UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2009

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 333-138479

LEGEND MEDIA, INC.

(Exact Name of Registrant as Specified in its Charter)

Nevada		87-0602435
(State or Other Jurisdiction of		(I.R.S. Employer Identification No.)
Incorporation or Organization)

Room 609, Gehua Tower A , Qinglong Hutong Building No. 1

Beijing 100007, People’S Republic Of China

(Address of Principal Executive Offices)

(86-10) 8418 7177

(Issuer’s Telephone Number)

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

Securities registered pursuant to Section 12(g) of the Exchange Act:

Common Stock, $.001 par value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.		Yes o No þ
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.		o
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 past 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 þ 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 o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.		o

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

Large accelerated filer o Non-accelerated filer o (Do not check if smaller reporting company)	Accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).		Yes o No þ

The aggregate market value of the registrant’s voting and non-voting common equity held by non-affiliates was $3,713,040. The aggregate market value was calculated using the price at which the common equity was last sold on October 12, 2009

Determination of stock ownership by non-affiliates was made solely for the purpose of this requirement, and the registrant is not bound by these determinations for any other purpose.

On October 12, 2009 there were 112,813,355 shares of common stock outstanding.

LEGEND MEDIA, INC

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED JUNE 30, 2009

TABLE OF CONTENTS

PART I	3
Item 1. Business	3
Item 1A. Risk Factors	14
Item 1B. Unresolved Staff Comments	31
Item 2. Properties	31
Item 3. Legal Proceedings	31
Item 4. Submission of Matters to a Vote of Security Holders	31
None.	31
PART II	32
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	32
Item 6. Selected Financial Data	32
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	32
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	46
Item 8. Financial Statements and Supplementary Data	46
Item 9. Changes In and Disagreements with Accountants On Accounting and Financial Disclosure	46
Item 9A(T). Controls and Procedures	46
Item 9B. Other Information	47
PART III	48
Item 10. Directors, Executive Officers, and Corporate Governance.	48
Item 11. Executive Compensation	49
Item 12. Security Ownership Of Certain Beneficial Owners And Management And Related Stockholder Matters	52
Item 13. Certain Relationships and Related Transactions And Director Independence	55
Item 14. Principal Accountant Fees and Services	56
Director Independence	57
Item 15. Exhibits and Financial Statement Schedules	57

PART I

Item 1. Business

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K and the documents we incorporate by reference herein include forward-looking statements. All statements other than statements of historical facts contained in this Form 10-K and the documents we incorporate by reference, including statements regarding our future financial position, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We based these forward-looking statements largely on our current expectations and projections about future events and financial trends we believe may affect our financial condition, results of operations, business strategy and financial needs.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions described under the caption “Risk Factors” and elsewhere in this Annual Report on Form 10-K. In addition, our past results of operations do not necessarily indicate our future results. New risks emerge from time to time and it is not possible for us to predict all such risks, nor can we assess the impact of all such risks on our business or the extent to which any risk factor, or combination of risks, may cause actual results to differ materially from those contained in any forward-looking statements.

Except as otherwise required by applicable laws, we undertake no obligation to publicly update or revise any forward-looking statements or the risk factors described in this Annual Report on Form 10-K or in the documents we incorporate by reference, whether as a result of new information, future events, changed circumstances or any other reason after the date of this Annual Report on Form 10-K. You should not rely upon forward-looking statements as predictions of future events or performance. We cannot assure you that the events and circumstances reflected in our forward-looking statements will be achieved or occur. Although we believe our expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.

Description of Business

Legend Media, Inc., formerly known as Noble Quests, Inc. (hereinafter referred to as the “Company,” “Legend Media,” “we,” “us,” or “our” ), was organized as a Nevada corporation on March 16, 1998, to sell multi-media marketing services and other related services to network marketing groups. Specifically, we assisted network marketers in using marketing tools such as public relations, advertising, direct mail, collateral development, electronic communications and promotion tools to increase product and service awareness.

On January 31, 2008, the Company entered into a Share Exchange Agreement with Ms. Shannon McCallum-Law, the majority stockholder, sole director and Chief Executive Officer of the Company, Well Chance Investments Limited (“Well Chance”) and Well Chance's sole shareholder (the "Well Chance Shareholder"). Pursuant to the terms of the Share Exchange Agreement, the Company acquired all issued and outstanding shares of Well Chance's common stock in exchange for the Company’s issuance of 1,200,000 shares of its common stock to the Well Chance Shareholder on the basis of 1,200 shares of common stock for each share of Well Chance common stock. The Share Exchange Agreement closed February 5, 2008.

Concurrently with the closing of the transactions under the Share Exchange Agreement (the “Share Exchange Agreement”) and as a condition thereof, Ms. McCallum-Law returned to us for cancellation 2,419,885 of the 5,119,885 shares of our common stock she owned. Ms. McCallum-Law was not compensated for the cancellation of the shares. In addition, we issued (i) 4,100,000 shares of our common stock to certain affiliates of Well Chance for $87,740 and (ii) 200,000 shares in exchange for consulting services performed in connection with this transaction. Upon completion of the foregoing transactions, we had 8,200,000 shares of common stock issued and outstanding.

The share exchange with the Well Chance Shareholder was accounted for as a reverse acquisition under the purchase method because Well Chance obtained control of the Company. Accordingly, the share exchange was recorded as a recapitalization of Well Chance, with Well Chance being treated as the continuing entity.

Effective February 14, 2008, the Company changed its name from Noble Quests, Inc. to Legend Media, Inc. Well Chance was incorporated under the laws of the British Virgin Islands as an International Business Company on February 22, 2005. Well Chance was formed to create a business principally engaged in the development and management of a technology platform that deploys advertisements across its various advertising media. Well Chance expanded its business in February 2008 to build a consumer advertising network in the People’s Republic of China (the “PRC”) focused on the Chinese radio advertising industry and advertising media that targets the consumer base of China.

On May 8, 2008, the Company and Well Chance entered into a Share Purchase Agreement (the “Music Radio Share Purchase Agreement”) with Music Radio Limited, a British Virgin Islands company, and Ju Boachun and Xue Wei (the “Music Radio Shareholders”), for the purchase of radio advertising rights in Tianjin, PRC. Pursuant to the Music Radio Share Purchase Agreement, Well Chance in exchange for the issuance of (a) shares of the Company's common stock with an aggregate value of US$7,160,714 based on the weighted average trading price of the Company's common stock for the 90 trading days immediately preceding May 8, 2008 (1,935,528 shares), and (b) US$2,000,000, purchased 80% of the common stock of Legend Media Tianjin Investment Company Limited, a British Virgin Islands company and a wholly owned subsidiary of Music Radio Limited. The closing of the Music Radio Share Purchase Agreement occurred May 30, 2008, and the Company secured effective control of the exclusive sales contract for the Tianjin, PRC based radio channel. Tianjin, PRC is a city with a population over 11.5 million. The exclusive sales contract provides the Company with 19,710 minutes per year of advertising space. The contract is up for renewal annually and expires December 31, 2009. Because the region is one of the most economically developed and urbanized regions in the PRC, the Company believes the radio station is well situated to target the expanding middle and upper class in the PRC.

On July 21, 2008, Legend Media closed a transaction pursuant to which Well Chance purchased 100% of the common stock of News Radio Limited, a British Virgin Islands company, for (a) shares of the Company's common stock with an aggregate value of 2,000,000 Chinese Renminbi ("RMB") (approximately $287,728 based on the currency exchange rate on June 5, 2008) based on the weighted average trading price of the common stock for the 30 trading days immediately before June 4, 2008 (104,427 shares) payable on the closing date, (b) RMB5,250,000 (approximately $755,287 based on the currency exchange rate on June 5, 2008) payable 28 days after the closing date, and (c) RMB1,600,000 (approximately $230,182 based on the currency exchange rate on June 5, 2008) payable 90 days after the closing date. The transaction occurred pursuant to the terms of a Share Purchase Agreement (the “News Radio Share Purchase Agreement”) the Company entered into on June 4, 2008 with Well Chance and all of the shareholders of News Radio Limited (the “News Radio Shareholders”). The closing gave Legend Media effective control of the PRC-based company that has the exclusive sales contract for the Beijing, PRC based radio channel FM 90.5. Beijing is a metropolis in northern PRC with a population of over 17 million. As with Tianjin, it is one of four municipalities in the PRC with status as a province in the PRC's administrative structure. Beijing is the PRC's second largest city, after Shanghai, and is recognized as the political, educational, and cultural center of the PRC. Beijing has a rapidly developing economy with an expanding affluent population. In 2008, retail sales in Beijing exceeded $67 billion.

Beijing was considered strategically important to the Company’s objective of building a market leading brand position in the radio advertising industry. The exclusive sales contract for Beijing FM 90.5 is for four years (two years plus a two-year option) and grants Legend Media, through its operating affiliate, Beijing Maihesi International Advertising Co., Ltd. (“MAIHESI”), the right to be the exclusive advertising agent for the channel, under which the Company has the exclusive rights to manage and sell all advertising minutes for the radio station. The contract provides Legend Media with 45,990 of radio advertising minutes per year. The exclusive rights to sell advertising also extend to program sponsorship which the Company expects will provide additional advertising inventory for sale.

On August 4, 2008, MAIHESI, a company organized in the PRC and an affiliate of Legend Media, entered into an Exclusive Advertising Rights Agreement with Beijing Guoguang Guangrong Advertising Co., Ltd. (the "Beijing Merci Agreement"), pursuant to which MAIHESI acquired 45,990 advertising minutes per year on FM 107.1, a news and entertainment radio station that broadcasts to the Shenzhen region of the PRC. The Exclusive Advertising Rights Agreement closed August 31, 2008 and expires September 30, 2010.

On October 28, 2008, Tianjin Yinse Lingdong Advertising Co., Ltd. (“TJ YSLD”), a company organized in the PRC and an affiliate of Legend Media, entered into an Exclusive Advertising Rights Agreement Beijing Atis Advertising Co., Ltd., pursuant to which TJ YSLD acquired 19,710 advertising minutes per year on FM 95.5, a music and entertainment radio station that broadcasts to the PRC’s Xi’an region. The exclusive contract gives Legend Media 19,710 minutes of radio advertising targeting Shenzhen, a developing city metropolis with a population of over eight million. Shenzhen is one of the wealthiest and most economically diverse cities in the PRC.

On November 28, 2008, the Company entered into and closed an Acquisition Agreement (the "Music Radio Acquisition Agreement") with Well Chance, Music Radio Limited, and the Music Radio Shareholders. Pursuant to the Music Radio Acquisition Agreement, the Company acquired control over Beijing Yinse Lingdong Advertising Co., Ltd (“YSLD”) and caused the contribution of an airline magazine advertising business of Beijing Hongtenglianguang Advertising Co., Ltd (“HTLG”), a PRC company 100% owned by the Music Radio Shareholders, to YSLD. In exchange for the acquisition of control, the Company issued 5,033,680 shares of its newly-created Series B convertible preferred stock ("Series B Preferred Stock") to the Music Radio Shareholders and two warrants to purchase an aggregate of 10,000,000 shares of the Company's common stock, to Ju Baochun. The closing gave Legend Media effective control of YSLD, a PRC-based company, and YSLD’s exclusive sales contract with Xinhua Airline Magazine. The airline magazine reaches a potential audience approaching 20 million passengers per year. The exclusive contract with Xinhua Airline Magazine provides 80 pages of advertising per monthly issue. The exclusive contract expires March 31, 2010 and will be up for renewal prior to that date.

