BILLBOARDS USE RIGHT

12 Months Ended

Jun. 30, 2013

Goodwill and Intangible Assets Disclosure [Abstract]

NOTE 7 - BILLBOARDS USE RIGHT

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

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

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

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

The projected amortization expense as of June 30, 2013 attributed to future years is as follows:

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

The following is a schedule by year for future minimum payments under the billboard use right agreements at June 30, 2013:

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

V Media Corp 10-K