available, we have determined that the risks of disruption in comparison to the cost of the insurance are such that we do not require it at this time. Therefore, any business disruption, litigation or natural disaster might result in substantial costs and diversion of our resources.

Our management may exercise broad discretion and judgment.

Any person who invests in our common stock will do so without an opportunity to evaluate the specific merits or risks of many potential new prospective business opportunities in which we may engage. In these circumstances, investors will be entirely dependent on the broad discretion and judgment of management in connection with the selection of a prospective business. There can be no assurance that determinations made by management will guarantee that we will achieve our business objectives.

There is no active market in our common stock and none may develop or be sustained.

Our stock is currently quoted on the OTC Bulletin Board under the symbol “"CMDI.OB.”" There is currently no active trading market in our common stock and there is no assurance that an active trading market will develop. In the event that an active trading market commences, there can be no assurance as to the market price of the shares of common stock, whether any trading market will provide liquidity to investors, or whether any trading market will be sustained.

Payment of dividends is unlikely.

We intend to retain our earnings, if any, to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay any dividends on our common stock for the foreseeable future. The payment of dividends will be contingent upon future revenues and earnings, if any, capital requirements and overall financial conditions. The payment of any future dividends will be within the discretion of our board of directors.

We may issue additional securities.

We may issue additional shares of common stock in connection with a future financing. To the extent that additional shares of common stock are issued, our stockholders would experience dilution of their respective ownership interests in our shares. The issuance of additional shares of common stock may adversely affect the market price of our common stock, in the event that an active trading market commences, of which there can be no assurance.

If we become directly subject to the recent scrutiny, criticism and negative publicity involving certain U.S.-listed Chinese companies, we may have to expend significant resources to investigate and resolve the matter which could harm our business operations, stock price and reputation and could result in a loss of your investment in our stock, especially if such matter cannot be addressed and resolved quickly.

Recently, U.S. public companies that have substantially all of their operations in China, particularly companies like us which have completed so-called reverse merger transactions, have been the subject of intense scrutiny, criticism and negative publicity by investors, short sellers, financial commentators and regulatory agencies, such as the United States Securities and Exchange Commission. Much of the scrutiny, criticism and negative publicity has centered around financial and accounting irregularities and mistakes, a lack of effective internal controls over financial accounting, inadequate corporate governance policies or a lack of adherence thereto and, in many cases, allegations of fraud. As a result of the scrutiny, criticism and negative publicity, the publicly traded stock of many U.S. listed Chinese companies has sharply decreased in value and, in some cases, has become virtually worthless. Many of these companies are now subject to shareholder lawsuits, SEC enforcement actions and are conducting internal and external investigations into the allegations. It is not clear what affect this sector-wide scrutiny, criticism and negative publicity will have on our company, our business and our stock price. If we become the subject of any unfavorable allegations, whether such allegations are proven to be true or untrue, we will have to expend significant resources to investigate such allegations and/or defend our company. This situation could be costly and time consuming and distract our management from growing our company. If such allegations are not proven to be groundless, our company and business operations will be severely impacted. It could seriously affect our ability to raise money and our ability to uplist to major stock exchange, and your investment in our stock could be rendered worthless.

General economic conditions may adversely affect our financial condition and results of operations.

The unprecedented events in global financial markets have had a profound impact on the global economy. Many industries are impacted by these market conditions. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates, and tax rates may adversely affect our Company’'s growth and profitability. Specifically:

·● the global credit/liquidity crisis could impact the cost and availability of financing and our Company’'s overall liquidity; ● volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and ● the devaluation and volatility of global stock markets impacts the valuation of our Company’'s equity securities.

These factors could have a material adverse effect on our Company’'s financial condition and results of operations.

Climate change and related regulatory responses may impact our business.

To the extent that climate change increases the risk of natural disasters or other disruptive events in the areas in which we operate, we could be harmed. While we maintain business recovery plans that are intended to allow us to recover from natural disasters or other events that can be disruptive to our business, our plans may not fully protect us from all such disasters or events.

There are risks related to doing business in China given an uncertain regulatory environment.

Uncertainty in the state regulatory environment in China may expose our Company to unexpected liability exposure and possibly even penalties. China has an evolving regulatory environment as to what is permitted and often new regulations are adopted to regulate certain areas where there were no regulations before. As a result, our Company may be exposed to unforeseen risks of violating rules that did not exist. Such risks apply to all aspects of the operation of our Company. In case our Company is found to be in such violation, we could be subjected to monetary and other unexpected penalties. This may in turn have an impact on our results of operation and the value of shares of our common stock.

Capital outflow policies in the People’'s Republic of China may hamper our ability to remit income to the United States.

The PRC has adopted currency and capital transfer regulations. These regulations may require us to comply with complex regulations for the movement of capital. Although our directors believe that it is currently in compliance with these regulations, should these regulations or the interpretation of them by courts or regulatory agencies change, we may not be able to remit all income earned and proceeds received in connection with our operations or from the sale of our operating subsidiary to our stockholders.

The fluctuation of the Renminbi may materially and adversely affect your investment.

The value of the Chinese Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in the PRC’'s political and economic conditions. Any significant revaluation of the Renminbi may materially and adversely affect our cash flows, revenues and financial condition. For example, to the extent that we need to convert U.S. dollars we receive from any future offerings of our common stock into Renminbi for our operations, appreciation of the Renminbi against the U.S. dollar could have a material adverse effect on our business, financial condition and results of operations. Conversely, if we decide to convert our Renminbi into U.S. dollars for the purpose of making payments for dividends on our shares of common stock or for other business purposes and the U.S. dollar appreciates against the Renminbi, the U.S. dollar equivalent of the Renminbi we convert would be reduced. Any significant devaluation of Renminbi may reduce our operation costs in U.S. dollars but may also reduce our earnings in U.S. dollars. The depreciation of significant U.S. dollar denominated assets could result in a charge to our income statement and a reduction in the value of these assets. On the other side, however, the continued appreciation of Renminbi against U.S. dollar will also result in translation gain under U.S. GAAP.

Since July 2005, the RMB has no longer been pegged to the U.S. dollar. Although the People's Bank of China regularly intervenes in the foreign exchange market to prevent significant short-term fluctuations in the exchange rate, the RMB may appreciate or depreciate significantly in value against the U.S. dollar in the medium to long term. Moreover, it is possible that in the future PRC authorities may lift restrictions on fluctuations in the RMB exchange rate and lessen intervention in the foreign exchange market. We may not be able to hedge effectively against Renminbi appreciation, so there can be no assurance that future movements in the exchange rate of Renminbi and other currencies will not have an adverse effect on our financial condition.

In addition, there can be no assurance that we will be able to obtain sufficient foreign exchange to pay dividends or satisfy other foreign exchange requirements in the future.

It may be difficult to enforce judgments or bring actions outside the United States against our Company and certain of our directors and officers.

It may be difficult to effect service of process and enforcement of legal judgments upon our Company and our officers and directors because some of them reside outside the United States. As our operations are presently based in China and some of our key directors and officers reside outside the United States, service of process on our key directors and officers may be difficult to effect within the United States. Also, substantially all of our assets are located outside the United States and any judgment obtained in the United States against us may not be enforceable outside the United States.

We may experience difficulty in establishing business controls and procedures that meet Western standards.

The PRC historically has not adopted a Western style of management and financial reporting concepts and practices, modern banking, computer or other control systems. We may have difficulty in hiring and retaining a sufficient number of qualified employees to work in the PRC. As a result of these factors, we may experience difficulty in establishing management, legal and financial controls, collecting financial data and preparing financial statements, books of account and corporate records and instituting business practices that meet Western standards.

Compliance with changing regulation of corporate governance and public disclosure will result in additional expenses and pose challenges for our management team.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the rules and regulations promulgated thereunder, the Sarbanes-Oxley Act and SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the U.S. public markets. Our management team will need to devote significant time and financial resources to comply with both existing and evolving standards for public companies, which will lead to increased general and administrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.

Compliance with China’'s advertising laws and regulations may be difficult and could be costly, and failure to comply could subject us to government sanctions.

China’'s advertising laws and regulations require advertisers, advertising operators and advertising distributors to ensure the content of the advertisements they prepare or distribute are fair and accurate and are in compliance with applicable law. Violation of these laws or regulations may result in penalties, including fines, confiscation of advertising fees, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the Chinese government may revoke a violator’'s license for advertising operations.

As an advertising service provider, we are obligated under China’'s laws and regulations to monitor the advertising content shown on our network for compliance with applicable law. We endeavor to comply with such requirements, including by requesting relevant documents from the advertisers. However, we can provide no assurance each advertisement that an advertiser or advertising agency client provides us and which we publish is in compliance with relevant advertising laws and regulations or that the supporting documentation and government approvals provided to us by our advertising clients in connection with certain advertising content are complete. Although we review advertising content for compliance with relevant laws and regulations, the content standards in China are less certain and less clear than in those in more developed countries such as the U.S. and we can provide no assurance that we will be able to properly review the content to comply with the standards imposed on us.

We rely on contractual arrangements between Dalian Guo-Heng and V-Media for our operations in China, which may not be as effective as direct ownership in providing operational control.

We rely on contractual arrangements between Dalian Guo-Heng and V-Media to operate our advertising business. For a description of these contractual arrangements, see “"Part I – Item 1 – Business – Overview.”"

These contractual arrangements may not be as effective as direct ownership in providing us with control over our variable interest entity. Under the current contractual arrangements, if V-Media fails to perform its obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies under Chinese laws, including seeking specific performance or injunctive relief and claiming damages, and we can provide no assurance as to the effectiveness of these remedies, if available.

Many of these contractual arrangements are governed by Chinese law and provide for the resolution of disputes through either arbitration or litigation in China. Accordingly, these contracts would be interpreted in accordance with Chinese law and any disputes would be resolved in accordance with Chinese legal procedures. The legal environment in China is not as developed as in other jurisdictions, such as the U.S. As a result, uncertainties in the Chinese legal system could limit our ability to enforce these contractual arrangements, which may make it difficult to exert effective control over V-Media, and our ability to conduct our business may be materially and adversely affected.

Failure to comply with PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident shareholders to personal liability, limit our ability to acquire PRC companies or to inject capital into our PRC subsidiary or affiliate, limit our PRC subsidiary’'s and affiliate’'s ability to distribute profits to us or otherwise materially adversely affect us.

In October 2005, SAFE, issued the Notice on Relevant Issues in the Foreign Exchange Control over Financing and Return Investment Through Special Purpose Companies by Residents Inside China, generally referred to as Circular 75, which required PRC residents to register with the competent local SAFE branch before establishing or acquiring control over an offshore special purpose company, or SPV, for the purpose of engaging in an equity financing outside of China on the strength of domestic PRC assets originally held by those residents. Internal implementing guidelines issued by SAFE, which became public in June 2007 (known as Notice 106), expanded the reach of Circular 75 by (1) purporting to cover the establishment or acquisition of control by PRC residents of offshore entities which merely acquire “"control”" over domestic companies or assets, even in the absence of legal ownership; (2) adding requirements relating to the source of the PRC resident’'s funds used to establish or acquire the offshore entity; covering the use of existing offshore entities for offshore financings; (3) purporting to cover situations in which an offshore SPV establishes a new subsidiary in China or acquires an unrelated company or unrelated assets in China; and (4) making the domestic affiliate of the SPV responsible for the accuracy of certain documents which must be filed in connection with any such registration, notably, the business plan which describes the overseas financing and the use of proceeds. Amendments to registrations made under Circular 75 are required in connection with any increase or decrease of capital, transfer of shares, mergers and acquisitions, equity investment or creation of any security interest in any assets located in China to guarantee offshore obligations, and Notice 106 makes the offshore SPV jointly responsible for these filings. In the case of an SPV which was established, and which acquired a related domestic company or assets, before the implementation date of Circular 75, a retroactive SAFE registration was required to have been completed before March 31, 2006; this date was subsequently extended indefinitely by Notice 106, which also required that the registrant establish that all foreign exchange transactions undertaken by the SPV and its affiliates were in compliance with applicable laws and regulations. Failure to comply with the requirements of Circular 75, as applied by SAFE in accordance with Notice 106, may result in fines and other penalties under PRC laws for evasion of applicable foreign exchange restrictions. Any such failure could also result in the SPV’'s affiliates being impeded or prevented from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation to the SPV, or from engaging in other transfers of funds into or out of China.

We believe our shareholders are currently in compliance with Circular 75. However, because of uncertainty over how Circular 75 will be interpreted and implemented, and how or whether SAFE will apply it to us in the future, we cannot predict how it will affect our business operations or future strategies. For example, our present and prospective PRC subsidiary’'s and affiliate’'s ability to conduct foreign exchange activities, such as the remittance of dividends and foreign currency-denominated borrowings, may be subject to compliance with Circular 75 by our PRC resident beneficial holders. In addition, such PRC residents may not always be able to complete the necessary registration procedures required by Circular 75. We also have little control over either our present or prospective direct or indirect shareholders or the outcome of such registration procedures. A failure by our PRC resident beneficial holders or future PRC resident shareholders to comply with Circular 75, if SAFE requires it, could subject these PRC resident beneficial holders to fines or legal sanctions, restrict our overseas or cross-border investment activities, limit our subsidiary’'s and affiliate’'s ability to make distributions or pay dividends or affect our ownership structure, which could adversely affect our business and prospects.

Adverse changes in the political and economic policies of the Chinese government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our services and have a material adverse effect on our competitive position.

Substantially all of our assets are located in China and substantially all of our revenue is derived from our operations in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. The Chinese economy differs from the economies of many developed countries in many respects, including:

· the amount of government involvement;

· the level of development;

· the growth rate;

· the control of foreign exchange; and

· the allocation of resources.

While the Chinese economy has experienced significant growth in the past 25 years, growth has been uneven both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall Chinese economy, but may also have a negative effect on us. For example, our operating results and financial condition may be adversely affected by the government control over capital investments or changes in tax regulations. We cannot predict the future direction of political or economic reforms or the effects such measures may have on our business, financial position or results of operations. Any adverse change in the political or economic conditions in China, including changes in the policies of the Chinese government or in laws and regulations in China, could have a material adverse effect on the overall economic growth of China and in the advertising industry. Such developments could have a material adverse effect on our business, lead to reduction in demand for our services and materially and adversely affect our competitive position.

The Chinese government exerts substantial influence over the manner in which we must conduct our business activities.

China only recently has permitted provincial and local economic autonomy and private economic activities, and as a result, we are dependent on our relationship with the local government in the province in which we operate our business. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure compliance with such regulations or interpretations.

RISKS RELATED TO THE MARKET FOR OUR STOCK

Our common stock is quoted on the OTC Bulletin Board which may have an unfavorable impact on our stock price and liquidity.

Our common stock is quoted on the OTC Bulletin Board. The OTC Bulletin Board is a significantly more limited market than the New York Stock Exchange or NASDAQ system. The quotation of our shares on the OTC Bulletin Board may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could depress the trading price of our common stock and could have a long-term adverse impact on our ability to raise capital in the future.

The market price of our common stock may be volatile.

The market price of our common stock has been, and will likely continue to be, highly volatile. Some of the factors that may materially affect the market price of our common stock are beyond our control, such as changes in financial estimates by industry and securities analysts and conditions or trends in the industry in which we operate. These factors may materially adversely affect the market price of our common stock, regardless of our performance. In addition, the public stock markets have experienced extreme price and trading volume volatility. This volatility has significantly affected the market prices of securities of many companies for reasons frequently unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of our common stock. We expect the price of our common stock will be subject to continued volatility.

We are subject to penny stock regulations and restrictions.

Our shares are subject to rules applicable to “"penny stock”" which pertain to any equity security with a market price less than $5.00 per share or an exercise price of less than $5.00 per share. Penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in our shares.

Our senior management holds a significant percentage of our outstanding voting securities.

Guojun Wang, our Chairman and Chief Executive Officer, and his wife, Ms. Ming Ma, who is President and a director of the board, beneficially own 10,167,600 shares of common stock, which represent 36.8% of the common stock of the Company. Mr. Wang owns 6,850,000 of these shares, which represents 24.8% of the common stock of the Company, and Ms. Ma owns 3,317,600 of these shares, which represents 12.0% of the common stock of the Company. As a result, they possess significant influence, giving them the ability to prevent significant corporate transactions. Their ownership and control may impede or delay any future change in control through merger, consolidation, takeover or other business combinations and may discourage a potential acquirer from making a tender offer.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

None.

ITEM 2. PROPERTIES.

Our principal executive offices are located at 8th Floor, Golden Name Commercial Tower, 68 Renmin Road, Zhongshan District, Dalian, P.R. China, 116001. This office consists of approximately 8,988 square feet which we leased from Mr. Guojun Wang and Ms. Ming Ma for a nominal $1 a year. This lease agreement is renewable each year for a one-year period.

Our Shenyang subsidiary office is located at 5B-2-1 Room, 136 Huigong Street, Shenhe District, Shenyang, P.R. China, 110013. This office consists of approximately 4,700 square feet. This lease agreement is renewable each year for a one-year period.

Our Tianjin subsidiary office is located at Room 1-2-1217, Chengji Economics and Trade Center, Heping District, Tianjin, P.R. China, 300051. This office consists of approximately 678 square feet. This lease agreement is renewable each year for a one-year period.

Our Shanghai subsidiary office is located at Room 1018, No. 799, Huanlindong Road, Pudong New District, Shanghai, P.R. China, 200123. This office consists of approximately 215 square feet. This lease agreement is renewable upon expiration for a two-year period.

Dalian Vastitude & Modern Transit Media Co., Ltd. is located at 11 Liaohe West Road, Development Zone, Dalian, P.R. China, 116600. This office consists of approximately 3,331 square feet. This lease agreement is renewable upon expiration for a three-year period.

Vastitude Media - US Corp. is located at 1221 Ave of the Americas, Suite 4200, New York, New York, 10020. This office consists of approximately 1000 square feet. The lease agreement is automatically renewed by monthly.

ITEM 3. LEGAL PROCEEDINGS.

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.

ITEM 4. ~~(REMOVED~~MINE ~~AND~~SAFETY ~~RESERVED.)~~DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~Trading~~Market Information

Our common stock is currently quoted on the OTC Bulletin Board maintained by the NASD under the symbol CMDI.OB. The transfer agent for our common stock is Securities Transfer Corporation, 2591 Dallas Parkway, Suite 102, Frisco, TX 75034.

The following table sets forth the high and low closing bid quotations for our common stock for the fiscal quarters indicated as reported on the OTC Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. Trading in our common stock has been sporadic and does not constitute an active market. Our common stock is thinly traded and any reported sale prices may not be a true market-based valuation of our common stock.

Year 2014	High ($)		Low ($)
First Quarter ended September 30, 2013		0.15		0.06
Second Quarter ended December 31, 2013		0.15		0.05
Third Quarter ended March 31, 2014		0.11		0.07
Fourth Quarter ended June 30, 2014		0.40		0.11

Year 2013	High ($)		Low ($)
First Quarter ended September 30, 2012		0.28		0.11
Second Quarter ended December 31, 2012		0.12		0.03
Third Quarter ended March 31, 2013		0.20		0.06
Fourth Quarter ended June 30, 2013		0.15		0.13

Year 2012	High ($)		Low ($)
First Quarter ended September 30, 2011		0.58		0.25
Second Quarter ended December 31, 2011		0.35		0.10
Third Quarter ended March 31, 2012		0.28		0.12
Fourth Quarter ended June 30, 2012		0.28		0.10

As of the date of this filing, there were approximately 273 owners of record of our common stock.

AsTrades ofin ~~September~~our 11common stock may be subject to Rule 15g-9 under the Exchange Act, ~~2013~~which imposes requirements on broker-dealers who sell securities subject to the rule to persons other than established customers and accredited investors. For transactions covered by the rule, ~~there~~broker-dealers ~~were~~must ~~approximately~~make ~~274~~a ~~owners~~special ofsuitability ~~record~~determination for purchasers of ~~our~~the ~~common~~securities ~~stock~~and receive the purchaser's written agreement to the transaction before the sale.

~~Trades~~Our inshares ~~our~~are ~~common~~subject ~~stock~~to ~~may~~rules beapplicable ~~subject~~to "penny stock" which pertain to ~~Rule~~any ~~15g~~equity security with a market price less than $5.00 per share or an exercise price of less than $5.00 per share. Penny stock rules require a broker-9dealer, ~~under~~prior ~~the~~to ~~Exchange~~a ~~Act~~transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, which ~~imposes~~specifies ~~requirements~~information onabout penny stocks and the nature and significance of risks of the penny stock market. A broker-~~dealers~~dealer ~~who~~must ~~sell~~also ~~securities~~provide ~~subject~~the tocustomer with bid and offer quotations for the ~~rule~~penny tostock, ~~persons~~the ~~other~~compensation ~~than~~of ~~established~~the ~~customers~~broker-dealer, and ~~accredited~~sales ~~investors. For~~person ~~transactions~~in ~~covered~~the bytransaction, and monthly account statements indicating the ~~rule~~market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-~~dealers~~dealer must make a special ~~suitability~~written determination ~~for~~that ~~purchasers~~the ofpenny stock is a suitable investment for the ~~securities~~purchaser and receive the purchaser’'s written agreement to the transaction. ~~before~~These disclosure requirements may have the ~~sale~~effect of reducing the trading activity in our shares.

Our shares are subject to rules applicable to “penny stock” which pertain to any equity security with a market price less than $5.00 per share or an exercise price of less than $5.00 per share. Penny stock rules require a broker-dealer, prior to a transaction in a penny stock, to deliver a standardized risk disclosure document prepared by the SEC, which specifies information about penny stocks and the nature and significance of risks of the penny stock market. A broker-dealer must also provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer, and sales person in the transaction, and monthly account statements indicating the market value of each penny stock held in the customer's account. In addition, the penny stock rules require that, prior to a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in our shares.

Dividend Policy

We have not paid or declared any cash dividends on our common stock in the past and do not foresee doing so in the foreseeable future. We intend to retain any future earnings for the operation and expansion of our business. Any decision as to future payment of dividends will depend on the available earnings, the capital requirements of our Company, our general financial condition and other factors deemed pertinent by our Board of Directors.