In determining the amount of consideration to be paid in connection with the Music Radio Acquisition Agreement, the Company reviewed and compared publicly available selected financial data and stock trading prices for public companies chosen based on their common participation in the Chinese advertising and media industry, and conducted a discounted cash flow analysis. Applying the conclusions drawn therefrom, the number of shares of Series B Preferred Stock issued in the Music Radio Acquisition Agreement was calculated based on an aggregate purchase price of RMB275,000,000, a currency exchange rate of RMB6.829 to U.S. $1, and a per share issue price of 20 times the greater of (a) 75% of the weighted average trading price of one share of common stock for the 15 trading days ended on the third day before closing, and (b) $0.40. Because 75% of the weighted average trading price for the common stock during the period was $0.3440, the per share issue price used was $0.40. As more fully described below, each share of Series B Preferred Stock is initially convertible into 20 shares of common stock, or an aggregate of 100,673,600 shares of common stock, representing approximately 90.6% of the issued and outstanding common stock on an as-converted basis (not including the Company's outstanding Series A convertible preferred stock, warrants or options).

As a result of the Music Radio Acquisition Agreement and the reverse merger with Well Chance, the historical financial statements presented are those of Well Chance and YSLD. At the time of the reverse merger, Well Chance’s historical financials became those of the Company. The subsequent Music Radio Acquisition Agreement, which gave the Company control of YSLD, was between entities under common control and, as such, accounted for similarly to a pooling of interests.

Well Chance conducts its business operations through its 80% owned subsidiary, Legend (Beijing) Consulting Co., Ltd., and its wholly owned subsidiary, Legend (Beijing) Information and Technology Co., Ltd., each of which are incorporated under the laws of the PRC. The amount due from the minority interest is immaterial as June 30, 2009 and 2008.

In February 2009, the Company terminated the Beijing Merci Agreement and focused on other opportunities. The decision to do so was based on management's decision to make a strategic shift towards larger more established opportunities, in combination with the other factors, management determined it best to abandon the project and focus on other opportunities. The Company notified Beijing Guoguang Guangrong Advertising Co., Ltd. of its decision to terminate the agreement and made an immediate request for the return of all deposits and payments. Subsequent to attempts by MAIHESI and Beijing Guoguang Guangrong Advertising Co., Ltd. to settle the dispute, MAIHESI began arbitration in which we were requesting immediate termination of all contractual obligations under the Beijing Merci Agreement In July 2009, the Company terminated the agreement giving us the advertising rights to Beijing channel FM 90.5 which is also a channel controlled by Beijing Guoguang Guangrong Advertising Co., Ltd. The decision was the product of several factors including (i) management’s desire to stabilize the cash flow of the business, (ii) overall market conditions dictated a slower growth plan, (iii) management’s belief that more established opportunities are becoming available and (iv) the poor handling by Beijing Guoguang Guangrong Advertising Co., Ltd. of the Beijing Merci Agreement termination.

On July 20, 2009, MAIHESIentered into an agreement (the “Termination Agreement”) with Beijing Guoguang Guangrong Advertising Co., Ltd. =(“Guoguang”), pursuant to which MAIHESI and Guoguang terminated (i) the Exclusive Advertising Rights Agreement dated May 5, 2008 by and between MAIHESI and Guoguang, under which MAIHESI was originally granted the exclusive right to market and sell all broadcast advertising in connection with the frequency FM90.5 of China Radio International in Beijing (the “Beijing Agency Agreement”), and (ii) the Exclusive Advertising Rights Agreement dated August 4, 2008 by and between MAIHESI and Guoguang, under which MAIHESI was originally granted the exclusive right to market and sell all broadcast advertising in connection with the frequency FM107.1 of China Radio International in Shenzhen (the “Shenzhen Agency Agreement”, collectively with the Beijing Agency Agreement, the “Agency Agreements”).

According to the Termination Agreement, (i) MAIHESI or its affiliate shall pay Guoguang RMB1,150,000 (which, as of June 30, 2009, equals approximately $168,360) as compensation for the early termination of the Beijing Agency Agreement, (ii) MAIHESI agrees to forsake the deposits of RMB2,760,000 and RMB1,050,000 under the Beijing Agency Agreement and Shenzhen Agency Agreement, respectively (which, as of June 30, 2009, equals approximately $404,064 and $153,720, respectively), (iii) Guoguang agrees to forsake the accrued cost for the advertising minutes payable to Guoguang (approximately RMB3,592,323, which, as of June 30, 2009, equaled approximately $525,916), and (iv) both MAIHESI and Guoguang agree to waive any claims and refrain from initiating any legal proceedings against the other party arising from or in connection with the terminated Agency Agreements. In addition, the Termination Agreement contains other covenants, agreements and default and confidentiality provisions customary to agreements of this nature.

Due to PRC regulatory restrictions on foreign investment in the advertising industry, we operate our business in China through TJ YSLD, MAIHESI and YSLD. Our relationships with these operating affiliates and their shareholders are governed by a series of contractual arrangements that allow us to effectively control and derive a substantial portion of the economic benefits from them. Accordingly, we treat TJ YSLD, MAIHESI and YSLD as VIEs and have consolidated their financial results in our financial statements in accordance with generally accepted accounting principles in the United States. In August 2009, the Company began consolidating Chinese operations under one operating entity, YSLD. Through this process, the Company will terminate certain agreements with the Chinese operating companies and subsequently dispose of certain subsidiaries that no longer have an operating function. In doing so the Company expects to reduce administrative efforts and costs.

Business Strategy

Our objective is to become a dominant advertising company focused on targeting the affluent and middle class consumers in China by developing an inventory of advertising assets that target key affluent lifestyle indicators such as car ownership and airline travel. To date the Company has acquired exclusive advertising rights for the Hainan Airline group’s airline magazine and two radio channels operating in Tianjin and Xi’an. The strategy has a key focus on the radio advertising sector which has been underutilized and undervalued in the PRC. As car ownership in China continues to expand (China is currently the largest new car market in the world), the Company plans to promote radio advertising in the PRC as a media targeting the affluent and middle class consumers until it becomes a top marketing medium comparable to television, outdoor advertising, the Internet and print. Our plan to achieve this objective involves five key strategic principles:

Develop Scale of Inventory: We intend to acquire additional advertising assets / inventory that has a common thread of targeting key lifestyle trends of the rapidly growing affluent and middle class of China. The key lifestyle predictors the Company is focused on are car ownership, airline travel and real estate ownership.

Our plan calls for the expansion of media assets in three key areas:

Radio advertising assets;

Airline magazine advertising assets; and

Real estate focused opportunities

Radio Advertising

Our radio expansion strategy is to efficiently establish a national radio network. The Company believes a national network can be built through a combination of a few large regional channels and a few city level channels. The Company faced some adversity in the process as management decided to abandon radio projects in Beijing and Shenzhen due to market conditions; however, we are committed to the radio advertising market and believe a new strategy focused on steady growth will outperform the original strategy of rapid inventory expansion.

As part of the process, we continuously explore new acquisitions of radio advertising time with keen focus on existing sales levels, cost of acquisition, expected time to breakeven and overall potential of the channel.

We expect to generate revenue growth from building inventory of radio advertising minutes and improving the utilization rate of those acquired minutes and benefiting from increased advertising rates that we can charge for those minutes.

The Company currently controls 19,710 minutes of radio advertising in Tianjin and 19,710 minutes in Xi’an. The stations have a combined reach of over 18 million people.

Airline magazine advertising

Our airline based advertising business expansion strategy is to focus on securing additional exclusive rights for airline magazines on other airlines. The Company identified some large and small airlines that use exclusive agents for their advertising sales. Management believes exclusive sales contracts for these airlines will become available in the coming year. The Company’s airline based growth strategy is limited by a) the number of airline magazines available in the market and b) the cost of acquiring exclusive rights to the airline magazines.

We expect to generate revenue growth from not only building inventory but also improving the number of pages sold and increasing the per page rate charged.

Real estate focused opportunities

The Company has relationships with top real estate organizations in China, including both developers and real estate agents. As property ownership is a top 5 affluent lifestyle predictor, the Company is exploring opportunities to leverage existing relationships to develop additional opportunities to target China’s affluent and middle classes.

For the immediate operations of the business, the Company will leverage these relations and look to act as an agent for other media companies. In these cases the Company will sell other media on behalf of the other media companies. We expect to generate revenue and profit growth while further developing our relationships.

II.

Focus Short Term Efforts on Improving Existing Sales: Our business has an existing revenue stream; however, there is considerable unsold advertising inventory. We do not sell over 50% of the available inventory for sale. Management plans to focus on increasing inventory utilization and in turn growth in profits as most costs are fixed. The Company will focus immediate attention on improving sales by:

Creating a database of customers from radio and airline advertising that can be used to cross sell across media types;

Implementing active training programs for all sales people;

Reviewing and refining pricing and discounting policies;

Tracking inventory utilization and providing improved information to the sales force; and

Implementing incentive plans that effectively motivate the sales team.

The Company believes it is imperative to improve existing sales efforts to reach a quick cash flow neutral position.

III.

National Sales Effort: As local sales efforts are being improved, the Company expects to build the next generation sales force. The Company anticipates the new sales force will be led by a seasoned media sales executive and focus on:

Promoting the value of using targeted media to reach consumers in China;

Specifically promote the value of radio versus other media platforms; and

Promoting the value of Legend Media as innovator in targeted media in China.

The advertising industry in China is young and rapidly developing. Airline magazine advertising works well within the current paradigm as print media has been developed in the market. Radio needs to be developed and we anticipate our new sales force will become industry promoters. We expect they will take the lead with major brands and advertising companies on promoting the “value proposition” of radio advertising. We believe our national sales team will be in the position to close sales with major national brands as the message is delivered and if and when interest for radio increases. As described above, we do not plan to launch an active national promotion until a critical mass of inventory is acquired because we believe early promotion will drive up the cost of the acquired inventory and bring competitors into the space.

IV.

Promote the Radio Channels and Influence Content: Legend Media does not intend to be a content company but expects to help radio channels better understand consumers’ expectations. In doing so, we expect both radio channels and Legend Media will benefit. Further, Legend Media intends to work with radio stations to promote them through active community outreach programs and events. The radio stations need to use the “interactivity” of radio to promote the stations and ultimately increase advertising value. Legend Media plans to be an active consultant to radio stations on how to implement such strategies. Currently, in the Chinese radio market, radio stations are not actively promoted through other channels such as outdoor advertising or event promotion. Legend Media views the promotion of radio stations as a key to long term success of the business.

Find a Use for Unsold Inventory: We estimate China’s radio advertising industry operates at an inventory utilization rate (sold minutes divided by the total available advertising minutes) of less than 25%. Exact numbers are hard to determine as the industry’s reporting structure is poor. Our management is looking to alternative strategies to use the unsold minutes without disrupting Legend Media’s core business of radio advertising sales. The Company is cautious when using price to increase utilization as it is likely to reduce overall value of the industry. The Company plans to look at several alternative uses of the unsold inventory including:

Partnering with alternative media companies, such as mobile phone short message service (“SMS”)\marketing companies to promote the SMS service while building a direct marketing solution. The SMS partner would be a strategic addition as it could also provide increased interactivity to the radio content and advertising content;

Partnering with a third party to sell products, such as working on a commission basis with an online retail outlet;

Launching a Company owned direct marketing and product selling entity and taking advantage of the unsold minutes by:

Selling products;

ii.

