10-Q 1 kvme-10qjan2010a.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10 Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 FOR THE QUARTER ENDED January 31, 2010 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 FOR THE TRANSITION PERIOD FROM _____ K's Media (Name of small business issuer in its charter) Commission File Number 000-52760 Nevada 75-3263792 (State or Other Jurisdiction of Organization) (IRS Employer Identification #) Rm.1909,Tower A, The Spaces International Center.No.8,Dongdaqiao Road, ChaoYang District, Beijing 100020, P.R China (Address of Principal Executive Offices) (Zip Code) 86-10-5921-2200 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] The Company is a Shell company: Yes [ ] No [X] As of March 18, 2010, the Company has 32,945,547 shares of common stock issued and 26,645,547 shares of common stock outstanding. K's Media Form 10-Q for the period ended January 31, 2010 TABLE OF CONTENTS Page PART I - FINANCIAL INFORMATION ITEM 1 - FINANCIAL STATEMENTS (Unaudited) Condensed Consolidated Balance Sheets 1 Condensed Consolidated Statements of Operations 2 Condensed Consolidated Statements of Cash Flows 3 Notes to Consolidated Financial Statements 4-27 ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27-33 ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 33 ITEM 4 - CONTROLS AND PROCEDURES 33-34 PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS 34 ITEM 1A- RISK FACTORS 34 ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 34 ITEM 3 - DEFAULTS UPON SENIOR SECURITIES 34 ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 34 ITEM 5 - OTHER INFORMATION 34 ITEM 6 - EXHIBITS 35 SIGNATURES ITEM 1. FINANCIAL STATEMENTS K's Media (Previously known as Kinglake Resources Inc.) Consolidated Balance Sheets January 31, 2010 and April 30, 2009 (Unaudited) January 31, April 30, (Expressed in U.S. Dollars) 2010 2009 (Unaudited) (Audited) ASSETS Current assets Cash $ 21,013 1,102,634 Accounts receivable, net of allowance for doubtful accounts 747,487 580,440 of $2,519,456 and $ 250,772, respectively Prepaid expenses and other receivables (Note 5) 20,050 652,085 Inventory 42,898 107,066 Amount due from related party (Note 9) - 249,232 _____________________________ Total current assets 831,448 2,691,457 Equipment, net (Note 6) 50,252 55,235 _____________________________ Total assets $ 881,700 $ 2,746,692 _____________________________ LIABILITIES Current liabilities Accounts payable and accrued liabilities (Note 7)$ 932,785 $ 355,463 Amount due to related parties (Note 9) 20,119 8,086 Unearned revenue 118,831 226,602 _____________________________ Total liabilities 1,071,735 590,151 _____________________________ STOCKHOLDERS' EQUITY (DEFICIENCY) Stockholders' Equity (Deficiency) (Note 8) Preferred stock, $0.00001 par value; authorized 100,000,000 shares, issued and outstanding 0 and 0 shares, respectively - - Common stock, $0.00001 par value; authorized 100,000,000 shares, 32,945,547 and 33,466,167 shares issued and 26,645,547 and 22,966,167 shares outstanding, respectively 329 335 Additional paid-in capital 7,947,695 7,027,844 Deferred consulting services - (116,250) Accumulated other comprehensive loss 42,777 48,574 Accumulated deficit (8,180,836) (4,803,962) _____________________________ Total stockholders' equity (deficiency) (190,035) 2,156,541 _____________________________ Total liabilities and stockholders' equity (deficiency) $ 881,700 $ 2,746,692 _____________________________ The accompanying notes are an integral part of these consolidated financial statements. 1 K's Media (Previously known as Kinglake Resources Inc.) Consolidated Statements of Operations and Comprehensive Loss For the three and nine months ended January 31, 2010 and 2009 (Unaudited) (Expressed in U.S. Dollars) Three months ended Nine months ended January 31, January 31, 2010 2009 2010 2009 Advertising revenues at contracted amounts $ 660,539 $ 604,840 $ 3,706,691 $ 654,319 Adjustments for barter transactions - - (188,816) - _________________________________________________ Net revenues 660,539 604,840 3,517,875 654,319 Rental and broadcasting fees due entertainment clubs 461,983 752,107 1,415,789 1,604,396 _________________________________________________ Gross profit (loss) 198,556 (147,267) 2,102,086 (950,077) _________________________________________________ Selling, general and administrative expenses: Selling expenses 87,172 324,244 670,961 324,244 General and administrative (including stock-based compensation of $0, $68,613, $1,036,095, and $847,089, respectively) 978,584 756,424 2,544,450 2,285,404 Provision for doubtful accounts 476,103 - 2,268,304 - _________________________________________________ Total 1,541,859 1,080,668 5,483,715 2,609,648 _________________________________________________ Loss from operations (1,343,303) (1,227,935) (3,381,629) (3,559,725) Other income and expenses Interest income 241 10,667 3,809 25,796 Foreign exchange gain (loss) 2,921 1,270 2,654 (23,961) Interest and bank charges (436) (908) (1,708) (3,151) _________________________________________________ Other income and expenses (net) 2,726 11,029 4,755 (1,316) _________________________________________________ Net Loss (1,340,577) (1,216,906) (3,376,874) (3,561,041) Other Comprehensive Income (Loss) (3,212) (2,260) (5,797) 24,493 _________________________________________________ Comprehensive Loss (1,343,789) (1,219,166) (3,382,671) (3,536,548) Net loss per share Basic and diluted $ (0.05) $ (0.05) $ (0.13) $ (0.16) Number of common shares used to compute loss per share Basic and diluted 26,645,547 22,916,167 25,419,087 22,385,974 The accompanying notes are an integral part of these consolidated financial statements. 