Overview and Future Plan of Operations
In 2007, our revenues grew by 108% from $5,179,174 in 2006 to $10,783,574 in 2007 primarily resulting from increased advertising sales delivered by new agency partnerships in China.
This year we also experienced increases in gross profit and EBITDA (exclusive of all non-cash items) compared to 2006. Our gross profit was $6,332,713, up 93% compared to $3,277,561 in 2006. Our EBITDA increased 33% to $2,717,091 compared with $2,048,741 in 2006.
Over the course of 2007 our Sino Trade subsidiary, which is responsible for media sales in China, established new relationships with nine well-established media sales agencies throughout China. By doing so, Sino Trade was able to increase revenue without the risk of added overhead associated with an in-house sales force expansion.
The Company experienced a loss of $5,908,545 primarily due to costs related to business expansion in China. During 2007 we entered the television entertainment market when we produced and distributed the Who Wants To Be A Millionaire? TV show in China. We set up our own studio and began producing the TV show. The first show aired September 29, 2007 and became a weekly episode thereafter. While the show received high ratings the sales and distribution performances were unsatisfactory resulting in losses. Management decided to discontinue the show resulting in an impairment of $2,000,000. Also contributing to our overall loss were consulting and management expenses related to business expansion into China which were paid for with common stock issued in 2007 and valued at $5,293,825; legal and professional expenses and a non-cash charge for our stock-based compensation to an executive in the sum of $260,877.
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