Promoting Company owned “community” based websites; and

iii.

Building marketing databases through radio promoted contests.

Partnering with a charitable organization such as the Red Cross, to utilize some of the unsold minutes to enhance community relations.

Market Overview

China’s economy is rapidly expanding and is not forecasted to slow down in the foreseeable future

From 2002 to 2008, China’s economy grew at a compound annual growth rate of 16.4% reaching US$4.4 trillion in 2008 and became the third largest economy in the world behind the United States and Japan. Looking forward, Goldman Sachs raised its China growth forecast to 8.3 percent for 2009 and 10.9 percent for 20101. The rapid expansion in China's economy led to increased affluence and the rise of the middle class in China.

By 2015, it is estimated there will be 27 million households in the PRC earning over RMB100,000 (approximately $14,650 at current exchange rates), growing to 41 million households by 2025;

In 2006, the PRC had 310,000 US$ millionaires and that number is estimated to reach 609,000 by 2011, the highest number in the world and primarily consisting of first generation of US$ millionaires; and

By 2011, it is estimated there will be 16 million high net-worth individuals in the PRC with $6.2 trillion in total assets.2

The expanding personal wealth of the Chinese population is creating the world’s largest consumer market. In 2008, the PRC’s retail sales grew 22% to RMB10.9 trillion (US$1.6 trillion).

China’s emergence as the world’s fastest growing and potentially largest retail market is driving international and domestic brands to shift strategic focus away from mature markets and towards brand building in China. The result has been tremendous growth in the overall advertising market in China.

China’s advertising market is rapidly expanding

In 2007, China’s media expenditures hit RMB197.5 billion (US$28.9 billion at current exchange rates) and are forecasted to exceed RMB287.9 billion (US$42.2 billion at current exchange rates)3 by 2009. 2007’s percentage change, compared to 2006, was 18.3% and 2008 compared to 2007 is expected to be approximately 22.0% (2008 reports are still not issued). In 2009, the market has struggled but is showing signs of rebounding as summer ends. Though forecasted growth for 2009 varies widely by source, management expects a steady improvement through the holiday season with a return to historical growth by mid to late 2010.

1 http://www.chinadaily.com.cn/bizchina/2009-05/15/content_7780182.htm

2 “HSBC joins race to cash in on China's new millionaires “, Reuters March 31, 2008

3“This Year, Next Year China Media Forecasts 2008,, GroupM

China is one of the most, if not the most, challenging markets in the world. Similar to the United States, China is large with cultural diversity within its borders. China can be viewed as a collection of diverse and complex markets each with populations exceeding most countries. The complexity in the market creates challenges for new and existing brands. We expect that brands, international and domestic alike, will continue to invest in advertising in China as they look to expand ways to reach and engage customers.

Expected trend toward targeted media

Management believes there are several pressure points that will create a shift of how advertising dollars are spent in China:

Advertising cost per thousand impressions will continue to rise;

A majority of China’s population live in rural areas and have minimal disposable income;

Consumer package goods companies will be able to tap a larger market in China but most new entrants are looking to target the affluent and middle class;

The affluent and middle class will drive consumption while remaining a small percentage of the population;

UBS economist Jonathan Anderson estimates that of the 1.3 billion Chinese, only 70 million have the income level to support a significant level of consumption4.

Management expects advertisers to shift towards efficiency versus reach. We expect brands to spend more per thousand impressions but buy fewer impressions. To do so the brands will look to media platforms that have specific demographics and psychographics that skew to the lifestyles of the affluent.

Air travel based marketing (back of seat airline magazines)

Travel is a key lifestyle indicator of the affluent in China. 69% of China’s affluent consumers view domestic travel as a priority for spending free time and disposable income. 75% of this group view outbound travel as a priority. 17% of China’s affluent say travel is important to social status in China.5 The conclusion is simple: China’s affluent consumers can be targeted on airplanes and at airports.

China is the number one new car market in the world - radio advertising is underutilized, undervalued and an opportunity

While the overall advertising industry has exploded, the radio industry has fallen behind posting 2007 revenue of $426 million.6 Radio advertising as a percentage of total advertising in China is currently 2.6% and is forecasted to improve to 3.5% by 2009.7 Even by 2009, the ratio is predicted to fall short of the worldwide average of 8.1% and those of the United States, 11.8%, and Western Europe, 5.6%. Also, while GDP of the United States is 4.3 times that of China’s, radio advertising spending in the United States is 52.4 times that of China’s, at US$22 billion in 2007.

The combined impact of macro level influences is the expectation that radio advertising in China has explosive growth ahead of it as it commercializes.

Adding to the opportunity in the radio industry is relative low cost compared to alternative media. 2007 average cost per 1,000 impressions was $0.78 while TV, outdoor, newspapers and magazines cost advertisers materially more.8 The relatively low cost provides radio with an added value proposition to attract new customers to the industry. Further, we expect the relatively low cost provides additional revenue growth opportunities for us as rates will increase over time as they become more in line with alternatives.

4 Bowring, P. (2007, April 11). China’s Middle Class: Not What You Think It Is. Retrieved from www.asiasentinel.com

5 MasterCard Worldwide and HSBC (Second Quarter 2007 and Third Quarter 2007”). Insights. Retrieved from www.masterintelligence.com;

6 “Global Entertainment and Media Outlook 2007-2011,” PriceWaterhouseCoopers

7 “This Year, Next Year China Media Forecasts 2008,” GroupM

8 Source: Internal estimates based on data from ZenithOptimedia and National Bureau of Statistics of China

The radio advertising industry’s forecasted growth is also driven by the increased mobility of the Chinese population. Currently, there are over 28 million privately owned vehicles in China. This number is expected to increase to over 48 million by 2010.9 Increased car ownership also gave rise to radio listenership and the importance of radio as a means to reach the affluent class in China. As with the United States, which has a radio advertising industry valued at US$22 billion, China’s radio industry should increasingly become a larger portion of total advertising spending as car ownership grows. The increased number of cars and the resulting increase in traffic will provide advertisers a way to reach consumers in a captive environment with a chance for repetitive messaging. Management expects the coming five years to have the largest growth rate of radio advertising sales in the history of China.

Products and Services

Legend Media currently sells radio and airline magazine advertising. We have the exclusive rights to manage and sell 80 pages per month of advertising for Hainan Airline Group’s back of seat magazine. We also have the exclusive rights to manage and sell 108 minutes of advertising per day or 39,420 minutes per year. The exclusive rights to sell advertising also extend to program sponsorship which provides additional revenue opportunities. The minutes are distributed between our Tianjin based channel, FM 92.5, and our Xi’an based channel, FM 95.5.

We maintain offices in Beijing, Shanghai, Qingdao, Haikou, Sanya, Xi’an and Tianjin. The Company manages the products as one advertising business.

Legend Media does not plan on entering the content development business but does have access to helping the stations gear content towards listeners’ needs and expectations. Content production is expensive and adds an unnecessary level of complexity when management is focusing on steady inventory expansion. At this time, management has no expectations of entering the content production business but prefers the role of advisor and influencer.

Customers

Legend targets international, national and regional brands. Our focus has been on real estate, automobiles and financial services, the largest of which is the real estate sector which accounts for 67% of our revenue to date. The automobile industry and financial service sectors account for 31% combined. Our customers are top tier advertisers and include Imported Volkswagen Car Co., Ltd., China Construction Bank Co., Ltd. Tianjin Branch, Tianjin Wanke Realestate Co., Ltd. and Tianjin Xingguang Canlan Entertainment Co., Ltd.

Customers purchase radio advertising either directly from us or through an advertising agent.

Management began to establish relationships with tier 1 advertising agencies in China and plans to use them to acquire new customers at the point Legend Media has a significant inventory base. Management plans to expand our real estate advertising client base while balancing the sector mix with additional automobile, consumer goods, and financial services brands. The Company relies on the real estate industry, and our large customers are associated with that industry. A significant downturn in the real estate market and the subsequent loss of a few of our larger customers would have a material adverse effect on our business. Management looks to diversify our customer base to minimize the impact of any one industry or customer group on the overall performance of our business.

Competition

Our business is subject to significant competition, mostly from alternative media such as TV and Internet. We believe our ability to effectively target car owners and air travelers provides an advantage over alternatives and in turn over our competitors.

Air travel focused

While we have limited competition on Hainan Airline Group’s airplanes we compete with the larger airline groups including Air China and China Eastern. Further, Air Media is an air travel focused media company and competes for customers looking to reach air travelers.

9 National Bureau of Statistics of China, Xinhua Economic News, Google Finance and internal calculations

Radio Advertising

The radio advertising industry is highly fragmented and has not had a dominant national force as of yet. While there is competition amongst radio advertising sales companies, the Company views its competition as coming from alternative advertising media, especially outdoor advertising. As radio is only 2.6% of the advertising industry in China, the primary competition issue is one of promoting the value proposition of radio advertising versus the alternatives. One of Legend Media’s key strategic goals is to market the industry as a whole to maximize the value of the industry.

Currently, hundreds of companies sell radio advertising. The most successful of which is the agency owned by the Beijing Radio Station, China’s number one radio station. Outside of Beijing Radio Station, the four largest competitors to Legend Media are expected to be Yuan Chuan Radio, based in Shanghai, Beijing Universal Chief Advertising, based in Beijing, Simulcast (a joint venture between Beijing Radio and Phoenix Satellite TV), based in Beijing, and Xinhua Sports and Entertainment Limited, based in Beijing. We believe the market remains wide open for a dominant market leader as the largest of the competitors only controls an estimated 350,000 minutes annually.

Sales and Marketing

The Company views all employees as part of our sales and marketing effort as our purpose is to sell radio advertising. The organization is structured along those lines with the view that every point of contact from the first to invoicing is a chance to exceed customer expectations and encourage future sales.

As of October 12, 2009, we have a staff of 58 with 34 dedicated to sales and all of which are full time. Each member of the team focuses his efforts on a specific radio channel while being managed by a common executive across the enterprise.

Legend Media also has sales and marketing relationships that help the sales process by using existing relationships to promote the Company’s advertising inventory. These customers are also added to the group level customer management system to achieve maximum service levels and cross selling opportunities.

Seasonality

The advertising industry in China is seasonal and, for the most part, tracks consumer spending and the resulting advertising trends. The advertising cycle in China typically peaks toward the end of each calendar year with a decline during January and February due to the Chinese Lunar New Year. Currently, the biggest seasonal impact on advertising is the Chinese Lunar New Year as the market is still developing and less impacted by other seasonal influences that impact the advertising industry as a whole.

Government Regulation

The PRC government views the media industry as one of national importance. This means the media industry is extensively regulated, including radio, television, newspapers, magazines and advertising. The regulations imposed structure our decisions and the Company is committed to following all imposed regulations.

Key regulations relevant to the Company’s activities in China are:

Laws and regulations that govern investments of capital, especially foreign capital, in the media industry. Under the PRC laws, “foreign” includes Hong Kong, Taiwan and Macau. As a result of the restrictions, we operate our business in China through a series of contractual arrangements which provide effective control over the PRC entities without direct ownership;

Laws and regulations specifically related to advertising as whole and radio advertising specifically; and

Regulations on foreign currency exchange.

Limitations on Foreign Ownership in the Advertising Industry

The principal regulations governing foreign ownership in the advertising industry in China include:

Catalogue for Guiding Foreign Investment in Industry (2004); and

Administrative Regulations on Foreign-invested Advertising Enterprises (2004).