2 K's Media (Previously known as Kinglake Resources Inc.) Consolidated Statements of Cash Flows For the nine months ended January 31, 2010 and 2009 (Unaudited) (Expressed in U.S. Dollars) 2010 2009 Cash flows used in operating activities Net loss $ (3,376,874) $ (3,561,041) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation expense 9,852 5,246 Non-cash employee benefits - 641,250 Provision for doubtful accounts 2,268,304 - Stock-based compensation 1,036,095 205,839 Changes in operating assets and liabilities: Accounts receivable (2,435,974) (147,937) Prepaid expenses and other receivable 632,035 (810,808) Inventory 64,025 - Accounts payable and accrued liabilities 577,498 193,875 Amount due from related party 249,232 - Amount due to related parties 12,022 (42,112) Unearned revenue (107,477) - ___________________________________ Net cash used in operating activities (1,071,262) (3,515,688) ___________________________________ Cash flows used in investing activities Purchase of fixed assets (4,935) (42,752) ___________________________________ Net cash used in investing activities (4,935) (42,752) ___________________________________ Cash flows provided by (used in) financing activities Issuance of common stock and warrants - 4,593,836 Advance to related parties (4,372) (172,550) ___________________________________ Net cash provided by (used in) financing activities (4,372) 4,421,286 ___________________________________ Effect of foreign exchange rate changes (1,052) 22,088 ___________________________________ Increase (decrease) in cash (1,081,621) 884,934 Cash, beginning of period 1,102,634 1,152,852 ___________________________________ Cash, end of period $ 21,013 $ 2,037,786 ___________________________________ Supplemental disclosure of cash flow information: Interest paid $ 30 $ - Income tax paid $ - $ - Non-cash investing and financing activities: Common stock issued for employee benefits $ - $ 641,250 The accompanying notes are an integral part of these consolidated financial statements. 3 K's MEDIA (Previously known as Kinglake Resources Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS January 31, 2010 (Unaudited) Note 1. Nature of Operations and Going Concern Nature of Operations K's Media (the "Company") was incorporated in the State of Nevada on April 14, 2006 under the name Kinglake Resources Inc., which was changed to K's Media on March 11, 2008. In April 2006, the Company acquired a mining claim in the Province of British Columbia. The mining claim expired April 18, 2007. During the year ended April 30, 2009, the Company ceased to be a development stage enterprise as it commenced its planned principal operations. On January 18, 2008, the Company completed a Share Exchange Agreement (the "Share Exchange Agreement") dated December 23, 2007 with Orient Come Holdings Limited, a company organized under the laws of British Virgin Islands ("Orient Come") and Beijing K's Media Advertising Ltd. Co. ("K's Media"), a limited liability company organized under the laws of the People's Republic of China ("China"). Pursuant to the terms of the Share Exchange Agreement, the shareholders of Orient Come (the "Orient Come Shareholders") transferred to the Company all of the Orient Come shares in exchange for the issuance of 13,000,000 shares of the Company's common stock (the "Acquisition"). As a result of the Acquisition, Orient Come became the Company's wholly-owned subsidiary and the Orient Come Shareholders and/or their designated third parties acquired in the aggregate approximately 62% of the Company's issued and outstanding stock. In connection with the Share Exchange Agreement, the Company issued 2,000,000 shares of its common stock as a finder's fee to a third party. Concurrent with the Share Exchange Agreement, the Company entered into a series of agreements with K's Media and the shareholders of K's Media (see Note 1(a) to (d) for details). Included among these agreements is a Business Cooperation Agreement. Under this agreement the Company 4 effectively controls K's Media. As a result of the Business Cooperation Agreement, K's Media is deemed to be a subsidiary of the Company under Accounting Standards Codification ("ASC") Topic 810, "Consolidation". On February 22, 2008, Orient Come assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's Media Broadcasting") (see Note 1(b) for details). K's Media Broadcasting, a company