~~Sales~~Securities ofauthorized ~~Unregistered~~for ~~Securities~~issuance under equity compensation plans.

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. SELECTED FINANCIAL DATA.

As a “"smaller reporting company,”" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 7. MANAGEMENT’'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Factors that can affect our results of operations are as follows:

Domestic Spending and Urbanization

The demand for our advertising time slots is directly related to the outdoor advertising spending in northeast China and the overall economic growth in China. Advertising spending is largely determined by the economic conditions in our region. The Chinese government is aimed at building a domestic consumer-driven economy, which we believe, will continue to generate demand for outdoor advertising.

Expansion of Our Market Presence by Launching City Navigator ® Networks in Other Major Commercial Cities

We believe our proprietary multi-media advertising system – City Navigator ® Network is one of the most advanced outdoor advertising platforms available in China. This system combines the latest LED displaying technology, internet and WI-FI technology, and has proven to be very effective in our competition to get access to top tier cities such as Shanghai and Beijing.

By using wireless access technology, our LED displays at bus and taxi shelters are able to display real time programs at the control of our centralized computer systems. It consists of a Wi-Fi receiver, large-screen LED display, and web-based touch-screen kiosk which provide the public with information on all aspects of the city life, including travel, traffic, restaurants, shopping, hotels, business, medical and education. In addition, every City Navigator is equipped with Bluetooth, wireless access and printing technology. Users can either print the information or send the information to their cell phones or computers. As City Navigator® Network adopts Wi-Fi technology, users can enjoy its service from any area covered by its Wi-Fi signals. We are aggressively expanding our media platform by launching City Navigator ® Networks in our target cities, such as, Tianjin, Qingdao and Shanghai, to create our own cross-region advertising network and enhance our advertising distribution capacity.

Promotion of Our Brand Name to Attract a Wider Client Base and Increase Revenues

We promote our brand name, [国域无疆]TM, through both our own media channels and public channels in North China. We believe that the enhancement of public awareness to our brand name will help to broaden our client base, especially in the new marketplace such as Shenyang and Tianjin. As we expand our advertising client base and promote public’'s awareness to our brand, demand for time slots and advertising space on our network will continue to grow.

Upgrade of Our Outdoor Billboard Network with New Digital Display Technology

We intend to capitalize recent advances in digital display technology, especially mega-screen LED displays, to meet major institutional clients’' needs. Because the LED displays can be linked through centralized computer systems to instantaneously change static advertisements, and are highly visible even during bright daylight, it improves the advertising effectiveness and efficiency markedly. We plan to build more mega-screen (100 square meters to 500 square meters, approximately 1,076.4 square feet to 5,382 square feet) LED displays at premier locations in our marketplace. The Company has entered into a one-year lease agreement commencing March 1, 2012 for a LED in Time Square, New York City and signed a new extension agreement to extend the lease through August 31, 2014. In January 2013, the Company signed a contract valued at $900,000 with a customer to sublease certain advertising time slots of its leased Time Square Billboard for one year term effective January 1, 2013. There are currently additional time slots available for lease.

As we continue to expand our network, we expect to face a number of challenges. We have expanded our network rapidly, and we, as well as our competitors, have occupied many of the most desirable locations in Dalian. In order to continue expanding our network in a manner that is attractive to potential advertising clients, we must continue to identify and occupy desirable locations and to provide effective channels for advertisers. In addition, we must react to continuous technological innovations in the use of wireless and broadband technology in our network, and changes in the regulatory environment, such as the regulations allowing 100% foreign ownership of PRC advertising companies and new regulations governing cross-border investment by PRC persons.

We believe that our business model and success in our regional market give us a considerable advantage over our competitors. Our future growth will depend primarily on the following factors:

●	Overall economic growth in China, which we expect to contribute to an increase in advertising spending in major urban areas in China where consumer spending is concentrated;

●	Our ability to expand our network into new locations and additional cities including New York;

●	Our ability to expand our sales force and engage in increased sales and marketing efforts;

●	Our ability to expand our client base through promotion of our services;

●	Our ability to expand our new systems including large-screen LED display network and City Navigator® Networks.

Results of Operations for the Year Ended June 30, ~~2013~~2014 Compared to the Year Ended June 30, ~~2012~~2013

Revenue

The following table shows the operations of the Company on a consolidated basis for the fiscal years ended June 30, ~~2013~~2014 and ~~2012~~2013:

REVENUES	Fiscal Years Ended June 30,
	2013		2012		Difference			% Change
	2014		2013		Difference				% Change
Dalian District
Street Fixture and Display network	$	67,~~695~~025,~~706~~688	$	56,~~316~~695,~~472~~706	$	1329,~~379,234~~982		~~25.9~~	%	4.9	%
City Transit system Display network		43,~~094~~483,~~252~~114		34,~~015~~094,~~754~~252		1(611,~~078,498~~138	)	~~35.8~~	%	(14.9	)%
Outdoor Billboards		3,~~659~~505,~~857~~519		3,~~915~~659,~~086~~857		(~~255~~154,~~229)~~338	)	~~(6.5)~~	%	(4.2	)%
City Navigator		~~351~~307,~~288~~144		1351,~~356,042~~288		(144,~~004,754)~~144	)	~~(74.1)~~	%	(12.6	)%
Other service income (a)		1426,~~789,061~~575		~~526~~1,~~154~~789,061		(1,~~262~~362,~~907~~486	)	~~240~~	%	(76.2	)%
Subtotal for Dalian District	$	1614,~~590~~748,~~164~~040	$	1416,~~129~~590,~~508~~164	$	2(1,~~460~~842,~~656~~124	)	~~17.4~~	%	(11.1	)%
Shenyang District
Street Fixture and Display network	$	~~342~~262,~~940~~812	$	~~256~~342,~~543~~940	$	86(80,~~397~~128	)	~~33.7~~	%	(23.4	)%
Outdoor Billboards		~~757~~619,~~659~~628		~~982~~757,~~923~~659		(~~225~~138,~~264)~~031	)	~~(22.9)~~	%	(18.2	)%
Subtotal for Shenyang District	$	1882,~~100,599~~440	$	1,~~239~~100,~~466~~599	$	(~~138~~218,~~867)~~159	)	~~(11.2)~~	%	(19.8	)%
Beijing District
Outdoor Billboards	$	21,~~416~~244,~~329~~343	$	2,~~124~~416,~~900~~329	$	~~291~~(1,~~429~~171,986	)	~~13.7~~	%	(48.5	)%
Subtotal for Beijing District	$	21,~~416~~244,~~329~~343	$	2,~~124~~416,~~900~~329	$	~~291~~(1,~~429~~171,986	)	~~13.7~~	%	(48.5	)%
Tianjin District
Outdoor Billboards	$	~~440~~339,~~331~~398	$	~~422~~440,~~556~~331	$	17(100,~~775~~933	)	~~4.2~~	%	(22.9	)%
Subtotal for Tianjin District	$	~~440~~339,~~331~~398	$	~~422~~440,~~556~~331	$	17(100,~~775~~933	)	~~4.2~~	%	(22.9	)%
Shanghai District
Outdoor Billboards	$	~~825~~104,~~793~~688	$	~~554~~825,~~255~~793	$	~~271~~(721,~~538~~105	)	49	%	(87.3	)%
Subtotal for Shanghai District	$	~~825~~104,~~793~~688	$	~~554~~825,~~255~~793	$	~~271~~(721,~~538~~105	)	49	%	(87.3	)%
US District
Outdoor Billboards	$	~~450~~1,~~000~~770,599	$	-450,000	$	~~450~~1,~~000~~320,599		~~100~~	%	293.5	%
Subtotal for US District	$	~~450~~1,~~000~~770,599	$	-450,000	$	~~450~~1,~~000~~320,599		~~100~~	%	293.5	%
Total Revenues	$	2119,~~823~~089,~~216~~508	$	1821,~~470~~823,~~685~~216	$	3(2,~~352~~733,~~531~~708	)	~~18.2~~	%	(12.5	)%

(a) Other service income generated by Construction & Design service provided by Dalian Vastitute Engineering & Design Company and technique service provided by Dalian Vastitute Network Technology Company to outside customers.

Revenue

~~Our~~Revenues ~~total revenues~~ for the fiscal year ended June 30, ~~2013~~2014 were $2119,~~823~~089,~~216~~508, ana ~~increase~~decrease of $32,~~352~~733,~~531~~708 or 1812.25%, from $1821,~~470~~823,~~685~~216 for the fiscal year ended June 30, ~~2012~~2013. The mainly reason is the Company was affected by the general economic downturn, especially real estate industry during 2012 and 20013. In past year, the Company monitored its operating segments and adjusted its business strategy to face economic change. In order to focus resources towards profitable subsidiaries and segments, the Company is downsizing its non-profitable subsidiaries. It may not renew billboard rentals that did not bring enough cash flow in the past.

For the fiscal year ended June 30, ~~2013~~2014, sales in Dalian district, accounted for 7677.3% of our total sales, ~~increased~~a bydecrease of $21,~~460~~842,~~656~~124, or 1711.41%, to $1614,~~590~~748,~~164~~040 from $1416,~~129~~590,~~508~~164 for the fiscal year ended June 30, ~~2012~~2013. The ~~increase~~decrease was mainly because of ~~the~~construction ~~Company’s~~revenue ~~market~~which ~~leadership~~decreased ~~position~~$1,362,486 ~~and~~or ~~the~~76.2%, ~~advertising~~from ~~market~~$1,789,061 ~~recovery~~to ~~in China~~$426,575. ~~However,~~Revenue ~~revenue~~ from City Transit System Display Network and City Navigator had a decline of 7414.19% and 12.6% compared with revenue last year. ~~This~~These ~~was~~were due to 1) the Company changed its strategy to focus more on outdoor LED screens and billboards, which have less government regulations on location approval. City Navigator, on the contrary, faces more stringent approval by the government. 2) ~~Clientele~~Customers for City ~~Navigators~~Navigator are mostly in the real estate industry. Real estate ~~clients~~customers are still under financial pressure and thus ~~lowered~~have lower advertisement ~~budget~~budgets. Overall sales in Shenyang district decreased by $~~138~~218,~~867~~159, or 1119.28%, to $1882,~~100,599~~440 from $1,~~239~~100,~~466~~599 for the fiscal year ended June 30, ~~2012~~2014. In Shenyang, sales generated from street fixture and display ~~network~~networks ~~increased~~decreased by 3323.74%, or $8680,~~397~~128 for the fiscal year ended June 30, ~~2013~~2014 compared with same period in ~~2012~~2013, and sales generated from billboards including LED screens decreased by 2218.92%, or $~~225~~138,~~264~~031 for the fiscal year ended June 30, ~~2013~~2014 as compared with the same period in 2013.

For the fiscal year ended June 30, ~~2013~~2014, sales in Tianjin district ~~increased~~decreased by $17100,~~775~~933, or 422.29%, to $~~440~~339,~~331~~398 from $~~422~~440,~~556~~331 for the fiscal year ended June 30, ~~2012~~2013. Sales revenue in Shanghai District ~~increased~~decreased by $~~271~~721,~~538~~105 or 4987.03% to $~~825~~104,~~793~~688 from $~~554~~825,~~255~~793 for the fiscal year ended June 30, ~~2012~~2013. Sales revenue in Beijing District ~~increased~~decreased by $~~291~~1,~~429~~171,986 or 1348.75% to $21,~~416~~244,~~329~~343 from $2,~~124~~416,~~900~~329 for the fiscal year ended June 30, ~~2012~~2013.

Sales revenue in the US ~~district~~ increased by $~~450~~1,~~000~~320,599 to $ 1,770,599 from ~~none~~$450,000 for the fiscal year ended June 30, ~~2013~~2014, as ~~in January 2013,~~ the Company signed avarious ~~contract~~contracts ~~valued~~with atcustomers ~~$900,000~~from ~~with~~both aChina ~~customer~~and US to sublease certain advertising time ~~slot~~slots of its leased Time Square Billboard ~~for~~during ~~one~~the year. ~~term~~This ~~effective~~lease expired ~~January~~on 1August 31, ~~2013~~2014, and was not renewed since it did not generate enough sales to meet the Company's expectation.

Cost of Revenue

Cost of revenue for the fiscal year ended June 30, ~~2013~~2014 were $1816,~~247~~250,~~311~~101, ana ~~increase~~decrease of $71,~~496~~997,~~913~~210 or 6910.79%, from $1018,~~750~~247,~~398~~311 for the same period ended June 30, ~~2012~~2013. The ~~increase~~decrease in cost of revenue was primarily attributable to: (i) The ~~increase~~decrease in ~~depreciation of about $0.2 million due to increase of property plant and equipment. (ii) The increase in~~ billboard rights amortization expense in the amount of $10.84 million due to ~~increase~~a decrease of billboard right obtained in China. (~~iii~~ii) ~~The~~Decrease ~~cost of Time Square LED~~ in ~~the amount of $3.8 million, compared with $1.1 million in the same period ended June 30, 2012. (iv) Increase in labor and~~ raw material cost. As a percentage of total revenues, cost of revenue accounted for approximately 8385.61% and 5883.26% for the fiscal year ended June 30, ~~2013~~2014 and ~~2012~~2013, respectively. We incurred fees to building owners for placing and/or operating our digital screens. These fees constitute a significant portion of our cost of revenues. While we make payment almost immediately after signing the leasing contract and make additional payment on a fixed schedule, it took us a while to ramp up sales of advertising time slots and locations and build up revenues from these newly acquired or leased platforms. As we continue to operate the current advertising network and look for opportunity to expand and add on new platforms, we may experience a similar level of leasing fees and billboard rights amortization expense. However, as the newly acquired platforms start to generate revenue, we anticipate a decrease in the percentage of cost of revenue relative to revenue.

COST OF REVENUES	Fiscal Year Ended June 30,
	2013		2012		Difference			% Change
	2014		2013		Difference			% Change
Dalian District
Street Fixture and Display network	$	43,~~572~~804,~~063~~975	$	34,~~093~~572,~~073~~063	$	1(767,~~478,990~~088	)		47(16.8	)%
City Transit system Display network		2,~~470~~676,~~733~~707		12,~~916~~470,~~391~~733		~~554~~205,~~342~~974			288.93	%
Outdoor Billboards		2,~~117~~494,~~049~~156		12,~~831~~117,~~756~~049		~~285~~377,~~293~~107			1517.68	%
City Navigator		~~316~~291,~~846~~828		~~511~~316,~~209~~846		(~~194~~25,~~363)~~018	)		(387.0)9	)%
Other service cost (b)		1220,~~782,543~~740		~~451~~1,~~503~~782,543		(1,~~331~~561,~~040~~803	)		~~294~~(87.86	)%
Subtotal for Dalian District	$	119,~~259~~488,~~234~~406	$	711,~~803~~259,~~932~~234	$	3(1,~~455~~770,~~302~~828	)		44(15.37	)%
Shenyang District
Street Fixture and Display network	$	~~365~~360,~~630~~457	$	~~220~~365,~~912~~630	$	~~144~~(5,~~718~~173	)		65(1.54	)%
Outdoor Billboards		~~759~~823,~~033~~403		~~571~~759,~~727~~033		~~187~~64,~~306~~370			~~32.~~8.5	%
Subtotal for Shenyang District	$	1,~~124~~183,~~663~~860	$	~~792~~1,~~639~~124,663	$	~~332~~59,~~024~~197			415.93	%
Beijing District
Outdoor Billboards	$	1,~~483~~309,~~807~~945	$	1,~~070~~483,~~574~~807	$	~~413~~(173,~~233~~862	)		38(11.67	)%
Subtotal for Beijing District	$	1,~~483~~309,~~807~~945	$	1,~~070~~483,~~574~~807	$	~~413~~(173,~~233~~862	)		38(11.67	)%
Tianjin District
Outdoor Billboards	$	~~151~~199,~~535~~801	$	~~260~~151,~~749~~535	$	~~(109~~48,~~214~~266	)		~~(41~~31.9)	%
Subtotal for Tianjin District	$	~~151~~199,~~535~~801	$	~~260~~151,~~749~~535	$	~~(109~~48,~~214~~266	)		~~(41~~31.9)	%
Shanghai District
Outdoor Billboards	$	~~955~~541,~~218~~017	$	~~822~~955,~~504~~218	$	~~132~~(414,~~714~~201	)		16(43.14	)%
Subtotal for Shanghai District	$	~~955~~541,~~218~~017	$	~~822~~955,~~504~~218	$	~~132~~(414,~~714~~201	)		16(43.14	)%
United States
Outdoor Billboards		3,~~272~~527,~~854~~072		–3,272,854		3254,~~272,854~~218			~~100~~7.8	%
Subtotal for United States		3,~~272~~527,~~854~~072		–3,272,854		3254,~~272,854~~218			~~100~~7.8	%
Total Cost of Revenue	$	1816,~~247~~250,~~311~~101	$	1018,~~750~~247,~~398~~311	$	7(1,~~496~~997,~~913~~210	)		69(10.79	)%

(b) Other service ~~cost~~costs attributed by Dalian Vastitute Engineering & Design Company and by Dalian Vastitute Network Technology Company when they provide Construction & Design service and technique service to outside customers, respectively.

Gross Profit

Gross profit for the fiscal year ended June 30, ~~2013~~2014 decreased by $4736,~~144,382~~498 or 5320.76% to $32,~~575~~839,~~905~~407 from $73,~~720~~575,~~287~~905 for the same period in ~~2012. The decrease in gross profit was due to the increase in cost of revenue during the fiscal year ended June 30,~~ 2013. Our gross profit margin during the fiscal year ended June 30, ~~2013~~2014 and ~~2012~~2013 were 1614.49% and 4116.84%, respectively. The decrease in our gross profit margin during fiscal year ~~2013~~2014 was primarily due to ~~(i)~~ decreased ~~increased~~construction ~~cost of~~ revenue ~~which was mainly caused by increased depreciation expense of advertising equipment~~ and ~~increase~~revenue infrom ~~overhead~~Beijing ~~due to the higher labor cost and raw material cost of $3~~district.89 ~~million, (ii) cost of Times Square LED was about $3.8 million in current period.~~ As a result, our gross profit margin was lower than the level we normally would expect. We intend to ~~increase~~focus ~~our~~resources ~~sales~~towards ~~effort~~profitable tosubsidiaries ~~improve~~and ~~the~~segments. ~~utilization~~We ~~rate~~may ofnot ~~our~~renew ~~platforms~~billboard inrentals ~~the~~that ~~coming~~did ~~year~~not tobring ~~improve~~enough ~~our~~cash ~~gross~~flow ~~profit~~in ~~margin,~~the ~~and~~past. Instead, we ~~expect~~will toinvest ~~have~~ a ~~margin~~higher ~~recovery~~dollar asamount ~~the~~in ~~new~~business ~~market~~segments ~~gains~~that ~~sales~~have ~~momentum~~higher gross margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses totaled $75,~~548~~139,~~597~~047 during the fiscal year ended June 30, ~~2013~~2014, ana ~~increase~~decrease of $~~961~~2,~~787~~409,548 or 1431.69%, compared to $67,~~586~~548,~~810~~795 for the same period ended June 30, ~~2012~~2013. ~~Along~~The ~~with~~decrease ~~an increase~~ in our ~~payroll and administrative costs, the increase in our~~ operating expenses was mainly due to (1) a decrease of $20.29 million in bad debt provision; and (2) more ~~increased~~controlled selling and promotional expenses ~~so as to improve market awareness~~ in both existing and new markets, and other costs related to supporting our sales force ~~as the overall advertising market became more competitive~~. We expect selling and marketing expenses to increase at a controllable ~~pace~~rate as we will continue to invest greater resources in sales and marketing of our advertising network.

~~Income~~Loss from Operations

Loss from operations was $32,~~972~~299,~~690~~640 for the year ended June 30, ~~2013~~2014 as compared to $13,~~133~~972,~~477~~690 ~~income~~loss for the year ended June 30, ~~2012~~2013, a decrease of $51,~~106~~673,~~167~~050 or ~~450~~42.51%. The decrease in loss from operation was mainly due to ~~our~~a ~~increase~~decrease in cost of revenue and selling, general and administrative expense, offsetting the ~~increase~~decrease in total revenue. For the year ended June 30, ~~2013~~2014, non-cash expenses include $9.63 million in depreciation and amortization expense and $21.23 million of provision for doubtful accounts. For the year ended June 30, ~~2012~~2013, non-cash expenses include $4.9.6 million of depreciation and amortization expense and $02.2 million of provision for doubtful accounts.

Other Income (Expense)

For the fiscal year ended June 30, ~~2013~~2014, we had total other expense of $~~848~~881,~~589~~262, an increase of $~~301~~32,~~008~~673 or 553.9%, compared with $~~547~~848,~~581~~589 during the same period of ~~2012~~2013. The increase in other expenses was mainly due to the ~~investment~~decrease ~~loss~~of ~~and~~subsidy ~~increasing interest expense~~income.

~~Total~~Interest ~~interest~~ expense on bank loans for the fiscal year ended June 30, ~~2013~~2014 and ~~2012~~2013, amounted to $1,~~359~~205,~~366~~755 and $1,~~236~~359,~~432~~366, respectively.

~~Income (~~Loss) Before Income Taxes

Loss before income taxes was $43,~~821~~180,~~279~~902 for the year ended June 30, ~~2013~~2014 as compared to ~~income~~a loss before income taxes of $~~585~~4,~~896~~821,279 for the year ended June 30, ~~2012~~2013, representing a decrease of $51,~~407~~640,~~175~~377 or ~~922~~34.90% due to the reasons described above.

Income tax provision (benefit)

Our profit is subject to the prevailing tax rate applicable to the respective jurisdictions in which we operate.