These regulations set the guidelines by which foreign entities may directly invest in the advertising industry. The regulations require foreign entities that directly invest in China’s advertising industry to have at least two years of direct operations in the advertising industry outside of China. Further, since December 10, 2005, 100% ownership in Chinese advertising companies is allowed, but a foreign company must have at least three years of direct operations in the advertising industry outside of China.

Because we have not been involved in advertising outside of China for the required number of years, our domestic PRC operating subsidiaries, which are considered foreign invested, are currently ineligible to apply for the required advertising services licenses in China. Our PRC operating affiliates hold the requisite licenses to provide advertising services in China and are owned or controlled by PRC citizens designated by us. Our radio advertising business operates in China though contractual arrangements with consolidated entities in China. The Company, Legend (Beijing) Consulting Co. Ltd, and Legend (Beijing) Information and Technology Co., Ltd have entered into a series of contractual arrangements with our PRC operating affiliates and their respective shareholders under which:

We exert effective control over the PRC operating affiliates;

A substantial portion of the economic benefits of our PRC operating affiliates will be transferred to us; and

We consolidate the results in our financial statements.

Our PRC legal counsel reviews all agreements entered into in China. Our PRC counsel structured the PRC based business and advised the Company regarding (i) the ownership structure to operate in China and comply with existing PRC laws and regulations and (ii) whether the contractual arrangements between Legend (Beijing) Consulting Co., Ltd and Legend (Beijing) Information and Technology Co., Ltd, and their respective PRC affiliates and PRC shareholders, are valid, binding and enforceable.

Our PRC counsel advised us there are uncertainties regarding the interpretation and application of current and future PRC laws and regulations. For that reason, there can be no assurance the PRC regulatory authorities will not in the future take a view contrary to that of our PRC counsel. Further, PRC counsel also advised we could be subject to severe penalties if the PRC government determines the agreements establishing the structure for operating our PRC advertising business do not comply with PRC government restrictions on foreign investment in the advertising industry.

Regulations on the advertising industry

The principal regulations governing the PRC advertising industry include the:

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Advertising Law promulgated by the National People’s Congress on October 27, 1994;

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Administration Regulations of Advertising Industry, promulgated by the State Council on October 26, 1987; and

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Implementation Rule of Advertising Industry Administration, or the Implementation Rule, promulgated by the State Administration for Industry and Commence on January 9, 1988, amended in 1998, 2000 and 2004, and effective as of January 1, 2005.

The regulations stipulate companies engaging in advertising activities must obtain from the State Administration for Industry and Commerce ("SAIC"), or its local branches, a business license which includes operating an advertising business within its business scope. A company conducting advertising activities without such license may be subject to penalties, including fines, confiscation of advertising income and orders to cease advertising operation. The business license of an advertising company is valid for the duration of its existence, unless the license is suspended or revoked due to a violation of any relevant law or regulation.

We do not expect to encounter any difficulties in maintaining our business licenses. Each of our affiliated PRC companies obtained such a business license as required by PRC regulations. We work with various advertising agencies and to the best of our knowledge these advertising agents also have the required business licenses as required by PRC law, although it is possible one or more them may not be in compliance at any given time. We will terminate any relationship deemed to be with an entity that is not properly licensed per the PRC’s regulations.

Advertising content

PRC advertising laws and regulations set forth content requirements for advertisements in China, which include prohibitions on, among other things, false or misleading content, superlative wording, socially destabilizing content or content involving obscenities, superstition, violence, discrimination or infringement of the public interest. Advertisements for anesthetic, psychotropic, toxic or radioactive drugs are prohibited. It is prohibited to disseminate tobacco advertisements via radio, film, television, newspapers or magazines. It is also prohibited to display tobacco advertisements in any waiting lounge, theater, cinema, conference hall, stadium or other public area. There are also specific restrictions and requirements regarding advertisements that relate to patented products or processes, pharmaceuticals, medical instruments, agrochemicals, foodstuff, alcohol and cosmetics. In addition, all advertisements relating to pharmaceuticals, medical instruments, agrochemicals and veterinary pharmaceuticals advertised through radio, film, television, newspapers, magazines, out-of-home and other forms of media, together with any other advertisements subject to censorship by administrative authorities according to relevant laws and administrative regulations, must be submitted to relevant administrative authorities for content approval prior to dissemination.

Advertisers, advertising operators and advertising distributors are required by PRC advertising laws and regulations to ensure the content of the advertisements they prepare or distribute are true and in compliance with applicable law. In providing advertising services, advertising operators and distributors must review the prescribed supporting documents provided by advertisers for advertisements and verify the content of the advertisements comply with applicable PRC laws and regulations. In addition, prior to distributing advertisements for certain commodities which are subject to government censorship and approval, advertising distributors are obligated to ensure such censorship performed and approval obtained. Violation of these regulations may result in penalties, including fines, confiscation of advertising income, orders to cease dissemination of the advertisements and orders to publish an advertisement correcting the misleading information. In circumstances involving serious violations, the SAIC or its local branches may revoke violators’ licenses or permits for advertising business operations. Furthermore, advertisers, advertising operators or advertising distributors may be subject to civil liability if they infringe on the legal rights and interests of third parties in the course of their advertising business.

The radio industry is plagued by airing of what are termed “medical advertisements” or advertisements that promote products with claims of specific medical benefits. The Chinese regulatory body has taken notice of these advertisements and such added review led to the prohibition of such advertisements. Though prohibited, these advertisements still are estimated to account for more than 45% of the revenues generated by the radio advertising industry. Further, these advertisements, in most cases outside of tier 1 cities, represent the majority of revenues for radio channels. As such, the local authorities have taken a passive approach to enforcement and allowed channels to continue to air the advertisements. Not allowing such would result in radio industry crisis and the inability of many stations to cover expenses. Though passively enforced, it is believed over the coming years the regulatory body will become stricter and look to eliminate such advertisements.

Legend Media and our affiliates are committed to the direction set forth by the regulatory body and do not sell or air “medial advertisements.” However, with expansion the Company expects it may encounter new relationships with radio stations and other advertising companies resulting in airing of such restricted content. The Company’s management has a strict policy of not selling such advertisements but accepts the terms of future relationships may require such advertisements to be aired as the Company works to eliminate and replace the advertisements with unrestricted content.

Item 1A. Risk Factors

The risk factors listed in this section and other factors noted herein or incorporated by reference could cause our actual results to differ materially from those contained in any forward-looking statements. The following risk factors, in addition to the information discussed elsewhere herein, should be carefully considered in evaluating us and our business:

We have a limited operating history, which may make it difficult for you to evaluate our business and prospects.

We began operations in China in February 8, 2008 and had our first month of revenue in June 2008. We entered into two Memoranda of Understanding in February 2008 and closed our first acquisition in May 2008 for radio advertising inventory for a radio channel in Tianjin, China. We secured our radio advertising minutes in Beijing in July 2008. As such, we have a very limited operating history upon which you can evaluate the viability and sustainability of our business and its acceptance by advertisers and consumers. It is also difficult to evaluate the viability of radio advertising in China because the industry is still underdeveloped and we do not have the experience to know how the radio advertising industry will develop in China. In addition, due to our short operating history in China and recent additions to our management team, some of our senior management and employees have only worked together at the Company for a relatively short period of time. As a result, it may be difficult for you to evaluate the effectiveness of our senior management and other key employees and their ability to address future challenges to our business.

We have expanded our scope of operations to include airline magazines and plan to further expand our scope to include media that specifically targets the affluent of China.

Our business previously focused on radio advertising sales but due to market conditions and other factors we expanded our strategy to include media that targets lifestyle trends of the affluent and middle class. In November 2008, we closed a transaction by which we gained exclusive rights to sell advertising for the 4th largest airline group in China. We are repositioning the Company away from solely a radio advertising company and towards a broader media company that targets affluent consumers. If we do not effectively manage our re-positioning we could impact the overall expected performance of the business. Further, we are not sure how the market will react to a broadening of our media offerings. Any failure to efficiently or effectively manage this growth of our operations may limit our future growth and hamper our business strategy.

Our failure to maintain relationships with radio stations and specific radio channels would harm our business and prospects.

Our ability to generate revenues from advertising sales depends on our ability to air advertisements on radio channels. Our ability to place advertisements on specific radio channels in large part is related to our ability to secure and maintain exclusive sales agreements with radio channels in China. This, in turn, requires we develop and maintain business relationships with national, regional and local radio stations as well as with national and local government agencies. As of June 30, 2009, we were in control of 54 minutes of radio advertising per day in Tianjin, China and 54 minutes in Xi’an, China. In total, the Company controls 108 minutes of inventory per day, or 39,420 minutes per year. We have entered into three exclusive advertising agency arrangements with different entities. We cannot assure you we can maintain these relationships on satisfactory terms, or at all. If we fail to maintain relationships with radio stations we would be at risk of losing our rights to be the exclusive advertising agent for the respective channel. In turn, we would lose inventory and be unable to satisfy our customers’ advertising needs.

Our failure to maintain our relationship with the airline magazine would harm our business and prospects.

Our ability to generate revenues from airline magazine advertising sales depends on our exclusive right to sell and manage advertising for the Hainan Airline Group’s airline magazine. We cannot assure you we can maintain the relationship with the airline on satisfactory terms, or at all. If we fail to maintain relationships with the airline we would be at risk of losing our rights to be the exclusive advertising agent for the magazine. In turn, we would lose the inventory and be unable to satisfy our customers’ advertising needs. Any failure to maintain this relationship on a satisfactory level would severely impact our revenue and materially impact our ability to continue to operate.

We derive nearly all of our revenues from the sale of advertising, and advertising is sensitive to overall economic trends, domestic consumption trends and advertising trends.

Demand for the Company’s various advertising assets, and the resulting advertising spending by our customers, is sensitive to changes in general economic conditions and specifically to changes in overall advertising spending. It is likely that a decline in overall advertising spending in China will have a greater impact on radio advertising as it is deemed non essential and as such customers will shift a larger portion of spending to primary media such as television. Advertisers may reduce their investment in advertising for any number of reasons, including:

a general decline in economic conditions in China that impact the growth of domestic consumption in China;

a decline in economic conditions in the cities where we maintain radio advertising operations;

a decline in retail sale growth in China is likely to reduce the number of new brands trying to enter the market;

a decision by customers to shift advertising investment from radio and print to other available advertising media;

a decline in advertising spending in general; or

an overall decrease in advertising investment in China.

Our quarterly operating results are difficult to predict and may fluctuate significantly from period to period in the future.

Our quarterly operating results are difficult to predict and may fluctuate significantly based on the seasonality of consumer spending and corresponding advertising trends in China. Revenues of our business are largely dependent on overall advertising expenditures. Overall advertising in China tends to decrease during January and February each year due to the Chinese Lunar New Year holiday. We also expect to experience fluctuations around overall commercial slowdowns which can be influenced by external influences. As radio is a support medium to other advertising media, our operating results are likely to fluctuate as overall advertising spending decreases. The reduction in overall advertising spending in the market is likely to cause advertisers to shift their marketing mix and, in turn, reduce the percentage of advertising spending on radio advertising. As a result, you may not be able to rely on period to period comparisons of our operating results as an indication of our future performance. A large portion of costs are fixed thus, if our revenues for a particular quarter are lower than expected, we may be unable to reduce our operating expenses for that quarter by a corresponding amount, which would harm our operating results for that quarter relative to our operating results from other quarters.