organized under the laws of China, is a wholly owned subsidiary of the Company. As a result of the Share Exchange Agreement, the Company is involved in the advertising business that targets high end consumers in China by placing premium brand advertising in "entertainment" clubs on behalf of top-tier consumer products clients. Entertainment clubs are popular entertainment establishments in Asia that rent private rooms containing karaoke singing equipment, typically to groups of friends and business colleagues. The Share Exchange Agreement has been considered a reverse acquisition as Orient Come effectively assumed control of the Company. The Company (the legal acquirer of Orient Come) in substance is the accounting acquiree and Orient Come (the legal acquiree of the Company) is the accounting acquirer. The consolidated financial statements presented are those of Orient Come, the accounting acquirer, at historical cost, from June 18, 2007 to January 18, 2008, and combined with the Company thereafter. Orient Come commenced operations on June 18, 2007. At December 23, 2007, the president of the Company was the brother of a significant stockholder of Orient Come and K's Media. The following agreements were entered into concurrent with the Share Exchange Agreement: (a) Escrow Agreement The Company entered into an Escrow Agreement ("Escrow Agreement") with K's Media and shareholders of K's Media effective December 23, 2007. Pursuant to the Escrow Agreement, 10,500,000 Escrow Shares of Company common stock 5 were deposited and held in an escrow account with an escrow agent. The Escrow Agreement, as amended January 31, 2008, September 4, 2008, June 4, 2009, August 4, 2009, and September 7, 2009, provides for the release and delivery to K's Media stockholders and designees of up to 10,500,000 Escrow Shares of Company common stock based on the achievement of certain Performance Thresholds and the cancellation of the remaining shares, as follows: Escrow Minimum Shares Performance Performance Deliverable Threshold Threshold __________________________________________ K's Media Signed Sales: 16 months ended April 30, 2009 2,625,000 $ 1,900,000 $ 1,059,395 Year ended April 30, 2010 2,625,000 $ 14,380,000 $ 7,990,224 Year ended Aptil 30, 2011 2,625,000 $ 33,230,000 $ 18,464,803 Number of Agreements with entertainment clubs initiated by K's Media stockholders and designees: 16 months ended April 30, 2009 1,575,000 600 300 Year ended April 30, 2010 525,000 300 300 Year ended April 30, 2011 525,000 300 300 ____________ 10,500,000 ____________ Under the Escrow Agreement, as amended, if the applicable Performance Threshold is met, the respective parties are to be delivered the Escrow Shares deliverable. If the Minimum Performance Threshold is not met, the applicable Escrow Shares are to be returned to the Company and cancelled. If the Minimum Performance Threshold is met but the Performance Threshold is not met, then a proportionate number of the 10,500,000 Escrow Shares (actual results divided by the Performance Threshold) are to be delivered to the respective parties and the remainder is to be returned to the Company and cancelled. Effective July 31, 2009, the Company authorized the release of a total of 3,679,380 Escrow Shares and cancellation of a total of 520,620 Escrow shares in connection with the achievement of performance thresholds relating to the 16 6 months ended April 30, 2009. After such release and cancellation, there are 6,300,000 Escrow shares remaining. (b) Business Cooperation Agreement Pursuant to the provisions of the Business Cooperation Agreement, which has a term of 20 years, K's Media retained the services of Orient Come in relation to the current and proposed operations of K's Media's business in China ("Orient Come's Services"). Under the Business Cooperation Agreement, K's Media will remit a quarterly consulting fee, equal to 80% of its quarterly revenues after deduction of direct operating costs, expenses and taxes in consideration of Orient Come's services. On February 22, 2008, Orient Come assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's Media Broadcasting") pursuant to an Assignment Agreement dated February 22, 2008 (the "Assignment Agreement"). Under the Assignment Agreement, Orient Come assigned all of its right, title and interest in and to the Business Cooperation Agreement and K's Media Broadcasting agreed to assume all of Orient Come's obligations under the Business Cooperation Agreement. K's Media Broadcasting, a company organized under the laws of China, is a wholly owned subsidiary of the Company. (c) Option Agreement Under an Option Agreement entered into by and among Orient Come, shareholders of K's Media and K's Media effective as of December 23, 2007, the shareholders of K's Media, irrevocably granted to Orient Come or its designated party an exclusive option to purchase, to the extent permitted by China law, a portion or all of their respective equity interests in K's Media for a purchase price of $100. Orient Come or its designated party has the