UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~December 3031, 2014

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________to ________________

Commission File Number: 000-53027

V 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)

86-0411-8272-8168

(Registrant’'s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

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 (232.405 of this chapter) 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “"large accelerated filer”", “"accelerated filer”" and “"smaller reporting company”" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer o☐ Accelerated filer o☐ Non-accelerated filer o☐ Smaller reporting company x☒

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

As of ~~November~~March 1416, ~~2014~~2015, the Company had outstanding 27,590,701 shares of common stock, $0.0001 par value.

INDEX

	Page
PART I FINANCIAL INFORMATION	3
Item 1. Condensed Consolidated Financial Statements.(Unaudited)	3
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.	22
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk.	3036
Item 4. Controls and Procedures.	3036
PART II OTHER INFORMATION	3137
Item 1. Legal Proceedings	3137
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	3137
Item 6. Exhibits.	3137
Signatures	3238

INTRODUCTION

Use of Certain Defined Terms

In this Form 10-Q, unless indicated otherwise, references to:

● “"We,”" “"us,”" “"our”" and the “"Company”" refers to V Media Corporation and its subsidiaries.

● “"Securities Act”" refers to the Securities Act of 1933, as amended, and “"Exchange Act”" refer to the Securities Exchange Act of 1934, as amended;

● “"China”" and “"PRC”" refer to the People's Republic of China;

● “"RMB”" refers to Renminbi, the legal currency of China; and

● “"U.S. dollar,”" “"$”" and “"US$”" refer to the legal currency of the United States. For all U.S. dollar amounts reported, the dollar amount has been calculated on the basis that $1 = RMB 6. 1538 for June 30, 2014, and $1 = RMB 6.~~1538~~1387 for ~~September~~December 3031, 2014, which were determined based on the currency conversion rate at the end of each respective period. The conversion rates of $1 = RMB 6.~~1266~~1087 is used for the condensed consolidated statement of operations and other comprehensive income (loss) and condensed consolidated statement of cash flows for the ~~three~~six months ended ~~September~~December 3031, 2013, and $1 = RMB6.~~1573~~1463 is used for the condensed consolidated statement of operation and other comprehensive income (loss) and condensed consolidated statement of cash flows for the ~~three~~six months ended ~~September~~December 3031, 2014; both of which were based on the average currency conversion rate for each respective quarter.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Information contained in this report includes some statements that are not purely historical fact and that are “"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”" and “"Management’'s Discussion and Analysis of Financial Condition and Results of Operations”" 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; 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.

V MEDIA CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	As of September 30			As of June 30
	As of December 31			As of June 30
	2014			2014
ASSETS
Current assets
Cash and cash equivalents	$	~~268~~742,~~697~~872		$	1,141,377
Restricted cash		24,~~697~~333,~~500~~140			2,882,750
Accounts receivable, net		4,283,819			3,796,095
Accounts receivable, net of allowance for doubtful accounts of $3,167,973 and $2,557,684 as of December 31, 2014 and June 30, 2014		3,800,136			3,796,095
Advance to suppliers, net		1,815,886			523,200
Advance to suppliers, net of allowance for doubtful accounts of $113,595 and $98,530 as of December 31, 2014 and June 30, 2014		2,679,785			523,200
Loans receivable, net		~~614~~1,~~530~~668,463			689,291
Other current assets		36547,~~124~~015			90,577
Total current assets		913,~~716~~771,~~556~~411			9,123,290
Property, equipment and construction in progress, net		23,~~163~~782,~~496~~557			23,525,520
Other assets
Billboards use right, net		2,~~850~~690,~~311~~187			3,330,283
Loans receivable		~~22,332~~-			152,276
Security deposits		2,~~014~~085,~~894~~323			2,010,019
Total other assets		4,~~887~~775,~~537~~510			5,492,578
Total Assets	$	3742,~~767~~329,~~589~~478		$	38,141,388
LIABILITIES AND EQUITY
Current liabilities
Short term loans	$	1514,~~876~~204,~~250~~880		$	15,876,250
Accounts payable		13,~~723~~567,~~136~~053			2,998,517
Bank acceptance notes payable		36,~~575~~841,~~000~~800			3,575,000
Other payables		1,~~628~~584,~~840~~179			1,609,876
Deferred revenues		14,~~998~~535,~~366~~410			1,692,272
Taxes payable		~~534~~465,~~816~~220			520,147
Due to related parties		~~521~~1,~~185~~551,937			415,685
Total current liabilities		2532,~~857~~750,~~593~~479			26,687,747
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		8,450,820			6,820,820
Accumulated other comprehensive income		1,~~102~~197,~~916~~795			1,108,296
Retained earnings		642,939			1,603,424
Retained earnings (Accumulated deficit)		(1,315,300	)		1,603,424
Total V Media Corp. equity		108,~~199~~336,~~534~~174			9,535,399
Noncontrolling interest		1,~~710~~242,~~462~~825			1,918,242
Total equity		119,~~909~~578,~~996~~999			11,453,641
Total Liabilities and Equity	$	3742,~~767~~329,~~589~~478		$	38,141,388

The accompanying notes are an integral part of these unaudited condensed consolidated financial ~~statements.~~statement

V MEDIA CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)


	For the six months ended December 31,						For the three months ended December 31,
	2014			2013			2014			2013


Revenues	$	7,672,257		$	11,139,156		$	3,524,574		$	5,487,565

Cost of revenue		(7,404,538	)		(8,637,195	)		(4,240,400	)		(4,432,472	)

Gross profit (loss)		267,719			2,501,961			(715,826	)		1,055,093

Selling, general and administrative expenses		(3,533,047	)		(2,713,591	)		(1,657,869	)		(1,438,741	)

Loss from operations		(3,265,328	)		(211,630	)		(2,373,695	)		(383,648	)

Other income (expenses):
Interest income		40,631			30,156			5,146			8,467
Interest expense		(632,505	)		(551,775	)		(313,113	)		(297,627	)
Subsidy income		359,706			194,743			335,330			43,692
Other expenses		(17,103	)		(26,924	)		(827	)		(247	)

Total other income (expenses)		(249,271	)		(353,800	)		26,536			(245,715	)

Loss before income taxes		(3,514,599	)		(565,430	)		(2,347,159	)		(629,363	)

Income tax provision
Current		83,430			-			82,719			(88,669	)
Deferred		-			105,734			-			105,734
Total income tax provision		83,430			105,734			82,719			17,065

Net loss		(3,598,029	)		(671,164	)		(2,429,878	)		(646,428	)

Less: net income (loss) attribute to the noncontrolling interest		(679,305	)		25,713			(471,639	)		(79,439	)

Net loss attributable to V Media Corp.	$	(2,918,724	)	$	(696,877	)	$	(1,958,239	)	$	(566,989	)


Net loss		(3,598,029	)		(671,164	)		(2,429,878	)		(646,428	)

Other comprehensive income
Foreign currency translation gain		93,387			160,555			300,194			126,121

Comprehensive loss		(3,504,642	)		(510,609	)		(2,129,684	)		(520,307	)

Less: comprehensive income (loss) attributed to
the noncontrolling interest		(671,529	)		55,086			(262,322	)		(55,752	)

Comprehensive loss attributable to V Media Corp.	$	(2,833,113	)	$	(565,695	)	$	(1,867,362	)	$	(464,555	)

Loss per share
Basic and diluted	$	(0.11	)	$	(0.03	)	$	(0.07	)	$	(0.02	)
Weighted average number of common shares
Basic and diluted		27,590,701			27,590,701			27,590,701			27,590,701

	For the three months ended September 30,
	2014			2013
Revenues	$	4,147,683		$	5,651,591
Cost of revenue		(3,164,138	)		(4,204,723	)
Gross profit		983,545			1,446,868
Selling, general and administrative expenses		(1,875,178	)		(1,274,850	)
Income (loss) from operations		(891,633	)		172,018
Other income (expenses):
Interest income		35,485			21,689
Interest expense		(319,392	)		(254,148	)
Subsidy income		24,376			151,051
Other expenses		(16,276	)		(26,677	)
Total other income (expenses)		(275,807	)		(108,085	)
Income (loss) before income taxes		(1,167,440	)		63,933
Income tax provision
Current		711			88,669
Deferred		-			-
Total income tax provision		711			88,669
Net loss		(1,168,151	)		(24,736	)
Less: net income (loss) attributable to noncontrolling interest		(207,666	)		105,152
Net loss attributable to V Media Corp.	$	(960,485	)	$	(129,888	)
Net loss		(1,168,151	)		(24,736	)
Other comprehensive income
Foreign currency translation gain (loss)		(206,807	)		34,434
Comprehensive income (loss)		(1,374,958	)		9,698
Less: comprehensive income (loss) attributed to noncontrolling interest		(409,207	)		110,838
Comprehensive loss attributable to V Media Corp.	$	(965,751	)	$	(101,140	)
Earnings (loss) per share
Basic and diluted	$	(0.03	)	$	(0.00	)
Weighted average number of common shares
Basic and diluted		27,590,701			27,550,701

The accompanying notes are an integral part of these unaudited condensed consolidated financial statement

~~The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.~~4

V MEDIA CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the three months ended September 30,
	For the six months ended December 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(13,~~168~~598,~~151~~029	)	$	(24671,~~736~~164	)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation		~~444~~1,~~092~~514,877			~~757~~1,~~312~~495,594
Amortization		1,~~044~~988,~~083~~347			13,~~658~~284,~~440~~052
Provision for doubtful accounts-Accounts receivable		525,937			125,992
Provision for doubtful accounts-accounts receivable		603,290			417,001
Provision for doubtful accounts-loans receivable		~~438~~391,~~397~~002			-
Deferred tax provision (benefit)		-			105,734
Changes in operating assets and liabilities
Accounts receivable		(1598,~~013,380~~102	)		(~~719~~1,~~940~~218,475	)
Advance to suppliers		(12,~~369~~167,~~457~~456	)		(~~756~~540,~~530~~966	)
Other current assets		54(455,~~423~~717	)		(~~122~~552,~~426~~295	)
Security deposit		(470,~~872~~270	)		7(15,~~835~~715	)
Accounts payable		(1560,~~274,674~~466	)		~~(294~~81,~~557~~955	)
Other payables		1841,~~937~~007			~~(61~~649,~~626~~151	)
Deferred revenues		~~305~~2,~~912~~835,606			23274,~~304~~124
Taxes payable		14(56,~~661~~139	)		~~149~~(23,~~016~~226	)
Net cash provided by (used in) operating activities		(1,984,092	)		742,084
Net cash provided by operating activities		988,882			3,285,770
CASH FLOWS FROM INVESTING ACTIVITIES:
Loans to third party, net		(~~156~~1,~~319~~200,009	)		~~127~~(685,~~768~~582	)
Acquisition of billboards use rights		(~~564~~1,~~293~~341,034	)		(23,~~025~~862,~~607~~365	)
Purchase of property and equipment		(821,~~268~~713,761	)		(~~108~~259,~~083~~031	)
Net cash used in investing activities		(~~802~~4,~~880~~254,804	)		(24,~~005~~806,~~922~~978	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash		~~185~~(1,~~147~~441,522	)		82262,~~253~~567
Net proceeds from capital contributions		1,~~624~~627,~~100~~000			-
Net proceeds from short-term bank loans		-			1,958,657
Net proceeds from (repayment of) short-term bank loans		(1,708,350	)		1,964,420
Net proceeds from (repayment of) related party loans		105,500			(37,950	)
Net proceeds from bank acceptance notes payable		3,254,000			-
Repayment of third party loans		-			(1,387,382	)
Net proceeds from (repayment of) related party loans		1,134,208			(211,796	)
Repayment of long-term loans		-			(173,560	)
Repayment of third party loans		-			(916,729	)
Net cash provided by financing activities		1,914,747			442,018
Repayment of long-term loans		-			(336,715	)
Net cash provided by financing activities		2,865,336			761,747
EFFECT OF EXCHANGE RATE CHANGE ON
CASH AND CASH EQUIVALENTS		~~(455~~2,081	)		829,~~212~~566
NET DECREASE IN CASH AND CASH EQUIVALENTS		(~~872~~398,~~680~~505	)		(~~813~~729,~~608~~895	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		1,141,377			2,148,321
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	~~268~~742,~~697~~872		$	1,~~334~~418,~~713~~426
SUPPLEMENTAL CASH FLOW DISCLOSURES
Income taxes paid	$	-11,815		$	2453,~~535~~941
Interest paid	$	~~319~~632,~~277~~257		$	~~232~~513,~~771~~727

The accompanying notes are an integral part of these unaudited condensed consolidated financial ~~statements.~~statement

V MEDIA COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS, BASIS OF PRESENTATION, AND LIQUIDITY

(a)

Organization and nature of business

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 Variable Interest Entities ("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.