Our business has been impacted by global economic conditions and a corresponding decrease in global advertising spending, which may adversely affect our financial condition, results of operations and cashflow from operations.

Recent global market and economic conditions have been unprecedented and challenging with tighter credit conditions and recessions in most major economies continuing into 2009. Continued concerns about the systemic impact of potential long-term and wide-spread recession, the availability and cost of credit, and the global housing and mortgage markets have contributed to increased market volatility and diminished expectations for Western and emerging economies. These conditions, combined with declining business and consumer confidence and increased unemployment, have contributed to volatility of unprecedented levels.

As a result of these market conditions, the cost and availability of capital has been and may continue to be adversely affected. Concern about the stability of markets generally and the strength of counterparties specifically led many lenders and institutional investors to reduce, and in some cases, cease providing credit to businesses and consumers, as well as increase the cost of lending. These factors led to a decrease in spending by businesses and consumers alike, and to a decline in global advertising and media spending. Furthermore, bank borrowings are an import source of our liquidity. Continued turbulence in the U.S. and international markets and economies and prolonged declines in business consumer spending may adversely affect our liquidity and financial condition, the liquidity and financial condition of our customers, and in turn impact our accounts receivable, and our ability to raise capital needed to expand the business.

Our independent registered public accounting firm added an emphasis paragraph to their audit report contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2009 describing an uncertainty related to our ability to continue as a going concern.

Due to our continued losses and limited capital resources, our independent registered public accounting firm issued a report that describes an uncertainty related to our ability to continue as a going concern. The auditors’ report discloses that we did not generate significant revenues during the fiscal year ended June 30, 2009, we incurred a net loss of approximately $6,425,846, and consumed cash in operating activities of approximately $2,873,355. These conditions raise substantial doubt about our ability to continue as a going concern and may make it difficult for us to raise capital. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty.

One of our directors and our CEO, Ju Baochun, beneficially owns a significant number of shares of our common stock which will have an impact on all major decisions on which our shareholders may vote and which may discourage an acquisition of the Company.

Ju Baochun, one of our directors and our CEO, currently owns approximately 56% of our outstanding common stock. As a result, Mr. Ju has the ability to significantly impact virtually all corporate actions requiring shareholder approval, including the following:

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election of directors;

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amendment of organizational documents;

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merger of our company or the sale of our assets or other corporate transactions; and

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control the outcome of any other matter submitted to the security holders for vote.

The interests of Mr. Ju may differ from the interests of our other shareholders. Further, Mr. Ju's beneficial stock ownership may discourage potential investors from investing in our common stock due to the lack of influence they could have on our business decisions, which in turn could reduce our stock price.

If advertisers or the listening public do not accept, or lose interest in, our radio advertising, our revenues may be negatively affected and our business may not expand or be successful.

China’a radio advertising industry is small and underdeveloped compared to alternative advertising media including television, outdoor, Internet, newspapers and magazines. We compete with these media and others for advertising spending of our current and prospective customers. Our success depends upon the emergence of radio as a viable messaging medium, the continued increase in listenership and ultimately the broader acceptance of radio by the advertisers themselves. Advertisers may elect not to invest in radio advertising as a whole or not use our specific services. If a substantial number of advertisers lose interest in advertising on the radio or on our channels specifically, we will be unable to generate sufficient revenues and cash flows to operate our business, and our financial condition and results of operations would be materially and adversely affected.

If advertisers lose interest in print media or air travel based media, our airline magazine advertising revenues may be negatively affected and our business may not expand or be successful.

The air travel advertising industry in China is still developing. Although there has been support for air travel based advertising as well as print media in general, there is no certainty this will continue. We compete with all platforms and media types for a share of advertising spending of our current and prospective customers. Our success depends upon print and air travel based media continuing to develop and garner support from the advertising community. If a substantial number of advertisers lose interest in advertising in airline magazines, we will be unable to generate sufficient revenues and cash flows to operate our business, and our financial condition and results of operations would be materially and adversely affected.

The process of building a relationship with a radio channel and then gaining exclusive rights to their advertising inventory can be time consuming and requires resources, mostly management’s time and attention, from which we may be unable to recognize the anticipated benefits.

Our business plan depends largely on our ability to gain exclusive rights to radio channels across China. The process depends on our ability to establish relationships with local, regional and national radio stations which control up to 10 radio channels. Establishing these relationships and securing exclusive rights to radio advertising inventory can be lengthy and often not result in securing of the exclusive rights. We often need to convince radio stations about the benefit of partnering with us to ensure they maximize the value of their individual channels and station as a whole. We invest considerable time and effort into the process but a radio station may decide not to partner with us. If a majority of targets decide not to partner with us, we will not be able to grow our business or revenues as planned.

The acquisition of additional exclusive radio advertising inventory requires significant up front costs that may not be immediately recoverable.

Once we sign a contract with a radio channel to acquire the exclusive sales and marketing rights for its advertising inventory, we immediately deposit up to 25% of the first year's contract price. Such deposits are usually held for the term of the contract and roll-over as contracts are renewed. Further, we often have to establish a new sales office to handle the new contract. Such deposits and investments usually come months before any revenue is generated by the new contact. We may also experience further delays in revenue generation, if any, due to deployment delays or difficulties in selling advertising time to new or current advertisers to be aired on the new radio channels acquired.

The acquisition of additional exclusive radio advertising inventory may result in the Company placing advertisements that are restricted.

The acquisition of new advertising inventory either through new contracts with channels or the acquisition of competing businesses may result in the Company placing advertisements that are restricted by the regulatory body. An estimated 40% to 50% of current radio advertising in China is sold to companies placing “medical advertisements.” These advertisements are restricted and per the regulatory body may not be aired without prior approval by relevant government authorities. However, local regulatory bodies have overlooked strict enforcement so far due to concerns strict enforcement may lead to a financial crisis in the radio industry. As we expand our inventory we are likely to be in a situation where an acquisition and / or radio channel has existing sales derived from such advertisements. The Company plans to eliminate such advertisements but may not be able to immediately as many of these advertisements are content substitutes which will require the channels replace the content prior to eliminating the advertisements. Further, the Company, as part of negotiations with radio channels, may offer a timed removal of the advertisements as they often provide an existing source of revenue that can not be immediately replaced and that offsets the immediate costs associated with a new contract. The Company, as a core principle, will follow all applicable advertising laws; however, the Company also accepts the need at times to phase the restricted advertisements out versus an immediate removal.

There are no guarantees the regulatory body will not immediately eliminate all such restricted advertisements. If the Company through acquisitions and new contacts implements a phase out approach to such advertisements, a change in regulatory action would adversely impact the result of the Company. The Company does not currently sell any such restricted advertisements.

We face significant competition from alternative advertising media, and if we do not compete successfully against new and existing competitors, we may not be able to execute on our plan, and our profitability may be adversely affected.

The radio industry in China is underdeveloped and for the most underutilized by advertisers in the market. We compete first and foremost with alternative advertising media to increase the level of investment in radio advertising in China. We compete with other mobile digital television advertising companies and new media advertising companies in China. Further, if the radio advertising industry expands as expected in the coming years, the Company is likely to face new competitors focused on selling radio advertising. We compete for advertising customers primarily on the basis of cost per impression and reach of the radio channels we have under contract. Specifically in the radio advertising industry we compete with Yuan Chuan Radio, Beijing Universal Chief Advertising, Simulcast, Beijing Radio Station, Xinhua Finance Media Unlimited and numerous other smaller radio advertising companies. We also face competition from radio stations that establish their own sales networks. The Company views its primary competition as coming from other advertising media, such as television, outdoor, newspapers, magazines and the Internet. The alternative media have already established a stronger presence in China and have a far more comprehensive and organized sales effort.

Further, we may also face competition from new entrants into radio advertising. Though we are working to acquire a significant amount of exclusive radio advertising minutes, the total amount of radio advertising inventory in China is approximately 80 million minutes. The vast amount of minutes across China means that as radio becomes a more viable advertising medium, there will be plenty of inventory available for competitors looking to enter the market. Therefore, we cannot assure you we will succeed in executing on our plan of gaining a market leading amount of advertising under contract at very attractive rates.

Increased competition could reduce our ability to secure new contracts for radio advertising, attract new customers and maintain our planned growth trajectory. We cannot assure you we will successfully compete against new or existing competitors.

The airline magazine will continue to face competition from alternative print media as well as alternative platforms. Further, the Company will find increasing competition from airport based advertising. Increased competition could impact our revenue and profit by driving prices down and costs up.

If we or someone else in the radio advertising industry does not “champion” the industry, we may not be able to execute on our sales plan, and our profitability may be adversely affected.

We believe the radio industry in China is underdeveloped and for the most part underutilized by advertisers. As such, the industry will require a “champion” to promote the inherent benefits of adding radio advertising to existing marketing activities. Companies in China, to date, have not adopted radio as part of their advertising plan as companies have done in other parts of the world. For the industry to meet the more aggressive growth forecasts, we believe the medium as a whole will have to become a larger part of the marketing spending by larger advertisers in China. We expect to take an active role in championing the industry but accept that this will require an investment of time and resources. There are no guarantees our effort to promote the radio advertising industry will be successful in attracting an increased market share of radio advertising. We cannot assure you we will be able to efficiently or effectively promote the radio advertising industry to become a larger portion of the total advertising spending. Any failure to effectively develop the radio advertising industry may materially and adversely affect our business and future growth.

Acquisitions of existing radio advertising businesses and new exclusive contracts with radio channels may expose us to potential risks and have an adverse effect on our ability to manage our business.

Selective acquisitions and new deals directly with radio channels form a major part of our strategy to expand our business. As we are presented with appropriate opportunities, we may acquire additional businesses or exclusive contracts for radio advertising that are part of our core business. Our integration of the acquired entities and contacts into our business may not be successful and may not enable us to expand into new markets. This would significantly affect the expected benefits of these acquisitions. Moreover, the integration of new acquisitions has required, and will continue to require, significant attention from our management. Future acquisitions will also likely present similar challenges.

The diversion of our management’s attention and difficulties encountered in any integration process could have an adverse effect on our ability to manage our business. In addition, we may face challenges trying to integrate new operations, services and personnel with our existing operations. Our recent acquisitions and possible future acquisitions may also expose us to other potential risks, including risks associated with unforeseen or hidden liabilities, the diversion of resources from our existing businesses and technologies, our inability to generate sufficient revenues to offset the costs, expenses of acquisitions and potential loss of, or harm to, relationships with employees and advertising customers as a result of our integration of new businesses and new regulations governing cross-border investment by PRC residents.

There may be unknown risks inherent in our acquisitions and signing of new contracts with radio channels for the exclusive sales and marketing rights of their advertising inventory.

Although we conduct due diligence with respect to the major acquisitions we have undertaken and expect to do so with respect to future acquisitions, we may not be aware of all of the risks associated with the targets of such acquisitions. Any discovery of adverse information concerning any company we acquired could have a material adverse effect on our business, financial condition and results of operations. While we are entitled to seek indemnification in certain circumstances, successfully asserting indemnification or enforcing such indemnification could be costly and time consuming or may not be successful at all.

Failure to manage our growth could strain our management, operational and other resources and we may not be able to achieve anticipated levels of growth in the new networks and media platforms we are beginning to operate, either of which could materially and adversely affect our business and growth potential.