sole discretion to decide when to exercise the option, whether in part or in full. The agreement has a term of 20 years. (d) Equity Pledge Agreement Under an Equity Pledge Agreement entered into by and among Orient Come, K's Media and shareholders of K's Media dated 7 December 23, 2007, the shareholders of K's Media pledged, all of their equity interests in K's Media to guarantee the performance of K's Media in its obligations under the Business Cooperation Agreement. If K's Media or any of its shareholders breaches his/her respective contractual obligations under this agreement, or upon the occurrence of one of the events regarded as an event of default under each such agreement, Orient Come, as pledgee, will be entitled to certain rights, including the right to dispose of the pledged equity interests. The shareholders of K's Media agree not to dispose of the pledged equity interests or take any actions that would prejudice Orient Come's interest, and to notify the Company of any events or upon receipt of any notices which may affect Orient Come's interest in the pledge. The term of the Pledges shall last until all obligations under the Exclusive Business Cooperation Agreement have been satisfied by K's Media. Going Concern The Company has incurred net operating losses since inception. The Company faces all the risks common to companies that are relatively new, including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. At January 31, 2010, the Company has accumulated losses of $8,180,836 since inception. The Company's recurring losses raise substantial doubt about its ability to continue as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The Company expects to incur losses from its business operations and will require additional funding during the year ended April 30, 2010. The future of the Company hereafter will depend in large part on the Company's ability to successfully raise capital from external sources to pay for planned expenditures and to fund operations. Management believes that its current and future plans will enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be 8 required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements. Note 2. Statement of Information Furnished The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position as of January 31, 2010, and the results of operations and cash flows for the three and nine months ended January 31, 2010 and 2009. These results have been determined on the basis of generally accepted accounting principles and practices in the United States and applied consistently with those used in the preparation of the Company's 2009 Annual Report on Form 10-K. Operating results for the three and nine months ended January 31, 2010 are not necessarily indicative of the results that can be expected for the year ending April 30, 2010. These consolidated financial statements include the accounts of K's Media (Registrant, formerly known as Kinglake Resources Inc.), Oriental Come Holdings Limited (100% owned subsidiary), Beijing K's Media Broadcasting Ltd. Co. (100% owned subsidiary) and Beijing K's Media Advertising Ltd. Co., which is deemed to be a Variable Interest Entity of the Company through contractual relationship. This consolidation is required by ASC Topic 810, "Consolidation". Note 3. Changes in Accounting Policies The Company adopted the following accounting policies during the period: (i) Disclosures about Derivative Instruments and Hedging Activities On May 1, 2009, the Company adopted ASC Topic 815-10, "Derivatives and Hedging". This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity's derivative instruments 9 and hedging activities and their effects on the entity's financial position, financial performance, and cash flows. ASC Topic 815-10 applies to all derivative instruments within its scope as well as related hedged items, bifurcated derivatives, and non-derivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to ASC Topic 815-10 must provide more robust qualitative disclosures and expanded quantitative disclosures. The adoption of this statement did not have any material effect on the Company's consolidated financial statements. (ii) Determination of the Useful Life of Intangible Assets On May 1, 2009, the Company adopted the amendment to ASC No. 350 issued by the FASB entitled "Determination of the Useful Life of Intangible Assets", which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The amendment did not have a material impact on the Company's financial statements. (iii) Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement) On May 1, 2009. the Company adopted ASC Topic 470-20, "Debt - Debt with Conversion and Other Options". ASC Topic 470-20 clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. ASC Topic 470-20 requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. ASC Topic 470-20 requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations. ASC Topic 470-20 requires retrospective application to the terms of instruments as they existed for all periods presented. The adoption of ASC Topic 470-20 did not have any material effect on the Company's consolidated financial statements. 