(b)

Basis of presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("US GAAP") for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company's annual report on Form 10-K for the fiscal year ended June 30, 2014 filed with the SEC on October 14, 2014. Operating results for the six and three months ended December 31, 2014 may not be necessarily indicative of the results that may be expected for the full year.

(c)

Liquidity, capital resources and management's plans

The Company reported a net loss of approximately $2.9 million and $0.7 million for the six-month periods ended December 31, 2014 and 2013, respectively. At December 31, 2014 and June 30, 2014, the Company had a working capital deficit of approximately $19.0 million and $17.6 million, respectively.

The Company continues to finance its operations primarily through short-term bank borrowings and bank acceptance notes. Short-term bank borrowings and bank acceptance notes amounts to approximately $14.2 million and $6.8 million, respectively, at December 31, 2014. Management expects that short-term bank financing will continue to be available through March 31, 2016.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~NOTE~~The 1Company –has ~~ORGANIZATION~~also historically funded part of its working capital needs from operations, ~~BASIS~~advance OFpayments ~~PRESENTATION~~from ~~AND~~customers, ~~LIQUIDITY~~capital contributions and loans from its principal shareholders.

VBased ~~Media~~on ~~Corp.~~our current operating plans, (“management expects that the Company”)'s existing resources, ~~originally~~including ~~known~~short-term asbank ~~Golden~~loans ~~Key~~and ~~International~~bank ~~Inc.~~notes payable, advances from customers, capital contributions and ~~then~~loans ~~China~~from ~~New~~our ~~Media~~major ~~Corp~~shareholders will be sufficient to meet the working capital requirements for the Company's current operations over the next twelve months. Management expects the Company to be able to refinance all of its short term loans based on past experience and its good credit history. In July 2012, the Company signed an agreement with Bank of East Asia, pursuant to which, the bank is providing the Company with a ~~corporation~~RMB ~~organized~~22 ~~under~~million ($3.6 million) revolving credit line from July 25, 2012 to July 25, 2020. In addition, the ~~laws~~Company's ofprincipal shareholder has committed to provide personal loans when necessary to provide it with sufficient liquidity for the ~~State~~next oftwelve ~~Delaware~~months. inThe ~~1999~~Company also will discontinue the less profitable business lines to increase its overall profitability of the Company.

~~Effective July 17~~Additionally, ~~2012,~~ the Company's ~~changed~~Time ~~its~~Square ~~name~~billboard ~~from~~lease ~~China~~expired ~~New~~on ~~Media~~August ~~Corp.~~31, to2014 Vand ~~Media~~the ~~Corporation~~lease ~~through~~was anot ~~short~~renewed ~~form~~due ~~merger pursuant~~ to ~~Section 253 of~~ the ~~General~~recurring ~~Corporation~~losses ~~Law~~on ofthis ~~the~~project. ~~State~~Management ofexpects ~~Delaware~~to bysave ~~merging~~$3 amillion ~~wholly owned subsidiary~~ of ~~the~~lease ~~Company~~payments ~~into~~annually ~~the~~on ~~Company,~~this ~~with the Company as the surviving corporation in the merger~~project. With ~~The Company, along with~~ its ~~subsidiaries~~continued ~~and~~efforts ~~VIEs,~~to iscut ~~engaged~~costs ~~in the sale, construction~~ and ~~operations~~to ofpromote ~~outdoor~~new ~~advertising displays and other alternative media~~ business~~. The Company is headquartered in Dalian~~, the ~~commercial~~Company ~~center~~expects ofto ~~Northeastern~~turn ~~China~~around and ~~has~~become ~~subsidiaries~~profitable in ~~Beijing,~~the ~~Shanghai~~next ~~and~~twelve ~~Tianjin~~months.

~~Basis~~The ability of ~~presentation~~the Company to continue is dependent upon management's ability to implement its strategic plans, obtain additional capital and generate net income and positive cash flows from operations. There can be no assurance that these plans will be sufficient or that additional financing will be available in amounts or terms acceptable to the Company, if at all.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles (“US GAAP”) for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. These condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and footnotes included in the Company’s annual report on Form 10-K for the fiscal year ended June 30, 2014 filed with the SEC on October 14, 2014. Operating results for the three months ended September 30, 2014 may not be necessarily indicative of the results that may be expected for the full year.

The condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs. All significant inter-company transactions and balances between the Company, its subsidiaries and VIEs are eliminated upon consolidation.

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 loans from commercial banks and capital contributions from our majority shareholders Mr. Wang Guojun and Mrs. Ma Ming. 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.

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Based on our current operating plan, we believe that our existing resources, including bank loans and bank notes payable and advances from customers and capital contributions from major shareholders will be sufficient to meet our working capital requirements for our current operations over the next twelve months. 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’s management expects to be able to refinance all of our 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 provided us with a RMB 22 million ($3.6 million) revolving credit line from July 25, 2012 to July 25, 2020. In September 25, 2014, the Company received RMB 10 million ( $1.63 million) from the Company’s majority shareholder Mr. Wang Guojun and Ms. Ma Ming( RMB 5 million each), In addition, Our major Shareholder, Mr. Guojun Wang has pledged to provide personal loans when necessary to provide us with sufficient liquidity for the next 12 months. The Company also will discontinue the less profitable business lines to increase the overall profitability of the Company.

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 $3 million on this lease payment annually on this project which will decrease approximately $1.8 million of our prior year loss from our the bottom line. Without this project, the Company expects to turn around and become profitable for the fiscal year ending June 30, 2015.

NOTE 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying unaudited condensed 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 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~~7

InV ~~preparing~~MEDIA ~~the~~COPORATION ~~consolidated~~AND financial statements in conformity with US GAAP, 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 deferred tax assets, recoverability of long-lived assets, allowance for advance to suppliers and allowance for doubtful accounts. Actual results could differ from those estimates.SUBSIDIARIES

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

In preparing the consolidated financial statements in conformity with US GAAP, 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 utilization of deferred tax assets, recoverability of long-lived assets, collectability of advances to suppliers, loans receivable and accounts receivable. 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 ~~September~~December 3031, 2014, the Company had restricted cash of $24.73 million. 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 9).

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 $3,~~083~~167,~~912~~973 and $2,557,684 as of ~~September~~December 3031, 2014 and June 30, 2014, 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. We have annually recorded an allowance when there is doubt as to collectability. If facts subsequently become available to indicate that an allowance provided requires an adjustment, then the adjustment will be classified as a change in estimate. The allowance for doubtful accounts totaled $~~176~~113,~~060~~595 and $98,530 as of ~~September~~December 3031, 2014 and June 30, 2014, respectively. Accounts are written off only after exhaustive collection efforts.

V MEDIA COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED 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.

Recent Accounting Pronouncements

In ~~August~~May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-1509, ~~“Disclosure~~Revenue offrom ~~Uncertainties~~Contracts ~~About~~with anCustomers: ~~Entity’s~~Topic ~~Ability~~606. toThis ~~Continue~~Update asaffects aany ~~Going~~entity ~~Concern”~~that ~~(“ASU~~either ~~2014-15”),~~enters ~~which~~into ~~requires~~contracts ~~management~~with customers to ~~perform~~transfer ~~interim~~goods ~~and~~or ~~annual~~services ~~assessments~~or ofenters aninto ~~entity’s~~contracts ~~ability~~for tothe ~~continue~~transfer asof anonfinancial ~~going~~assets, ~~concern~~unless those contracts are within ~~one~~the ~~year~~scope of ~~the~~other ~~date~~standards. The guidance in this Update supersedes the ~~financial~~revenue ~~statements~~recognition ~~are~~requirements ~~issued~~in Topic 605, Revenue Recognition and ~~provides~~most industry-specific guidance. onThe ~~determining~~core ~~when~~principle ~~and~~of ~~how~~the toguidance ~~disclose~~is ~~going~~that ~~concern~~an ~~uncertainties~~entity inshould recognize revenue to illustrate the ~~financial~~transfer ~~statements.~~of ~~Certain~~promised ~~disclosures~~goods ~~will~~or beservices ~~required~~to ifcustomers ~~conditions~~in ~~give~~an ~~rise~~amount tothat ~~substantial~~reflects ~~doubt~~the ~~about~~consideration anto which the entity’s ~~ability~~expects to ~~continue~~be asentitled ain ~~going~~exchange ~~concern~~for those goods or services. ~~ASU~~The ~~2014-15~~new ~~applies~~guidance toalso ~~all~~includes ~~entities~~a cohesive set of disclosure requirements that will provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a reporting organization's contracts with customers. This ASU is effective for ~~annual~~fiscal years, and interim ~~reporting~~ periods ~~ending~~within those years beginning after December 15, 2016, ~~with~~for ~~early~~public ~~adoption~~companies ~~permitted.~~and ~~The~~2017 ~~Company~~for ~~does~~non-public ~~not~~entities. ~~expect~~Management ~~that~~is evaluating the ~~adoption~~effect, ofif ~~this~~any, ~~standard will have a material effect~~ on the Company’'s ~~consolidated~~ financial ~~statements~~position and results of operations.