For the fiscal year ended June 30, ~~2013~~2014, we reported a total income tax provision of $~~875~~125,~~065~~741 due to operating income in certain of our Chinese subsidiaries incurred during the year ~~and valuation allowance to deferred tax assets~~. For the same period in ~~2012~~2013, we reported a total income tax provision of $~~226~~875,~~807~~065. For the year ended June 30, ~~2013~~2014, management concluded the realization of PRC deferred tax assets is uncertain. ~~The~~A ~~increase in the deferred tax assets totaled $623,392 for the year ended June 30, 2013. Accordingly, a~~ full valuation allowance has been provided against the deferred tax assets as of June 30, ~~2013~~2014. The valuation allowance as of June 30, ~~2013~~2014 and ~~2012~~2013 was $10.0276 million and $01.02, respectively.

Net ~~Income (~~Loss) attributable to V- Media Corp.

Net loss attributable to the Company was $63,~~060~~110,~~879~~653 for the fiscal year ended June 30, ~~2013~~2014, as compared with a net ~~income~~loss of $506,~~853~~060,879 during the fiscal year ended June 30, ~~2012~~2013. The decrease in net ~~income~~loss was mainly attributed to ~~increase~~our decrease in cost of revenue, and selling, general and administrative ~~expenses~~expense, offsetting the decrease in total revenue.

Comprehensive Income (Loss) Attributable to the Company

Our business operates primarily in Chinese Renminbi (“"RMB”"), but we report our results in U.S. Dollars. The conversion of our accounts from RMB to U.S. Dollars results in translation adjustments. As a result of a currency translation adjustment gain, our comprehensive loss was $53,~~725~~527,~~061~~607 during the fiscal year ended June 30, ~~2013~~2014, as compared with comprehensive ~~income~~loss of $~~201~~5,~~359~~725,061 during the fiscal year ended June 30, ~~2012~~2013.

The exchange rates used for foreign currency translation were as follows (US$1 = RMB):


Period Covered	Balance Sheet Date Rate		Average Rate

Year ended June 30, 2014		6.1538		6.1410
Year ended June 30, 2013		6.1372		6.2462

Liquidity and Capital Resources

We have historically funded our working capital needs from operations, advance payments from customers, bank borrowings, and capital from shareholders. Presently, our principal sources of liquidity are generated from our operations and loans from commercial banks ~~and capital leases~~. Our working capital requirements are influenced by the level of our operations, the numerical and dollar volume of our sales contracts, the progress of our contract execution, and the timing of accounts receivable collections.

Based on our current operating plan, we believe that our existing resources, including cash generated from operations, bank loans and bank notes payable and advances from suppliers will be sufficient to meet our working capital requirement for our current operations over the next twelve months. In the past few months, our revenue increased due to our effort of client diversification and strategy adjustment. In order to fully implement our business plan and continue our growth, however, we will require additional capital either from our shareholders or from outside sources. Our long-term liquidity will depend on our ability to refinance our debts. The Company expects to be able to refinance its short term loans based on past experience and the Company’'s good credit history. In July 2012, we signed an agreement with Bank of Asia, pursuant to which, the bank will provide us with a RMB 22 million ($3.6 million) revolving note payable credit line from July 25, 2012 to July 25, 2020. InOn ~~May~~September ~~2013~~4, 2014, we signed another agreement with ~~China~~Industrial ~~Merchants~~and Commercial Bank of China, and pursuant to ~~which~~the agreement, the bank ~~will~~provided ~~provide~~ a ~~RMB10~~RMB ~~million ($~~1.68 million ($292,500) ~~revolving~~one-year ~~notes~~loan ~~payable credit line~~ to us ~~from~~until ~~May~~September 273, ~~2013 to May 26, 2014~~2015. ~~We also have a line of credit from Bank of China in the amount of $3.48 million.~~ Our major Shareholder, Mr. Guojun Wang ~~will~~has pledged to provide personal loans when necessary to provide us with sufficient liquidity for the next 12 months. For the year ended June 30, 2013, non-cash charge offs amounted to $12.2 million which includes $9.6 million depreciation and amortization expense, $2.2 million provision for doubtful accounts and $0.4 million deferred tax provision.

As Additionally, ofour ~~June~~Time ~~30,~~Square ~~2013~~billboard lease has expired on August 31, 2014 and the ~~Company’s~~lease ~~cash~~was ~~and~~not ~~cash~~renewed ~~equivalents~~due ~~amounted~~to the recurring loss on this project. The management expects to save $~~2,148,321,~~3 anmillion ~~increase~~lease ofpayment ~~$621,717~~annually ~~from~~on this project and will cut approximately $1.8 million loss on the bottom line. Without this project,~~526,604~~ asthe ofCompany expects to turn around and become profitable for the fiscal year ending June 30, ~~2012~~2015.

As of June 30, 2014, the Company's cash and cash equivalents amounted to $1,141,377, a decrease of $1,006,944 from $2,148,321 as of June 30, 2013.

Cash Flow from Operating Activities

Net cash provided by operating activities was $65,~~825~~423,~~723~~060 for the fiscal year ended June 30, ~~2013~~2014, a decrease of $1,~~942~~402,~~185~~663 from the cash provided by operating activities of $86,~~767~~825,~~908~~723 for the fiscal year ended June 30, ~~2012~~2013. The decrease was mainly due to ~~decreased~~decrease of our net ~~income~~loss. ofIn $6addition,~~055,433,~~ ~~increase~~our ofaccounts ~~account~~ receivable decreased ofby $~~518~~351,~~031~~245, ~~decrease~~which ofis ~~deferred~~more ~~revenues~~than oflast year, and other payable decreased by $1877,~~346,801~~896 ~~and~~instead ~~accounts~~of increasing. Accounts payable decreased instead of $1increasing,~~826,658,~~ ~~offset~~as byit ~~increase~~did last year as well. We also experienced decrease of depreciation and amortization of $4369,~~765~~457,~~112,~~ ~~increase~~and a decrease of provision for doubtful accounts of $2912,~~014,113~~437. ~~and~~Other ~~other~~assets, ~~liabilities~~ including other ~~payable~~current ofassets ~~$555,006~~ and ~~tax~~security ~~payable~~deposit decreased instead of ~~$689,033~~increasing as well.

Cash Used in Investing Activities

Net cash used in investing activities in the fiscal year ended June 30, ~~2013~~2014 was $8,~~755~~232,~~514~~704 as compared to cash used in investing activities of $98,~~224~~755,~~072~~514 for the fiscal year ended June 30, ~~2012~~2013. Cash used in investing activities in current period was primarily for acquisitions of new outdoor advertising platforms to expand our existing advertising network, ~~and~~offset by net repayments of loans to third parties.

Cash Provided by Financing Activities

For the fiscal year ended June 30, ~~2013~~2014, net cash provided by financing activities was $21,~~488~~806,~~616~~265 as a result of i) net proceeds from ~~bank~~restricted ~~acceptance~~cash ~~notes payable~~ was $50.14 million; ii) Net proceeds from short-term bank loans was approximately $13.13 million, iii) net proceeds from ~~capital~~related ~~contributions~~party loans of $~~334~~54,~~603~~616, partially offset by cash used in ~~restricted~~repayment ~~cash~~of bank acceptance notes payable of $31.36 million and $0.64 million repayment of long-term loans. Net cash used in financing activities was $~~142~~2,~~674~~488,616 for the fiscal year ended June 30, ~~2012~~2013, primarily due to net repayment of ~~short~~restricted cash of $3.3 million, related party loans of $0.3 million and long-term ~~bank~~ loans of $~~769,686~~0.6 million and partially offset by a $~~431~~334,~~130~~603 proceeds from ~~related~~capital ~~party~~contributions, ~~loan and~~ $~~481,230~~1.1 million proceeds from ~~long~~short-term bank loans and $5.1 million proceeds from bank acceptance notes payable.

Loan Facility

Short-Term Loans

a) Loan payable to Shanghai Pudong Development bank ~~consisted~~is ~~of two loans. One was~~ a one-year term loan from ~~November~~June 2219, ~~2011~~2014 to ~~November 21, 2012 for RMB 6,000,000 ( $944,400). The loan has been repaid in September, 2012. The second loan was a one-year term loan from~~ June 18, ~~2012~~2015 tofor ~~June 14~~RMB12, ~~2013 in the amount of RMB 10,~~000,000 (~~approximately~~ $1.5795 million) at a variable interest rate based on the interest rate set by the People’'s Bank of China. The ~~During the periods presented, the~~ effective rate ~~was~~is 7.25% per year. This loan ~~was~~has ~~repaid~~been inguaranteed ~~June~~by ~~2013~~the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma as well as the Joint Venture Guarantee Group Co., LTD, an independent third party guarantee company.

b) Loan payable to Dalian Bank Xigang Branch ~~consists of two loans; A one-year term loan from March 27, 2012 to March 26, 2013 with the amount of RMB 10,000,000 ($1.57 million). The loan was repaid~~ in ~~March 2013. Another loan is in~~ the amount of RMB 20,000,000 ($3.2625 million) for a one-year term from December 20, 2012 to December 19, 2013 ~~with a fixed interest rate of 8.4% per year. This loan has been guaranteed by an unrelated company~~,was ~~Dalian~~repaid ~~Huanbohai~~on ~~Development~~the ~~Credit~~due ~~Guaranty Company~~date. ~~The Company pledged its trademark for this loan.~~

c) Loan payable to Industrial and Commercial Bank of China was for a one-year term ~~due~~from onSeptember ~~August 21~~20, 2012 to September 12, 2013, and was repaid on the due date. The Company obtained a new loan for the same amount from ~~September~~August 2029, ~~2012~~2013 to ~~September~~August 1228, ~~2013~~2014 at a variable interest rate based on the interest rate set by the People’'s Bank of China. The ~~During the periods presented, the~~ effective rate ~~was~~is 7.2% per year. The Company pledged a real estate property owned by the Company’'s major ~~Stockholder~~stockholder. ~~The~~This ~~Loan~~loan was repaid on ~~September~~August 1128, ~~2013~~2014.

d) The Company obtained a loan from Jinzhou Bank in the amount of RMB 10,000,000 ($1.63 million) for a term from December 11, 2012 to December 10, 2013 with a fixed interest rate of 8.4% per year. The loan was repaid when it was due. The Company obtained a new loan for the same amount from November 18, 2013 to November 17, 2014 with a fixed interest rate of 8.4% per year. The Company pledged part of its advertising equipment with a carrying value of ~~RMB31~~RMB 31 million (approximately $5.10 million), and also is guaranteed by the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma.

e) The ~~Loan~~Company ~~payable~~signed toa ~~Jilin Bank consists of two loans; A one-year term~~ loan ~~from~~agreement ~~June~~with ~~19,~~Dalian ~~2012~~Bank toShenyang ~~May~~Branch ~~9, 2013~~ in the amount of RMB 36,000,000 (~~approximately~~ $~~0.49 million~~975,000) atfor ~~interest~~a ~~rate~~term ~~varying~~from ~~based~~June on19, ~~the~~2013 ~~interest~~to ~~rate~~June ~~set~~18, by2014 ~~the~~with ~~People’s~~a ~~Bank~~fixed ofinterest ~~China. During the periods presented, the effective~~ rate ~~was~~of 8.~~528~~1% per year., ~~The~~and ~~other~~was ~~loan~~repaid ison athe ~~one-year~~due ~~term~~date. ~~loan~~The ~~from~~Company ~~May~~obtained ~~10,~~a ~~2012~~new toloan ~~May~~for ~~9, 2013 in~~ the same amount offrom ~~RMB~~June 1523,~~000,000~~ ~~(approximately~~2014 ~~$2.44~~to ~~million)~~June at22, an2015 ~~interest~~with ~~rate~~a ~~varying~~fixed ~~based on the~~ interest rate ~~set by the People’s Bank~~ of ~~China. During the periods presented, the effective rate was~~ 8.~~528~~1% per year. The ~~two~~loan ~~loans~~is ~~have been~~ guaranteed by anV-Media ~~unrelated company~~, and ~~Dalian~~also ~~Enterprise~~guaranteed ~~Credit~~by ~~Guaranty~~the ~~Co., Ltd. The~~ Company's ~~also~~major ~~pledged~~stockholders, ~~part~~Mr. ofGuojun ~~its~~Wang, ~~advertising~~Ms. ~~equipment~~Ming ~~with~~Ma, anMs. ~~approximate~~Caiqin ~~value~~Wang ofand ~~RMB 43 million (approximately $7~~Mr.07 ~~million).~~Tao ~~The Company repaid the two loans on their due date~~Sun.

f) Loan payable to Dalian Bank ~~Shenyang~~Shanghai Branch is in the amount of RMB 62,~~000~~900,000 ($~~944~~471,~~400~~250) for ~~one-year~~a term from ~~June~~November 629, 2012 to ~~June~~November 527, 2013 atwith ana ~~interest~~fixed ~~rate varying based on the~~ interest rate ~~set by the People’s Bank~~ of ~~China~~7. ~~During the periods presented, the effective rate was~~ 8~~.856~~% per year. ~~The~~On ~~loan~~December ~~was~~3, ~~repaid~~2013, on the ~~due~~loan ~~date.~~was ~~The~~extended ~~Company~~for ~~obtained~~one ayear, ~~new~~with ~~loan~~a indue ~~the~~date ~~amount~~ of ~~RMB~~December 42,~~000~~ 2014,~~000~~ ~~($0.65~~with ~~million)~~the ~~for~~same ainterest ~~new~~rate. ~~term~~This ~~from~~loan ~~June~~is ~~19,~~guaranteed ~~2013~~by ~~to June 18~~V-Media, ~~2014~~and ~~with~~is aalso ~~fixed~~guaranteed ~~interest~~by ~~rate~~the ofCompany's ~~8.1%~~major ~~per~~stockholders, ~~year~~Mr. ~~The~~Guojun ~~loan~~Wang, isand ~~guaranteed~~Ms. byMing ~~V-Media~~Ma.

g) Loan payable to ~~Dalian~~Yingkou Bank ~~Shanghai~~consisted ~~Branch~~of ~~was~~two anloans. ~~eleven-month~~One ~~term~~ loan in the amount of RMB 5,000,000 ($0.81 million) was from ~~December~~May 2922, ~~2011~~2013 to ~~November~~May 2821, ~~2012~~2014 with a fixed interest rate of 7.8% per year, ~~which~~and ~~was~~on ~~repaid~~the indue ~~November~~date, ~~2012.~~the ~~The~~loan ~~Company~~was ~~obtained~~extended for one year, with a new due date of May 21, 2015, with the same interest rate . Another loan is in the amount of ~~RMB~~RMB5, 2000,~~900,~~000 ~~for~~($0.81 amillion) ~~new~~from ~~term~~June ~~of November 29~~26, ~~2012~~2013 to ~~November~~June 2725, ~~2013~~2014 with a fixed interest rate of 7.8% per year., ~~This~~and the loan ~~has~~also was extended for one year, with a new due date of May 27, 2015, and the same interest rate. Both loans have been guaranteed by ~~V-Media~~Liaoning Baijia Financing Assurance Co.,Ltd, and one of the Company's major stockholders, Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment with a value of RMB15 million ($2.4 million) to Liaoning Baijia Financing Assurance Co., Ltd as additional collateral.

h) Loan payable to China Merchant bank was a one-year term loan in amount of RMB 5,000,000 ($0.81 million) from May 30, 2013 to May 30, 2014 with a fixed interest rate of 7.8% per year, and the loan was repaid on the due date.

i) Loan payable to Guangdong Development Bank is a one-year term loan from May 9, 2013 to May 8, 2014 in amount of RMB15,000,000 ($2.44 million) with a fixed interest rate of 7.8% per year. The loan was repaid on the due date, and the Company obtained a new loan for the same amount from May 16, 2014 to May 15, 2015 with a fixed interest rate of 8.1%. This loan has been guaranteed by Dalian Enterprise Credit Guarantee Co., LTD and the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment to Dalian Enterprise Credit Guarantee Co., LTD as additional collateral.

j) Loan payable to Dalian Bank the First Centre Branch is a one-year term loan from December 16, 2013 to December 15, 2014 in the amount of RMB20,000,000 ($3.25 million) with a fixed interest rate of 8.4% per year. The Company pledged its trademark for the loan.

k) Loan payable to Jilin Bank is a one-year term loan from June 26, 2014 to June 25, 2015 in the amount of RMB10,000,000 ($1.63 million) with a fixed interest rate of 7.8% per year. This loan has been guaranteed by the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma as well as Dalian QianbaiHe Clothing accessories Co., LTD. The Company pledged part of its advertising equipment to Dalian QianbaiHe Clothing accessories Co., LTD as additional collateral.

l) Loans payable to Agriculture and Commerce Bank are two one-year term loans, both from June 3, 2014 to June 2, 2015 in amount of RMB5,000,000 ($0.81 million each) with a fixed interest rate of 7.8% per year. The loans have been guaranteed by a third party, Dalian High and New Technology Guarantee Investment Co., and the Company's major stockholders, Ms. Ming Ma. In the guarantee contract, the Company paid approximately $40,000 (RMB 250,000) guarantee fee, and pledged part of its advertising equipment to Dalian High and New Technology Guarantee Investment Co. as additional collateral.

m) The Company had $1.38 million of loans from outside unrelated parities as of June 30, 2013. Which were subsequently repaid during the year ended June 30, 2014.

h) Loan payable to Yingkou bank consisted of two loans. One loan in the amount of RMB 5,000,000 ($0.81 million) from May 22, 2013 to May 21, 2014 with a fixed interest rate of 7.8% per year. Another loan is in the amount of RMB6, 000,000 ($0.94 million) a one-year term loan with interest at 8.203% set by the People’s Bank of China from June 29, 2012 to June 28, 2013. The loan was repaid in June 2013. The Company obtained a new one-year term loan in the amount of RMB5,000,000 ($0.81 million) from June 26, 2013 to June 25, 2014 with a fixed interest rate of 7.8% per year. Both loans have been guaranteed by Liaoning Baijia Financing Assurance Co.,Ltd, and one of the Company’s major stockholders, Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment to Liaoning Baijia Financing Assurance Co., Ltd.

i) Loan payable to China Merchant bank is a one-year term loan in amount of RMB6,000,000 ($0.94 million) from May 24, 2012 to May 24, 2013 at a fixed interest rate of 8.528% per year. The loan was repaid in May 2013. The Company obtained a new one-year term loan in the amount of RMB 5,000,000 ($0.81 million) from May 30, 2013 to May 30, 2014 with a fixed interest rate of 7.8% per year. The Company pledged part of its advertising equipment with an approximate carrying value of RMB 12.1 million (approximately $1.97 million).

j) Loan payable to Guangdong Development Bank is a one-year term loan from May 9, 2013 to May 8, 2014 in amount of RMB15,000,000 ($2.44 million) with a fixed interest rate of 7.8% per year. This loan has been guaranteed by Dalian Enterprise Credit Guarantee Co., LTD and the Company’s major stockholders Mr. Guojun Wang and Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment to Dalian Enterprise Credit Guarantee Co., LTD.

k) The Company had $1.38 million and $0.52 million loans from outside unrelated parities as of June 30, 2013 and 2012, respectively, which were due on demand and bear no interest.

Long term loan

On December 29, 2011, V-Media Group’s Shenyang and Beijing subsidiaries entered into loan agreements with ORIX Finance Leases (China) Co., Ltd. (“ORIX Leasing”) pursuant to which two subsidiaries borrowed $0.67 million (RMB 4.1 million) and $0.57 million (RMB 3.5 million), respectively, from ORIX leasing and pledged its advertising equipment with the approximate value of RMB $1.0 million (RMB6.26 million) and $0.87 million (RMB5.37 million), respectively. These loans are paid on a monthly basis over a two-year period and consist of a fixed payment based upon a 24-month amortization of the loan amount plus an interest component that varies based upon the rate announced from time to time by the People’s Bank of China for two-year loans. At June 30, 2013, the monthly payments under the agreement for Shenyang and Beijing were $0.03 million (RMB 181,309) and $0.02 million (RMB 155,410), respectively, which include an interest component calculated at the rate of 6.65%.

As of June 30, 2013, the loan amounted to $389,876, which is due in one year.

Application of Critical Accounting Policies

Management's discussion and analysis of its financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“"U.S. GAAP”"). Our financial statements reflect the selection and application of accounting policies which require management to make significant estimates and judgments. See Note 2 to our consolidated financial statements, “"Summary of Significant Accounting Policies.”"

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition or results of operations.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “"smaller reporting company,”" as defined by Item 10 of Regulation S-K, the Company is not required to provide this information.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Our consolidated financial statements for the fiscal years ended June 30, ~~2012~~2014 and ~~2011~~2013 are attached hereto.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

2322

ITEM 9A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, as of the end of the period covered by this Annual Report on Form 10-K (the “"Evaluation Date”"). The evaluation of our disclosure controls and procedures included a review of our processes and the effect on the information generated for use in this Annual Report on Form 10-K. In the course of this evaluation, we sought to identify any material weaknesses in our disclosure controls and procedures and to confirm that any necessary corrective action, including process improvements, was taken. The purpose of this evaluation is to determine if, as of the Evaluation Date, our disclosure controls and procedures were operating effectively such that the information, required to be disclosed in our reports with the Securities and Exchange Commission (“"SEC”") (i) was recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) was accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating and implementing possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Based upon, and as of the Evaluation Date, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures contained material weaknesses. Therefore, our management concluded that our disclosure controls and procedures were not effective. We believe that the weaknesses in our disclosure controls and procedures result from weaknesses in our internal control over financial reporting, which is described below.

Notwithstanding management’'s assessment that the internal control over financial reporting was ineffective as of June 30, ~~2013~~2014 due to the material weakness described in the “"Management’'s Annual Report on Internal Control over Financial Reporting section below, the Company believes that the consolidated financial statements included in this Annual Report on Form 10-K fairly present its financial condition, results of operations and cash flows for the fiscal periods covered thereby in all material respects.

Management’'s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. The Company’'s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’'s internal control over financial reporting includes those policies and procedures that:

(i)

pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles (“"U.S. GAAP”"), and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and

(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’'s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting cannot provide absolute assurance of preventing and detecting misstatements on a timely basis. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures.