We have expanded our operations and plan to continue to expand in China. We must continue to expand our operations to meet our plan and the expected needs of the emerging radio advertising industry. We must continue to sign new contracts for the exclusive rights to radio advertising inventory across China. We also need to take advantage of the current environment that provides the opportunities to enter into such agreements. Our expansion has resulted, and will continue to result, in substantial demands on our management's resources. It has also increased our need for a reliable supply of management to handle the sales and marketing activities needed in the expanding markets. To manage our growth, we must develop and improve our existing administrative and operational systems and, our financial and management controls and further expand, train and manage our work force. We may not be able to manage our current or future expansion as it extends beyond our base of operations in Beijing, China. We cannot assure you we will be able to efficiently or effectively manage the growth of our operations, recruit top talent and train our personnel. Any failure to efficiently manage our expansion may materially and adversely affect our business and future growth.

Our business depends substantially on the continuing efforts of our key executives. Our business may be severely disrupted if we lose their services.

Our future success heavily depends upon the continued services of our key executives, particularly Ju BaoChun our Chief Executive Officer, and Jeffrey Dash, our Chief Financial Officer. We rely on the expertise of our key executives in business operations and the advertising industries and on their relationships with our stockholders, business partners and regulators. If one or more of our key executives is unable or unwilling to continue in his present positions, we may not be able to replace them easily or at all. Therefore, our business may be severely disrupted, our financial condition and results of operations may be materially and adversely affected and we may incur additional expenses to recruit and train personnel.

Our senior management and employees have worked together for a short period of time, which may make it difficult for you to evaluate their effectiveness and ability to address challenges.

Due to our limited operating history, certain of our senior management and employees have worked together at the Company for a relatively short period of time. As a result, it may be difficult for you to evaluate the effectiveness of our senior management and other key employees and their ability to work with the employees of our operating groups and address future challenges to our business.

If we are unable to attract, train and retain key individuals, highly skilled employees and important talent, our business may be adversely affected.

We need to hire additional employees, including personnel to sell our radio advertising inventory and administrative staff to support our operations. If we are unable to identify, attract, hire, train and retain individuals in these areas or retain our existing employees, due to our failure to provide them with adequate incentives or otherwise, the effectiveness of our sales efforts and overall business management may be negatively impacted, which could adversely affect our business, expansion and results of operations.

We may be subject to intellectual property infringement claims, which may force us to incur legal expenses and could potentially result in judgments against us, which may materially disrupt our business.

We cannot be certain our radio advertising content or other aspects of our business do not or will not infringe upon patents, copyrights or other intellectual property rights held by third parties. Although we are not aware of any such claims, we may become subject to legal proceedings and claims relating to the intellectual property of others in the ordinary course of our business. If we are found to have violated the intellectual property rights of others, we may be enjoined from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives. In addition, we may incur substantial expenses in defending against these third party infringement claims, regardless of their merit. Successful infringement or licensing claims against us may impact our ability to place advertisement for our customers or in substantial monetary liabilities, which may materially and adversely disrupt our business.

If we fail to implement effective internal controls required by the Sarbanes-Oxley Act of 2002, to remedy any material weaknesses in our internal controls that we may identify, or to obtain the attestation required by Section 404 of the Sarbanes-Oxley Act of 2002, such failure could result in material misstatements in our financial statements, cause investors to lose confidence in our reported financial information and have a negative effect on the trading price of our common stock.

Section 404 of the Sarbanes-Oxley Act of 2002 requires management of public companies to develop and implement internal controls over financial reporting and evaluate the effectiveness thereof, and the independent auditors to attest to the effectiveness of such internal controls and the evaluation performed by management. We have not yet been required to obtain the independent auditor attestation required by the Sarbanes-Oxley Act of 2002.

Any failure to complete our assessment of our internal controls over financial reporting, to remediate any material weaknesses that we may identify, or to implement new or improved controls, or difficulties encountered in their implementation, could harm our operating results, cause us to fail to meet our reporting obligations or result in material misstatements in our financial statements. Any such failure also could adversely affect the results of the periodic management evaluations of our internal controls and, in the case of a failure to remediate any material weaknesses that we may identify, would adversely affect our ability to obtain the annual auditor attestation reports regarding the effectiveness of our internal controls over financial reporting that are required under Section 404 of the Sarbanes-Oxley Act. Inadequate internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common stock.

Further, because some members of our management team have limited or no experience operating a publicly-traded company, we may need to recruit, hire, train and retain additional financial reporting, internal controls and other personnel in order to develop and implement appropriate internal controls and reporting procedures. This may be time consuming, difficult and costly for us.

We need additional capital and we may not be able to obtain it, which could adversely affect our liquidity and financial position.

We will require additional cash to make acquisitions, secure new radio advertising inventory and achieve our business plan. We plan to expand through new contracts and acquisitions. We have identified many targets but still many have not been identified. The Company will need additional capital to execute its current business plan. The cost of acquisitions and the cost of signing new contracts for radio advertising is not known until the opportunities are analyzed, due diligence has commenced and negotiations are underway. The Company will need to raise additional capital to expand at its planned rate. The sale of additional equity securities could result in additional dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations. We may not be able to obtain financing in amounts or on terms acceptable to us, if at all. As a result, our operating results and financial condition could be adversely affected.

Our ability to obtain additional capital on acceptable terms is subject to a variety of uncertainties, including:

Investors’ perception of, and demand for, securities of radio advertising companies;

A decline in economic conditions in China leading to reduced demand for securities of Chinese advertising companies overall;

Conditions of the U.S. and other capital markets in which we may seek to raise funds;

Our future results of operations, financial condition and cash flows; and

PRC governmental regulation of foreign investment in advertising services companies in China.

We cannot assure you financing will be available in amounts or on terms acceptable to us, if at all. Any failure by us to raise additional funds on terms favorable to us could have a material adverse effect on our liquidity and financial condition.

We have limited insurance coverage for our operations in China.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited insurance products. We determined that the risks of disruption or liability from our business, the loss or damage to our property, including our facilities, equipment and office furniture, the cost of insuring for these risks, and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result, we do not have any business liability, disruption, litigation or property insurance coverage for our operations in China. Any uninsured occurrence of loss or damage to property, or litigation or business disruption may result in the incurrence of substantial costs and the diversion of resources, which could have an adverse effect on our operating results.

Risks related to the regulation of our business and to our structure

If the PRC government finds that the agreements that establish the structure for operating our China business do not comply with PRC governmental restrictions on foreign investment in the advertising industry, we could be subject to severe penalties.

The PRC government requires foreign entities that invest in PRC companies providing advertising services to have at least two years of direct operations in the advertising industry outside of China. We recently entered the radio advertising industry and have not operated any advertising business outside of China and therefore, we do not qualify to directly invest in or provide advertising services in China. We are a Nevada based company with subsidiaries in the British Virgin Islands and Hong Kong and therefore treated as foreign entity under Chinese law. Accordingly, our China based subsidiaries Legend (Beijing) Consulting Co., Ltd and Legend (Beijing) Information and Technology Co., Ltd are currently ineligible to apply for the required licenses to provide advertising services in China. Our business is currently operated through our contractual arrangements with our consolidated affiliated entities, TJ YSLD and MAIHESI. Both TJ YSLD and MAIHESI are currently owned by Ju Baochun and Xue Wei and hold the requisite licenses to provide advertising services in China.

TJ YSLD and MAIHESI directly operate our advertising business, sell advertising to our customers and enter into sales and marketing agreements with radio stations. We have been and will continue to depend on the two PRC companies to operate and build our business. We do not have any equity interest in TJ YSLD and MAIHESI, but receive the economic benefits of ownership through contractual arrangements. We entered into contractual arrangements with PRC operating affiliates and their respective subsidiaries, pursuant to which we, through our PRC operating subsidiaries, provide technical support and consulting services to our PRC operating affiliates and their subsidiaries. In addition, we made agreements with our PRC operating affiliates and each of their shareholders which provide us with the substantial ability to control these affiliates and their existing and future subsidiaries.

If we, or our existing or future PRC operating subsidiaries and affiliates, are found to violate any existing or future PRC law or regulation or fail to obtain or maintain any of the required permits or approvals, the relevant PRC regulatory authorities, including the SAIC, which regulates the registration and operation of advertising companies, would have broad discretion in dealing with such violations, including:

Revoking the business and operating licenses of our PRC subsidiaries and affiliates;

Discontinuing or restricting our PRC subsidiaries’ and affiliates’ operations;

Imposing fines, confiscating the income of our PRC subsidiaries and affiliates or our income, or imposing conditions or requirements with which we or our PRC subsidiaries and affiliates may not be able to comply;

Requiring us or our PRC subsidiaries and affiliates to restructure the relevant ownership structure or operations; or

Restricting or prohibiting our use of the proceeds from our initial public offering or private placement to finance our business and operations in China.

The imposition of any of these penalties would result in a material and adverse effect on our ability to conduct our business.

We rely on contractual arrangements with our PRC operating affiliates and their subsidiaries and shareholders for our China operations, which may not be as effective in providing operational control as direct ownership.

We rely on contractual arrangements with several affiliated PRC entities and their respective shareholders to operate our advertising business in China. Our contractual arrangements may not be as effective in providing us with control over our PRC operating affiliates and their subsidiaries as direct ownership. If we had direct ownership of our PRC operating affiliates and their respective subsidiaries, we could exercise our rights as a shareholder to effect changes in the board of directors of those companies, which in turn could effect changes, subject to any applicable fiduciary obligations, at the management level. However, under the current contractual arrangements, as a legal matter, if our PRC operating affiliates or any of their subsidiaries and shareholders fails to perform its or his respective obligations under these contractual arrangements, we may have to incur substantial costs and resources to enforce such arrangements, and rely on legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages, which we cannot assure you to be effective. For example, if shareholders of TJ YSLD refused to transfer equity interests in TJ YSLD to us or our designated persons when we exercise the purchase option pursuant to these contractual arrangements, or if the shareholders were otherwise to act in bad faith toward us, then we may have to take legal action to compel them to fulfill their contractual obligations. Accordingly, it may be difficult for us to change our corporate structure or to bring claims against our PRC operating affiliates if they do not perform their obligations under their contracts with us or if any of the PRC citizens who hold the equity interest in our PRC operating affiliates do not cooperate with any such actions.

Many of these contractual arrangements are governed by PRC laws and provide for resolution of disputes through arbitration in Hong Kong. Accordingly, these contracts would be interpreted in accordance with PRC law and any disputes would be resolved in accordance with PRC laws. The legal environment in the PRC is not as developed as in other jurisdictions, such as the United States. As a result, uncertainties in the PRC legal system could limit our ability to enforce these contractual arrangements. If we are unable to enforce these contractual arrangements, we may not be able to exert effective control over our operating entities, and our ability to conduct our business may be negatively affected

Our contractual arrangements with our subsidiaries and affiliated entities may be subject to scrutiny by the PRC tax authorities and a finding we owe additional taxes, could substantially increase our taxes owed, and reduce our net income.

Under applicable PRC laws, rules and regulations, arrangements and transactions among related parties may be subject to audits or challenges by the PRC tax authorities. We are not able to determine whether any of these transactions will be regarded by the PRC tax authorities as arm’s length transactions. Based on our knowledge, the PRC tax authorities have not issued a ruling or interpretation in respect of the type of transaction structure similar to ours. The relevant tax authorities may determine our contractual relationships were not entered into on an arm’s length basis. If any of the transactions are determined not to have been entered into on an arm’s length basis, or are found to result in an impermissible reduction in taxes under PRC law, the PRC tax authorities may adjust our profits and losses and assess more taxes on it. Further, the PRC tax authorities may impose late payment surcharges and other penalties for underpaid taxes. Our business may be materially and adversely affected if tax liabilities increase or if it is found to be subject to late payment surcharges or other penalties.