In ~~November~~August 2014, the FASB issued ~~Accounting~~ASU ~~Standards Update~~ No. 2014-1615, ~~Derivatives~~"Disclosure ~~and~~of ~~Hedging~~Uncertainties ~~(Topic~~About ~~815):~~an ~~Determining~~Entity's ~~Whether~~Ability ~~the~~to ~~Host~~Continue ~~Contract~~as in a ~~Hybrid~~Going ~~Financial~~Concern" ~~Instrument~~("ASU ~~Issued~~2014-15"), inwhich ~~the~~requires ~~Form~~management ~~of a Share Is More Akin~~ to ~~Debt~~perform orinterim toand ~~Equity~~annual (aassessments ~~consensus~~ of ~~the~~an ~~FASB~~entity's ~~Emerging~~ability ~~Issues~~to ~~Task~~continue ~~Force).~~as ~~The~~a ~~amendments~~going ~~permit~~concern ~~the~~within ~~use~~one year of the ~~Fed~~date ~~Funds~~the ~~Effective~~financial ~~Swap~~statements ~~Rate~~are ~~(also~~issued ~~referred~~and toprovides asguidance ~~the~~on ~~Overnight~~determining ~~Index~~when ~~Swap~~and ~~Rate,~~how orto ~~OIS)~~disclose asgoing aconcern ~~benchmark~~uncertainties ~~interest~~in ~~rate~~the ~~for~~financial ~~hedge accounting purposes~~statements. ~~Public~~Certain ~~business~~disclosures ~~entities~~will ~~are~~be required toif ~~implement~~conditions ~~the~~give ~~new~~rise ~~requirements~~to insubstantial ~~fiscal~~doubt ~~years~~about ~~(and~~an ~~interim~~entity's ~~periods~~ability ~~within~~to ~~those~~continue ~~fiscal~~as ~~years)~~a ~~beginning~~going ~~after~~concern. ~~December~~ASU 2014-15, ~~2015.~~applies ~~All~~to ~~other~~all ~~types of~~ entities ~~are~~and ~~required~~is toeffective ~~implement~~for ~~the~~annual ~~new~~and ~~requirements~~interim inreporting ~~fiscal~~periods ~~years~~ending ~~beginning~~ after December 15, ~~2015~~2016,~~and~~ ~~interim~~with ~~periods~~early ~~beginning~~adoption ~~after December 15, 2016~~permitted. The Company does not expect that the adoption of ~~ASU~~this ~~2014-16~~standard towill have a material ~~impact~~effect on the Company's consolidated financial ~~statement~~statements.

109

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In November 2014, FASB issued Accounting Standards Update No. 2014-16, Derivatives and Hedging (Topic 815): Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity (a consensus of the FASB Emerging Issues Task Force). The amendments permit the use of the Fed Funds Effective Swap Rate (also referred to as the Overnight Index Swap Rate, or OIS) as a benchmark interest rate for hedge accounting purposes. Public business entities are required to implement the new requirements in fiscal years (and interim periods within those fiscal years) beginning after December 15, 2015. All other types of entities are required to implement the new requirements in fiscal years beginning after December 15, 2015,and interim periods beginning after December 15, 2016. The Company does not expect the adoption of ASU 2014-16 to have material impact on the Company's consolidated financial statement.

In February 2015, the FASB issued new guidance for evaluating whether a reporting organization should consolidate certain legal entities. This guidance is effective for annual and interim periods beginning after December 15, 2015, and early adoption is permitted. The guidance should be applied either using a modified retrospective approach or retrospectively. We will adopt this standard on January 1, 2016, and we are currently assessing which implementation method we will apply and the impact its adoption will have on our financial position and results of operations.

NOTE 3 - LOANS RECEIVABLE

The loans receivable include the following:

			September 30,2014			June 30,2014
			December 31, 2014			June 30, 2014
a	)	Dalian Qianbaihe Cloth Accessories Co.	$	~~235~~236,~~974~~554		$	235,974
b	)	Dalian Tianjun Trade Co.		260,~~000~~640			260,000
c	)	Dalian Digital Media Co.		36,~~594~~684			36,594
d	)	Beijing Cross-Strait Publishing Exchange Center		48,~~750~~870			48,750
e	)	Dalian Culture and Broadcasting Corp		136,~~500~~836			136,500
f	)	Dalian Bomeishiji Media Corp		~~145~~146,~~645~~003			145,645
g	)	Shenzhen Lianchuang Jianhe Corp		~~365~~366,~~357~~256			365,357
h	)	Bainianchahui Corp.		~~572~~654,~~647~~140			523,776
i	)	Wanjiada Commerce and Trade Co.		~~222,132~~-			141,926
j	)	Beijing Dayang Hongye Building Decoration Engineering		~~121~~122,~~875~~175			121,875
k	)	~~Others~~Guohe Co.		~~242~~625,~~641~~536			~~215,313~~-
		Total loans receivable	$	2,388,115		$	2,231,710
l	)	Shushuai Ma		424,597			-
		Doubtful accounts allowance		(1,751,253	)		(1,390,143	)
m	)	Others		380,396			215,313
		Net loans receivable	$	636,862		$	841,567
		Total loans receivable	$	3,438,687		$	2,231,710
		Net loans receivable – non current	$	22,332		$	152,276
		Allowance for doubtful accounts		(1,770,224	)		(1,390,143	)
		Net loans receivable – current	$	614,530		$	689,291
		Net loans receivable		1,668,463			841,567
		Net loans receivable – non current		-			152,276
		Net loans receivable – current	$	1,668,463		$	689,291

~~a) The Company made $0.24 million loan to Dalian Qianbaihe Cloth Accessories Co. for one year from March 5, 2014 to March 4, 2015 with interest~~ 10~~%. The loan has been reserved as part of the allowance for doubtful accounts.~~

b)V ~~The~~MEDIA ~~Company~~COPORATION ~~made~~AND 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 long term asset and has been reserved in the provision for doubtful accounts. (2) One-year term loan from November 30, 2012 to October 29, 2013 in the amount of $0.49 million (RMB 3.0 million). The Company has been repaid $0.47 million (RMB2.9 million) as of June 30, 2014. The remaining balance of $0.02 million (RMB 100,000) has been extended to October 31, 2014. However, Dalian Tianjun did not pay back the loan as of October 31, 2014 and the loan has been reserved as part of the allowance for doubtful accounts.SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

a) The Company made $0.24 million loan to Dalian Qianbaihe Cloth Accessories Co. for one year from March 5, 2014 to March 4, 2015 with interest 10%. The loan has been fully reserved as part of the allowance for doubtful accounts.

b) 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 has been reserved in the provision for doubtful accounts. (2) One-year term loan from November 30, 2012 to October 29, 2013 in the amount of $0.49 million (RMB 3.0 million). The Company has been repaid $0.47 million (RMB2.9 million) as of June 30, 2014. The remaining balance of $0.02 million (RMB 100,000) has been extended to October 31, 2014. However, Dalian Tianjun did not pay back the loan as of December 31, 2014 and the balance has been fully reserved as part of the allowance for doubtful accounts.

c) 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. The loan is fully reserved as part of the allowance for doubtful accounts.

d) The Company loaned $0.05 million to Beijing Cross-Strait publishing exchange center on November 20, 2011. The loan is due on demand and bears no interest. The loan is fully reserved as part of the allowance for doubtful accounts.

e) The Company loaned $0.14 million to Dalian Culture and Broadcasting Corp in December 2012. In November, 2013, the loan was extended on November 21, 2013 for one year with the due date on October 31, 2014. The annual interest is 10%. However, since the Company did not receive the loan repayment as of December 31, 2014, the loan has been fully reserved as part of the allowance for doubtful accounts.

f) The Company loaned $0.15 million to Dalian Bomeishiji Media Corp for one year with the balance due on December 31, 2014. The annual interest is 10%. The Company did not receive the repayment as of the due date and the loan is fully reserved as part of the allowance for doubtful accounts.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

e) The Company loaned $0.14 million to Dalian Culture and broadcasting Corp in December 2012. In November, 2013, the loan was extended on November 21, 2013 for one year with the due date on October 31, 2014. The annual interest is 10%. However, the Company did no received the loan repayment before the report date, the loan is fully reserved as part of the allowance for doubtful accounts.

f) The Company loaned $0.15 million to Dalian Bomeishiji Media Corp for one year with the balance due on December 31, 2014. The annual interest is 10%. The loan is fully reserved as part of the allowance for doubtful accounts.

g) The Company loaned $0.37 million to Shenzhen Lianchuangjianhe Corp in 2013 which is due on demand and bear 10% annual interest.

h) The Company made the following loans to Bainianchahui Corp: (1) $0.26 million (RMB 1.57 million) for one year due on November 09, 2014. However, the Company did not receive the loan repayment before ~~the~~December ~~report date~~31, 2014 and the loan is fully reserved., (2) $0.15 million (RMB 0.94million) for two years and is due on December 31, 2015. ~~The loan has been classified as a long term receivable.~~ Both loans bear annual interest of 10%., and (3) $0.1624 million (RMB 1.0 million) ~~and~~which ~~are~~is due on demand.

i) The Company loaned $0.22 million to Wanjiada Commerce and Trade Co. on June 27, 2014 which is due on demand with no interest. The Company received the repayment as of December 31, 2014.

j) 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. The loan is fully reserved as part of the allowance for doubtful accounts.

k) The Company ~~has~~loaned ~~various loans of~~ $0.2463 million ~~and $0.22 million~~ to ~~other~~Guohe ~~third~~Company ~~parties~~in ~~as of September 30~~December, 2014 ~~and June 30, 2014, respectively,~~ which ~~are~~is due on demand ~~and~~with ~~bear~~ no interest.

l) The Company loaned $0.42 million to Shushuai Ma in December, 2014 which is due on demand with no interest.

m) The Company has various loans of $0.38 million to other third parties as of December 31, 2014 which is due on demand and bears no interest.

NOTE 4 - MAJOR SUPPLIERS

During the ~~three~~six months ended ~~September~~December 3031, 2014, two major suppliers provided approximately 3634% of the Company’'s purchase of raw materials, with each supplier accounting for 2225% and 149%. During the ~~three~~six months ended ~~September~~December 3031, 2013, ~~two~~three major suppliers provided approximately 6878% of the Company’'s purchase of raw materials, with each supplier accounting for 5552% and 13% and 13%.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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

	September 30, 2014			June 30, 2014
	December 31, 2014			June 30, 2014
Advertising equipment	$	33,~~088~~659,~~038~~001		$	33,088,038
Office equipment and furniture		~~878~~933,~~775~~155			904,450
Office building and Improvement		~~117~~118,~~875~~165			117,875
Transportation		1,~~653~~657,~~165~~235			1,666,891
Subtotal		3536,~~737~~367,~~853~~556			35,777,254
Less: Accumulated depreciation		(1415,~~162~~406,~~411~~070	)		(13,855,225	)
Construction in progress		12,~~588~~821,~~054~~071			1,603,491
Total	$	23,~~163~~782,~~496~~557		$	23,525,520

Depreciation expense totaled $~~444~~1,~~092~~070,785 and $~~757~~738,~~312~~282 for the three months ended ~~September~~December 3031, 2014 and 2013, respectively, and totaled $1,514,877 and $1,495,594 for the six months ended December 31, 2014 and 2013, respectively. Approximately $29.515 million of advertising equipment was pledged as collateral against various short term loans as of ~~September~~December 3031, 2014.

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)

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - BILLBOARDS USE RIGHTS

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 Company also leased a billboard use right at Times Square in New York under a non-cancellable ~~twelve-month~~ operating lease ~~commencing March 1, 2012 and signed an extension agreement to extend the lease~~ through August 31, 2014, requiring a quarterly lease payment of $840,000 before September 1, 2013 and increasing to $870,000 ~~afterward~~thereafter. ~~The Company amortized the expense on a straight-line basis over the term of the leases.~~ This lease ~~has~~ expired on August 31, 2014 and ~~the lease~~ was not renewed.