Management of the Company, including the Company’'s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the Company’'s internal control over financial reporting as of the Evaluation Date. In making this evaluation, management used the 1992 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this evaluation, management concluded that we had made improvements in our internal control over financial reporting as of the Evaluation Date but the Company's internal control over financial reporting as of the Evaluation Date was not effective based on these criteria.

over financial reporting as of the Evaluation Date. In making this evaluation, management used the 1992 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on this evaluation, management concluded that we had made improvements in our internal control over financial reporting as of the Evaluation Date and the Company’s internal control over financial reporting as of the Evaluation Date was not effective based on these criteria.23

Through the past fiscal year, we have been implementing the following changes to our internal control over financial reporting that have materially affected its internal control over financial reporting:

● ToWe initiated ~~improve~~in ~~its~~the ~~financial~~process ~~system, management~~ of ~~the~~completing ~~Company~~a ~~has~~review ~~engaged~~and ~~more~~revision ~~experienced~~of ~~accounting~~the ~~professional~~documentation ~~who~~of ~~are~~the ~~familiar~~Company's ~~with~~internal ~~U.S.~~control ~~GAAP~~procedures ~~Standard~~and policies and ~~reporting~~launched ~~requirements~~an internal review mechanism.

● ~~The~~ We ~~Company~~did ~~has~~the ~~designed~~preliminary ~~procedures~~implementation of an initiative and training in China to ~~enhance~~ensure the ~~independent~~importance ~~performance~~of byinternal ~~separate~~controls ~~individuals~~and ofcompliance ~~different~~with ~~tasks,~~established ~~such~~policies asand inprocedures ~~the~~are ~~custody~~fully ofunderstood ~~assets~~throughout the organization and plan to provide additional U.S. GAAP training to all employees involved to ensure the ~~recording~~performance of ~~transactions~~and compliance with those procedures and policies.

● We initiated in the process of completing a review and revision of the documentation of the Company’s internal control procedures and policies.

● We began the preliminary implementation of an initiative and training in China to ensure the importance of internal controls and compliance with established policies and procedures are fully understood throughout the organization and plan to provide additional U.S. GAAP training to all employees involved to ensure the performance of and compliance with those procedures and policies.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within V Media Corp. have been detected.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The following sets forth certain information with respect to our current directors and executive officers.

Name	Age	Positions with the Company
Guojun Wang	4950	Chief Executive Officer and Chairman of the Board
Hongwen Liu	4647	Chief Financial Officer
Ming Ma	4748	President and Director

All directors hold office until the next annual meeting of our stockholders and until their successors have been elected and qualify. All executive officers serve at the pleasure of the Board of Directors.

Guojun Wang, 4950, Chairman and Chief Executive Officer. Mr. Wang has served as our Chairman and Chief Execuitve Officer since December 2009. Before Mr. Wang founded V-Media in September 2000, he had served as President of Dalian Pacific Advertisement Co., Ltd. for 11 years. With his more than 20 years of experience in the Chinese media and advertising industry and his success in building and managing one of the largest regional outdoor media companies in China, Mr. Wang was elected Vice Chairman of China Advertising Association of Commerce in 2007. He graduated from Northeastern University of Finance & Economics with a bachelor’'s degree in Economics in 1988. Mr. Wang’'s role as the founder of the Company provides the Board of Directors with considerable institutional knowledge and an important long-term perspective on the Company and our industry as a whole.

Hongwen Liu, 4647, Chief Financial Officer. Mr. Liu joined the Company as Chief Financial Officer in December 2009. Prior to that, he served as Deputy Director of Dalian Da-xin Accounting Firm for nine years. Mr. Liu graduated from the Computer-Based Accounting Department of Dalian Radio and Television University in July 1991.

Ming Ma, 4748, President and Director. Ms. Ma has served as our President since December 2009 and became a director in June 2010. Ms. Ma has been in charge of V-Media’'s daily operation since its inception in September 2000. Prior to that, she had served as Sales Manager in Dalian Pacific Advertisement Co. Ltd. Ms. Ma graduated from Dalian Institute of Finance Trade Union in 1991. Ms. Ma’'s many years of experience in the advertising industry provides the Board of Directors with valuable insight into our industry. Ms. Ma is the wife of Mr. Wang, our Chairman and Chief Executive Officer.

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Family Relationships

Mr. Guojun Wang and Ms. Ming Ma are husband and wife.

Involvement in Certain Legal Proceedings

None.

Code of Business Conduct and Ethics

We currently have a code of ethics that applies to our officers, employees and directors, including our Chief Executive Officer (i.e., our principal executive officer) and our Chief Financial Officer (i.e., our principal accounting officer and principal financial officer). A copy of the Code of Ethics is available on the Company’'s website http://en.gywj.cn.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers, and persons who beneficially own more than 10% of any class of our equity securities, who collectively we generally refer to as insiders, to file with the SEC initial reports of beneficial ownership and reports of changes in beneficial ownership of common stock and other equity securities of the Company. Our insiders are required by SEC regulation to furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of the copies of the forms furnished to us, we believe that during the fiscal year ended June 30, ~~2013~~2014, our insiders complied with all applicable filing requirements.

Corporate Governance

Board Leadership Structure. Our Board of Directors does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board, as the Board believes it is in the best interest of the Company to make that determination based on the position and direction of the Company and the membership of the Board. In the future, we may allow two individuals to hold these two positions if the Board of Directors believes that it would be in the best interests of the Company and its stockholders.

Risk Management. The Company’'s management is responsible for the day-to-day risk management of the Company. Management reports to the Board of Directors on the material risks the Company faces when management determines that the Company’'s risk profile materially changes. The Board of Directors uses management’'s reports to evaluate the Company’'s exposure to risks in light of the Company’'s business plan and growth strategies. The Board of Directors primarily focuses on risks in the areas of operations, liquidity and regulatory changes and compliance, which the Board of Directors believes are the areas most likely to have a potential impact on the Company in a material way.

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Consideration and Determination of Executive and Director Compensation. The Board of Directors has the primary authority to determine our compensation philosophy and to establish compensation for our executive officers. In establishing executive officer compensation, the Board of Directors uses its subjective evaluation of the executives’' performance and responsibilities, our overall performance and the Chief Executive Officer’'s recommendations. The Board of Directors has not used any compensation consultant in setting executive salaries, or in determining other components of executive compensation, nor does it seek formally to benchmark the compensation of our executive officers against compensation paid by other companies to their executives.

Management plays a significant role in the compensation-setting process. The most significant aspects of management’'s role are:

· evaluating employee performance;

· preparing information for meetings of the Board of Directors;

· establishing business performance targets and objectives;

· providing background information regarding the Company’'s strategic objectives; and

· recommending salary levels and equity awards.

Risk Management related to Compensation Policies and Practices. We do not believe that our compensation policies and practices encourage excessive and unnecessary risk-taking, and that the level of risk that they do encourage is not reasonably likely to have a material adverse effect on the Company. The design of our compensation policies and practices encourages our employees to remain focused on both our short- and long-term goals.

Board and the Board Committees:

Our Board of Directors currently consists of two members: Mr. Guojin Wang and Ms. Ming Ma. We do not have a standing nominating, audit or compensation committee. As a small public company, we believe that all of our directors acting together, as opposed to a subset of them acting by means of a committee, is the most efficient and effective framework for us to perform the functions otherwise associated with nominating, audit and compensation committees.

Nominating Committee Functions -- Our Board of Directors seeks to ensure that it is composed of members whose particular experience, qualifications, attributes, and skills, when taken together, will allow the Board of Directors to satisfy its oversight obligations effectively. Currently, the Company does not have a separate nominating committee. The Board of Directors as a whole is in charge of identifying and appointing appropriate persons to add to the Board of Directors when necessary. In identifying Board candidates it is the Board’'s goal to identify persons whom it believes have appropriate expertise and experience to contribute to the oversight of a company of the Company’'s nature while also reviewing other appropriate factors. In evaluating a director candidate, our Board of Directors will review his or her qualifications including capability, availability to serve, conflicts of interest, general understanding of business, understanding of our business and technology, educational and professional background, personal accomplishment and other relevant factors. Our Board of Directors has not established any specific qualification standards for director nominees, although from time to time the Board of Directors may identify certain skills or attributes as being particularly desirable to help meet specific needs that have arisen. The Company believes that each of the persons that currently comprise its Board of Directors have the experience, qualifications and attributes and skills taken as a whole to enable the Board of Directors to satisfy its oversight responsibilities effectively. .

Audit Committee Functions -- Currently we do not have an audit committee.

Compensation Committee Functions--We do not have a compensation committee due to the small size of the board. Rather, the full Board of Directors participates in deliberations concerning executive compensation and establishes the compensation and benefit plans and programs of the Company. In establishing executive officer compensation, the Board of Directors uses its subjective evaluation of the executives’' performance and responsibilities, our overall performance and the Chief Executive Officer’'s recommendations. The Board of Directors has not used any compensation consultant in setting executive salaries, or in determining other components of executive compensation, nor does it seek formally to benchmark the compensation of our executive officers against compensation paid by other companies to their executives. We do not currently have a written compensation committee charter or similar document. Mr. Guojun Wang and Ms. Ming Ma are board members and also our employee. Their compensation was decided by the employment agreements they entered into with the Company before the business combination.

Independent Directors

As of ~~September~~the ~~14,~~date ~~2013~~of this filing, we don’'t have any independent directors in our company.

2827

ITEM 11. EXECUTIVE COMPENSATION.

Executive Compensation

The following table sets forth information concerning the annual compensation earned by our named executive officers for the periods specified.

Summary Compensation Table

Name and Principal Position	Fiscal Year Ended June 30,	Salary ($)(1)		Bonus ($)		~~Stock Awards ($)~~	~~Option~~Stock Awards ($)	~~Nonequity Incentive Plan Compensation ($)~~	~~Nonqualified Deferred Compensation Earnings ($)~~	~~All Other Compensation ($)~~	Option Awards ($)	~~Total ($)~~		Nonequity Incentive Plan Compensation ($)		Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)
Guojun Wang, Chief Executive Officer	~~2012~~2013	$	4748,~~220~~030	$	4,~~722~~803	-	-	-	-	-		$-	~~51,942~~		-		-		-	$	52,833
	2013	$	48,030	$	4,803	-	-	-	-	-		$	52,833
	2014	$	48,750	$	4,875			-				-			-		-		-	$	53,625

(1) The amounts shown in this table were paid in RMB and were translated into U.S. dollars at the rate of 0.~~1601~~1629 for 2013 and 0.~~1574~~1601 for ~~2012~~2014, which are the average 12 month exchange rates that the Company used in its audited financial statements for such years.

Employment Agreements with Named Executive Officers

V-Media has entered into an employment agreement with each of its executive employees. Each agreement has a term of three years. Except for salary and bonus, the terms of the agreements are substantially identical and reflect employment standards common in China. Mr. Guojun Wang, our Chief Executive Officer, receives an annual salary of RMB 300,000 (approximately $48,~~030~~750), less all applicable taxes and other appropriate deductions. Mr. Wang is entitled to an annual bonus in an amount of 10% of his annual salary, which must be approved by the Company’'s Board of Directors based on the Company’'s results of operations.

Director Compensation

Mr. Guojun Wang and Ms. Ming Ma did not receive compensation for their services as directors.

2928

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Equity Compensation Plan ~~Information~~

The Company does not maintain any equity compensation plans.

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information regarding the beneficial ownership of our Common Stock as of the ~~September~~date ~~27,~~of ~~2012~~this filing by (i) each person known by us to be the beneficial owner of more than 5% of our Common Stock, (ii) our directors, (iii) our named executive officers and (iv) our directors and executive officers as a group.

Beneficial ownership has been determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the shares. Unless otherwise indicated, the persons named in the table below have sole voting and investment power with respect to the number of shares indicated as beneficially owned by them.

Name and Address of Beneficial Owner	Common Stock Beneficially Owned(1)		Percentage of Common Stock Owned (1)
Five Percent Stockholders (other than directors and principal executive officer):
Chuk Chung Fuk (2)		6,590,000		23.89	%
China Reinv Partners, L.P.(3)		5,497,933		19.93	%
Directors and Named Executive Officers:
Guojun Wang (4)		6,850,000		24.83	%
Hongwen Liu (4)		0		*
Ming Ma (4)		3,317,600		12.02	%
Directors and Executive Officers as a group (3 persons)		10,~~207~~167,600		36.85	%

_______________

* Less than 1%.

(1) Applicable percentage ownership is based on 27,590,001 shares of common stock outstanding as of ~~September~~as ~~27,~~of ~~2012~~the date of this filing. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock that are currently issuable upon conversion or exercisable within 60 days of ~~September~~of ~~27,~~the ~~2012~~date of this filing, are deemed to be beneficially owned by the person holding such convertible securities or warrants for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

(2)	The address of this stockholder is Room 1105, 11/F., Tower 1, Lippo Center, No. 89 Queensway, Admiralty, Hong Kong.

(3)	Based on a Schedule 13G filed by the indicated holder. The address of the indicated holder is c/o Oded Har-Even, Zysman Aharoni Gayer & Co./Sullivan & Worcester LLP, 1290 Avenue of the Americas, 29th Floor, New York, NY 10023 U.S.A.

(4)	The address of the indicated holder is c/o Golden Name Commercial Tower, Room 803, No. 68 Renming Road, Zhongshan District, Dalian, China 116001.

3029

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Related Transactions

Amounts due to certain stockholders are as follows:

	June 30, 2013		June 30, 2012
	June 30, 2014		June 30, 2013
Wang, Caiqin	$	146,~~157~~250	$	~~118~~146,~~050~~157
Ma, Ming		93,~~577~~324		~~412~~93,~~242~~577
Wang, Guojun		~~122~~176,~~369~~111		64122,~~482~~369
Total due to stockholders	$	~~362~~415,~~103~~685	$	~~594~~362,~~774~~103

The above stockholders listed are officers and directors of the Company. Each of these stockholders provided funds for the Company’'s operations and for advertising material and equipment purchase purposes. These amounts due are generally unsecured, non-interest bearing and due upon demand.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Audit Fees. The aggregate fees billed by Friedman LLP for professional services rendered for the audit of our annual financial statements included in our Annual Report on Form 10-K and the reviews of the financial statements included in our quarterly reports on Form 10-Q totaled $~~130~~135,000 for the fiscal year ended June 30, ~~2013~~2014 and $~~140~~130,000 for the fiscal year ended June 30, ~~2012~~2013.

Audit-Related Fees. The aggregate fees billed by our independent accounting firm related to assurance and related services totaled $0 for the fiscal year ended June 30, ~~2013~~2014 and ~~2012~~2013.

Tax Fees. The aggregate fees billed by our independent accounting firm for professional services rendered for tax compliance, tax advice and tax planning totaled $0 for the fiscal years ended June 30, ~~2013~~2014 and ~~2012~~2013.

All Other Fees. The aggregate of all other fees for services provided by our independent accounting firm were $0 for the fiscal year ended June 30, ~~2013~~2014 and $0 for the fiscal year ended June 30, ~~2012~~2013.

3130

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following documents are filed as part of this report:

1. Financial Statements

INDEX TO FINANCIAL STATEMENTS

Report of Registered Independent Public Accounting Firm			F-1

Consolidated Balance Sheets			F-2

Consolidated Statements of Income and Comprehensive Income			F-3

Consolidated Statements of Equity			F-4

Consolidated Statements of Cash Flows			F-5

Notes to the Financial Statements			F-6

2. Financial Statement Schedules

None.

3. Exhibits

3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’'s registration statement on Form SB2 filed on April 11, 2007).

3.2 Bylaws (incorporated by reference to Exhibit 3.1 to the Company’'s registration statement on Form SB2 filed on April 11, 2007).

10.1 Agreement and Plan of Merger, dated December 8, 2009, among the Company and the certain parties listed therein (incorporated by reference to Exhibit 10.1 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.2 Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 10.2 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.3 Exclusive Service Agreement dated November 6, 2009 among Dalian Guo-Heng, V-Media and its subsidiaries (incorporated by reference to Exhibit 10.3 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.4 Call Option Agreement dated November 6, 2009 among Dalian Guo-Heng, V-Media, V-Media’'s shareholders and subsidiaries (incorporated by reference to Exhibit 10.4 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.5 Shareholders’' Voting Rights Proxy Agreement dated November 6, 2009 among Dalian Guo-Heng, V-Media and V-Media’'s shareholders (incorporated by reference to Exhibit 10.5 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.6 Equity Pledge Agreement dated November 6, 2009 among Dalian Guo-Heng, V-Media, V-Media’'s shareholders and subsidiaries (incorporated by reference to Exhibit 10.6 to the Company’'s current report on Form 8-K filed on December 9, 2009).

3231

10.7 Form of Employment Agreement (incorporated by reference to Exhibit 10.7 to the Company’'s current report on Form 8-K filed on December 9, 2009).^

10.8 Stock Purchase Agreement dated December 8, 2009, by and between the Company and the shareholders listed therein (incorporated by reference to Exhibit 10.13 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.9 Cooperation Agreement between Vastitude (Beijing) Technology Co., Ltd. and Beijing Shidai Lianxin Cultural Propagation Co., Ltd., dated February 9, 2010 (incorporated by reference to Exhibit 10.1 to the Company’'s current report on Form 8-K filed on March 5, 2010).

10.10 Cooperation Agreement between Dalian Vastitude Media Group Co., Ltd. and Liaoning Daily Newspaper Media Group Co., Ltd., dated February 10, 2010 (incorporated by reference to Exhibit 10.2 to the Company’'s current report on Form 8-K filed on March 5, 2010).

10.11	Contract with Shanghai Vastitude Advertising & Media Co., Ltd. and Shanghai Haosheng Advertising Co., Ltd. (incorporated by reference to Exhibit 10.1 to the Company’'s current report on Form 8-K filed on July 14, 2010) (English translation).
14.1	Code of Ethics.
21.1	Subsidiaries of the Registrant.
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a).*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a).*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*
99.1	Certificate of Ownership Merging V Media Corporation into China New Media Corp. dated July 17, 2012 (incorporated by reference to Exhibit 3.1 to the Company’'s current report on Form 8-K filed on July 18, 2012).
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets at June 30, ~~2012~~2014 and June 30, ~~2011~~2013, (ii) the Statements of Operations and Comprehensive Income (Loss) for the years ended June 30, ~~2012~~2014 and ~~2011~~2013, (iii) the Statements of Stockholders’' Equity for the years ended June 30, ~~2012~~2014 and ~~2011~~2013, (iv) Statements of Cash Flows for the years ended June 30, ~~2012~~2014 and ~~2011~~2013 and (v) the notes to the Financial Statements. *

* Filed herewith.

^ Indicates a management contract or compensatory plan or arrangement.

3332

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		V Media Corporation
Date: September 27, 2013	By:	/s/ Guojun Wang
Date: October 14, 2014	By:	/s/ Guojun Wang
		Guojun Wang Chief Executive Officer

Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SIGNATURE	TITLE	DATE
/s/ Guojun Wang	Chief Executive Officer and Chairman	~~September~~October 2714, ~~2013~~2014
Guojun Wang	(principal executive officer)
/s/ Hongwei Liu	Chief Financial Officer	~~September~~October 2714, ~~2013~~2014
Hongwen Liu	(principal financial and accounting officer)
/s/ Ming Ma	Director	~~September~~October 2714, ~~2013~~2014
Ming Ma

3433

Exhibit Index

3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’'s registration statement on Form SB2 filed on April 11, 2007).

3.2 Bylaws (incorporated by reference to Exhibit 3.1 to the Company’'s registration statement on Form SB2 filed on April 11, 2007).

10.2 Certificate of Designation of Series A Preferred Stock (incorporated by reference to Exhibit 10.2 to the Company’'s current report on Form 8-K filed on December 9, 2009).

10.7 Form of Employment Agreement (incorporated by reference to Exhibit 10.7 to the Company’'s current report on Form 8-K filed on December 9, 2009).^

3534

10.11	Contract with Shanghai Vastitude Advertising & Media Co., Ltd. and Shanghai Haosheng Advertising Co., Ltd. (incorporated by reference to Exhibit 10.1 to the Company’'s current report on Form 8-K filed on July 14, 2010) (English translation).
14.1	Code of Ethics.
21.1	Subsidiaries of the Registrant.
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a).*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a).*
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350.*
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350.*
99.1	Certificate of Ownership Merging V Media Corporation into China New Media Corp. dated July 17, 2012 (incorporated by reference to Exhibit 3.1 to the Company’'s current report on Form 8-K filed on July 18, 2012).
101	Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Balance Sheets at June 30, ~~2012~~2014 and June 30, ~~2011~~2013, (ii) the Statements of Operations and Comprehensive Income (Loss) for the years ended June 30, ~~2012~~2014 and ~~2011~~2013, (iii) the Statements of Stockholders’' Equity for the years ended June 30, ~~2012~~2014 and ~~2011~~2013, (iv) Statements of Cash Flows for the years ended June 30, ~~2012~~2014 and ~~2011~~2013 and (v) the notes to the Financial Statements. *

* Filed herewith.

^ Indicates a management contract or compensatory plan or arrangement.