Our PRC affiliated entities are beneficially controlled by Ju BaoChun, the Company’s largest shareholder, and the Chairman and CEO of the Company, which means our business depends on our continued relationship with Mr. Ju. Mr. Ju may have potential conflicts of interest with us, and we may not be able to enter further agreements to extract economic benefits from these entities, which may materially and adversely affect our business and financial condition.

Our operating entities in China, due to regulatory restrictions, are owned by Ju BaoChun and related parties to him. These entities have contractual relationships that provide effectively all of the economic benefit to the Company. Conflicts of interests between Mr. Ju’s roles as beneficial owner of the PRC operating companies and the Company may arise. We cannot assure you conflicts of interest will not arise between the Mr. Ju and minority shareholders. In addition, any such conflict may breach or cause the operating companies to breach or refuse to renew the existing contractual arrangements that allow us to effectively control PRC companies and receive economic benefits from them. If Mr. Ju chose to leave the Company and / or we could not resolve any such disputes Mr. Ju we would have to rely on legal proceedings, the outcome of which is uncertain and which could be disruptive to our business.

Our business operations may be affected by legislative or regulatory changes.

Changes in laws and regulations or interpretations therein, or the enactment of new laws and regulations governing placement or content radio advertising, our business licenses or otherwise affecting our business in China may materially and adversely affect our business prospects, expansion plans and results of operations. For example, the PRC government promulgated regulations allowing foreign companies to hold a 100%-interest in PRC advertising companies starting from December 10, 2005.

Risks Relating to Doing Business in the PRC

Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China, which could reduce the demand for our products and materially and adversely affect our ability to execute on our plan and grow the business.

Substantially all of our business operations are conducted in China and substantially all of our sales are made in China. Further, our entire growth plan is currently based on expanding our radio advertising business in China. Accordingly, our business, financial condition, results of operations and prospects are affected significantly by economic, political and legal developments in China. The Chinese economy differs from the economies of most developed countries in many respects, including:

The degree of government involvement;

The uncertainty and lack of visibility into the future plans of the government;

The forecasted growth rate of the economy;

The forecasted growth rate of domestic consumption;

The control of foreign exchange; and

Access to financing.

While the Chinese economy has grown significantly in the past 30 years, the growth has been uneven, both geographically and among various sectors of the economy. The PRC government implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall Chinese economy, but may also have a negative effect on us. For example, our financial condition and results of operations may be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us. At the same time, the very same policies can generate opportunity as the government works to spread the wealth more evenly across China.

The PRC economy has been transitioning from a planned economy to a more market-oriented economy. Although the PRC government has in recent years implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of sound corporate governance in business enterprises, a substantial portion of the productive assets in China is still owned by the PRC government. The continued control of these assets and other aspects of the national economy by the PRC government could materially and adversely affect our business. The Company depends on the ability to work with the government controlled radio stations to generate substantially all of their revenue.

A substantial portion of our assets are located in China and substantially all of our revenues are derived from our operations in China. Accordingly, our business, financial condition, results of operations and prospects are subject, to a significant extent, to economic, political and legal developments in China.

There are uncertainties with respect to the PRC legal system that could limit the protections available to you and us.

The PRC legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which decided legal cases have little precedential value. Each of our PRC operating subsidiaries and affiliates is subject to PRC laws and regulations. However, since the PRC legal system continues to evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties, which may limit legal protections available to us. For example, we may have to resort to administrative and court proceedings to enforce the legal protection that we enjoy either by law or contract. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. These uncertainties, including the inability to enforce our contracts, could materially and adversely affect our business and operation. Further, intellectual property rights and confidentiality protections in China may not be as effective as in the United States or other countries. Accordingly, we cannot predict the effect of future developments in the PRC legal system, particularly with regard to the advertising industry, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the preemption of local regulations by national laws. These uncertainties could limit the legal protections available to us and other foreign investors, including you. In addition, any litigation in China may be protracted and result in substantial costs and diversion of our resources and management attention.

You may experience difficulties effecting service of legal process, enforcing foreign judgments or bringing original actions in China based on United States or other foreign laws, against us, our management or the experts named in this Annual Report on Form 10-K.

We conduct substantially all of our operations in China and a substantial portion of our assets are located in China. In addition, most of our senior executive officers reside within China. As a result, it may not be possible to effect service of process within the United States or elsewhere outside China upon our senior executive officers, including with respect to matters arising under U.S. federal securities laws or applicable state securities laws. Moreover, the PRC does not have treaties with the United States or many other countries providing for the reciprocal recognition and enforcement of civil judgments of court.

Recent PRC regulations relating to offshore investment activities by PRC residents may increase our administrative burden and restrict our overseas and cross-border investment activity. If our stockholders who are PRC residents fail to make any required applications and filings under such regulations, we may be unable to distribute profits and may become subject to liability under PRC laws.

SAFE has promulgated several regulations, including SAFE Circular No. 75 issued in November 2005 and its implementation rule issued in May 2007, that require PRC residents and PRC corporate entities to register with local branches of SAFE in connection with their direct or indirect offshore investment in an overseas special purpose vehicles, or SPV, for the purposes of overseas equity financing activities. These regulations apply to our stockholders who are PRC residents and may apply to any offshore acquisitions that we make in the future.

Under the SAFE regulations, PRC residents who make, or previously made, direct or indirect investments in a SPV will be required to register those investments. In addition, any PRC resident who is a direct or indirect shareholder of a SPV is required to file with the local branch of SAFE, with respect to that offshore company, any material change involving capital variation, such as an increase or decrease in capital, transfer or swap of shares, merger, division, long term equity or debt investment or creation of any security interest over the assets located in China. If any PRC shareholder fails to make the required SAFE registration, the PRC subsidiaries of that offshore parent company may be prohibited from distributing their profits and the proceeds from any reduction in capital, share transfer or liquidation, to their offshore parent company, and the offshore parent company may also be prohibited from injecting additional capital into their PRC subsidiaries. Moreover, failure to comply with the various SAFE registration requirements described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions.

We cannot assure you all of our stockholders who are PRC residents will comply with or obtain any registrations or approvals required under these regulations or other related legislation. It is unclear how these regulations, and any future legislation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. The failure or inability of our PRC resident stockholders to comply with these regulations may subject us to fines and legal sanctions, restrict our overseas or cross-border investment activities, limit our ability to inject additional capital into our PRC subsidiaries, to make distributions or pay dividends, or materially and adversely affect our ownership structure. If any of the foregoing events occur, our acquisition strategy and business operations and our ability to distribute profits to you could be materially and adversely affected.

If any of our PRC affiliates become the subject of a bankruptcy or liquidation proceeding, we may lose the ability to use and enjoy those assets, which could reduce the size of our advertising network and materially and adversely affect our business, ability to generate revenues and the market price of our common stock.

To comply with PRC laws, rules and regulations relating to foreign ownership restrictions in the advertising business, we currently conduct our operations in China through contractual arrangements with TJ YSLD and MAIHESI, its shareholders and subsidiaries. As part of these arrangements, TJ YSLD and MAIHESI hold some of the assets that are important to the operation of our business. If any of these entities become bankrupt and all or part of their assets become subject to liens or rights of third party creditors, we may be unable to continue some or all of our business activities, which could materially and adversely affect our business, financial condition and results of operations. If TJ YSLD or MAHESI, or any of their subsidiaries, undergo a voluntary or involuntary liquidation proceeding, its shareholders or unrelated third party creditors may claim rights to some or all of their assets, thereby hindering our ability to operate our business, which could materially and adversely affect our business, our ability to generate revenues and the market price of our common stock.

The PRC tax authorities may require us to pay additional taxes in connection with our acquisitions of offshore entities that conducted their PRC operations through their affiliates in China.

Our operations and transactions are subject to review by the PRC tax authorities pursuant to relevant PRC laws and regulations. However, these laws, regulations and legal requirements change frequently, and their interpretation and enforcement involve uncertainties. For example, in the case of some of our acquisitions of offshore entities that conducted their PRC operations through their affiliates in China, we cannot assure you the PRC tax authorities will not require us to pay additional taxes in relation to such acquisitions, in particular where the PRC tax authorities take the view that the previous taxable income of the PRC affiliates of the acquired offshore entities needs to be adjusted and additional taxes be paid. In the event the sellers failed to pay any taxes required under PRC law in connection with these transactions, the PRC tax authorities might require us to pay the tax, together with late-payment interest and penalties.

Restrictions on currency exchange may limit our ability to utilize our revenues effectively.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China. We receive all our revenues in Renminbi. Under our current corporate structure, our income is primarily derived from dividend payments from our PRC subsidiaries TJ YSLD and MAIHESI. Shortages in the availability of foreign currency may restrict the ability of our PRC subsidiary to remit sufficient foreign currency to pay dividends or other payments to us, or otherwise satisfy their foreign currency-denominated obligations. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and expenditures from trade related transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements. However, approval from SAFE or its local branch is required where Renminbi is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also, at its discretion, restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system prevents us from obtaining sufficient foreign currency to satisfy our currency demands, we may not be able to pay dividends in foreign currencies to our stockholders.

Fluctuations in exchange rates could result in foreign currency exchange losses.

The exchange rate between the Renminbi and the U.S. dollar, Euro and other foreign currencies is affected by, among other things, changes in China’s political and economic conditions. Since July 2005, the Renminbi is no longer pegged solely to the U.S. dollar. Instead, it is reported to be pegged against a basket of currencies, determined by the People’s Bank of China. Under the new policy, the Renminbi is permitted to fluctuate within a narrow and managed band. This change in policy has resulted in significant appreciation of the Renminbi against the U.S. dollar. The Renminbi may appreciate or depreciate significantly in value against the U.S. dollar in the long term, depending on the fluctuation of the basket of currencies against which it is currently valued or it may be permitted to enter into a full float, which may also result in a significant appreciation or depreciation of the Renminbi against the U.S. dollar. Fluctuations in the exchange rate will also affect the relative value of any dividend we issue in the future which will be exchanged into U.S. dollars and earnings from and the value of any U.S. dollar-denominated investments we make in the future.

Very limited hedging options are available in China to reduce exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions to reduce our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may not be able to successfully hedge our exposure at all. In addition, our currency exchange losses may be aggravated by PRC exchange control regulations that restrict our ability to convert Renminbi into foreign currency.

We may be treated as a resident enterprise for PRC tax purposes under the new Enterprise Income Tax Law (“EIT Law”), which may subject us to PRC income tax for any dividends we receive from our subsidiary and withholding for any dividends we pay to our non-PRC stockholders.

Under the EIT Law, enterprises established outside of China whose “de facto management bodies” are located in China are considered “resident enterprises,” and are generally subject to the uniform 25% enterprise income tax rate for their global income. Under the implementation regulations to the EIT Law issued by the PRC State Council, “de facto management body” is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances, treasury or properties and other assets of an enterprise. If we are required to pay income tax for any dividends we receive from our subsidiary, the amount of dividends we can pay to our stockholders could be materially reduced.