10 (iv) Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity's Own Stock On May 1, 2009, the Company adopted ASC Topic 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity". ASC Topic 815-40 provides that an entity should use a two step approach to evaluate whether an equity- linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. Adoption of ASC Topic 815-40 did not have any material effect on the Company's consolidated financial position and results of operations. (v) Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities On May 1, 2009, the Company adopted ASC Topic 260, "Earnings Per Share". Under this standard, unvested share- based payment awards that contain rights to receive non- forfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The adoption of ASC Topic 260 did not have a material impact on the Company's financial statements. (vi) Issuer's Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement On May 1, 2009, the Company adopted ASC Topic 820, "Fair Value Measurements and Disclosures". ASC Topic 820 determines an issuer's unit of accounting for a liability issued with an inseparable third-party credit enhancement when it is measured or disclosed at fair value on a recurring basis. Adoption of ASC Topic 820 did not have any material effect on the Company's consolidated financial position and results of operations. (vii) Disclosures about Credit Derivatives and Certain Guarantees On May 1, 2009, the Company adopted ASC Topic 815-10-65, 11 "Derivatives and Hedging - Overall - Transition and Open Effective Date Information". ASC Topic 815-10-65 requires disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument. ASC Topic 815-10-65 also amends ASC Topic 952, "Franchisors", to require additional disclosure about the current status of the payment/performance risk of a guarantee. Finally, ASC Topic 815-10-65 clarifies the Board's intent about the effective date of ASC Topic 815, "Derivatives and Hedging". Adoption of ASC Topic 815-10-65 did not have any material effect on the Company's consolidated financial position and results of operations. (viii) Equity Method Investment Accounting Considerations On May 1, 2009, the Company adopted ASC Topic 323, "Investments - Equity Method and Joint Ventures". ASC Topic 323 clarifies accounting for certain transactions and impairment considerations involving the equity method. Transactions and impairment dealt with are initial measurement, decrease in investment value, and change in level of ownership or degree of influence. Adoption of ASC Topic 323 did not have any material effect on the Company's consolidated financial position and results of operations. (ix) Accounting for Defensive Intangible Assets On May 1, 2009, the Company adopted ASC Topic 350-30-35, "Intangibles - Goodwill and Others - General Intangibles Other Than Goodwill - Subsequent Measurement". ASC Topic 350-30-35 clarifies how to account for defensive intangible assets subsequent to initial measurement. ASC Topic 350-30- 35 applies to all defensive intangible assets except for intangible assets that are used in research and development activities. Adoption of ASC Topic 350-30-35 did not have any material effect on the Company's consolidated financial position and results of operations. (x) Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity's Consolidated Subsidiary On May 1, 2009, the Company adopted ASC Topic 815-40, "Derivatives and Hedging - Contracts in Entity's Own Equity". ASC Topic 815-40 clarifies whether a financial 12 instrument for which the payoff to the counterparty is based, in whole or in part, on the stock of an entity's consolidated subsidiary is indexed to the reporting entity's own stock. Adoption of ASC Topic 815-40 did not have any material effect on the Company's consolidated financial position and results of operations. (xi) Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities On May 1, 2009, the Company adopted ASC Topic 860, "Transfers and Servicing". ASC Topic 860 requires public entities to provide additional disclosures about transfers of financial assets. ASC Topic 860 also requires public enterprises, including sponsors that have a variable interest entity, to provide additional disclosures about their involvement with a variable interest entity. ASC Topic 860 also requires certain additional disclosures, in regards to variable interest entities, to provide greater transparency to financial statement users. Adoption of ASC Topic 860 did not have any material effect on the Company's consolidated financial position and results of operations. (xii) Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets On May 1, 2009, The FASB released ASC Topic 325-40, "Investments - Other - Beneficial Interests in Securitized Financial Assets". ASC Topic 325-40 allows for the use of other-than-temporary impairment assessments established in ASC Topic 320, "Investments - Debt and Equity Securities", for securities