3635

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and ~~Shareholder~~Stockholders

V Media Corporation

~~(Formerly~~We ~~China~~have ~~New~~audited the accompanying consolidated balance sheets of V Media Corporation and subsidiaries (the "Company") as of June 30, 2014 and 2013, and the related consolidated statements of income and comprehensive income (loss), changes in equity and cash flows for each of the two years in the period ended June 30, 2014. The Company's management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We ~~have~~conducted ~~audited~~our ~~the~~audits ~~accompanying~~in ~~consolidated~~accordance ~~balance~~with ~~sheets~~the standards of Vthe ~~Media~~Public ~~Corporation~~Company ~~(Formerly~~Accounting ~~China~~Oversight ~~New~~Board ~~Media~~(United ~~Corporation~~States). Those ~~and~~standards ~~subsidiaries~~require ~~(the~~that ~~“Company”)~~we asplan ofand ~~June~~perform ~~30,~~the ~~2013~~audit ~~and~~to ~~2012,~~obtain ~~and~~reasonable ~~the~~assurance ~~related~~about whether the consolidated financial statements are free of ~~operations~~material ~~and~~misstatement. The ~~comprehensive~~Company ~~income~~is ~~(loss)~~not required to have, ~~equity~~nor were we engaged to perform, ~~and~~an ~~cash~~audit ~~flows~~of ~~for~~its ~~the~~internal ~~years~~control ~~then~~over ~~ended~~financial reporting. ~~These~~Our audits included consideration of internal control over financial ~~statements~~reporting as a basis for designing audit procedures that are appropriate in the ~~responsibility~~circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’'s ~~management.~~internal ~~Our~~control ~~responsibility~~over isfinancial toreporting. Accordingly, we express anno such opinion. An audit also includes examining, on ~~these~~a ~~consolidated~~test basis, evidence supporting the amounts and disclosures in the financial statements, ~~based~~assessing onthe accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

WeIn ~~conducted~~ our ~~audits~~opinion, ~~in accordance with~~ the ~~standards~~consolidated offinancial ~~the~~statements ~~Public~~referred ~~Company~~to ~~Accounting~~above ~~Oversight~~present ~~Board~~fairly, ~~(United~~in ~~States).~~all ~~Those~~material ~~standards~~respects, ~~require that we plan and perform~~ the ~~audit to obtain reasonable assurance about whether the~~ financial ~~statements~~position ~~are free~~ of ~~material~~the ~~misstatement. The~~ Company isas ~~not~~of ~~required~~June ~~to have~~30, ~~nor~~2014 ~~were~~and ~~we engaged to perform~~2013, anand ~~audit~~the results of its ~~internal~~operations ~~control~~and ~~over~~its ~~financial~~cash ~~reporting.~~flows ~~Our~~for ~~audits~~each ~~included consideration~~ of ~~internal~~the ~~control~~two ~~over~~years ~~financial reporting as a basis for designing audit procedures that are appropriate~~ in the ~~circumstances,~~period ~~but~~ended ~~not~~June ~~for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly~~30, we2014 ~~express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures~~ in ~~the~~conformity ~~financial~~with ~~statements, assessing the~~ accounting principles ~~used~~generally ~~and~~accepted ~~significant~~in ~~estimates made by management, as well as evaluating~~ the ~~overall~~United ~~financial~~States ~~statement~~of ~~presentation~~America. ~~We believe that our audits provide a reasonable basis for our opinion.~~

In/s/ ~~our~~Friedman ~~opinion,~~LLP ~~the~~Friedman ~~consolidated~~LLP ~~financial~~New ~~statements referred to above present fairly~~York, inNY ~~all~~October ~~material respects~~14, the financial position of the Company as of June 30, 2013 and 2012, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.2014

/s/ Friedman LLP New York, NY September 27, 2013

1700 BROADWAY, NEW YORK, NY 10019 T 212.842.7000 F 212.842.7001 WWW.FRIEDMANLLP.COM

OFFICES IN NEW YORK LONG ISLAND AND NEW JERSEY AND A MEMBER OF DFK WITH AFFILIATES WORLDWIDE

37F-1

V MEDIA CORP. AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORTATION)

CONSOLIDATED BALANCE SHEETS

(IN US DOLLARS)

	As of June 30		As of June 30
	2013		2012
	2014		2013
ASSETS
Current assets
Cash and cash equivalents	$	21,~~148~~141,~~321~~377	$	12,~~526~~148,~~604~~321
Restricted cash		32,~~322~~882,~~299~~750		-3,322,299
Accounts receivable, net		43,~~007~~796,~~205~~095		4,~~960~~007,~~911~~205
Advance to suppliers, net		~~403~~523,~~444~~200		~~413~~403,~~883~~444
Loans receivable, net		2689,~~425,882~~291		2,~~099~~425,~~493~~882
Other current assets		~~397~~90,~~110~~577		~~195~~397,~~701~~110
Deferred tax assets		-		396,961
Total current assets		9,123,290		12,704,261
Total current assets		12,704,261		9,593,553
Property, equipment and construction in progress, net		23,525,520		23,649,850
Property, equipment and construction in progress, net		23,649,850		23,204,841
Other assets
Billboards use right, net		3,281,728		4,798,745
Billboards use rights, net		3,330,283		3,281,728
Security deposits		2,297,952		2,043,750
Loans receivable, net		152,276		-
Total other assets		5,579,680		6,842,495
Security deposits		2,010,019		2,297,952
Total Assets	$	41,933,791	$	39,640,889
Total other assets		5,492,578		5,579,680
Total Assets	$	38,141,388	$	41,933,791
LIABILITIES AND EQUITY
Current liabilities
Short term loans	$	1215,~~579~~876,~~026~~250	$	1112,~~035~~579,~~314~~026
Current portion of long term loans		~~389,876~~-		~~590~~389,~~370~~876
Accounts payable		32,~~194~~998,~~604~~517		23,~~274~~194,~~736~~604
Bank acceptance notes payable		53,~~214~~575,~~104~~000		-5,214,104
Other payables		21,~~372~~609,~~044~~876		12,~~924~~372,~~191~~044
Deferred revenues		21,~~392~~692,~~681~~272		2,~~649~~392,~~472~~681
Taxes payable		~~649~~520,~~418~~147		~~507~~649,~~145~~418
Due to related parties		~~362~~415,~~103~~685		~~594~~362,~~774~~103
Total current liabilities		2726,~~153~~687,~~856~~747		1927,~~576~~153,~~002~~856
Long term loan		-		363,060
Total Liabilities		27,153,856		19,939,062
Commitments and contingencies
Equity
Series A Preferred Stock, $0.0001 par value, 20,000,000 shares authorized,
1,000,000 shares issued and outstanding		100		100
Common stock, $0.0001 Par value; 80,000,000 shares authorized;
27,590,701 shares issued and outstanding		2,759		2,759
Additional paid-in-capital		6,820,820		6,820,820
Accumulated other comprehensive income		1,~~122~~108,~~624~~296		~~786~~1,~~806~~122,624
Retained earnings		41,~~714~~603,~~077~~424		104,~~774~~714,~~956~~077
Total V Media Corp. equity		129,~~660~~535,~~380~~399		1812,~~385~~660,~~441~~380
Noncontrolling interest		21,~~119~~918,~~555~~242		12,~~316~~119,~~386~~555
Total equity		1411,~~779~~453,~~935~~641		1914,~~701~~779,~~827~~935
Total Liabilities and Equity	$	4138,~~933~~141,~~791~~388	$	3941,~~640~~933,~~889~~791

The accompanying notes are an integral part of these consolidated financial statements.

38F-2

V MEDIA CORP. AND SUBSIDIARIES

~~(FORMERLY~~CONSOLIDATED ~~CHINA~~STATEMENTS ~~NEW~~OF ~~MEDIA~~OPERATIONS ~~CORPORTATION)~~AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(IN US DOLLARS)

	For the years ended June 30,
	2013			2012
	2014			2013
Revenues	$	2119,~~823~~089,~~216~~508		$	1821,~~470~~823,~~685~~216
Cost of revenue		(1816,~~247~~250,~~311~~101	)		(1018,~~750~~247,~~398~~311	)
Gross profit		32,~~575~~839,~~905~~407			73,~~720~~575,~~287~~905
Selling, general and administrative expenses		(75,~~548~~139,~~595~~047	)		(67,~~586~~548,~~810~~595	)
Income (loss) from operations		(3,972,690	)		1,133,477
Loss from operations		(2,299,640	)		(3,972,690	)
Other income (expenses):
Interest income		47101,~~243~~567			547,~~279~~243
Interest expense		(1,~~359~~205,~~366~~755	)		(1,~~236~~359,~~432~~366	)
Subsidy income		~~720~~250,~~390~~686			~~718~~720,~~984~~390
Other expenses		(~~256~~27,~~856~~760	)		(35256,~~412~~856	)
Total other expenses		(~~848~~881,~~589~~262	)		(~~547~~848,~~581~~589	)
Income (loss) before income taxes		(4,821,279	)		585,896
Loss before income taxes		(3,180,902	)		(4,821,279	)
Income tax provision (benefit)
Current		~~458~~125,~~845~~741			~~492~~458,~~080~~845
Deferred		~~416,220~~-			~~(265~~416,~~273~~220	)
Total income tax provision		875,065			226,807
		125,741			875,065
Net income (loss)		(5,696,344	)		359,089
Net loss		(3,306,643	)		(5,696,344	)
Less: net income attribute to the noncontrolling interest		364,535			308,236
Less: net (income) loss attribute to the noncontrolling interest		(195,990	)		364,535
Net income (loss) attributable to V Media Corp.	$	(6,060,879	)	$	50,853
Net loss attributable to V Media Corp.	$	(3,110,653	)	$	(6,060,879	)
Net income (loss)		(5,696,344	)		359,089
Net loss		(3,306,643	)		(5,696,344	)
Other comprehensive income
Other comprehensive income (loss)
Foreign currency translation adjustments		439,849			167,695
Foreign currency translation gain (loss)		(19,651	)		439,849
Comprehensive income (loss)		(5,256,495	)		526,784
Comprehensive loss		(3,326,294	)		(5,256,495	)
Less: comprehensive income attributed to the noncontrolling interest		468,566			325,425
Less: comprehensive loss attributed to the noncontrolling interest		201,313			468,566
Comprehensive income (loss) attributable to V Media Corp.	$	(5,725,061	)	$	201,359
Comprehensive loss attributable to V Media Corp.	$	(3,527,607	)	$	(5,725,061	)
Earnings (loss) per share
Basic and diluted	$	(0.2211	)	$	(0.0022	)
Weighted average number of common shares
Basic and diluted		27,~~550~~590,701			27,~~550~~590,701

The accompanying notes are an integral part of these consolidated financial statements.

39F-3

V MEDIA CORP. AND SUBSIDIARIES

~~(FORMERLY~~CONSOLIDATED ~~CHINA~~STATEMENTS ~~NEW~~OF ~~MEDIA~~CHANGES ~~CORPORTATION)~~IN EQUITY

~~CONSOLIDATED~~FOR ~~STATEMENTS~~THE OFYEARS ~~EQUITY~~ENDED JUNE 30, 2014 AND 2013

FOR THE YEARS ENDED JUNE 30, 2013 AND 2012


	Preferred Stock				Common Stock				Additional		Accumulated Other
	Par value $0.0001				Par value $0.0001				paid-in		comprehensive			Retained			Noncontrolling
	Shares		Amount		Shares		Amount		capital		income			earnings			Interest			Total
Balance at July 1, 2012		1,000,000	$	100		27,590,701	$	2,759	$	6,820,820	$	786,806		$	10,774,956		$	1,316,386		$	19,701,827

Noncontrolling interest capital contribution		-		-		-		-		-		-			-			334,603			334,603
Net income (loss) for the year		-		-		-		-		-		-			(6,060,879	)		364,535			(5,696,344	)
Foreign currency translation gain		-		-		-		-		-		335,818			-			104,031			439,849

Balance at June 30,2013		1,000,000	$	100		27,590,701	$	2,759	$	6,820,820	$	1,122,624		$	4,714,077		$	2,119,555		$	14,779,935

Net loss for the year		-		-		-		-		-		-			(3,110,653	)		(195,990	)		(3,306,643	)
Foreign currency translation gain (loss)		-		-		-		-		-		(14,328	)		-			(5,323	)		(19,651	)

Balance at June 30, 2014		1,000,000	$	100		27,590,701	$	2,759	$	6,820,820	$	1,108,296		$	1,603,424		$	1,918,242		$	11,453,641

	Preferred Stock			Common Stock				Additional		Accumulated Other
	Par value $0.0001			Par value $0.0001				paid-in		comprehensive		Retained			Noncontrolling
	Shares	Amount		Shares		Amount		capital		income		earnings			Interest		Total
Balance at July 1, 2011	1,000,000		100		27,590,701		2,759		6,820,820		636,300		10,724,103			990,961		19,175,043
Net income for the year													50,853			308,236		359,089
Foreign currency translation gain											150,506					17,189		167,695
Balance at June 30, 2012	1,000,000	$	100		27,590,701	$	2,759	$	6,820,820	$	786,806	$	10,774,956		$	1,316,386	$	19,701,827
Noncontrolling interest capital contribution																334,603		334,603
Net income (loss) for the year													(6,060,879	)		364,535		(5,696,344	)
Foreign currency translation gain											335,818					104,031		439,849
Balance at June 30, 2013	1,000,000	$	100		27,590,701	$	2,759	$	6,820,820	$	1,122,624	$	4,714,077		$	2,119,555	$	14,779,935

The accompanying notes are an integral part of these consolidated financial statements

~~The accompanying notes are an integral part of these consolidated financial statements.~~F-4

V MEDIA CORP. AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORTATION)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN US DOLLARS)

	For the years ended June 30,
	2013			2012
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	(5,696,344	)	$	359,089
Net loss	$	(3,306,643	)	$	(5,696,344	)
Adjustments to reconcile net income (loss) to net cash
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation		2,~~494~~534,~~683~~107			2,~~274~~494,~~967~~683
Amortization		76,~~131~~723,~~973~~092			27,~~586~~131,~~577~~973
Amortization of stock based compensation expense		-			24,804
Loss on sale of property		-			80,917
Loss on sale of property		80,917			-
Loss from equity investment		-			70,973
Loss from equity investment		70,973			11,868
Provision for doubtful accounts-accounts receivable		739,514			1,295,654
Provision for doubtful accounts-Accounts receivable		1,295,654			197,736
Provision for doubtful accounts-loans receivable		559,897			916,194
Provision for doubtful accounts-loans receivable		916,194			-
Deferred tax provision		-			403,764
Deferred tax provision (benefit)		403,764			(265,273	)
Changes in operating assets and liabilities
Accounts receivable		(~~187~~538,~~398~~643	)		~~330~~(187,~~633~~398	)
Advance to suppliers		(72121,~~501~~099	)		~~216~~(72,~~445~~501	)
Other current assets		~~(275~~306,~~111~~099	)		~~314~~(275,~~140~~111	)
Security deposit		~~(179~~282,~~077~~307	)		(54179,~~495~~077	)
Accounts payable		~~825~~(187,~~138~~837	)		2825,~~651,796~~137
Other payables		~~238~~(639,~~558~~338	)		~~(316~~238,~~448~~558	)
Deferred revenues		(~~343~~695,~~949~~438	)		1(343,~~002,852~~949	)
Taxes payable		~~122~~(232,~~250~~958	)		~~(566~~122,~~783~~250	)
Net cash provided by operating activities		65,~~825~~423,~~723~~060			86,~~767~~825,~~908~~723
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to third party, net		(1,~~067~~021,~~199~~157	)		(~~307~~1,~~809~~067,199	)
Equity investment		-			(94,440	)
Proceeds from sale of property		-			208,127
Proceeds from sale of property		208,127			-
Acquisition of billboards use rights		(6,780,238	)		(5,478,069	)
Acquisition of billboards use rights		(5,478,069	)		(2,536,601	)
Purchase of property and equipment		(2,473,623	)		(2,418,373	)
Purchase of property and equipment		(2,418,373	)		(6,285,222	)
Net cash used in investing activities		(8,232,704	)		(8,755,514	)
Net cash used in investing activities		(8,755,514	)		(9,224,072	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash		(3,264,323	)		-
Net proceeds (reduction) in restricted cash		431,463			(3,264,323	)
Net proceeds from capital contributions		~~334,603~~-			-334,603
Proceeds from (repayment of) short-term bank loans		1,135,090			(769,686	)
Net proceeds from short-term bank loans		3,338,220			1,135,090
Net proceeds from bank acceptance notes payable		5,123,115			-
Net proceeds from (repayments of ) bank acceptance notes payable		(1,628,400	)		5,123,115
Proceeds from (repayment of) related party loans		(253,172	)		431,130
Net proceeds from (repayment of) related party loans		54,616			(253,172	)
Proceeds from (repayment of) long-term loans		(586,697	)		481,230
Repayments of long-term loans		(389,634	)		(586,697	)
Net cash provided by financing activities		21,~~488~~806,~~616~~265			~~142~~2,~~674~~488,616
EFFECT OF EXCHANGE RATE CHANGE ON
CASH AND CASH EQUIVALENTS		62(3,~~892~~565	)		3162,~~214~~892
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		~~621~~(1,~~717~~006,944	)		~~(282~~621,~~276~~717	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		12,~~526~~148,~~604~~321			1,~~808~~526,~~880~~604
CASH AND CASH EQUIVALENTS, END OF YEAR	$	21,~~148~~141,~~321~~377		$	12,~~526~~148,~~604~~321
SUPPLEMENTAL CASH FLOW DISCLOSURES
Income taxes paid	$	~~239~~137,~~068~~706		$	1239,~~298,242~~068
Interest paid	$	1,~~057~~075,~~447~~725		$	~~945~~1,~~633~~057,447

The accompanying notes are an integral part of these consolidated financial statements.

41F-5

V- MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION, BASIS OF PRESENTATION AND LIQUIDITY

V Media Corp., (“"the Company”"), originally known as Golden Key International Inc., and then China New Media Corp., is a corporation organized under the laws of the State of Delaware in 1999.

Effective July 17, 2012, the Company changed its name from China New Media Corp. to V Media Corporation through a short form merger pursuant to Section 253 of the General Corporation Law of the State of Delaware by merging a wholly owned subsidiary of the Company into the Company, with the Company as the surviving corporation in the merger. The Company, along with its subsidiaries and VIEs, is engaged in the sale, construction and operations of outdoor advertising displays and other alternative media business. The Company is headquartered in Dalian, the commercial center of Northeastern China and has subsidiaries in Beijing, Shanghai and Tianjin.

On December 8, 2009, Golden Key International Inc. acquired all of the outstanding capital stock of HongKong Fortune-Rich Investment Co., Ltd., a Hong Kong corporation (“"Fortune-Rich ”"), through V Media Corp., a Delaware corporation (the “"Merger Sub”") wholly owned by the Company. Fortune-Rich is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Dalian Guo-Heng Management & Consultation Co., Ltd. (“"Dalian Guo-Heng”"), a limited liability company organized under the laws of the People’'s Republic of China (“"PRC”"). Substantially all of the Fortune-Rich’'s operations are conducted in China though Dalian Guo-Heng, and through contractual arrangements with several of Dalian Guo-Heng’'s consolidated affiliated entities in China, including Dalian Vastitude Media Group Co., Ltd. (“"V-Media”") and its subsidiaries. V-Media is an out-door advertising company headquartered in Dalian, the commercial center of Northeastern China. As a result of these contractual arrangements, which obligate the Company to absorb a majority of the risk of loss from V-Media’'s activities and entitle it to receive a majority of its residual returns. In addition, V-Media Group 's shareholders have pledged their equity interest in V-Media Group to Dalian Guo-Heng, irrevocably granted Dalian Guo-Heng an exclusive option to purchase, to the extent permitted under PRC law, all or part of the equity interests in V-Media Group and agreed to entrust all the rights to exercise their voting power to the person(s) appointed by Dalian Guo-Heng. Through these contractual arrangements, the Company and Dalian Guo-Heng hold all the variable interests of V-Media Group, and the Company and Dalian Guo-Heng have been determined to be the most closely associated with V-Media Group. Therefore, the Company is the primary beneficiary of V-Media Group. Based on these contractual arrangements, the Company believes that V-Media Group should be considered as a Variable Interest Entity (“"VIE”") under Accounting Standards Codification (“"ASC”") 810 (“"Consolidation”"), because the equity investors in V-Media Group do not have the characteristics of a controlling financial interest and the Company through Dalian Guo-Heng is the primary beneficiary of V-Media Group.

42In connection with the acquisition, Merger Sub issued 10 shares of the common stock of the Merger Sub which constituted the 10% ownership interest in the Merger Sub and 1,000,000 shares of Series A Preferred Stock of the Company to the shareholders of Fortune-Rich, in exchange for all the shares of the capital stock of Fortune-Rich (the "Share Exchange" or "Merger"). The 10 shares of the common stock of the Merger Sub were converted into approximately 26,398,634 shares of the common stock of the Company so that upon completion of the Merger, the shareholders of Fortune-Rich own approximately 96 % of the common stock of the Company. As a result of the above-mentioned transactions, the shareholders of Fortune-Rich and persons affiliated with V-Media own securities that represent 96% of the equity in the Company.

VF-~~MEDIA CORPORATION AND SUBSIDIARIES~~6

~~(FORMERLY~~V ~~CHINA NEW~~ MEDIA CORPORATION) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In connection with the acquisition, Merger Sub issued 10 shares of the common stock of the Merger Sub which constituted the 10% ownership interest in the Merger Sub and 1,000,000 shares of Series A Preferred Stock of the Company to the shareholders of Fortune-Rich, in exchange for all the shares of the capital stock of Fortune-Rich (the “Share Exchange” or “Merger”). The 10 shares of the common stock of the Merger Sub were converted into approximately 26,398,634 shares of the common stock of the Company so that upon completion of the Merger, the shareholders of Fortune-Rich own approximately 96 % of the common stock of the Company. As a result of the above-mentioned transactions, the shareholders of Fortune-Rich and persons affiliated with V-Media own securities that represent 96% of the equity in the Company.

The acquisition was accounted for as a reverse merger under the purchase method of accounting since there was a change of control. Accordingly, Hong Kong Fortune-Rich Investment Co., Ltd. and its subsidiaries will be treated as the continuing entity for accounting purposes.

As part of the merger, the Company’s name was changed from “Golden Key International, Inc.” to “China New Media Corp.”, which was later changed again to “V Media Corporation”.