Furthermore, the EIT Law and implementation regulations provide an income tax rate of 10% is normally applicable to dividends payable to non-PRC enterprise investors which are derived from sources within China, although such income tax may be exempted or reduced pursuant to a tax treaty between China and the jurisdictions in which our non-PRC enterprise stockholders reside. If we were considered a PRC resident enterprise under the EIT Law, our non-PRC enterprise investors who are deemed non-resident enterprises may be subject to the EIT at the rate of 10% upon the dividends payable by us or upon any gains realized from the transfer of our common shares, if such income is deemed derived from China, provided that (i) such non-PRC enterprise investors has no establishment or premises in China, or (ii) it has establishment or premises in China but its income derived from China has no real connection with such establishment or premises.

If we are required under the EIT Law to withhold income tax on dividends payable to our non-PRC enterprise stockholders or any gains realized from the transfer of our common shares, the value of your investment may be materially and adversely affected.

Our subsidiaries and affiliated entities are subject to restrictions on paying dividends and making other payments to us.

We are a holding company incorporated in Nevada and do not have any assets or conduct any business operations other than our investments in our subsidiaries and affiliated entities. As a result of our holding company structure, we currently rely entirely on dividends from our subsidiaries in China after they receive payments from our consolidated affiliated entities, TJ YSLD and MAIHESI, under various service and other contractual arrangements. However, PRC regulations currently permit payment of dividends only out of accumulated profits, as determined in accordance with PRC accounting standards and regulations. Our subsidiaries and consolidated affiliated entities in China are also required to set aside a portion of their after-tax profits according to PRC accounting standards and regulations to fund certain reserve funds. Furthermore, if our subsidiaries or consolidated affiliated entities in China incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments. If we or any of our subsidiaries in China are unable to receive all of the revenues from our operations through these contractual or dividend arrangements, we may be unable to pay dividends on our common stocks.

Any future outbreak of severe acute respiratory syndrome or avian flu in China, or similar adverse public health developments, may severely disrupt our business and operations.

From December 2002 to June 2003, China and other countries experienced an outbreak of a new and highly contagious form of atypical pneumonia now known as severe acute respiratory syndrome, or SARS. On July 5, 2003, the World Health Organization declared that the SARS outbreak had been contained. Since September 2003, however, a number of isolated new cases of SARS have been reported, most recently in central China in April 2004. During May and June 2003, many businesses in China were closed by the PRC government to prevent transmission of SARS. In addition, many countries, including China, have encountered incidents of the H5N1 strain of bird flu, or avian flu. This disease, which is spread through poultry populations, is capable in some circumstances of being transmitted to humans and is often fatal. A new outbreak of SARS or an outbreak of avian flu may result in health or other government authorities requiring the closure of our offices or other businesses, including office buildings, retail stores and other commercial venues, which could reduce the number of people commuting and reduce the appeal of radio advertising. Any recurrence of the SARS outbreak, an outbreak of avian flu or a development of a similar health hazard in China, may impact the economy, the advertising industry as a whole and the radio advertising industry specifically. Such occurrences could severely impact the value of radio advertising, reduce the advertising time purchased by advertisers and severely disrupt our business and operations.

The new PRC Property Rights Law may affect the perfection of the pledge in our equity pledge agreements with our consolidated affiliated entities and their individual shareholders.

Under the equity pledge agreements among Legend (Beijing) Consulting Co., Ltd., Legend (Beijing) Information and Technology Co., Ltd. and our consolidated affiliated entities, TJ YSLD and MAIHESI, and their respective individual shareholders have pledged all of their equity interests therein to Legend (Beijing) Consulting Co., Ltd., and Legend (Beijing) Information and Technology Co., Ltd., respectively, by recording the pledge on the shareholder registrars of the respective entities. However, according to the PRC Property Rights Law, which became effective October 1, 2007, a pledge is not effective without being registered with the relevant local administration for industry and commerce. To our knowledge, no application for registration of share pledge was processed by the local administration for industry and commerce in Beijing and Tianjin, due to a lack of registration procedures. TJ YSLD and MAIHESI will make efforts to register the equity pledge when the local administration for industry and commerce implements registration procedures. We cannot assure you they will be able to register the pledges. If we are unable to do so, the pledges may be deemed ineffective under the PRC Property Rights Law. If any individual shareholder of TJ YSLD or MAIHESI breaches his or her obligations under the agreement with Legend (Beijing) Consulting Co., Ltd. and Legend (Beijing) Information and Technology Co., Ltd., respectively, there is a risk that Legend (Beijing) Consulting Co., Ltd. or Legend (Beijing) Information and Technology Co., Ltd. may not be able to successfully enforce the pledge and would need to resort to legal proceedings to enforce its contractual rights.

We may incur substantial administrative and staffing cost due to the promulgation of the newChina Labor Contract Law.

On June 29, 2007, the Standing Committee of the National People’s Congress of China enacted the Labor Contract Law, which became effective on January 1, 2008. The Labor Contract Law contains substantial provisions with a view to improve job security and to protect the rights and interests of employees. In order to fully comply with the legal requirements under the Labor Contract Law, we may incur substantial administrative and staffing cost.

A regulation adopted in August 2006 establishes more complex procedures for acquisitions conducted by foreign investors, which could make it more difficult for us to pursue growth through acquisitions.

On August 8, 2006, six PRC regulatory agencies, namely, the PRC Ministry of Commerce, or the MOC, the State Assets Supervision and Administration Commission, the State Administration for Taxation, the SAIC, the China Securities Regulatory Commission and SAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, which became effective on September 8, 2006. Among other things, the regulations established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex, including requirements in some instances that the MOC be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. If we grow our business in part by directly acquiring complementary businesses in the PRC. Complying with the requirements of these regulations to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from the MOC, may delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market share.

Risks Related to our Common Stock

There is not an active trading market for our common stock, and if a market for our common stock does not develop, our investors may be unable to sell their shares.

Our common stock is currently quoted on the Over-The-Counter Bulletin Board (the “OTCBB”) trading system. The OTCBB is not a listing service or exchange, but is instead a dealer quotation service for subscribing members. The OTCBB tends to be highly illiquid, in part because there is no national quotation system by which potential investors can track the market price of shares except through information received or generated by a limited number of broker-dealers that make markets in particular stocks. There is a greater chance of market volatility for securities that trade on the OTCBB as opposed to a national exchange or quotation system. This volatility may be caused by a variety of factors including:

Lack of readily available price quotations;

Absence of consistent administrative supervision of “bid” and “ask” quotations;

Lower trading volume;

Market conditions;

Innovations or new products and services by us or our competitors;

Regulatory, legislative or other developments affecting us or our industry generally;

Limited availability of freely-tradable “unrestricted” shares of our common stock to satisfy purchase orders and demand;

Industry developments;

Economic and other external factors; and

Period-to-period fluctuations in our financial results.

In addition, the value of our common stock could be affected by:

Actual or anticipated variations in our operating results;

Changes in the market valuations of other companies operating in our industry;

Announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;

Adoption of new accounting standards affecting our industry;

Additions or departures of key personnel;

Introduction of new services or technology by our competitors or us;

Sales of our common stock or other securities in the open market;

Changes in financial estimates by securities analysts;

Conditions or trends in the market in which we operate;

Changes in earnings estimates and recommendations by financial analysts;

Our ability to execute our business plan;

Operating results that fall below expectations;

Our failure to meet financial analysts’ performance expectations; and

Other events or factors, many of which are beyond our control.

In addition, the securities markets have experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also significantly affect the market price of our common stock.

In a volatile market, you may experience wide fluctuations in the market price of our securities. These fluctuations may have an extremely negative effect on the market price of our securities and may prevent you from obtaining a market price equal to your purchase price when you attempt to sell our securities in the open market. In these situations, you may be required either to sell our securities at a market price which is lower than your purchase price, or to hold our securities for a longer period of time than you planned. An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using common stock as consideration.

Because we do not intend to pay any dividends on our common stock, purchases of our common stock may not be suited for investors seeking dividend income.

We do not anticipate declaring and paying dividends to our stockholders in the near future. It is our current intention to apply net earnings in the foreseeable future to the needs of our business. Prospective investors seeking or needing dividend income or liquidity from common stock should therefore, not purchase our common stock. There can be no assurance we will have sufficient earnings to declare and pay dividends to the holders of our shares, and in any event, a decision to declare and pay dividends is at the sole discretion of our board of directors, who do not intend to pay dividends on our common shares for the foreseeable future.

We cannot assure you we will list our common stock on NASDAQ or any other national securities system or exchange.

Although we intend to list our common stock on NASDAQ or the American Stock Exchange in the future, we do not currently meet the initial listing standards of either of those markets and cannot assure you we will be able to qualify for and maintain a listing of our common stock on either of those markets or any other stock system or exchange in the future. Furthermore, in case our application is approved, there can be no assurance that trading of our common stock on such market will reach or maintain desired liquidity. If we are unable to list our common stock on NASDAQ, the American Stock Exchange or another stock system or exchange, or to maintain the listing, we expect our common stock will be eligible to trade on the OTCBB, maintained by NASDAQ, another over-the-counter quotation system, or on the “pink sheets,” where an investor may find it more difficult, or impossible, to dispose of shares or obtain accurate quotations as to the market value of our common stock. Under such circumstances, the probability of reduced liquidity would hinder investors’ ability to obtain accurate quotations for our common stock, and our common stock could become substantially less attractive to investors.

Securities analysts may not initiate coverage or continue to cover our common stock, and this may have a negative impact on our common stock’s market price.

The trading market for our common stock will depend, in part, on the research and reports that securities analysts publish about us and our business. We do not have any control over these analysts. Currently there is no coverage of our common stock and there is no guarantee securities analysts will cover our common stock in the future. If securities analysts do not cover our common stock, the lack of research coverage may adversely affect its market price. If we are covered by securities analysts, and our stock is downgraded, our stock price would likely decline. If one or more of these analysts ceases to cover us or fails to publish regular reports on us, we could lose visibility in the financial markets, which could cause our stock price or trading volume to decline.

We have raised substantial amounts of capital in private placements, and if we fail to comply with the applicable securities laws, ensuing rescission rights or lawsuits would severely damage our financial position.

Our private placements consist of securities that were not registered under the Securities Act or any state “blue sky” law as a result of exemptions from such registration requirements. Such exemptions are highly technical in nature and if we inadvertently failed to comply with any of such exemptive provisions, investors could have the right to rescind their purchase of our securities and sue for damages. If any investors were to successfully seek such rescission or prevail in any such suit, we could face severe financial demands that could have significant, adverse affects on our financial position. Future financings may involve sales of our common stock at prices below prevailing market prices on the OTCBB or exchange on which our common stock is quoted or listed at that time, as well as the issuance of warrants or convertible securities at a discount to market price.

The application of the “penny stock” rules could adversely affect the market price of our common stock and increase your transaction costs to sell those shares .

The Securities Exchange Commission (the “SEC”) adopted regulations which generally define a “penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share, subject to specific exemptions. The last reported trade of the Company’s stock on the OTCBB was at a price below $5.00 per share, our common stock is considered a penny stock and there can be no assurance our common stock will ever trade at a price above $5.00 per share in the future. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock, the broker-dealer make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our common stock and may affect the ability of investors to sell their shares, until our common stock no longer is considered a penny stock.

Item 1B. Unresolved Staff Comments

Not applicable to smaller reporting companies.

Item 2. Properties

We lease office space in the locations and on the terms described in the table below:

Location

Purpose

Approximate

Size in

Square Feet

Monthly

Rent

(USD)

Lease

Expires*

Beijing, China

Headquarters

7,104

15,241

12/31/2009

Beijing, China

Finance and Accounting Office

2,000

4,656

6/30/2009

Tianjin, China

Legend Media, Inc. 10-K