~~Lease expense recorded in cost of sales in connection with the Time Square billboard totaled $0.16 million and $0.87 million for the three months ended September 30, 2014 and 2013, respectively.~~13

~~Amortization~~V ofMEDIA ~~billboard~~COPORATION ~~use~~AND ~~rights for the three months ended September 30, 2014 and 2013 was $1,044,083 and $1,658,440, respectively.~~SUBSIDIARIES

The projected amortization expense as of September 30, 2014 attributed to future years is as follows:

12 months ending September 30,
2015	$	1,089,203
2016		782,053
2017		338,655
2018		247,619
2019		247,619
Thereafter		145,162
	$	2,850,311

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

12 months ending September 30,
2014	$	4,651,938
2015		438,541
2016		306,115
2017		250,774
	$	5,647,368

V MEDIA CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Lease expense recorded in cost of sales in connection with the Time Square billboard totaled $0 million and $0.87 million for the three months ended December 31, 2014 and 2013, respectively, and $0 million and $1.74 million for the six months ended December 31, 2014 and 2013, respectively.

Amortization of billboard use rights for the three months ended December 31, 2014 and 2013 was $944,264 and $1,625,612, respectively, and $1,988,347 and $3,284,052 for the six months ended December 31, 2014 and 2013, respectively.

The projected amortization expense as of December 31, 2014 attributed to future years is as follows:

12 months ending December 31,
2015	$	816,288
2016		692,016
2017		276,058
2018		249,238
2019		249,238
Thereafter		407,349
	$	2,690,187

The following is a schedule by year for future minimum payments under the billboard use right agreements at December 31, 2014:

12 months ending December 31,
2015	$	1,888,866
2016		944,653
2017		694,597
2018		258,229
	$	3,786,345

NOTE 8 - SHORT TERM LOANS

The short term loans include the following:

	September 30, 2013		June 30, 2014
	December 31, 2014		June 30, 2014
a) Loans payable to Shanghai Pudong Development Bank	$	1,~~950~~954,~~000~~800	$	1,950,000
b) Loan payable to Dalian Bank the First Centre Branch		31,~~250~~629,000		3,250,000
c) Loan payable to Industrial and Commercial Bank of China		~~292~~293,~~500~~220		292,500
d) Loan payable to Jinzhou Bank		1,~~625~~547,~~000~~550		1,625,000
e) Loan payable to Dalian Bank Shenyang Branch		975,000		975,000
e)Loan payable to Dalian Bank Shenyang Branch		977,400		975,000
f) Loan payable to Dalian Bank Shanghai Branch		471,250		471,250
f)Loan payable to Dalian Bank Shanghai Branch		472,410		471,250
g) Loan payable to Yingkou Bank		1,~~625~~629,000		1,625,000
h) Loan payable to Jilin bank		1,~~625~~629,000		1,625,000
i) Loan payable to Guangdong Development Bank		2,~~437~~443,500		2,437,500
j) Loans payable to Agriculture and Commerce Bank		1,~~625~~629,000		1,625,000
Total short term loans	$	1514,~~876~~204,~~250~~880	$	15,876,250

a) Loan payable to Shanghai Pudong Development bank is a one-year term loan from June 19, 2014 to June 18, 2015 for RMB 12,000,000 ($1.95 million) at a variable interest 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 a Joint Venture Guarantee Group Co., LTD, an independent third party guarantee company.14

b)V ~~Loan~~MEDIA ~~payable~~COPORATION toAND Dalian Bank the First Centre Branch is a one-year term loan from December 16, 2013 to December 15, 2014 in the amount of RMB 20,000,000 ($3.25 million) with a fixed interest rate of 8.4% per year. The Company pledged its brand trademark for the loan.SUBSIDIARIES

c)NOTES ~~Loan~~TO ~~payable~~UNAUDITED toCONDENSED ~~Industrial~~CONSOLIDATED ~~and~~FINANCIAL Commercial Bank of China was for a one-year term from August 29, 2013 to August 28, 2014, which was repaid on the due date. The Company obtained a new loan for the same amount from September 5, 2014 to September 5, 2015 at a variable interest rate based on the interest rate set by the People’s Bank of China. As of September 30, 2014, the effective rate of the new loan is 7.2% per year. The Company pledged certain real estate property owned by the Company’s major stockholder as collateralSTATEMENTS

Loan payable to Shanghai Pudong Development bank is a one-year term loan from June 19, 2014 to June 18, 2015 for RMB 12,000,000 ($1.95 million) at a variable interest 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 a Joint Venture Guarantee Group Co., LTD, an independent third party guarantee company.

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 RMB 20,000,000 ($3.25 million) with a fixed interest rate of 8.4% per year. The loan was repaid when due and the Company obtained a new loan for RMB10,000,000 ($1.63 million) from December 16, 2014 to October 16, 2015 with a fixed interest rate of 8.4% per year. The Company pledged its brand trademark for the loan.

Loan payable to Industrial and Commercial Bank of China was for a one-year term from August 29, 2013 to August 28, 2014 in the amount of RMB 1,800,000 ($293,220), which was repaid on the due date. The Company obtained a new loan for the same amount from September 5, 2014 to September 5, 2015 at a variable interest rate based on the interest rate set by the People's Bank of China. As of December 31, 2014, the effective rate of the new loan is 7.2% per year. The Company pledged certain real property owned by the Company's major stockholder as collateral

The Company obtained a loan from Jinzhou Bank in the amount of RMB 10,000,000 ($1.63 million) for a term from November 18, 2013 to November 17, 2014 with a fixed interest rate of 8.4% per year. The loan was repaid when due and the Company obtained a new loan for RMB9,500,000 ($1.55 million) from November 18, 2014 to November 17, 2015 with a fixed interest rate of 8.4% per year. The loan is secured by certain of the Company's advertising equipment with a carrying value of RMB 31 million (approximately $5.0 million) and guaranteed by the Company's major stockholders, Mr. Guojun Wang and Ms. Ming Ma.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

de) The Company obtained a loan from ~~Jinzhou~~Dalian Bank Shenyang Branch in the amount of RMB 106,000,000 ($~~1.63 million~~977,400) for a term from ~~November~~June 1823, ~~2013~~2014 to ~~November~~June 1722, ~~2014~~2015 with a fixed interest rate of 8.41% per year. The ~~Company~~loan ~~pledged~~is ~~part~~guaranteed ofby ~~its~~the ~~advertising~~Company's ~~equipment with~~ a ~~carrying~~subsidiary, ~~value~~Dalian ~~of RMB 31 million (approximately $5.0 million)~~V-Media, and also is guaranteed by the Company's major stockholders, Mr. Guojun Wang, ~~and~~ Ms. Ming Ma, Ms. ~~The~~Caiqin ~~loan~~Wang ~~has~~and ~~been~~Mr. ~~repaid~~Tao ~~on November 17, 2014 (see Note 15)~~Sun.

ef) ~~The~~Loan ~~Company~~payable ~~obtained~~to ~~a loan from~~ Dalian Bank ~~Shenyang~~Shanghai Branch is in the amount of RMB 62,~~000~~900,000 ($~~975~~472,~~000~~410) for a ~~term~~year from ~~June~~December 233, ~~2014~~2013 to ~~June~~December 222, ~~2015~~2014 with a fixed interest rate of 87.18% per year. The loan iswas ~~guaranteed~~repaid bywhen ~~V-Media,~~due and ~~also~~the Company obtained a new loan for the same amount from December 12, 2014 to December 11, 2015 with a fixed interest rate of 7.28% per year. This loan is guaranteed by the Company's major ~~stockholders,~~Stockholders ~~Mr.~~Ming Ma and Guojun Wang, ~~Ms.~~and ~~Ming~~other ~~Ma,~~three ~~Ms.~~individuals ~~Caiqin~~Shiming Sun, Hong Wang and MrChuanrong He. ~~Tao Sun~~.

fg) Loan payable to ~~Dalian~~Yingkou Bank ~~Shanghai~~consisted ~~Branch~~of istwo loans. One loan in the amount of RMB 25,~~900~~000,000 ($~~471,250~~0.81 million) ~~for~~from May 22, 2014 to May 21, 2015 with a ~~term~~fixed interest rate of 7.8% per year. The loan is guaranteed by Liancheng Financing Assurance Co., Ltd. and a major shareholder, Ms. Ming Ma. Another loan is in the amount of RMB5, 000,000 ($0.81 million) from ~~December~~May 328, ~~2013~~2014 to ~~December~~May 227, ~~2014~~2015 with a fixed interest rate of 7.8% per year. This loan is guaranteed by ~~V-Media~~Liaoning Baijia Financing Assurance Co.,Ltd, and isa ~~also~~major ~~guaranteed~~shareholder, byMs. Ming Ma. In the guarantee contract, the Company's ~~major~~pledged ~~stockholders,~~part Mrof its advertising equipment with a value of RMB15 million ($2.4 ~~Guojun~~million) ~~Wang~~to Liancheng Financing Assurance Co., Ltd. and MsLiaoning Baijia Financing Assurance Co., ~~Ming~~Ltd Maas additional collateral.

gh) Loan payable to ~~Yingkou~~Jilin ~~bank~~Bank ~~consisted~~is ofa ~~two~~one-year ~~loans.~~term ~~One~~ loan ~~in the amount of RMB 5,000,000 ($0.81 million)~~ from ~~May~~June 2226, 2014 to ~~May~~June 2125, 2015 ~~with a fixed interest rate of 7.8% per year. Another loan is~~ in the amount of ~~RMB5~~RMB10, 000,000 ($01.8163 million) ~~from May 28, 2014 to May 27, 2015~~ with a fixed interest rate of 7.8% per year. ~~Both~~This ~~loans~~loan ~~have~~has been guaranteed by ~~Liaoning Baijia Financing Assurance Co.,Ltd, and one of~~ the Company’'s major stockholders, Mr. Guojun Wang and Ms. Ming Ma. Inas ~~the~~well ~~guarantee~~as ~~contract~~Dalian QianbaiHe Clothing Accessories Co., ~~the~~LTD. The Company pledged part of its advertising equipment ~~with a value of RMB15 million ($2.4 million)~~ to ~~Liaoning~~Dalian ~~Baijia~~QianbaiHe ~~Financing~~Clothing ~~Assurance~~accessories Co., ~~Ltd~~LTD as additional collateral.

h) 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.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

i) Loan payable to Guangdong Development Bank is a one-year term loan from May 16, 2014 to May 15, 2015 in amount of RMB15,000,000 ($2.44 million) with a fixed interest rate of 8.1% 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 as additional collateral.

j) Loans payable to Agriculture and Commerce Bank are two one-year term loans, both from June 3, 2014 to June 2, 2015 each in amount of RMB 5,000,000 ($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.