Liquidity and Capital Resources

Based on our current operating plan, we believe that our existing resources, including cash generated from operations, bank loans and bank notes payable and advances from suppliers will be sufficient to meet our working capital requirement for our current operations over the next twelve months. In the past few months, our revenue increased due to our effort of client diversification and strategy adjustment. In order to fully implement our business plan and continue our growth, however, we will require additional capital either from our shareholders or from outside sources. Our long-term liquidity will depend on our ability to refinance our debts. ~~The~~Management ~~Company~~ expects to be able to refinance all of its short term loans based on past experience and the Company’'s good credit history. In July 2012, we signed an agreement with Bank of Asia, pursuant to which, the bank ~~will~~provides ~~provide~~ us with a RMB 22 million ($3.6 million) revolving ~~note payable~~ credit line from July 25, 2012 to July 25, 2020. On InSeptember ~~May~~4, ~~2013~~2014, we signed another agreement with ~~China~~Industrial ~~Merchants~~and Commercial Bank of China, and pursuant to ~~which~~the agreement, the bank ~~will~~provided ~~provide~~ a ~~RMB10~~RMB ~~million ($~~1.68 million ($292,500) ~~revolving~~one ~~notes~~year ~~payable~~loan ~~credit line~~ to us ~~from~~until ~~May~~September 273, ~~2013~~2015 to(see ~~May~~Note ~~26, 2014~~16). ~~We also have a line of credit from Bank of China in the amount of $3.48 million.~~ Our major Shareholder, Mr. Guojun Wang ~~will~~has also pledged to provide personal loans when necessary to provide us with sufficient liquidity for the next 12 months. For the year ended June 30, 2013, non-cash charge offs amounted to $12.2 million which includes $9.6 million depreciation and amortization expense, $2.2 million provision for doubtful accounts and $0.4 million deferred tax provision.

43F-7

V- MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additionally, our Time Square billboard lease expired on August 31, 2014 and the lease was not renewed due to the recurring losses on this project. Management expects to save approximately $3 million in lease payments annually on this project that will reduce approximately $1.8 million loss compared to the 2014 operating results.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of V Media Corp., its subsidiary, Hong Kong Fortune-Rich Investment Co., Ltd. ("Fortune Rich") and its wholly-owned subsidiary Dalian Guo-Heng Management & Consultation Co., Ltd. ("Dalian Guo-Heng"), as well as Dalian Guo-Heng’'s variable interest entity and Dalian Vastitute Media Group Co., Ltd. ("V-Media Group"). The ~~non-controlling~~noncontrolling interests of the variable interest entities represent the minority stockholders’' interest in V-Media Group’'s majority owned subsidiaries. All ~~significant~~ inter-company balances and transactions have been eliminated in consolidation.

Use of Estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting years. Significant estimates, required by management, include the recoverability of long-lived assets and ~~the valuation of outstanding warrants and~~ allowance offor doubtful accounts. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and demand deposits with a bank with an original maturity of less than three months. Since a majority of the bank accounts are located in PRC, those bank balances are uninsured.

Restricted Cash

As of June 30, ~~2013~~2014, the Company had restricted cash of $32.39 million. Restricted cash totaling $2.67 million ~~of the restricted cash~~ was associated with its bank acceptance notes payable. The banks require the Company to maintain a cash balance of a minimum of 50% of the balance of the notes payable as collateral (Note 109). The Company also has a letter of credit from the Bank of China in the amount of $63.9648 million. ~~and~~The ~~was~~letter of credit terms required the Company to deposit $0.72 million of restricted cash in the bank.

~~Accounts Receivable~~F-8

~~Accounts~~V ~~receivable~~MEDIA ~~are~~CORPORATION ~~recorded~~AND ~~at net realizable value consisting of the carrying amount less an allowance for uncollectible amounts, as needed.~~SUBSIDIARIES

The Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages determined by management based on historical experience as well as current economic climate are applied to customers’ balances categorized by the number of months the underlying receivable has remained outstanding. If facts subsequently become available to indicate that the allowance provided requires an adjustment, then the allowance will be adjusted. The allowance for doubtful accounts totaled $1,824,593 and $488,723 as of June 30, 2013 and 2012, respectively. Accounts are written off only after exhaustive collection efforts.

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounts Receivable

Accounts receivable are recorded at net realizable value consisting of the carrying amount, less an allowance for uncollectible amounts, as needed. If facts subsequently become available to indicate that the allowance provided requires an adjustment, then the allowance will be adjusted. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer's historical payment history, its current credit-worthiness and current economic trends. The allowance for doubtful accounts totaled $2,557,684 and $1,824,593 as of June 30, 2014 and June 30, 2013, respectively. Accounts are written off only after exhaustive collection efforts.

Advance to suppliers

The Company periodically makes advances to certain vendors for purchases of advertising materials and equipment and records those advances as advance to suppliers. ~~Historically,~~We have annually recorded an allowance when there is doubt as to collectability. If facts subsequently become available to indicate that the ~~Company~~allowance ~~has~~provided ~~not~~requires ~~experienced~~an ~~any~~adjustment, ~~losses~~then the adjustment will be classified as a ~~result~~change in estimate. The allowance for doubtful accounts totaled $98,530 and $98,797 as of ~~these~~June ~~advances~~30, 2014 and June 30, 2013, respectively. Accounts are written off only after exhaustive collection efforts.

The Company uses the aging method to estimate the allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages determined by management based on historical experience as well as current economic climate are applied to customers’ balances categorized by the number of months the underlying advance has remained outstanding. The allowance is adjusted to the amount computed as a result of the aging method. If facts subsequently become available to indicate that the allowance provided requires an adjustment, then the adjustment will be classified as a change in estimate. The allowance for doubtful accounts totaled $98,797 and $0 as of June 30, 2013 and 2012, respectively. Accounts are written off only after exhaustive collection efforts.

Property, Equipment and Construction in Progress

Property and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred while additions, renewals and betterments are capitalized. When property and equipment is retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation of property, plant and equipment is provided using the straight-line method for substantially all assets with estimated lives as follows:

	Estimated Useful Life	Residual value
Building	15 years		5%
Improvement of the building	5 years		0%
Advertising equipment	4-15 years		5%
Transportation	7 years		5%
Office equipment and furniture	5 years		5%

Construction in progress represents direct costs of construction or acquisition and design fees incurred. Capitalization of these costs ceases and the construction in progress is transferred to plant and equipment when substantially all the activities necessary to prepare the assets for their intended use are completed. No depreciation is provided until it is completed and ready for intended use.

45F-9

V- MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Impairment of long-lived assets

Long-lived assets, which include property, plant and equipment, billboard use right and intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of long-lived assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated undiscounted future cash flows expected to be generated by the assets. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the assets. Fair value is generally determined using the asset’'s expected future discounted cash flows or market value, if readily determinable. No impairment loss has been recorded for the years ended June 30, ~~2013~~2014 and ~~2012~~2013.

Deferred revenues

Deferred revenues represent cash received in advance from customers according to the contracts for advertising service fees, advertisement production and sponsorship fees. These advances are usually refundable to the customers if the Company is unable to deliver the advertising services. Deferred revenues are recognized as income when services are provided based on the terms of the contracts.

Revenue recognition

The Company recognizes revenues when advertisements are posted over respective contractual terms based on the schedules agreed with customers and collections are reasonably assured. ~~Payments received in advance of services provided are recorded as deferred revenues.~~

Foreign currency translation

The Company and Fortune-Rich use the United States dollar (“"US Dollars”") for financial reporting purposes. The Company, Dalian Guo-Heng and Dalian Vastitute Group maintain their books and records in the currency of Renminbi (“"RMB”"), being the primary currency of the economic environment in which their operations are conducted.

For financial reporting purposes, RMB has been translated into United States dollars ("USD") as the reporting currency. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders' equity as "Accumulated other comprehensive income". Gains and losses resulting from foreign currency translations are included in accumulated other comprehensive income. There is no significant fluctuation in exchange rate for the conversion of RMB to USD after the balance sheet date.

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income Taxes

The Company recognized deferred tax assets and liabilities based upon the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, whenever necessary, against net deferred tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized.

F-10

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments

The Company follows the provisions of Accounting Standards Codification (“"ASC”") 820, “"Fair Value Measurements and Disclosures.”" ASC 820 clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other then quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect managements’' own assumptions.

The carrying amounts of certain financial instruments, including accounts receivable, advances to suppliers, other ~~receivable~~receivables, accounts payable, taxes payable, other payables, accrued expenses, deferred revenue, ~~short-term capital lease obligations~~ and short-term ~~borrowing~~borrowings approximate their fair value due the short-term nature of these items. The carrying amount of the Company’s long-term capital lease obligations approximates the fair value based on the Company's expected borrowing rate for financial instruments with similar remaining maturities and comparable risk in market.

Earnings (loss) per Share

The Company computes earnings (loss) per share (“"EPS’') in accordance with ASC 260, “"Earnings per share.”" ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, ~~options~~ and ~~warrants~~options) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

~~Concentrations of Business and Credit Risk~~F-11

~~The~~V ~~Company~~MEDIA ~~maintains~~CORPORATION ~~certain~~AND bank accounts in the PRC, which are not protected by FDIC insurance or other insurance. The Company’s operations are carried out in the PRC. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC and the general state of the PRC’s economy.SUBSIDIARIES

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The~~Concentrations ~~Company’s~~of ~~operations~~Business ~~in the PRC are subject to specific considerations~~ and ~~significant~~Credit risks not typically associated with companies in the North America and Western Europe. The Company’s operating results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things.Risk

~~Reclassifications~~The Company maintains certain bank accounts in the PRC, which are not protected by FDIC insurance or other insurance. The Company's operations are carried out in the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC and the general state of the PRC's economy.

~~Certain~~The ~~prior~~Company's ~~year~~operations ~~amounts~~in ~~have~~the ~~been~~PRC ~~reclassified~~are subject to ~~conform~~specific toconsiderations and significant risks not typically associated with companies in the ~~current~~North ~~year~~America ~~presentation~~and Western Europe. ~~These~~The ~~reclassifications~~Company's ~~have~~operating noresults ~~material~~may ~~impact~~be onadversely ~~the~~affected ~~previously~~by ~~reported~~changes ~~financial~~in ~~position~~governmental policies with respect to laws and regulations, ~~results~~anti-inflationary ofmeasures, ~~operations~~currency conversion and ~~cash~~remittance ~~flows~~abroad, and rates and methods of taxation, among other things.

Recent Accounting Pronouncements

In ~~February~~April ~~2013~~2014, the FASB issued anASU ~~accounting~~2014-08, ~~standards~~"Presentation ~~update~~of Financial Statements (~~"ASU"~~Topic 205) ~~No.~~and ~~2013-02~~Property, ~~"Comprehensive~~Plant, ~~Income~~and Equipment (Topic ~~220~~360): Reporting ofDiscontinued ~~Amounts~~Operations ~~Reclassified~~and ~~Out~~Disclosures of ~~Accumulated~~Disposals ~~Other~~of ~~Comprehensive~~Components ~~Income,"~~of ~~requiring~~an ~~new~~Entity". ~~disclosures~~The ~~for~~amendments ~~items~~in ~~reclassified~~the ~~out~~ASU ofchange ~~accumulated~~the ~~other~~criteria ~~comprehensive~~for ~~income~~reporting ~~("AOCI"),~~discontinued ~~including~~operations ~~(1)~~while ~~changes~~enhancing disclosures in ~~AOCI~~this ~~balances~~area. byThe ~~component~~new ~~and~~guidance ~~(2)~~requires ~~significant~~expanded ~~items~~disclosures ~~reclassified~~about ~~out~~discontinued ofoperations ~~AOCI.~~that ~~The~~will ~~guidance~~provide ~~does~~financial ~~not~~statement ~~amend~~users ~~any~~with ~~existing~~more ~~requirements~~information ~~for~~about ~~reporting~~the ~~net~~assets, liabilities, income, orand ~~OCI~~expenses inof ~~the~~discontinued ~~financial statements~~operations. The ~~standards~~new ~~update~~guidance ~~was~~also ~~effective~~requires ~~for~~disclosure ~~reporting~~of ~~periods~~the ~~beginning~~pre-tax ~~after~~income ~~December~~attributable ~~15,~~to ~~2012,~~a todisposal beof ~~applied~~a ~~prospectively~~significant part of an organization that does not qualify for discontinued operations reporting. The ~~Company~~amendments isin ~~currently~~the ~~evaluating~~ASU are effective in the ~~impact~~first quarter of ~~adopting~~annual ~~this~~periods ~~standard~~beginning on ~~its~~or ~~consolidated~~after ~~financial~~December ~~statements.~~15, As2014 ~~this~~for ~~guidance~~public ~~only~~companies. ~~requires~~Early ~~expanded~~adoption ~~disclosures,~~is ~~the~~permitted. The adoption of ~~this~~ASU ~~guidance~~2014-08 is not expected to have a ~~significant~~material impact on the Company's consolidated financial statements.

In ~~March~~May ~~2013~~2014, the Financial Accounting Standards Board ("FASB") issued anAccounting ~~accounting~~Standards ~~standards~~Update ~~update~~ (“"ASU”") No. ~~2013~~2014-0509, ~~“Foreign~~Revenue ~~Currency~~from ~~Matters~~Contracts ~~(Topic~~with ~~830)~~Customers: ~~Parent’s~~Topic ~~Accounting~~606. ~~for~~This ~~the~~Update ~~Cumulative~~affects ~~Translation~~any ~~Adjustment~~entity ~~upon~~that ~~Derecognition~~either ofenters ~~Certain~~into ~~Subsidiaries~~contracts with customers to transfer goods or ~~Groups~~services ofor ~~Assets~~enters ~~within~~into acontracts ~~Foreign~~for ~~Entity~~the ortransfer of annonfinancial ~~Investment~~assets, inunless athose ~~Foreign~~contracts ~~Entity,’~~are ~~requiring~~within the ~~release~~scope of other standards. The guidance in this Update supersedes the ~~cumulative~~revenue ~~translation~~recognition ~~adjustment~~requirements ~~into~~in ~~net~~Topic ~~income~~605, ~~when~~Revenue aRecognition ~~parent~~and ~~either~~most ~~sells~~industry-specific aguidance. ~~part~~The orcore ~~all~~principle of ~~its~~the ~~investment~~guidance inis athat ~~foreign~~an entity should recognize revenue to illustrate the transfer of promised goods or noservices ~~longer~~to ~~holds~~customers ain ~~controlling~~an ~~financial~~amount ~~interest~~that reflects the consideration to which the entity expects to be entitled in aexchange ~~subsidiary~~for those goods or ~~group~~services. The new guidance also includes a cohesive set of ~~assets~~disclosure requirements that iswill aprovide ~~nonprofit~~users ~~activity~~of orfinancial astatements ~~business~~with ~~within~~comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a ~~foreign~~reporting ~~entity~~organization's contracts with customers. ~~The~~ ~~standards~~This ~~update~~ASU is effective ~~prospectively~~retrospectively for fiscal years, and interim ~~reporting~~ periods within those years beginning after December 15, ~~2013. Early~~2016 ~~adoption~~for ispublic ~~permitted.~~companies ~~The~~and ~~Company~~2017 ~~does~~for ~~not~~non-public ~~expect~~entities. ~~the~~Management ~~adoption~~is ofevaluating ~~this~~the ~~guidance~~effect, ~~will~~if ~~have~~any, ~~a significant impact~~ on the Company's ~~consolidated~~ financial ~~statements~~position and results of operations.

48F-12

V- MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, A Similar Tax Loss, or a Tax Credit Carryforward Exists (A Consensus the FASB Emerging Issues Task Force). ASU 2013-11 provides guidance on financial statement presentation of unrecognized tax benefit when a net operating loss carrforward, a similar tax loss, or a tax credit carryforward exists. The FASB’s objective in issuing this ASU is to eliminate diversity in practice resulting from a lack of guidance on this topic in current U.S. GAAP. This ASU applies to all entities with unrecognized tax benefits that also have tax loss or tax credit carryforwards in the same tax jurisdiction as of the reporting date. This amendment is effective for public entities for fiscal years beginning after December 15, 2013 and interim periods within those years. The company does not expect the adoption of this standard to have a material impact on the Company’s unaudited condensed consolidated financial position and results of operations.

Company’s management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, will have a material effect on the Company’s condensed consolidated financial position, results of operations, or cash flows.

NOTE 3 - LOANS RECEIVABLE

The loans receivable include the following:

			June 30, 2013			June 30, 2012
			June 30,2014			June 30,2013
a	)	Dalian Qianbaihe Cloth Accessories Co.	$	236,614		$	103,884
a)		Dalian Qianbaihe Cloth Accessories Co.	$	235,974		$	236,614
b	)	Feiyue International Trade		-			214,064
b)		Dalian Tianjun Trade Co.		260,000			767,417
c	)	Dalian Tianjun Trade Co.		767,417			1,259,200
c)		Dalian Digital Media Co.		36,594			36,693
d	)	Rongfu Auto Parts Co.		-			31,232
d)		Beijing Cross-Strait Publishing Exchange Center		48,750			48,882
e	)	Dalian Digital Media Co.		36,693			40,731
e)		Dalian Culture and Broadcasting Corp		136,500			136,870
f	)	Beijing Cross-Strait Publishing Exchange Center		48,882			47,220
f)		Dalian Bomeishiji Media Corp		145,645			146,040
g	)	Dalian Culture and Broadcasting Corp		136,870			-
g)		Shenzhen Lianchuang Jianhe Corp		365,357			545,583
h	)	Dalian Bomeishiji Media Corp		146,040			-
h)		Bainianchahui Corp.		523,776			232,082
i	)	Shenzhen Lianchuang Jianhe Corp		545,583			-
i)		Dalian Tongxing Iron and Steel Co., Ltd.		-			218,422
j	)	Bainianchahui Corp.		232,082			-
j)		Dalian Yongshun Material Corp.		-			133,807
k	)	Dalian Tongxing iron and steel Co., Ltd.		218,422			-
k)		Wanjiada Commerce and Trade Co.		141,926			-
l	)	Dalian Yongshun Material Corp.		133,807			-
l)		Beijing Dayang Hongye Building Decoration Engineering		121,875			-
m	)	Others		757,142			403,162
m)		Others		215,313			757,142
		Total loans receivable	$	32,~~259~~231,~~552~~710		$	23,~~099~~259,~~493~~552
		Bad debt allowance		(833,700	)		-
		Doubtful accounts allowance		(1,390,143	)		(833,700	)
		Net loans receivable	$	2841,~~425,882~~567		$	2,~~099~~425,~~493~~882
		Net loans receivable – non current		152,276			-
		Net loans receivable - current	$	689,291		$	2,425,882

a) The Company made a$0.24 ~~non-interest bearing~~ loan to Dalian Qianbaihe Cloth Accessories Co. on June 30, 2013 for $0six months with interest 10%.24 ~~million~~On March 5, 2014, the Company renewed the loan agreement, and pursuant to the agreement, the loan was extended for one year and is due on ~~demand~~March 4, 2015 with the same interest rate. The loan ishas ~~expected~~been toreserved beas ~~paid~~part byof ~~December~~the ~~31,~~allowance ~~2013~~for doubtful accounts.

~~b) The Company made a non~~F-interest loan of $0.21 million to Feiyue International Trade Co. as of June 30, 2012. The loan was repaid in July 2012. The Company made a non-interest loan of $0.03 million to Feiyue International Trade Co. in September 2012 and another loan of $0.23 million in 2013. These loans are repaid as of June, 30 2013.13

c)V ~~The~~MEDIA ~~Company~~CORPORATION ~~made~~AND the following loans to Dalian Tianjun Trade Co.: (1) $0.8 million (RMB 5 million) for one year from June 10, 2012 to June 9, 2013 at a fixed interest rate of 10% per year which has been repaid by June 30, 2013. (2) One-year term loan from December 29, 2011 to December 28, 2012 in the amount of $0.49 million (RMB 3 million) at a fixed interest rate of 10% per annum which has been repaid by June 30, 2013. (3) $0.24 million (RMB 1.5 million) for one year from December 31, 2012 to December 30, 2013. (4) One-year term loan from November 30, 2012 to October 29, 2013 in the amount of $0.49 million (RMB 3 million). (5) In December 2012, the Company made a non-interest loan of $0.03 million (RMB0.21million) to Dalian Tianjun Trade Co. The loan was repaid by July 31, 2013.SUBSIDIARIES

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

db) The Company made the following loans to Dalian Tianjun Trade Co.: (1) $0.24 million (RMB 1.5 million) for one year from January 1, 2014 to December 31, 2015 which is classified as a ~~non~~long term asset and has been reserved in the provision for doubtful accounts. (2) One-~~interest~~year ~~bearing~~term loan from November 30, 2012 to October 29, 2013 in the amount of $0.0349 million to(RMB ~~Rongfu~~3.0 ~~Auto~~million). ~~Parts~~The CoCompany has been repaid $0.47 onmillion ~~January~~(RMB2.9 15million) as of June 30, ~~2012~~2014. ~~which~~The ~~was~~remaining ~~repaid~~balance inof ~~January~~$0.02 million (RMB 100,000) has been extended to October 31, 2014. (3) In August 2013, the Company made a loan of $0.03 million (RMB 210,000), which loan has been repaid.

ec) The Company made a non-interest bearing loan of $0.04 million to Dalian Digital Media Co. as of June 30, 2012. The loan is due on demand and bears no interest. ~~Dalian~~The ~~Digital~~loan ~~Media~~is ~~Co.~~fully ~~repaid~~reserved as part of the ~~loan~~allowance ~~during~~for ~~fiscal~~doubtful ~~year 2013, with the remaining balance of $0~~accounts.~~04 million.~~

fd) The Company loaned $0.05 million to Beijing Cross-Strait publishing exchange center on November 20, 2011. ~~which~~The ~~was~~loan is due on ~~November~~demand ~~19,~~and ~~2012~~bears ~~with~~ no interest. The loan ~~was~~is ~~extended~~fully reserved as part of the allowance for ~~another~~doubtful ~~year~~accounts.

ge) The Company loaned $0.14 million to Dalian Culture and broadcasting Corp in December 2012. In November, ~~which~~2013, the loan was extended for one year and is due on ~~demand~~October ~~with~~31, no2014. The annual interest is 10%.

hf) The Company loaned $0.1514 million to Dalian Bomeishiji Media Corp infor ~~December~~one ~~2012,~~year ~~which~~with isthe balance due on ~~demand~~December ~~with~~31, no2014. The annual interest is 10%.

ig) The Company loaned $0.5537 million to Shenzhen ~~lianchuang~~Lianchuangjianhe ~~jianhe~~ Corp in 2013 which is due on ~~demand~~October ~~with~~29, no2014 and bears 10% annual interest.

jh) The Company ~~loaned~~made two loans to Bainianchahui Corp: (1) $0.2326 million to(RMB ~~Bainianchahui~~1.57 ~~Corp~~million) for one year due on November 9. in2014; ~~2013~~the ~~which~~loan is fully reserved. (2) $0.15 million (RMB 0.93million) for two years and is due on ~~demand~~December ~~with~~31, no2015. ~~interest~~The loan has been classified as a long term receivable. ~~Bainianchahui~~Both ~~Corp~~loans bear annual interest of 10%. ~~repaid~~(3) $0.1611 million as(RMB of0.7 ~~July~~million) ~~31,~~and ~~2013~~are due on demand.

ki) The Company loaned $0.22 million to Dalian Tongxing ~~iron~~Iron and ~~steel~~Steel Co., Ltd. in 2013 which iswas due on ~~demand~~June ~~with~~25, no2014 and bears annual interest of 10%. The loan was repaid.

lj) The Company loaned $0.13 million to Dalian Yongshun Material Corp. in 2013 which iswas due on demand with no interest. The loan was repaid.

mk) The Company ~~had~~loaned ~~various loans of~~ $0.7614 million to ~~other~~Wanjiada ~~third~~Commerce ~~parties~~and asTrade ofCo. on June 3027, ~~2013,~~2014 which ~~are~~is due on demand ~~and~~with ~~bear~~ no interest.

