As of November 14, 2007 we are a company establishing ourselves as a leader in the digital media industry. The company has refocused strategic business operation plans to maximize strategic position in the publishing industry.
SUBSIDIARIES
PAC-POLY INVESTMENTS LIMITED
As of November 14, 2007, we hold of record 100% of the total issued and outstanding shares of Pac-Poly Investments Limited ("Pac-Poly"), which is our wholly-owned subsidiary. Pac-Poly is an investment holding company. We maintain a 7.98% effective interest in Xinhua C&D through Pac-Poly.
BEIJING JOANNES INFORMATION TECHNOLOGY CO. LT.
On May 9, 2006, we formed Beijing Joannes Information Technology Co. Lt. ("Beijing Joannes"), as our Chinese wholly owned subsidiary, to launch a digital media content initiative. We held of record 100% of the total issued and outstanding shares of Beijing Joannes. Beijing Joannes was formed for the purpose of launching a digital media content initiative with the web site branded www.geepip.com. The business focus is building online communities with connectivity to an ecommerce engine, which allows for the online purchase of e-books, e-audio, and computer games. Hard copies of books can also be purchase through the portal. A unique customer loyalty program and digital redemption or trade-in strategy will be a market differentiator.
RECENT BUSINESS OPERATIONS
DIVESTURE OF INTEREST IN XINHUA CIRCULATION & DISTIRBUTION
Pursuant to the terms and provisions of an investment agreement (the "Investment Agreement") among our two subsidiaries Pac-Poly and Beijing Boheng and Xinhua Bookstore (Main Store) ("Xinhua Bookstore"), we acquired a 57.67% interest in the publication distribution business in the People's Republic of China. Xinhua Bookstore transferred the publication distribution business into a newly formed
Chinese company called Xinhua Circulation & Distribution ("Xinhua C&D"). Xinhua C&D is presently primarily a book distribution enterprise. As of May 31, 2006, we reduced our ownership interest in Xinhua C&D to 7.98%. We had originally intended to help guide Xinhua C&D through the modernization and growth of its systems and distribution strategies. Realizing the large investment in real estate, equipment, fixed assets requirements to achieve modernization and growth, as well as the shifting of reading habits to a digital format and a dynamic and growing digital youth (age 12-25) comprising over 50% of the population, our management, after very careful consideration, effective May 31, 2006, revised our business focus to instead concentrate on the growing opportunity in online content distribution, co-publishing, and digital rights management. While executing this strategy, we will continue to maximize our strategic position in the publishing industry by utilizing the connections and channels we have established as a result of our interest in Xinhua C&D. As a result of the decision to focus on digital media and co-publishing, we were able to renegotiate our financial commitment to Xinhua C&D and eliminate the requirement to invest a further $16,700,000 into Xinhua C&D to build their new distribution warehouse along with all other obligations related to the long term leasing of approximately 128 acres of land on which the warehouse was to be built. This change reduced our equity interest in Xinhua C&D to 7.98%.