NOTE 9 – BANK ACCEPTANCE NOTES PAYABLE

As of ~~September~~December 3031, 2014 ~~and June 30~~, ~~2014,~~ the Company has bank acceptance notes payable in the amount of $36,~~575~~841,~~000~~800. The notes are guaranteed to be paid by the banks and are usually for a short-term period of time of three to six months (see Note 15). The Company is required to maintain cash deposits at a minimum of 50% of the total balance of the notes payable with the banks, in order to ensure future credit availability. AsIn addition, certain of ~~September~~the 30bank acceptance notes totaling $3,258,000 ~~2014~~are secured by the Company's trademark and ~~June~~$3,584,000 30of the bank acceptance notes from Bank of East Asia are guaranteed by the Company's major shareholders, Mr. Guojun Wang and Ms. Ming Ma. As of December 31, 2014, $23.74 million in restricted cash ~~was~~related ~~associated~~to ~~with~~ these notes payable.

NOTE 10 – SUBSIDY INCOME

Since one of the Company’s subsidiaries is located in a special economic development zone in Dalian City, the Company received a special tax subsidy of $24,376 and $151,051 from the local government for the three months ended September 30, 2014 and 2013, respectively.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – SUBSIDY INCOME

Since one of the Company's subsidiaries is located in a special economic development zone in Dalian City, the Company received a special tax subsidy of $335,330 and $43,692 from the local government in the three months ended December 31, 2014 and 2013, respectively, and $359,706 and $194,743 in the six months ended December 31, 2014 and 2013, respectively.

NOTE 11 - RELATED PARTY TRANSACTIONS

Amounts due to related parties are as follows:

	September 30, 2014		June 30, 2014
	December 31, 2014		June 30, 2014
Wang, Caiqin	$	~~146~~935,~~250~~543	$	146,250
Ma, Ming		~~251~~391,~~394~~918		145,894
Wang, Guojun		~~123~~224,~~541~~476		123,541
Total	$	~~521~~1,~~185~~551,937	$	415,685

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 12 – TAXES

a)	Corporate Income Tax

Significant components of the income tax provision were as follows:

	For the three months ended September 30,
	For the six months ended December 31,						For the three months ended December 31,
	2014			2013			2014			2013
Current tax provision
Federal	$	-		$	-		$	-		$	-
State		-			-			-			-
Foreign		~~711~~83,430			~~88,669~~-			82,719			(88,669	)
		711			88,669
		83,430			-			82,719			(88,669	)
Deferred tax provision (benefit)
Deferred tax assets (benefit)
Operating loss carry forward		342,238			409,690
Net operating loss carry forward (NOL)		(933,707	)		(400,824	)		(591,469	)		-
Allowance for operating loss carry forward		(342,238	)		(409,690	)
Change in valuation allowance		933,707			506,558			591,469			105,734
Income tax provision	$	~~711~~83,430		$	88105,~~669~~734		$	82,719		$	17,065

The Company has several subsidiaries operating in different tax jurisdictions. The pre-tax earnings (loss) for the three months ended September 30, 2014 and 2013 are summarized below:

	For the three months ended September 30,
Entities with taxable income	$	102,272		$	1,422,769
Entities with losses		(1,269,712	)		(1,358,836	)
Total income (loss) before taxes	$	(1,167,440	)	$	63,933

Current tax expense represents the tax effect calculated on the gain entities noted above at a statutory rate of 25%. Deferred tax benefits attributed to the loss entities were fully reserved as part of the valuation allowance.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Tax calculation:
	2014			2013
Current taxable income	$	102,272		$	1,422,769
NOL applied		(99,430	)		(1,068,093	)
Net taxable income		2,842			354,676
Statutory rate		25	%		25	%
Income tax expense	$	711		$	88,669

The Company has several subsidiaries operating in different tax jurisdictions. The pre-tax earnings (loss) for the six and three months ended December 31, 2014 and 2013 are summarized below:

		For the six months ended December 31,								For the three months ended December 31,
	2014				2013				2014				2013
Entities with taxable income		$	104,208			$	1,486,258			$	-			$	287,537
Entities with losses			(3,618,807	)			(2,051,688	)			(2,347,159	)			(916,900	)
Total income (loss) before taxes		$	(3,514,599	)		$	(565,430	)		$	(2,347,159	)		$	(629,363	)

The current tax provision is calculated using the PRC statutory rate of 25%, as follows:

Tax calculation:

	For the six months ended December 31,						For the three months ended December 31,
	2014			2013			2014			2013
Current taxable income	$	104,208		$	1,486,258		$	-		$	287,537
Provision for doubtful accounts not deductible		329,428			-			330,876			-
NOL applied		(99,916	)		(1,486,258	)		-			(287,537	)
Net taxable income		333,720			-			330,876			-
Statutory rate		25	%		25	%		25	%		25	%
Income tax expense	$	83,430		$	-		$	82,719		$	-

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 through ~~September~~December 3031, 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 2034 of approximately $5,~~284~~288,000 ~~and $5,116,000~~ as of ~~September~~December 3031, 2014 ~~and June 30, 2014, 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,~~796~~797,~~624~~920 ~~and $1,739,330~~ as of ~~September~~December 3031, ~~2013 and June 30,~~ 2014~~, 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.

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 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 $3,039,789 and $3,065,281 as of September 30, 2014 and June 30, 2014, respectively.

V MEDIA ~~CORPORATION~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 three months ended September 30, 2014, management concluded the realization of PRC deferred tax assets is uncertain. Deferred tax assets amounted to 0.8 million and 0.8 million as of September 30, 2014 and June 30, 2014. The valuation allowance as of September 30, 2014 and June 30, 2014 was $0.8 million and $0.8 million, respectively.

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 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 $3,045,216 and $3,065,281 as of December 31, 2014 and June 30, 2014, 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 six months ended December 31, 2014, management concluded the realization of PRC deferred tax assets is uncertain. Deferred tax assets amounted to $0.9 million and $0.8 million as of December 31, 2014 and June 30, 2014. The valuation allowance as of December 31, 2014 and June 30, 2014 was $0.9 million and $0.8 million, 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 $~~156~~146,~~961~~954 and $~~423~~158,~~335~~884 for the three months ended ~~September~~December 3031, 2014 and 2013, respectively, and totaled $304,245 and $582,219 for the six months ended December 31, 2014 and 2013, respectively.

c) Taxes payable consisted of the following:

	September 30, 2014			June 30, 2014
Business tax payable	$	(23,736	)	$	(23,736	)
Corporate income tax payable		244,373			243,587
VAT payable		169,011			179,896
Other		145,168			120,400
Total taxes payable	$	534,816		$	520,147

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 three months ended September 30, 2014. 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~~COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

c) Taxes payable consisted of the following:

	December 31, 2014			June 30, 2014
Business tax payable	$	(23,783	)	$	(23,736	)
Corporate income tax payable		315,687			243,587
VAT payable		16,496			179,896
Other		156,820			120,400
Total taxes payable	$	465,220		$	520,147

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 three and six months ended December 31, 2014. 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.

NOTE 13 – EARNINGS PER SHARE

As of ~~September~~December 3031, 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.

NOTE 14 – 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.

V MEDIA COPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED 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 three months ended September 30, 2014
		For the three months ended December 31, 2014
	~~Dalian District~~	Dalian District		~~Shenyang District~~		Shenyang District	~~Beijing District~~			~~Tianjin~~Beijing District			~~Shanghai District~~	Tianjin District		~~US Corporation~~		Shanghai District	~~Total~~			US Corporation			Total
Revenue	$	~~3,726,927~~$	3,238,118	$	~~275,861~~	$	$209,131	-		$	~~52,094~~-		$	~~58,468~~$	16,568	$	~~34,333~~	$	$60,757	~~4,147,683~~		$	-		$	3,524,574
Cost of Revenue		~~(2,202,869~~	)(3,309,951	)	~~(218,152~~	)	(239,545	~~(375,766~~)	)		(65468,~~638~~767	)		~~(142,591~~	)(77,840	)	~~(159,122~~	)	(144,297	~~(3,164,138~~)	)		-			(4,240,400	)
Gross Profit	$	~~1,524,058~~$	(71,833	$)	~~57,709~~	$	$(30,414	~~(375,766~~)	)	$	(13468,~~544~~767	)	$	~~(84,022~~$	)(61,272	$)	~~(124, 789~~	)$	$(83,540	~~983,545~~)		$	-		$	(715,826	)
	For the three months ended September 30, 2013
		For the three months ended December 31, 2013
	~~Dalian District~~	Dalian District		~~Shenyang District~~		Shenyang District	~~Beijing District~~			~~Tianjin~~Beijing District			~~Shanghai District~~	Tianjin District		~~US Corporation~~		Shanghai District	~~Total~~			US Corporation			Total
Revenue	$	~~4,395,343~~$	3,834,192	$	~~153,123~~	$	$257,696	~~785,311~~		$	43465,~~315~~617		$	~~49,499~~$	237,249	$	~~225,000~~	$	$146	~~5,651,591~~		$	692,665		$	5,487,565
Cost of Revenue		~~(2,593,121~~	)(2,717,317	)	~~(236,873~~	)	(252,617	~~(330,422~~)	)		(29409,~~027~~572	)		~~(131,257~~	)(40,480	)	~~(884,023~~	)	(133,735	~~(4,204,723~~)	)		(878,751	)		(4,432,472	)
Gross Profit	$	~~1,802,222~~$	1,116,875	$	~~(83,750~~	)$	$5,079	~~454,889~~		$	1456,~~288~~045		$	~~(81,758~~$	)196,769	$	~~(659,023~~	)$	$(133,589	~~1,446,868~~)		$	(186,086	)	$	1,055,093
		For the six months ended December 31, 2014
		Dalian District				Shenyang District				Beijing District				Tianjin District				Shanghai District				US Corporation			Total
Revenue		$	6,965,045			$	484,992			$	-			$	68,662			$	119,225			$	34,333		$	7,672,257
Cost of Revenue			(5,512,820	)			(457,697	)			(844,533	)			(143,478	)			(286,888	)			(159,122	)		(7,404,538	)
Gross Profit		$	1,452,225			$	27,295			$	(844,533	)		$	(74,816	)		$	(167,663	)		$	(124,789	)	$	267,719
		For the six months ended December 31, 2013
		Dalian District				Shenyang District				Beijing District				Tianjin District				Shanghai District				US Corporation			Total
Revenue		$	8,229,536			$	410,818			$	1,250,928			$	280,564			$	49,645			$	917,665		$	11,139,156
Cost of Revenue			(5,310,437	)			(489,490	)			(739,995	)			(69,507	)			(264,992	)			(1,762,774	)		(8,637,195	)
Gross Profit		$	2,919,099			$	(78,672	)		$	510,933			$	211,057			$	(215,347	)		$	(845,109	)	$	2,501,961

NOTE 15 – SUBSEQUENT EVENTS

OnIn ~~Sept.~~February 252015, ~~2014,~~ the Company ~~increased~~renewed ~~its~~RMB ~~registered~~18 ~~capital~~million ~~from~~(approximately 20$2.93 million) ~~RMB~~of tobanker 30acceptance ~~million~~notes ~~RMB.~~from ~~This~~Bank ~~decision~~of isEast ~~based~~Asia. onThe ~~the~~notes ~~resolution~~payable ofare ~~the~~due ~~Company’s~~in ~~recent~~August ~~shareholder meeting~~2015.⁠

In ~~October~~March ~~2014~~2015, the Company's ~~renewed~~principal ~~RMB~~shareholders, 4Mr. ~~million~~Guojun ~~(approximately~~Wang ~~$650~~and Ms. Ming Ma,~~000)~~ ofsigned ~~banker~~two ~~acceptance~~financial ~~notes~~support ~~from~~letters ~~Dongya~~and ~~Bank.~~committed ~~The~~to ~~notes~~provide ~~payable~~working ~~are~~capital ~~currently~~loans ~~due~~to the Company when necessary in ~~April~~the ~~2015~~next twelve months.