~~NOTE 4~~ F- ~~MAJOR SUPPLIERS~~14

~~During~~V ~~the~~MEDIA ~~year~~CORPORATION ~~ended~~AND June 30, 2013, two major suppliers provided approximately 52% of the Company’s purchase of raw materials, with each supplier accounting for 36% and 16%. During the year ended June 30, 2012, three major suppliers provided approximately 76% of the Company’s purchase of raw materials, with each supplier accounting for 27%, 26% and 23%.SUBSIDIARIES

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

l) The Company loaned $0.12 million to Beijing Dayang Hongye Building Decoration Engineering on July 10, 2013 which is due on demand with no interest.

m) The Company has various loans of $0.22 million to other third parties as of June 30, 2014, which are due on demand and bear no interest.

NOTE 4 - MAJOR SUPPLIERS AND CUSTOMERS

During the year ended June 30, 2014, three major suppliers provided approximately 84% of the Company's purchase of raw materials, with each supplier accounting for 37% and 33% and 14%. During the year ended June 30, 2013, two major suppliers provided approximately 52% of the Company's purchase of raw materials, with each supplier accounting for 36% and 16%, respectively.

NOTE 5 - PROPERTY, EQUIPMENT AND CONSTRUCTION IN PROGRESS, NET

Property, equipment and construction in progress consist of the following:

	June 30, 2013			June 30,2012
	June 30, 2014			June 30, 2013
Advertising equipment	$	3033,~~614~~088,~~086~~038		$	2630,~~034~~614,~~266~~086
Office equipment and furniture		~~840~~904,~~724~~450			~~667~~840,~~417~~724
Office building and Improvement		~~118~~117,~~195~~875			~~438~~118,~~097~~195
Transportation		1,~~652~~666,~~585~~891			1,~~498~~652,~~252~~585
Subtotal		3335,~~225~~777,~~590~~254			2833,~~638~~225,~~032~~590
Less: Accumulated depreciation		(1113,~~323~~855,~~309~~225	)		(811,~~536~~323,~~303~~309	)
Construction in progress		1,~~747~~603,~~569~~491			31,~~103~~747,~~112~~569
Total	$	23,~~649~~525,~~850~~520		$	23,~~204~~649,~~841~~850

Depreciation expense totaled $2,~~496~~534,~~649~~107 and $2,~~274~~496,~~967~~649 for the years ended June 30, ~~2013~~2014 and ~~2012~~2013, respectively. Approximately $2029.843 million worth of advertising equipment was pledged as collateral against various short term loans as of June 30, ~~2013~~2014.

The Company sold a real estate property with a net book value of $0.30 million in 2013 for gross proceeds of $0.21 million.

Construction in progress mainly consists of billboards and other outdoor advertising platforms that are still under construction and have not been put in use.

NOTE 6 – SECURITY DEPOSITS

Security deposits are mainly comprised of deposits made to third parties to guarantee the Company’'s outstanding loans. Since it has been the Company’'s policy to either roll-over a substantial amount of their existing loans or repay them and subsequently enter into a new loan with the same lender, security deposits have been recorded as long-term assets. (See note 8)

~~NOTE 7~~ F- ~~BILLBOARDS USE RIGHT~~15

~~The~~V ~~Company~~MEDIA ~~makes~~CORPORATION ~~advance~~AND payments for the right to construct advertising equipment and post advertisements in various locations in the PRC, based on long-term contracts with local government authorities or other business entities. These payments are recorded as billboards use right and amortized on a straight-line basis over the contract terms.SUBSIDIARIES

The Company leased a billboard use right at Times Square in New York under a non-cancellable twelve-moth operating lease commencing March 1, 2012 and signed a new extension agreement to extend the lease through August 31, 2014. Quarterly lease payment was $840,000 before September 1, 2013 and increases to $870,000 afterward. The Company amortizes the expense on a straight-line basis over the term of the lease.

In January 2013, the Company signed a contract valued at $900,000 with a customer to sublease certain advertising time slots of its leased Time Square Billboard for one year term effective January 1, 2013. There are currently additional time slots available for lease. Due to its inability to fully lease its billboard, the unexpired portion of its lease payments (2 months) recorded in prepaid expense were written off as of June 30, 2013. Lease expense recorded in cost of sales in connection with the Time Square billboard totaled $3.8 million and $1.1 million for the years ended June 30, 2013 and 2012, respectively.

Amortization of billboard use rights for the years ended June 30, 2013 and 2012 was $7,191,683 and $2,586,578, respectively.

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The~~NOTE ~~projected~~7 ~~amortization~~- ~~expense~~BILLBOARDS asUSE ~~of June 30, 2013 attributed to future years is as follows:~~RIGHTS

12 months ending June 30,
2014	$	1,255,264
2015		538,244
2016		316,358
2017		279,548
2018		248,291
Thereafter		644,023
	$	3,281,728

The Company makes payments for the rights to construct advertising equipment and post advertisements in various locations in the PRC, based on long-term contracts with local government authorities or other business entities. These payments are recorded as billboards use rights and amortized on a straight-line basis over the contract terms.

The ~~following~~Company isalso leased a ~~schedule~~billboard byuse ~~year~~rights ~~for~~at ~~future~~Times ~~minimum~~Square ~~payments~~in New York under a non-cancellable twelve-month operating lease commencing March 1, 2012 and signed an extension agreement to extend the ~~billboard~~lease ~~use~~through ~~right~~August ~~agreements~~31, at2014, requiring quarterly lease payments of $840,000 before September 1, 2013 and increasing to $870,000 afterward. The Company amortized the expense on a straight-line basis over the term of the leases. For the year ended June 30,, 2014 and 2013:, there were $3.46 million and $3.27 million amortization expense recorded as part of cost of revenue, respectively. This lease has expired on August 31, 2014 and was not renewed.

12 months ending June 30,
2014	$	4,357,504
2015		591,943
2016		200,078
2017		207,206
	$	5,356,731

Lease expense recorded in cost of sales in connection with the Time Square billboard totaled $3.46 million and $3.36 million for the years ended June 30, 2014 and 2013, respectively.

Amortization of billboard use rights totaled $6,723,092 and $7,191,683 for the years ended June 30 2014 and 2013, respectively.

The estimated amortization expense as of June 30, 2014 for the next five years is as follows:

years ending June 30,
2015	$	1,285,055
2016		826,815
2017		392,888
2018		247,619
2019		247,619
Thereafter		330,287
	$	3,330,283

F-16

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a schedule by year for future minimum payments under the billboard use right agreements at June 30, 2014:

years ending June 30,
2015	$	763,513
2016		572,634
2017		572,634
	$	1,908,781

NOTE 8 - SHORT TERM LOANS

The short term loans include the following:

		June 30, 2013		June 30, 2012
	June 30, 2014		June 30, 2013
a) Loans payable to Shanghai Pudong Development Bank	$	-1,950,000	$	~~2,518,400~~-
b) Loan payable to Dalian Bank Xigang Branch		~~3,258,815~~-		13,~~574~~258,~~000~~815
c) Loan payable to Industrial and Commercial Bank of China		~~293~~292,~~293~~500		~~283~~293,~~320~~293
d) Loan payable to Jinzhou Bank		1,~~629~~625,~~408~~000		-1,629,408
e) Loans payable to Jilin Bank		-		2,833,200
e)Loan payable to Dalian Bank Shenyang Branch		975,000		651,763
f) Loan payable to Dalian Bank Shenyang Branch		651,763		944,400
f)Loan payable to Dalian Bank Shanghai Branch		471,250		472,528
g) Loan payable to Dalian Bank Shanghai Branch		472,528		472,200
g) Loan payable to Yingkou Bank		1,625,000		1,629,408
h) Loan payable to Yinkou Bank		1,629,408		944,000
h) Loan payable to China Merchant bank		-		814,704
i) Loan payable to China Merchant bank		814,704		944,000
i) Loan payable to Guangdong Development Bank		2,437,500		2,444,111
j) Guangdong Development Bank		2,444,111		-
j) Loan payable to Dalian Bank the First Centre Branch		3,250,000		-
k) Loan payable to various unrelated parties		1,384,996		520,994
k) Loan payable to Jilin Bank		1,625,000		-
Total short term loans	$	12,579,026	$	11,035,314
l) Loans payable to Agriculture and Commerce Bank		1,625,000		-
m) Loans payable to various unrelated parties		-		1,384,996
Total short term loans	$	15,876,250	$	12,579,026

52a) Loan payable to Shanghai Pudong Development bank is a one-year term loan from June 19, 2014 to June 18, 2015 for RMB12,000,000 ($1.95 million)at a variable rate based on the interest rate set by the People's Bank of China. The effective rate is 7.5% per year. This loan has been guaranteed by the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma as well as the Joint Venture Guarantee Group Co., LTD, an independent third party guarantee company.

VF-~~MEDIA CORPORATION AND SUBSIDIARIES~~17

~~(FORMERLY~~V ~~CHINA NEW~~ MEDIA CORPORATION) AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ab) Loan payable to ~~Shanghai~~Dalian ~~Pudong~~Bank ~~Development~~Xigang ~~bank~~Branch ~~consisted~~in ofthe ~~two~~amount ~~loans.~~of ~~One was a one-year term loan from November 22, 2011 to November 21, 2012 for~~ RMB 620,000,000 ($~~944,400)~~3.25 ~~The~~million) ~~loan~~for ~~has been repaid in September, 2012. The second loan was~~ a one-year term ~~loan~~ from ~~June~~December 1820, 2012 to ~~June~~December 1419, 2013 ~~in the amount of RMB 10~~,~~000,000~~was ~~(approximately~~repaid ~~$1.57 million) at a variable interest rate based~~ on the ~~interest~~due ~~rate set by the People’s Bank of China~~date. ~~During the periods presented, the effective rate was 7.2% per year. This loan was repaid in June 2013.~~

bc) Loan payable to ~~Dalian~~Industrial ~~Bank~~and ~~Xigang~~Commercial ~~Branch~~Bank ~~consists~~ of ~~two~~China ~~loans;~~was Afor a one-year term ~~loan~~ from ~~March~~September 2720, 2012 to ~~March~~September 2612, 2013, ~~with~~and ~~the~~was ~~amount~~repaid ofon ~~RMB~~the ~~10,000,000~~due ~~($1~~date.57 ~~million).~~ The ~~loan~~Company ~~was~~obtained ~~repaid~~a innew ~~March 2013. Another~~ loan isfor in the same amount offrom ~~RMB~~August 2029,~~000,000~~ ~~($3.26~~2013 ~~million)~~to ~~for~~August 28, 2014 at a ~~one-year~~variable ~~term~~interest ~~from~~rate ~~December~~based ~~20,~~on ~~2012~~the tointerest ~~December~~rate ~~19,~~set ~~2013~~by ~~with~~the aPeople's ~~fixed~~Bank ~~interest~~of China. The effective rate ofis 87.42% per year. ~~This~~The ~~loan~~Company ~~has~~pledged ~~been~~a ~~guaranteed~~real byestate anproperty ~~unrelated~~owned ~~company,~~by ~~Dalian~~the ~~Huanbohai~~Company's ~~Development~~major ~~Credit Guaranty Company~~stockholder. ~~The~~This ~~Company~~loan ~~pledged~~was ~~its~~repaid ~~trademark~~on ~~for~~August ~~this~~28, ~~loan~~2014.

cd) ~~Loan~~The ~~payable~~Company toobtained ~~Industrial~~a ~~and~~loan ~~Commercial~~from Jinzhou Bank in the amount of ~~China~~RMB ~~was~~10,000,000 ($1.63 million) for a ~~one-year~~ term ~~due~~from onDecember ~~August 21~~11, 2012 to December 10, 2013 with a fixed interest rate of 8.4% per year. The loan was repaid onwhen ~~the~~it ~~due~~was ~~date~~due. The Company obtained a new loan for the same amount from ~~September~~November 2018, ~~2012~~2013 to ~~September~~November 1217, ~~2013~~2014 atwith a ~~variable~~fixed interest rate ~~based~~of on8.4% ~~the~~per ~~interest~~year. ~~rate~~The ~~set~~Company bypledged ~~the~~part ~~People’s Bank~~ of ~~China.~~its ~~During~~advertising ~~the~~equipment ~~periods~~with ~~presented,~~a ~~the~~carrying ~~effective~~value ~~rate~~of ~~was~~RMB ~~7.2%~~31 ~~per~~million ~~year~~(approximately $5.0 ~~The~~million), ~~Company~~and ~~pledged~~also ais ~~real~~guaranteed ~~estate property owned~~ by the Company’'s major ~~Stockholder~~stockholders, Mr. ~~This~~Guojun ~~loan~~Wang ~~was~~and ~~repaid~~Ms. onMing ~~September 11, 2013~~Ma.

de) The Company ~~obtained~~signed a loan agreement with Dalian Bank Shenyang Branch in the amount of RMB 106,000,000 ($~~1.63 million~~975,000) for a term from ~~December~~June 1119, ~~2012~~2013 to ~~December~~June 1018, ~~2013~~2014 with a fixed interest rate of 8.41% per year, and was repaid on the due date. The Company ~~pledged~~obtained ~~part~~a ofnew ~~its~~loan ~~advertising~~for ~~equipment~~the same amount from June 23, 2014 to June 22, 2015 with a ~~carrying~~fixed ~~value~~interest rate of ~~RMB31~~8.1% ~~million~~per ~~(approximately~~year. $5The loan is guaranteed by V-Media , and also guaranteed by the Company's major stockholders, Mr.1 ~~million)~~Guojun Wang, Ms. Ming Ma, Ms. Caiqin Wang and Mr. Tao Sun.

ef) Loan payable to ~~Jilin~~Dalian Bank ~~consists~~Shanghai ofBranch ~~two~~is ~~loans; A one-year term loan from June 19, 2012 to May 9, 2013~~ in the amount of RMB 32,~~000~~900,000 (~~approximately~~ $~~0.49 million~~471,250) atfor ~~interest~~a ~~rate~~term ~~varying~~from ~~based~~November on29, ~~the~~2012 ~~interest~~to ~~rate~~November ~~set~~27, by2013 ~~the~~with ~~People’s~~a ~~Bank~~fixed ofinterest ~~China. During the periods presented, the effective~~ rate ~~was~~of 87.~~528~~8% per year. ~~The~~On ~~other~~December ~~loan~~3, is2013, athe ~~one-year term~~ loan ~~from~~was ~~May~~extended ~~10,~~for ~~2012~~one ~~to May 9~~year, ~~2013~~with ina ~~the~~due ~~amount~~date of ~~RMB~~December 152,~~000~~ 2014,~~000~~ ~~(approximately~~with ~~$2.44~~the ~~million)~~same ~~at an~~ interest rate. ~~varying~~This ~~based~~loan onis ~~the~~guaranteed ~~interest rate set~~ by ~~the People’s Bank of China. During the periods presented~~V-Media, ~~the~~and ~~effective~~is ~~rate~~also ~~was 8.528% per year. The two loans have been~~ guaranteed by anthe ~~unrelated~~Company's ~~company,~~major ~~Dalian Enterprise Credit Guaranty Co.~~stockholders, ~~Ltd~~Mr. ~~The~~Guojun ~~Company~~Wang, ~~also~~and ~~pledged part of its advertising equipment with an approximate value of RMB 43 million (approximately $7~~Ms.07 ~~million).~~Ming ~~The Company repaid the two loans on their due date~~Ma.

~~f) Loan payable to Dalian Bank Shenyang Branch is in the amount of RMB 6,000,000 ($944,400) for one~~F-year term from June 6, 2012 to June 5, 2013 at an interest rate varying based on the interest rate set by the People’s Bank of China. During the periods presented, the effective rate was 8.856% per year. The loan was repaid on the due date. The Company obtained a new loan in the amount of RMB 4,000,000 ($0.65 million) for a new term from June 19, 2013 to June 18~~, 2014 with a fixed interest rate of 8.1% per year. The loan is guaranteed by V-Media.~~

53V MEDIA CORPORATION AND SUBSIDIARIES

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

h) Loan payable to ~~Yingkou~~China Merchant bank ~~consisted~~was ofa ~~two~~one-year ~~loans.~~term ~~One~~ loan in ~~the~~ amount of RMB 5,000,000 ($0.81 million) from May 2230, 2013 to May 2130, 2014 with a fixed interest rate of 7.8% per year~~. Another loan is in the amount of RMB6~~, ~~000,000~~and ~~($0.94 million) a one-year term loan with interest at 8.203% set by~~ the ~~People’s Bank of China from June 29, 2012 to June 28, 2013. The~~ loan was repaid inon ~~June 2013. The Company obtained a new one-year term loan in~~ the ~~amount~~due ~~of RMB5,000,000 ($0~~date.81 million) from June 26, 2013 to June 25, 2014 with a fixed interest rate of 7.8% per year. Both loans have been guaranteed by Liaoning Baijia Financing Assurance Co.,Ltd, and one of the Company’s major stockholders, Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment to Liaoning Baijia Financing Assurance Co., Ltd.

i) Loan payable to ~~China~~Guangdong ~~Merchant~~Development ~~bank~~Bank is a one-year term loan from May 9, 2013 to May 8, 2014 in amount of ~~RMB6~~RMB15,000,000 ($02.9444 million) ~~from~~with ~~May 24, 2012 to May 24, 2013 at~~ a fixed interest rate of 87.~~528~~8% per year. The loan was repaid inon ~~May~~the ~~2013~~due date. The Company obtained a new ~~one-year term~~ loan infor the same amount ~~of RMB 5,000,000 ($0.81 million)~~ from May 3016, ~~2013~~2014 to May 3015, ~~2014~~2015 with a fixed interest rate of 7.8.1%. ~~per~~This ~~year~~loan has been guaranteed by Dalian Enterprise Credit Guarantee Co., ~~The~~LTD and the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma. In the guarantee contract, the Company pledged part of its advertising equipment ~~with~~to anDalian ~~approximate~~Enterprise ~~carrying~~Credit ~~value~~Guarantee ~~of RMB 12~~Co.1, ~~million~~LTD ~~(approximately~~as ~~$1.97~~additional ~~million)~~collateral.

j) Loan payable to ~~Guangdong~~Dalian ~~Development~~ Bank the First Centre Branch is a one-year term loan from ~~May~~December 916, 2013 to ~~May~~December 815, 2014 in the amount of ~~RMB15~~RMB20,000,000 ($23.4425 million) with a fixed interest rate of 7.8.4% per year. ~~This~~The ~~loan has been guaranteed by Dalian Enterprise Credit Guarantee Co., LTD and the~~ Company’s ~~major stockholders Mr. Guojun Wang and Ms. Ming Ma. In the guarantee contract, the Company~~ pledged ~~part of~~ its ~~advertising~~brand ~~equipment~~trademark tofor ~~Dalian~~the ~~Enterprise Credit Guarantee Co~~loan.~~, LTD.~~

k) ~~The~~Loan ~~Company~~payable ~~had~~to Jilin Bank is a one-year term loan from June 26, 2014 to June 25, 2015 in the amount of RMB10,000,000 ($1.3863 million) ~~and~~with $0a fixed interest rate of 7.528% ~~million~~per ~~loans~~year. ~~from~~This ~~outside~~loan ~~unrelated~~has ~~parities~~been asguaranteed ofby ~~June~~the 30Company's major stockholders, ~~2013~~Mr. Guojun Wang and ~~2012,~~Ms. ~~respectively~~Ming Ma as well as Dalian QianbaiHe Clothing accessories Co., ~~which~~LTD. ~~were~~The ~~due~~Company onpledged ~~demand~~part ~~and~~of ~~bear~~its noadvertising ~~interest~~equipment to Dalian QianbaiHe Clothing accessories Co., LTD as additional collateral.

54F-19

V- MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~NOTE~~l) 9Loans –payable ~~LONG~~to ~~TERM~~Agriculture ~~LOAN~~and Commerce Bank are two one-year term loans, both from June 3, 2014 to June 2, 2015 in amount of RMB5,000,000 ($0.81 million each) with a fixed interest rate of 7.8% per year. The loans have been guaranteed by a third party, Dalian High and New Technology Guarantee Investment Co., and the Company's major stockholders, Ms. Ming Ma. In the guarantee contract, the Company paid approximately $40,000 (RMB 250,000) guarantee fee, and pledged part of its advertising equipment to Dalian High and New Technology Guarantee Investment Co. as additional collateral.

~~Long~~m) ~~term~~The ~~loan~~Company ~~consists~~had $1.38 million of ~~following:~~loans from outside unrelated parities as of June 30, 2013. Which were subsequently repaid during the year ended June 30, 2014.