~~On November 17, 2014, the Company repaid the loan from Jinzhou Bank of RMB 10,000,000 ($1.63 million). A new loan agreement to borrow the same amount is now under processing by Jinzhou Bank.~~22

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Overview and Corporate History

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.

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 displayed on mass city transit systems, which includes displays on 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.”"

WeThe ~~have~~Company ~~experienced~~is ~~sustainable~~trying ~~business~~to ~~growth~~maintain its business in ~~recent~~all ~~years~~geographic locations. The size of our network has grown significantly over the years since the commercial launch of our advertising network. As of ~~September~~December 3031, 2014, the number of bus and taxi shelters on which we operate and carry our advertisements is 810; the number of buses that carry our mobile advertisements is 336; the number of mobile displays through Dalian metro-trains is 38. As of ~~September~~December 3031, 2014, we have installed 52 “"City Navigator”" units across Dalian urban area, 3 mega-screen (126 square meters to 400 square meters, approximately 1,356 square feet to 4,306 square feet) LED screens and 8 metal billboards in Dalian, 4 LED screens in the business district in Shenyang, 1 indoor LED screen (22 square meters, approximately 237 square feet) in Tianjin Railway Station, 1 mega-screen (150 square meters, approximately 1,614 square feet) LED screen in Beijing and 5 outdoor billboards in Shanghai. Our Time Square billboard lease has expired on August 31, 2014 and the lease was not renewed due to the recurring loss on this project.

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 CMDI.OB.

2223

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 research and development, 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.	100%	Shanghai	Advertising company
Vastitude Media –US Corporation	100%	U.S.	Advertising company

Factors Affecting Our Results of Operations

Domestic Spending and Urbanization

The demand for our advertising time slots is directly related to the outdoor advertising spending in northeast 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 various 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 Northern China. We believe that the enhancement of public awareness to our brand name will help 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 on 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 effects remarkably. 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.

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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;

●	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.

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Results of Operations for the Three-Month Period Ended ~~September~~December 3031, 2014 Compared to the Three-Month Period Ended ~~September~~December 3031, 2013

Revenue

The following table shows the revenues of the Company on a consolidated basis:

REVENUES	Three Months Ended ~~September~~December 3031,
	2014		2013		Difference			% Change
Dalian District
Street Fixture and Display network	$	1,~~808~~234,~~654~~836	$	21,~~027~~742,~~839~~001	$	(~~219~~507,~~185~~165	)		(1029.81	)%
City Transit system Display network		~~968~~1,~~212~~039,685		~~935~~835,~~855~~494		32204,~~357~~191			324.54	%
Outdoor Billboards		~~710~~819,~~620~~819		1804,~~359,305~~079		~~(648~~15,~~685~~740	)		~~(47~~2.70	)%
City Navigator		~~148~~132,~~625~~578		52149,~~559~~442		96(16,~~066~~864	)		~~182~~(11.83	)%
Other service income(a)		9011,~~816~~200		19303,~~785~~176		71(291,~~031~~976	)		~~359~~(96.03	)%
Subtotal for Dalian District	$	3,~~726~~238,~~927~~118	$	43,~~395~~834,~~343~~192	$	(~~668~~596,~~416~~074	)		(15.25	)%
Shenyang District
Street Fixture and Display network	$	8022,~~516~~246	$	957,~~162~~547	$	71(35,~~354~~301	)		~~778~~(61.83	)%
Outdoor Billboards		~~195~~186,~~345~~885		~~143~~200,~~961~~149		51(13,~~384~~264	)		35(6.76	)%
Subtotal for Shenyang District	$	~~275~~209,~~861~~131	$	~~153~~257,~~123~~696	$	~~122~~(48,~~738~~565	)		80(18.28	)%
Beijing District
Outdoor Billboards	$	-	$	~~785~~465,~~311~~617	$	(~~785~~465,~~311~~617	)		(100	)%
Subtotal for Beijing District	$	-	$	~~785~~465,~~311~~617	$	(~~785~~465,~~311~~617	)		(100	)%
Tianjin District
Outdoor Billboards	$	5216,~~094~~568	$	43237,~~315~~249	$	8(220,~~779~~681	)		20(93.30	)%
Subtotal for Tianjin District	$	5216,~~094~~568	$	43237,~~315~~249	$	8(220,~~779~~681	)		20(93.30	)%
Shanghai District
Outdoor Billboards	$	5860,~~468~~757	$	~~49,499~~146	$	860,~~969~~611			1841514.14	%
Subtotal for Shanghai District	$	5860,~~468~~757	$	~~49,499~~146	$	860,~~969~~611			1841514.14	%
United States
Outdoor Billboards	$	~~34,333~~-	$	~~225~~692,~~000~~665	$	(~~190~~692,~~667~~665	)		(~~84.7~~100	)%
Subtotal for US District	$	~~34,333~~-	$	~~225~~692,~~000~~665	$	(~~190~~692,~~667~~665	)		(~~84.7~~100	)%
Total Revenues	$	43,~~147~~524,~~683~~574	$	5,~~651~~487,~~591~~565	$	(1,~~503~~962,~~908~~991	)		(2635.68	)%

(a) Other service income consisted of income from (i) Construction & Design service provided by Dalian Vastitute Engineering & Design Company and (ii) technique service provided by Dalian Vastitute Network Technology Company to outside customers.

Revenue

Revenues for the three months ended September 30, 2014 were $4,147,683, a decrease of $1,503,908 or 26.6%, from $5,651,591 for the three months ended September 30, 2013. The decrease in revenue was primarily attributable to the revenue decrease in Dalian, Beijing and the US , offset by revenue increase in Shenyang, Tianjin and Shanghai districts.

For three months ended September 30, 2014, sales in Dalian district, accounted for 89.9% of our total sales, decreased by $668,416, or 15.2%, to $3,726,927 from $4,395,343 for the three months ended September 30, 2013. The decrease is mainly the Company focuses their resources towards profitable subsidiaries and segments and thus the Company is downsizing its non-profitable subsidiaries. The Company may not renew billboard rentals that did not bring enough cash flow in the prior periods; instead, it will invest in business segments that have higher gross margins.

Sales in Tianjin district increased by 8,779, or 20.3%, to $52,094 from $43,315 for the three months ended September 30, 2014.Sales in Shanghai District increased $8,969 or 18.1% to $58,468 from $49,499 for the three months ended September 30, 2014.

Sales in Shenyang district increased $122,738 or 80.2% to $275,861 from $153,123 for the three months ended September 30, 2014. The increase was attributable to increased sales and marketing effort in local market.

Sales in Beijing district decreased by $785,311, or 100%, to $0 from $785,311 for the three months ended September 30, 2014. The reason of the decrease is that Beijing district has lost its only customer (of annual sales RMB 18 million) due to the lease expiration and that the client didn’t extend the contract due to expenditure control considerations.

Sales in the US decreased by $190,667, or 84.7% from $225,000 for the three months ended September 30, 2014. The Company has terminated the lease for the billboard in the US since it didn’t generate the level of revenue as the Company previously projected.

Revenue

Revenues for the three months ended December 31, 2014 were $3,524,574, a decrease of $1,962,991 or 35.8%, from $5,487,565 for the three months ended December 31, 2013. The decrease in revenue was primarily attributable to the revenue decrease in Dalian, Shenyang, Beijing, Tianjin and the US, offset by revenue increase in Shanghai districts.

For three months ended December 31, 2014, sales in Dalian district, accounted for 91.9% of our total sales, decreased by $596,074, or 15.5%, to $3,238,118 from $3,834,192 for the three months ended December 31, 2013. The mainly decrease reason is the Company focused resources towards profitable subsidiaries and segments and thus the Company is downsizing its non-profitable subsidiaries. The Company may not renew billboard rentals that did not bring enough cash flow in the prior period.

Sales in Tianjin district decreased by 220,681, or 93%, to $16,568 from $237,249 for the three months ended December 31, 2014, which due to loss of customers and inability of finding new customers.

Sales in Shenyang district decreased $48,565 or 18.8% to $209,131 from $257,696 for the three months ended December 31, 2014. Sales in Shanghai District increased $60,611 or 41,514.4% to $60,757 from $146 for the three months ended December 31, 2014.

Sales in Beijing district decreased by $465,617, or 100%, to $0 from $465,617 for the three months ended December 31, 2014. The reason of the decrease is that Beijing district has lost its only customer (of annual sales RMB 18 million) due to the lease expiration and that the client didn't extend the contract due to expenditure control consideration.

Sales in the US decreased by $692,665, or 100% from $692,665 for the three months ended December 31, 2014. The Company has terminated the lease for the billboard in the US since it didn't generate the level of revenue as the Company previously projected.

Cost of Revenue

Cost of revenue for the three months ended ~~September~~December 3031, 2014 was $34,~~164~~240,~~138~~400, a decrease of $1192,~~040,585~~072 or 244.73%, from $4,~~204~~432,~~723~~472 for the same period ended ~~September~~December 3031, 2013. ~~Decrease in cost of revenue is due to: (a) a reduction in depreciation of about $400,000. and (b) a reduction in amortization of about $610,000.~~ The decrease is primarily due to the termination of ~~the~~ lease for the billboard located at Times Square. We experienced higher labor cost due to hiring experienced ads production staff and higher material costs charge due to price increase, but the effect is offset by the savings noted above.

COST OF REVENUES	Three Months Ended ~~September~~December 3031,
	2014		2013		Difference			% Change
Dalian District
Street Fixture and Display network	$	~~947~~1,~~959~~202,961	$	1,~~181~~069,~~316~~309	$	~~(233~~133,~~357~~652	)		~~(19~~12.85	)%
City Transit system Display network		~~632~~1,~~191~~245,372		~~598~~921,~~120~~822		34323,~~071~~550			535.71	%
Outdoor Billboards		~~536~~710,~~017~~787		~~771~~430,~~240~~233		~~(235~~280,~~223~~554	)		~~(30~~65.52	)%
City Navigator		62145,~~278~~702		23139,~~946~~695		386,~~332~~007			~~160~~4.13	%
Other service cost (b)		245,~~424~~129		18156,~~499~~258		5(151,~~925~~129	)		32(96.07	)%
Subtotal for Dalian District	$	23,~~202~~309,~~869~~951	$	2,~~593~~717,~~121~~317	$	~~(390~~592,~~252~~634	)		~~(15~~21.08	)%
Shenyang District
Street Fixture and Display network	$	5831,~~901~~864	$	1655,~~581~~471	$	42(23,~~320~~607	)		~~255~~(42.26	)%
Outdoor Billboards		~~159~~207,~~251~~681		~~220~~197,~~292~~146		~~(61~~10,~~041~~535	)		~~(27~~5.73	)%
Subtotal for Shenyang District	$	~~218~~239,~~152~~545	$	~~236~~252,~~873~~617	$	(1813,~~721~~072	)		(75.92	)%
Beijing District
Outdoor Billboards	$	~~375~~468,~~766~~767	$	~~330~~409,~~422~~572	$	4559,~~344~~195			1314.75	%
Subtotal for Beijing District	$	~~375~~468,~~766~~767	$	~~330~~409,~~422~~572	$	4559,~~344~~195			1314.75	%
Tianjin District
Outdoor Billboards	$	6577,~~638~~840	$	2940,~~027~~480	$	3637,~~611~~360			~~126~~92.13	%
Subtotal for Tianjin District	$	6577,~~638~~840	$	2940,~~027~~480	$	3637,~~611~~360			~~126~~92.13	%
Shanghai District
Outdoor Billboards	$	~~142~~144,~~591~~297	$	~~131~~133,~~257~~735	$	1110,~~334~~562			87.69	%
Subtotal for Shanghai District	$	~~142~~144,~~591~~297	$	~~131~~133,~~257~~735	$	1110,~~334~~562			87.69	%
United States
Outdoor Billboards	$	~~159,122~~-	$	~~884~~878,~~023~~751	$	(~~724~~878,~~901~~751	)		(82100.0	)%
Subtotal for United States	$	~~159,122~~-	$	~~884~~878,~~023~~751	$	(~~724~~878,~~901~~751	)		(82100.0	)%
Total Cost of Revenue	$	34,~~164~~240,~~138~~400	$	4,~~204~~432,~~723~~472	$	(1192,~~040,585~~072	)		(244.73	)%

(b) Other service cost incurred 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.

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Gross Profit/Loss

Our gross profit/loss for the three months ended ~~September~~December 3031, 2014 decreased by $~~463~~1,~~323~~770,919 or 32167.08% to loss of $~~983~~715,~~545~~826 from profit of $1,~~446~~055,~~868~~093 for the same period in 2013. ~~The~~Our ~~decrease in~~ gross ~~profit~~margin ~~was due to the decreased revenue~~ during the three months ended ~~September~~December 3031, 2014~~. Management~~ isand ~~actively~~2013 ~~enforcing~~were ~~cost~~-~~saving~~20.3% ~~measures~~and ~~which~~19.2%, ~~lead~~respectively. toThe decrease ~~of cost and expenses~~ in ~~current~~gross ~~quarter.~~profit ~~With~~was ~~lower~~due ~~rental cost and production cost, we were able~~ to ~~improve~~the ~~gross~~decreased ~~margin.~~revenue ~~However, our gross margin~~ during the three months ended ~~September~~December 3031, 2014 ~~and 2013 were 23~~.7% ~~and 25.6%, respectively, the decrease is mainly due to the decrease of revenue.~~

Selling, General and Administrative Expenses

Selling, general and administrative expenses, totaled $1,~~875~~657,~~178~~869 during the three months ended ~~September~~December 3031, 2014, an increase of $~~600~~219,~~328~~128 or 4715.12%, compared to $1,~~274~~438,~~850~~741 for the same period ended ~~September~~December 3031, 2013. The main increase reason is ~~mainly due to $840,000~~ increase in ~~the~~depreciation ~~provision~~expense ~~for~~of ~~doubtful accounts, which generated from account receivable, advance to vendor and loans receivable would increase since the management has reassessed and updated its bad debt reserve policy~~$494K.

Other Expenses/Income, net

For the three months ended ~~September~~December 3031, 2014, we had total other ~~expenses~~income of $~~275~~26,~~807~~536, an increase of $~~167~~272,~~722~~251 or ~~155~~110.28%, compared with the other expenses of $~~108~~245,~~085~~715 during the same period of 2013. The increase in net of other expense was mainly due to a $~~126~~291,~~675~~638 ~~decrease~~increase in subsidy income during the period. ~~The~~which ~~subsidy~~ is a special tax subsidy for the companies located in a special economic development zone in Dalian City.

Total interest expense on the bank loans for the three months ended ~~September~~December 3031, 2014 and 2013, amounted to $~~319~~313,~~392~~113 and $~~254~~297,~~148~~627, respectively, the increase is due to the increase in borrowing.

Net Loss Attributable to the Company

Net loss attributable to the Company was $~~960~~1,~~485~~958,239 for the three months ended ~~September~~December 3031, 2014, as compared with the net loss of $~~129~~566,~~888~~989 during the three months ended ~~September~~December 3031, 2013, representing an increase of $~~830~~1,~~597~~391,250 or ~~639~~245.54%. The increase in net loss was mainly attributed to our decrease in revenue and increase in selling, general and administrative expenses.

Foreign currency translation adjustments

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, our comprehensive loss was $~~965~~1,~~751~~867,362 during the three months ended ~~September~~December 3031, 2014, and $~~101~~464,~~140~~555 during the three months ended ~~September~~December 3031, 2013.

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~~Liquidity~~Results ~~and~~of ~~Capital~~Operations ~~Resources~~for the Six-Month Period Ended December 31, 2014 Compared to the Six-Month Period Ended December 31, 2013

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

~~Based~~The onfollowing ~~our~~table ~~current~~shows ~~planned~~the operations, weof 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 requirements for our current operations over the next twelve months. 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’s ~~management expects to be able to refinance its short term loans based~~ on ~~past~~a ~~experience~~consolidated ~~and~~basis ~~the~~for ~~Company’s good credit history. In July 2012, we signed an agreement with Bank of Asia, pursuant to which,~~ the ~~bank~~six ~~provides~~months aended ~~RMB~~December ~~22 million ($3.6 million) revolving notes payable credit line from July 25~~31, ~~2012 to July 25, 2020. In September 25,~~ 2014, ~~the Company received RMB 10 million ( $1.63 million) from the Company’s majority shareholder Mr. Wang Guojun~~ and Ms. Ma Ming( RMB 5 million each), In addition, our major shareholder, Mr. Guojun Wang has pledged to provide personal loans when necessary to provide us with sufficient liquidity for the next 12 months. The Company also will discontinue the less profitable business lines to increase the overall profitability of the Company.2013:

Additionally, our Time Square billboard lease has expired on August 31, 2014 and the lease was not renewed due to the recurring loss on this project. The management expects to save $3 million lease payment annually on this project and will decrease approximately $1.8 million of our prior year loss from our the bottom line.. Without this project, the Company expects to turn around and become profitable for the fiscal year ending June 30, 2015.

REVENUES	Six Months Ended December 31,
	2014		2013		Difference			% Change
Dalian District
Street Fixture and Display network	$	3,043,490	$	3,769,841	$	(726,351	)		(19.3	)%
City Transit system Display network		2,007,897		1,771,349		236,548			13.4	%
Outdoor Billboards		1,530,439		2,163,383		(632,944	)		(29.3	)%
City Navigator		281,203		202,002		79,201			39.2	%
Other service income(a)		102,016		322,961		(220,945	)		(68.4	)%
Subtotal for Dalian District	$	6,965,045	$	8,229,536	$	(1,264,491	)		(15.4	)%

Shenyang District
Street Fixture and Display network	$	102,762	$	66,708	$	36,054			54.0	%
Outdoor Billboards		382,230		344,110		38,120			11.1	%
Subtotal for Shenyang District	$	484,992	$	410,818	$	74,174			18.1	%

Beijing District
Outdoor Billboards	$	-	$	1,250,928	$	(1,250,928	)		(100	)%
Subtotal for Beijing District	$	-	$	1,250,928	$	(1,250,928	)		(100	)%

Tianjin District
Outdoor Billboards	$	68,662	$	280,564	$	(211,902	)		(75.5	)%
Subtotal for Tianjin District	$	68,662	$	280,564	$	(211,902	)		(75.5	)%

Shanghai District
Outdoor Billboards	$	119,225	$	49,645	$	69,580			140.2	%
Subtotal for Shanghai District	$	119,225	$	49,645	$	69,580			140.2	%

US District
Outdoor Billboards	$	34,333	$	917,665	$	(883,332	)		(96.3	)%
Subtotal for US District	$	34,333	$	917,665	$	(883,332	)		(96.3	)%

Total Revenues	$	7,672,257	$	11,139,156	$	(3,466,899	)		(31.1	)%

As(a) Other service income consisted of ~~September~~income ~~30,~~from ~~2014,~~(i) ~~the~~Construction ~~Company’s~~& ~~cash~~Design ~~and~~service ~~cash~~provided ~~equivalents~~by ~~amounted~~Dalian toVastitute ~~$268,697,~~Engineering a& ~~decrease~~Design ofCompany ~~$872,680~~and ~~from~~(ii) ~~$1,141,377~~technique asservice ofprovided ~~June~~by ~~30,~~Dalian ~~2014~~Vastitute Network Technology Company to outside customers.

Revenue

Revenues for the six months ended December 31, 2014 were $7,672,257, a decrease of $3,466,899 or 31.1%, from $11,139,156 for the six months ended December 31, 2013. The decrease in revenue was primarily attributable to the revenue decrease in Dalian, Beijing, Tianjin and US district, offset by revenue increases in Shenyang and Shanghai district.

The overall decrease of revenue is due to the change of business strategy. Instead of chasing high revenue, we are more focusing on expanding our profitable business units and segments and downsizing those segments and subsidiaries continuously incurring loss.

The other reason for the decrease of revenue is because we lost some real estate clients in this quarter when service term expired. The real estate industry is still under financial pressure thus lowered advertisement budget. We are now developing new customers from banking, food and beverage and other industries to make up the market share loss. We expected that the revenue for the near future will be increased from these customers.

For six months ended December 31, 2014, sales in Dalian district, accounted for 90.8% of our total sales, decreased by $1,264,491, or 15.4%, to $6,965,045 from $8,229,536 for the six months ended December 31, 2013. The decrease is mainly from our construction services and network services. Our construction service and network services generated limited revenue for us in this year due to intensive competition we faced in the market.

Sales in Tianjin district decreased by 211,902, or 75.5%, to $68,662 from $280,564 for the six months ended December 31, 2014. Revenue decreases in Tianjin is due to more intense competition in the market.

Sales in Shenyang district increased $74,174 or 18.1% to $484,992 from $410,818 for the six months ended December 31, 2014. Sales in Shanghai District increased $69,580 or 140.2% to $119,225 from $49,645 for the six months ended December 31, 2014.

Sales in Beijing district decreased by $1,250,928, or 100%, to $0 from $1,250,928 for the six months ended December 31, 2014. The reason of the decrease is that Beijing district has lost its only customer (of annual sales RMB 18 million) due to the lease expiration and that the client didn't extend the contract due to expenditure control consideration.

Sales in the US decreased $883,332, or 96.3%, to $34,333 from $917,665 for the six months ended December 31, 2014. The Company has terminated the lease for the billboard in the US since it didn't generate the level of revenue as the Company previously projected.

Cost of Revenue

Cost of revenue for the six months ended December 31, 2014 was $7,404,538, a decrease of $1,232,657 or 14.3%, from $8,637,195 for the same period ended December 31, 2013. Decrease in cost of revenue is mainly due to decrease in the amortization of billboards use rights of $1,296,000. We terminated the lease for the billboard located at Times Square in August, 2014.