	June 30, 2013			June 30, 2012
ORIX Leasing	$	389,876		$	953,430
Less: current portion		(389,876	)		(590,370	)
Long term loan- noncurrent portion	$	--		$	363,060

NOTE 9 – BANK ACCEPTANCE NOTES PAYABLE

OnAs ~~December~~of ~~29,~~June ~~2011~~30, ~~V-Media~~ ~~Group’s~~2014 ~~Shenyang~~ and ~~Beijing~~2013, ~~subsidiaries~~the ~~entered~~Company ~~into~~has ~~loan~~bank ~~agreements~~acceptance ~~with~~notes ~~ORIX~~payable ~~Finance~~in ~~Leases~~the ~~(China)~~amount ~~Co.,~~of ~~Ltd. (“ORIX Leasing”) pursuant to which two subsidiaries borrowed~~ $~~0.67~~3,575,000 ~~million (RMB 4.1 million)~~ and $~~0.57 million (RMB 3.~~5 ~~million)~~,214,104, respectively,. ~~from~~The ~~ORIX~~notes ~~leasing~~are ~~and~~guaranteed ~~pledged~~to ~~its~~be ~~advertising~~paid ~~equipment~~by ~~with~~ the ~~approximate~~banks ~~value of RMB $1.0 million (RMB6.26 million)~~ and ~~$0.87 million (RMB5.37 million), respectively. These loans~~ are ~~paid~~usually onfor a ~~monthly basis over a two~~short-~~year~~term period ~~and~~of ~~consist~~time of athree ~~fixed~~to ~~payment~~six ~~based~~months ~~upon~~(see aNote ~~24-month~~16). ~~amortization~~The ofCompany ~~the~~is ~~loan~~required ~~amount~~to ~~plus~~maintain ancash ~~interest~~deposits ~~component~~at ~~that~~a ~~varies~~minimum ~~based~~of ~~upon~~50% of the ~~rate~~total ~~announced~~balance ~~from~~of ~~time~~the tonotes ~~time~~payable bywith the ~~People’s~~banks, ~~Bank~~in oforder ~~China~~to ~~for~~ensure ~~two-year~~future ~~loans~~credit availability. AtAs of June 30, ~~2013,~~2014 ~~the monthly payments under the agreement for Shenyang~~ and ~~Beijing~~2013, ~~were~~approximately $02.037 million ~~(RMB 181,309)~~ and $02.026 million ~~(RMB~~in ~~155,410),~~restricted ~~respectively,~~cash ~~which~~were ~~include~~associated anwith ~~interest~~these ~~component~~notes ~~calculated~~payable, ~~at the rate of 6~~respectively.~~65%.~~

NOTE 10 – ~~BANK~~SUBSIDY ~~ACCEPTANCE NOTES PAYABLE~~INCOME

AsSince one of ~~June 30, 2013,~~ the Company's ~~has~~subsidiaries ~~bank~~is ~~acceptance~~located ~~notes~~in ~~payable~~a inspecial ~~the~~economic ~~amount~~development ofzone ~~$5,214,104.~~in ~~The~~Dalian ~~notes~~City, ~~are~~the ~~guaranteed~~Company toreceived bea ~~paid~~special bysubsidy ~~the~~of ~~banks~~$250,686 and ~~are~~$430,681 ~~usually~~ for athe ~~short-term~~years ~~period~~ended ofJune ~~three~~30, to2014 ~~six~~and ~~months~~2013, respectively. ~~The~~For ~~Company~~"Vastitute isMedia" ~~required~~being torecognized ~~maintain~~as ~~cash~~one ~~deposits~~of atChina's awell-known ~~minimum~~trademark ofbrands, ~~50%~~the ofCompany ~~the~~also ~~total~~received ~~balance~~an award of ~~the~~$80,049 ~~notes~~from ~~payable~~the ~~with~~municipal ~~the~~government ~~banks,~~and inother ~~order~~miscellaneous toincome ~~ensure~~totaling ~~future~~$209,660 ~~credit~~for ~~availability.~~the Asyear ofended June 30, 2013~~, $2~~.~~6 million in restricted cash was associated with these notes payable.~~

~~NOTE 11 – SUBSIDY INCOME~~F-20

~~Since~~V ~~one~~MEDIA ofCORPORATION ~~the~~AND Company’s subsidiaries is located in a special economic development zone in Dalian City, the Company received a special tax refund of $430,681 and $718,984 from the local government as subsidy income for the years ended June 30, 2013 and 2012, respectively. For “Vastitute Media” being recognized as one of China’s well-known trademark brands, the Company also received an award of $80,049 from the municipal government for the year ended June 30, 2013. Other miscellaneous subsidy income totaled $209,660 for the year ended June 30, 2013.SUBSIDIARIES

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1211 - RELATED PARTY TRANSACTIONS

Amounts due to related parties are as follows:

	June 30, 2013		June 30, 2012
	June 30, 2014		June 30, 2013
Wang, Caiqin	$	146,~~157~~250	$	~~118~~146,~~050~~157
Ma, Ming		93145,~~577~~894		~~412~~93,~~242~~577
Wang, Guojun		~~122~~123,~~369~~541		64122,~~482~~369
Total	$	~~362~~415,~~103~~685	$	~~594~~362,~~774~~103

The above stockholders periodically provide funds for the Company’'s operations for advertising material and equipment purchases. These amounts are generally unsecured, non-interest bearing and due on demand.

NOTE 1312 - WARRANTS

On November 23, 2009, prior to and in conjunction with the Merger, Fortune-Rich entered into a Securities Purchase Agreement (“"SPA”") with an institutional investor and pursuant to the SPA, Fortune-Rich issued 10,415,000 shares of its common stock in exchange for $3,500,000 in cash. These shares of Fortune-Rich were convertible into 5,497,933 shares of the common stock of the Company upon completion of the Merger mentioned above. In addition, the investor was entitled to receive 6,249,000 warrants of Fortune-Rich, which were exchanged for 3,298,760 warrants of the Company upon the completion of the Merger with an exercise price of $0.95. ~~These~~The warrants, ~~are~~which ~~exercisable~~were ~~immediately~~assumed ~~for~~by the ~~same~~Company ~~number~~upon ofthe ~~common~~Merger, ~~shares~~expired on November 23, 2013. As of ~~the~~June ~~Company~~30, 2014, all warrants were expired.

The ~~warrants,~~following ~~which~~is ~~were~~a ~~assumed~~summary byof ~~the~~warrant ~~Company~~activities ~~upon~~for the ~~Merger, expire in four~~ years ~~from~~ended ~~November~~June 2330, ~~2009.~~2014 ~~The warrants issued in connection with the Merger meet the conditions for equity classification pursuant to ASC 815, “Derivatives~~ and ~~Hedging”; therefore, these warrants were classified as equity and included in Additional Paid-in Capital.~~2013:

On March 7, 2011, the Company granted its independent director, Stephen Monticelli warrants to purchase up to 50,000 shares of the Company’s common stock at an exercise price of $1.80 per share. The Warrant Shares for the first year (up to an aggregate total of 16,666 shares) will be vested following a full year of service as a Non-Executive Director. The Warrant Shares for the second year (up to an aggregate total for years one and two of 33,333 shares) will be vested following a second full year of service as a Non-Executive Director. The Warrant Shares for years three through five (up to an aggregate total for all five years of 50,000 shares) will be vested following the third full year of service as a Non-Executive Director.

	Warrants Outstanding		Weighted Average Exercise Price		Average Remaining Life in years		Average Intrinsic Value
Outstanding, June 30, 2012		3,348,760		0.96		1.45		-
Granted		-		-		-		-
Forfeited		33,334		1.8		-		-
Exercised		-		-		-		-
Outstanding, June 30, 2013		3,315,426	$	0.95		0.41		-
Granted		-		-		-		-
Forfeited		3,315,426	$	0.95		-		-
Exercised		-		-		-		-
Outstanding, June 30, 2014		-	$	-		-		-

~~The fair value of warrants granted was estimated at the date of grant using the Black~~F-Scholes option-pricing using level 2 inputs for measuring fair value. The fair value of the warrants to the director was $18,988 at the grant date. On September 24, 2012, Stephen Monticelli submitted his resignation from his position as an independent director of V Media Corporation. The unvested portion of his granted warrants were forfeited thereafter.21

~~The~~V ~~following~~MEDIA isCORPORATION aAND ~~summary of warrant activities for the year ended June 30, 2013:~~SUBSIDIARIES

	Warrants		Weighted Average		Average Remaining		Average Intrinsic
	Outstanding		Exercise Price		Life in years		Value
Outstanding, June 30, 2012		3,348,760	$	0.96		1.45	-
Granted		-		-		-	-
Forfeited		33,334	$	1.8		-	-
Exercised		-		-		-	-
Outstanding, June 30, 2013		3,315,426	$	0.95		0.41	-
Exercisable, June 30, 2013		3,315,426	$	0.95		0.41	-

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1413 – TAXES

a)	Corporate Income Tax

Significant components of the income tax provision were as follows:

	~~For the years ended June 30,~~	For the years ended June 30,
	2013			2012
		2014		2013
Current tax provision		$	-	$	-
Federal		$	-	$	-
State			-		-
Foreign			458,845		492,080
			458,845		492,080
Deferred tax provision (benefit), net of valuation allowance
Federal			-		-
State			-125,741		-458,845
Foreign			~~416~~125,~~220~~741		~~(265~~458,~~273~~845	)
			416,220		(265,273	)
Deferred tax expense (benefit)			-		-
Income tax provision		$	875,065	$	226,807
Federal			-		-
State			-		416,220
Foreign			-		416,220
		$	125,741	$	875,065

The following table reconciles the US statutory rates to the Company’'s effective rate for the years ended June 30, ~~2013~~2014 and ~~2012~~2013.

For the years ended June 30	2013		2012
		2014			2013
US statutory income tax rate	~~35.00~~	%	35.000	%		35.0	%
Income not taxed in US	~~-35.00~~	%	-35.000	%		-35.0	%
China Income tax statutory rate	~~25.00~~	%	25.000	%		25.0	%
Effect of deferred tax assets valuation allowance – Holding Company	-16.00	%	-
Change in deferred tax assets valuation allowance - Holding Company			-16.0	%		-16.0	%
Effect of deferred tax assets valuation allowance – PRC entities	-21.00	%	-
Change in deferred tax assets valuation allowance - PRC entities			-24.0	%		-21.0	%
Provision for doubtful accounts not allowed	-5.00	%	0.3	%
Provision for doubtful accounts not deductible			-4.0	%		-5.0	%
Other non-deductible item	~~-1.00~~	%	0-7.30	%		-1.0	%
Other	-		13.4	%
Effective rate			-4.0	%		-18.0	%
Effective rate	-18	%	38.7	%

~~Other is the net income that could not be offset by losses incurred by other subsidiaries in 2012.~~F-22

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The deferred tax expense (benefit) is the change of deferred tax assets and deferred tax liabilities resulting from the temporary difference between tax and US GAAP due to operating loss carry forward, deferred revenue and bad debt expense. The Company has several subsidiaries operating in different tax jurisdictions. The pre-tax earnings (loss) for the years ended June 30, 2014 and 2013 are summarized below:

	For the years ended June 30,
	2014			2013
Profitable entities	$	790,989		$	1,653,832
Loss entities		(3,971,891	)		(6,475,111	)
Total loss before taxes	$	(3,180,902	)	$	(4,821,279	)

Current tax expense represents the tax effect calculated on the profitable entities noted above at a statutory rate of 25%. Losses totaling $3,971,891 are attributed to entities operating in tax jurisdictions separate from the profit entities and cannot be used to offset any gains. Deferred tax benefits attributed to the loss entities were fully reserved as part of the valuation allowance.

Tax calculation:	For the years ended June 30,
	2014			2013
Earnings	$	790,989		$	1,653,832
NOL applied		(790,989	)		(1,653,832	)
Tax base		-			-
Statutory rate		25%			25%
	$	-		$	-

United States

The Company is subject to income taxes on an entity basis on income arising in or derived from the tax jurisdiction in which each entity is domiciled.

V Media Corp., a Delaware corporation, has incurred a net operating loss for federal income tax purposes ~~for~~through ~~the year ended~~ June 30, ~~2012~~2014. The Company had loss carry forwards for U.S. federal income tax purposes available for offset against future taxable U.S income expiring through ~~2033~~2034 of approximately $35,~~162~~116,~~886~~000 and $~~182~~3,~~321~~163,000 as of June 30, ~~2013~~2014 and June 30, ~~2012~~2013, respectively. Management believes that the realization of the benefits from these losses appears uncertain due to the Company's limited operating history in the United States. Accordingly, a full valuation allowance has been provided against the deferred tax asset and no deferred tax asset benefit has been recorded for the US operation. The valuation allowance against the deferred tax asset was $1,~~075~~739,~~381~~330 and $611,~~989~~075,381 as of June 30, ~~2013~~2014 and ~~June 30~~2013, ~~2012,~~ respectively. ~~The~~ This valuation allowance increased $1663,~~013,392~~949 and $81,~~434 during the years ended June 30~~013,392 ~~2013~~in 2014 and ~~2012~~2013, respectively.

Hong Kong

Fortune-Rich was incorporated in Hong Kong and has operations through its subsidiaries in the PRC, its only tax jurisdiction. Fortune-Rich did not earn any income that was derived in Hong Kong since incorporation and therefore was not subject to Hong Kong Profit tax. All Fortune-Rich and its subsidiaries’' income is generated in the PRC. Accordingly, its income tax provision is calculated based on the applicable tax rates and existing legislation, interpretations and practices in respect thereof.

57F-23

V- MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

PRC

a) Income Tax

Dalian Guo-heng and V-Media Group are governed by the Income Tax Law of the People’'s Republic of China concerning the private-run enterprises, which are currently subject to tax at a statutory rate of 25% on net income reported after appropriated tax adjustments. Because of different tax jurisdictions’' restriction, ~~the~~ V-Media Group and its subsidiaries of Gongcheng, Shenyang, Wangluo, ~~Tianjin,~~ Beijing and Shanghai have loss carryovers that can only be used to offset their own future taxable income. The loss carry forward for those subsidiaries amounted to $43,~~081~~065,~~411~~281 and $14,~~587~~081,~~852~~411 as of June 30, ~~2013~~2014 and ~~June 30~~2013, ~~2012,~~ respectively.

The Company periodically evaluates the likelihood of the realization of deferred tax assets, and reduces the carrying amount of the deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of the deferred tax assets, including its recent cumulative earnings experience, expectation of future income, the carry forward periods available for tax reporting purposes, and other relevant factors. For the year ended June 30, ~~2013~~2014, management concluded the realization of PRC deferred tax assets is uncertain. ~~The~~ ~~increase~~Deferred ~~in the deferred~~ tax assets ~~totaled~~amounted to approximately $~~623,392~~0.8 ~~for~~million ~~the~~and ~~year~~$1 ~~ended~~million as of June 30, 2014 and 2013. ~~Accordingly,~~The ~~a full~~ valuation allowance ~~has~~as ~~been~~of ~~provided~~June ~~against~~30, ~~the~~2014 ~~deferred~~and ~~tax~~2013 ~~assets~~was as$0.8 ofmillion ~~June~~and 30$1 million, ~~2013~~respectively. ~~The~~This valuation allowance asdecreased ofby ~~June 30~~$259,985 ~~2013~~ and ~~2012~~increased ~~was~~of $1~~.02~~,020,353 ~~million~~in 2014 and $02013, respectively.

b) Business Tax

Dalian Guo-heng, Dalian Vastitude Media Group Co., Ltd. and its five subsidiaries are also subject to 5% business tax and related surcharges levied on advertising services in China. Dalian V-Media’'s another subsidiary is only subject to a 3% business tax. Total business tax expenses were $1873,~~516,051~~656 and $~~831~~1,~~869~~516,051 for the years ended June 30, ~~2013~~2014 and ~~2012~~2013, respectively.

~~c) Taxes payable consisted of the following:~~F-24

	June 30,		June 30,
	2013		2012
Business tax payable	$	63,405	$	216,869
Corporate income tax payable		222,525		(1,108	)
VAT payable		150,791		-
Other		212,697		291,384
Total taxes payable	$	649,418	$	507,145

V MEDIA CORPORATION AND SUBSIDIARIES

The Company recognizes interest and penalties accrued related to unrecognized tax benefits and penalties, if any, as income tax expense. There were no unrecognized tax benefits or penalties for the year ended June 30, 2013. The Company files income tax returns with U.S. Federal Government, as well as Delaware State. The Company also files returns in foreign jurisdictions of Hong Kong and PRC. With few exceptions, the Company is subject to U.S. federal and state income tax examinations by tax authorities for years on or after 2009.

The Company’s foreign subsidiaries and VIEs also file income tax returns with both the National Tax Bureau and the Local Tax Bureaus. The Company is subject to income tax examinations by these foreign tax authorities. The Company has passed all tax examinations by both National and Local tax authorities since the inception of the Company in 2000.

V-MEDIA CORPORATION AND SUBSIDIARIES

(FORMERLY CHINA NEW MEDIA CORPORATION)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~NOTE~~c) 15Taxes –payable ~~EARNINGS~~consisted ~~PER~~of ~~SHARE~~the following:

As of June 30, 2013, the Company had 1,000,000 shares of preferred stock issued and outstanding, that have not been included in diluted weighted average shares calculation because pursuant to the Merger agreement, no preferred shares can be converted into any securities.

		June 30, 2014			June 30, 2013
Business tax payable (prepaid)	$	(23, 736	)	$	63,405
Corporate income tax payable		243,587			222,525
VAT payable		179,896			150,791
Other		120,400			212,697
	$	520,147		$	649,418

The Company’s ~~outstanding~~recognizes ~~warrants~~interest and penalties accrued related to ~~acquire~~unrecognized 3tax benefits and penalties,~~315~~ if any,~~426~~ ~~shares~~as ofincome ~~common~~tax ~~stock~~expense. There were ~~not~~no ~~included~~unrecognized tax benefits or penalties for the years ended June 30, 2013 or 2014. The Company files income tax returns with U.S. Federal Government, as well as the state of Delaware. The Company also files returns in foreign jurisdictions of Hong Kong and PRC. With few exceptions, the ~~diluted~~Company ~~weighted~~is ~~average~~subject ~~shares~~to ~~calculation~~U.S. ~~because~~Federal ~~they~~and ~~are~~state ~~anti-dilutive~~income tax examinations by tax authorities for years on or after 2010.

~~NOTE~~The 16Company's –foreign ~~SEGMENT~~subsidiaries ~~INFORMATION~~and VIEs also file income tax returns with both the National Tax Bureau and the Local Tax Bureaus. The Company is subject to income tax examinations by these foreign tax authorities. The Company has passed all tax examinations by both National and Local tax authorities since the inception of the Company in 2000.

NOTE 14 – EARNINGS PER SHARE

As of June 30, 2014, the Company had 1,000,000 shares of preferred stock issued and outstanding, that have not been included in diluted weighted average shares calculation because pursuant to the Merger agreement, no preferred shares can be converted into any securities and becomes their effect would be anti-dilutive.

NOTE 15 – SEGMENT INFORMATION

ASC 280, "Segment Reporting", establishes standards for reporting information about operating segments on a basis consistent with the Company's internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company's business segments.

The Company is an outdoor advertising company in China which provides a full range of integrated outdoor advertising services including art design, advertising publishing, daily maintenance and technical upgrading. The Company's chief operating decision maker ("CODM") has been identified as the CEO who reviews the financial information of separate operating segments when making decisions about allocating resources and assessing performance of each entity. Based on management's assessment, the Company has determined that its operating segments can be categorized by geographic locations as well as the format of the outdoor media platforms.

F-25

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The CODM evaluates performance based on each reporting segment's revenues, cost of revenues, and gross profit. Selling expenses and G&A expenses are not separated reviewed to each segment. The CODM does not review balance sheet information to measure the performance of the reportable segments, nor is this part of the segment information regularly provided to the CODM.

	For the year ended June 30, 2014
	Dalian District			Shenyang District			Beijing District			Tianjin District			Shanghai District			US Corporation			Total
Revenue	$	14,748,040		$	882,440		$	1,182,894		$	400,847		$	104,688		$	1,770,599		$	19,089,508
Cost of Revenue		(9,488,406	)		(1,183,860	)		(1,309,945	)		(199,801	)		(541,017	)		(3,527,072	)		(16,250,101	)
Gross Profit	$	5,259,634		$	(301,420	)	$	(127,051	)	$	201,046		$	(436,329	)	$	(1,756,473	)	$	2,839,407

	For the year ended June 30, 2013
	Dalian District			Shenyang District			Beijing District			Tianjin District			Shanghai District			US Corporation			Total
Revenue	$	16,590,164		$	1,100,599		$	2,416,329		$	440,331		$	825,793		$	450,000		$	21,823,216
Cost of Revenue		(11,259,234	)		(1,124,663	)		(1,483,807	)		(151,535	)		(955,218	)		(3,272,854	)		(18,247,311	)
Gross Profit	$	5,330,930		$	(24,064	)	$	932,522		$	288,796		$	(129,425	)	$	(2,822,854	)	$	3,575,905

	For the year ended June 30, 2012
	Dalian District			Shenyang District			Beijing District			Tianjin District			Shanghai District			US Corporation		Total
Revenue	$	14,129,508		$	1,239,466		$	2,124,900		$	422,556		$	554,255		$	-	$	18,470,685
Cost of Revenue		(7,803,932	)		(792,639	)		(1,070,574	)		(260,749	)		(822,504	)		-		(10,750,398	)
Gross Profit	$	6,325,576		$	446,827		$	1,054,326		$	161,807		$	(268,249	)	$	-	$	7,720,287

NOTE 16 – SUBSEQUENT EVENTS

59In August 2014, the Company renewed RMB 18 million (approximately $2,925,000) banker acceptance notes from Dongya Bank. The notes payable are currently due in February 2015.

On September 4, 2014, the Company singed RMB 1.8 million (approximately $292,500) short-term bank loan with Industrial and Commercial Bank of China for working capital needs. The one-year loan is due on September 3, 2015 with a floating interest rate of the prevailing one year lending rate of the People's Bank of China plus 20%, which adjustable every three months from September 4, 2014 to September 3, 2015.

F-26

Filing Compare · V Media Corp