COST OF REVENUES	Six Months Ended December 31,
	2014		2013		Difference			% Change
Dalian District
Street Fixture and Display network	$	2,150,920	$	2,250,623	$	(99,703	)		(4.4	)%
City Transit system Display network		1,877,563		1,519,941		357,622			23.5	%
Outdoor Billboards		1,246,804		1,201,473		45,331			3.8	%
City Navigator		207,980		163,642		44,338			27.1	%
Other service cost (b)		29,553		174,758		(145,205	)		(83.1	)%
Subtotal for Dalian District	$	5,512,820	$	5,310,437	$	202,383			3.8	%

Shenyang District
Street Fixture and Display network	$	90,765	$	72,052	$	18,713			26	%
Outdoor Billboards		366,932		417,438		(50,506	)		(12.1	)%
Subtotal for Shenyang District	$	457,697	$	489,490	$	(31,793	)		(6.5	)%

Beijing District
Outdoor Billboards	$	844,533	$	739,995	$	104,538			14.1	%
Subtotal for Beijing District	$	844,533	$	739,995	$	104,538			14.1	%

Tianjin District
Outdoor Billboards	$	143,478	$	69,507	$	73,971			106.4	%
Subtotal for Tianjin District	$	143,478	$	69,507	$	73,971			106.4	%

Shanghai District
Outdoor Billboards	$	286,888	$	264,992	$	21,896			8.3	%
Subtotal for Shanghai District	$	286,888	$	264,992	$	21,896			8.3	%

United States
Outdoor Billboards	$	159,122	$	1,762,774	$	(1,603,652	)		(91.0	)%
Subtotal for United States	$	159,122	$	1,762,774	$	(1,603,652	)		(91.0	)%

Total Cost of Revenue	$	7,404,538	$	8,637,195	$	(1,232,657	)		(14.3	)%

(b) Other service cost 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

Our gross profit for the six months ended December 31, 2014 decreased by $2,234,242 or 89.3% to $267,719 from $2,501,961 for the same period in 2013. The decrease in gross profit was due to the decrease in revenue during the six months ended December 31, 2014. Our gross margin during the six months ended December 31, 2014 and 2013 were 3.5% and 22.5%, respectively.

Selling, General and Administrative Expenses

Selling, general and administrative expenses, totaled $3,533,047 during the six months ended December 31, 2014, an increase of $819,456 or 30.2%, compared to $2,713,591 for the same period ended December 31, 2013. The following main reasons attributed to this increase:

1)	Travel expense by $77K due to the reimbursement for business trips. Because the Company is encountering declining in revenue, senior executives put more efforts in supervising the subsidiaries' work and incurred more traveling cost.

2)	The depreciation expense increased $307K in the six months ended December, 31, 2014 compared to the same period last year.

3)	Bad debt expense increased $155K for companies such as V-media, Jiaotong and Beijing for the six months ended December 31, 2014 compared to same period last year.

4)	The Company paid $55K to guaranty companies in order to use their services as guaranty to obtain bank loans for six months ended December 31, 2014. There was no such expense during last same period.

Other Expenses

For the six months ended December 31, 2014, we had total other expenses of $249,271, a decrease of $104,529 or 29.5%, compared with the other expenses of $353,800 during the same period of 2013. The decrease in other expense was mainly due to the $164,963 increase in subsidy income during the period.

Interest expense on our bank loans for the six months ended December 31, 2014 and 2013, amounted to $632,505 and $551,775, respectively.

Net Loss Attributable to the Company

Net loss attributable to the Company was $2,918,724 for the six months ended December 31, 2014, as compared with the net loss of $696,877 during the six months ended December 31, 2013, representing a decrease of 318.8%. The decrease in net loss was mainly attributed to our decrease in revenue and our increase in selling, general and administrative expenses.

Foreign currency translation adjustments

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, our comprehensive loss was $2,833,113 during the six months ended December 31, 2014, and $565,695 during the six months ended December 31, 2013.

Liquidity, Capital Resources and Management's Plans

The Company has also historically funded part of its working capital needs from operations, advance payments from customers, capital contributions and loans from its principal shareholders.

Based on our current operating plans, management expects that the Company's existing resources, including short-term bank loans and bank notes payable, advances from customers, capital contributions and loans from our major shareholders will be sufficient to meet the working capital requirements for the Company's current operations over the next twelve months. Management expects the Company to be able to refinance all of its short term loans based on past experience and its good credit history. In July 2012, the Company signed an agreement with Bank of East Asia, pursuant to which, the bank is providing the Company with a RMB 22 million ($3.6 million) revolving credit line from July 25, 2012 to July 25, 2020. In addition, the Company's principal shareholder has committed to provide personal loans when necessary to provide it with sufficient liquidity for the next twelve months. The Company also will discontinue the less profitable business lines to increase its overall profitability of the Company.

Additionally, the Company's 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 $3 million of lease payments annually on this project. With its continued efforts to cut costs and to promote new business, the Company expects to turn around and become profitable in the next twelve months.

The ability of the Company to continue is dependent upon management's ability to implement its strategic plans, obtain additional capital and generate net income and positive cash flows from operations. There can be no assurance that these plans will be sufficient or that additional financing will be available in amounts or terms acceptable to the Company, if at all.

As of December 31, 2014, the Company's cash and cash equivalents amounted to $742,872, a decrease of $398,505 from $1,141,377 as of June 30, 2014.

Cash Flow from Operating Activities

Net cash ~~used~~provided inby operating activities was $1988,~~984,092~~882 for the ~~three~~six months ended ~~September~~December 3031, 2014, a decrease of $2,~~726~~296,~~176~~888 from the net cash provided by operating activities of $~~742~~3,~~084~~285,770 for the ~~three~~six months ended ~~September~~December 3031, 2013. The decrease was mainly due to the increase in net loss of $12,~~143~~926,~~415~~865, and decreases in depreciation and amortization of $~~927~~1,~~577~~276, ~~accounts payable of $980~~422,~~117,~~ advance to suppliers of $~~612~~1,~~927~~626,490 and ~~accounts~~other ~~receivable~~payable of $~~293~~608,~~440~~144, offset by an increase in ~~provisions~~deferred ~~for~~revenues ~~doubtful~~of ~~accounts totaling~~ $~~838~~2,~~342~~561,482.

Cash Used in Investing Activities

Net cash used in investing activities in the ~~three~~six months ended ~~September~~December 3031, 2014 was $~~802~~4,~~880~~254,804 as compared to net cash used in investing activities of $24,~~005~~806,~~922~~978 for the ~~three~~six months ended ~~September~~December 3031, 2013. Cash used in investing activities in the current period was for acquisitions of new outdoor advertising platforms toand ~~expand~~purchase ~~our~~of ~~existing~~property ~~advertising~~and ~~network.~~equipment ~~The decrease in cash used in investing activities this period is mainly due~~ to ~~the~~expand ~~termination~~our ofexisting ~~the~~advertising ~~billboard lease located at Times Square~~network.

Cash Provided by Financing Activities

For the ~~three~~six months ended ~~September~~December 3031, 2014, net cash provided by financing activities was $12,~~914~~865,~~747~~336 as a result of i) net proceeds from capital contributions of $1.6 million ~~from the our majority shareholders Mr Wang Guojun and Ms. Ma Ming~~; ii) net proceeds from related party loans of approximately $01.1 million, and iii) net ~~proceeds~~repayment ~~from~~of restricted cash of $~~185~~1,~~147~~441,522. Net cash provided by financing activities was $~~442~~761,~~018~~747 for the ~~three~~six months ended ~~September~~December 3031, 2013, primarily due to net proceeds from short-term bank loans of $1,~~958~~964,~~657~~420 partially offset by a $1916,~~387,382~~729 repayment of third party loans.

Application of Critical Accounting Policies

Management's discussion and analysis of its financial condition and results of operations are based upon our condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles (“"US 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.”"

Impact of Recent Accounting Pronouncements

~~The~~In ~~Company’s~~May ~~management~~2014, ~~does~~the ~~not~~Financial ~~believe~~Accounting ~~that~~Standards ~~any~~Board ~~recently~~("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, ~~but~~Revenue ~~not~~from ~~yet~~Contracts ~~effective~~with Customers: Topic 606. This Update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets, ~~accounting~~unless those contracts are within the scope of other standards,. ifThe ~~currently~~guidance ~~adopted~~in this Update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition and most industry-specific guidance. The core principle of the guidance is that an entity should recognize revenue to illustrate the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance also includes a cohesive set of disclosure requirements that will ~~have~~provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from a ~~material~~reporting organization's contracts with customers. This ASU is effective for fiscal years, and interim periods within those years beginning after December 15, 2016 for public companies and 2017 for non-public entities. Management is evaluating the effect, if any, on the Company’'s ~~condensed consolidated~~ financial position, and results of operations~~, or cash flows~~.

In August 2014, the FASB issued ASU No. 2014-15, "Disclosure of Uncertainties About an Entity's Ability to Continue as a Going Concern" ("ASU 2014-15"), which requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity's ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on the Company's consolidated financial statements.

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 3. 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 4. 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 Quarterly Report on Form 10-Q (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 Quarterly Report on Form 10-Q. 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 light of the material weaknesses that were identified and described in our Annual Report on Form 10-K for the year ended June 30, 2014 which was filed with the Securities and Exchange Commission on October 14, 2014, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of ~~September~~December 3031, 2014.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~September~~December 3031, 2014, we have

● Continued our search for an experienced internal control manager for the Company to lead the testing and implementation of our accounting and internal control procedures.

● Evaluated the roles of our existing accounting personnel and updated the reporting structure of our accounting staff .

● Established a work plan to update the Company’'s internal control procedures and policies.

● Developed a preliminary staff training program to all employees involved which objective is to enhance the staff’'s awareness of the Company’'s updated accounting policies and procedures and familiarity with US GAAP and SEC rules and regulations.

There were no other changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None for the period covered by this report

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None for the period covered by this report.

ITEM 6. EXHIBITS.

(a) Exhibits.


31.1*	Certification of the CEO
31.2 *	Certification of the CFO
32.1 *	Certification of the CEO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.2*	Certification of the CFO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
101.*INS	XBRL Instance Document
101.*SCH	XBRL Taxonomy Extension Schema Document
101.*CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.*DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.*LAB	XBRL Taxonomy Extension Label Linkbase Document
101.*PRE	XBRL Taxonomy Extension Presentation Linkbase Document
__________________

* Filed herewith

3137

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: ~~November~~March 1923, ~~2014~~2015

	V MEDIA CORPORATION

	By:	/s/ Guojun Wang
		Name: Guojun Wang
		Title: Chief Executive Officer and Chairman (principal executive officer and duly authorized officer)



	By:	/s/ Hongwen Liu
		Name: Hongwen Liu
		Title: Chief Financial Officer and Treasurer (principal financial officer)

3238

Exhibit Index

31.1*	Certification of the CEO
31.2 *	Certification of the CFO
32.1 *	Certification of the CEO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
32.2*	Certification of the CFO pursuant to 18 U.S.C. Section 1350 adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as filed herewith.
101.*INS	XBRL Instance Document
101.*SCH	XBRL Taxonomy Extension Schema Document
101.*CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.*DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.*LAB	XBRL Taxonomy Extension Label Linkbase Document
101.*PRE	XBRL Taxonomy Extension Presentation Linkbase Document
_______________

* Filed herewith

3339

Filing Compare · V Media Corp