that had previously been subject to the impairment assessment under ASC Topic 325-40. ASC Topic 320 allows a reporting entity to assess an impaired security that is classified as either available-for-sale or held-to- maturity debt in order to determine whether the impairment should be recognized as other-than-temporary and recognized in earnings. Under ASC Topic 325-40, management can base the value it reports in the financial statements on its judgment of its ability to collect all the contracted amounts due. 13 Adoption of ASC Topic 325-40 did not have any material effect on the Company's consolidated financial position and results of operations. (xiii) Interim Disclosures About Fair Value of Financial Instruments On May 1, 2009, the Company adopted ASC Topic 825, "Financial Instruments", which extend the annual financial statement disclosure requirements for financial instruments to interim reporting periods of publicly traded companies. The adoption of ASC Topic 825 did not have a material impact on the Company's consolidated financial statements. (xiv) Recognition and Presentation of Other-Than-Temporary Impairments On July 1, 2009, the Company adopted ASC Topic 320, "Investment - Debt and Equity Securities", which amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than- temporary impairments in the financial statements. The guidance requires that an entity evaluate for and record an other-than-temporary impairment even when it concludes that it does not intend to sell an impaired security and does not believe it likely that it will be required to sell the security before recovery of the amortized cost basis. Once an entity has determined that an other-than-temporary impairment has occurred, it is required to record the credit loss component of the difference between the securities's amortized cost basis and the estimated fair value in earnings, whereas the remaining difference is to be recognized as a component of other comprehensive income and amortized over the remaining life of the security. The adoption of this guidance did not have a material impact on our consolidated financial position or results of operations. (xv) Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly 14 On July 1, 2009, the Company adopted ASC Topic 820, "Fair Value Measurement and Disclosures", for estimating fair value when the volume and level of activity related to the asset or liability has significantly decreased. This also includes guidance on identifying circumstances that indicate a transaction is not orderly and emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. The adoption of this standard did not have a material impact on our consolidated financial position or results of operations. (xvi) Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies On January 1, 2009, the Company adopted ASC Topic 805, "Business Combinations", to address application issues on initial and subsequent recognition and measurement arising from contingencies in a business combination. The adoption of ASC Topic 805 did not have an impact on the Company's consolidated financial statements. (xvii) Subsequent Events On July 1, 2009, the Company adopted ASC Topic 855, "Subsequent Events", which was amended and defines subsequent events as transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. The amendment defines two types of subsequent events: (i) events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements (that is, recognized subsequent events); and (ii) events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date (that is, non-recognized subsequent events). In addition, the amendment requires an entity to disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the ?nancial statements were issued or the date the ?nancial statements were available to be issued. The adoption of the amendment 15 did not have any effect on our financial position, results of operations or cash flows. In February 2010, the FASB issued ASU 2010-09, "Subsequent Events" (Topic 855): "Amendments to Certain Recognition and Disclosure Requirements". This amendment removes the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. Revised financial statements include financial statements revised as a result of either correction of an error or retrospective application of U.S. GAAP. The amendment in the ASU was effective for the Company upon issuance (February 24, 2010). The adoption of ASU 2010-09 had no effect on our consolidated financial statements. (xviii) The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles On August 1, 2009, the Company adopted the "FASB Accounting Standards Codification" (the "FASB ASC") as the single source of authoritative non-governmental U.S. GAAP. The FASB ASC did not change current U.S. GAAP, but simplified user access to all authoritative U.S. GAAP by organizing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents were superseded and all other accounting literature not included in the FASB ASC is now considered non-authoritative. The adoption of the FASB ASC did not have an impact on the Company's consolidated financial statements. (xix) Measuring Liabilities at Fair Value On September 1, 2009, the Company adopted ASU No. 2009-05, "Measuring Liabilities at Fair Value", or ASU 2009-05, which amends ASC 820 to provide clarification of circumstances in which a quoted price in an active market for an identical liability is not available. A reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities (or similar liabilities when traded as assets) and/or 2) a valuation technique that is consistent with the 16 principles of ASC 820. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. The adoption of this ASU did not have an impact on the Company's consolidated financial statements. (xx) Fair Value Measurements and Disclosure On November 1, 2009, the Company adopted ASU No. 2009-12, "Fair Value Measurements and Disclosure", or ASU 2009-12, which provides additional guidance on using the net asset value per share, provided by an investee, when estimating the fair value of an alternate investment that does not have a readily determinable fair value and enhances the disclosures concerning these investments. The adoption of this ASU did not have a material impact on the Company's consolidated financial statements. Under generally accepted accounting principles, we are required 1) to measure certain assets and liabilities at fair value or 2) to disclose the fair value of certain assets and liabilities recorded at cost. Pursuant to these fair value measurement and disclosure requirements, fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value is calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity. In addition, the fair value of liabilities includes consideration of non- performance risk, including our own credit risk. Each fair value measurement is reported in one of the following three levels: Level 1 - valuation inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. Level 2 - valuation inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, 17 and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ? Level 3 - valuation inputs are unobservable and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model- based techniques that include option pricing models, discounted cash flow models and similar techniques. At January 31, 2010 and April 30, 2009, the fair values of cash and cash equivalents, accounts receivables and accounts payable approximated their carrying values due to the short-term nature of these instruments. (xxi) Transfers and Servicing On December 1, 2009, the Company adopted ASC Topic 860, "Transfers and Servicing". ASC Topic 860 was amended to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its ?nancial reports about a transfer of ?nancial assets; the effects of a transfer on its ?nancial position, ?nancial performance, and cash flows; and a transferor's continuing involvement in transferred ?nancial assets. The adoption of ASC Topic 860 did not have a material impact on the Company's consolidated financial statements. Recent Accounting Pronouncements (i) Consolidation of Variable Interest Entities In June 2009, the FASB issued an amendment to ASC Topic 810, entitled "Consolidation of Variable Interest Entities", which changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity's purpose and design and a company's ability to 18 direct the activities of the entity that most significantly impact the entity's economic performance. This amendment requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and will require a company to provide additional disclosures about its involvement with variable interest entities, any significant changes in risk exposure due to that involvement and how its involvement with a variable interest entity affects the company's financial statements. This amendment will be effective at the start of the Company's fiscal year beginning May 1, 2010. The Company is currently evaluating the impact, if any, that the adoption of this amendment will have on its financial statements. (ii) Revenue Recognition: Multiple Deliverable Revenue Arrangements and Certain Revenue Arrangements That Include Software Elements In October 2009, FASB issued ASU No. 2009-13, "Revenue Recognition (Topic 605): "Multiple Deliverable Revenue Arrangements" (a Consensus of the FASB EITF). ASU No. 2009- 13 modifies ASC 605-25, "Revenue Recognition - Multiple- Element Arrangements" (formerly EITF 00-21). ASU No. 2009- 13 requires an entity to allocate the revenue at the inception of an arrangement to all of its deliverables based on their relative selling prices. This guidance eliminates the residual method of allocation of revenue in multiple deliverable arrangements and requires the allocation of revenue based on the relative-selling-price method. The determination of the selling price for each deliverable requires the use of a hierarchy designed to maximize the use of available objective evidence, including, VSOE, third party evidence of selling price (TPE), or estimated selling price (ESP). In October 2009, FASB issued Accounting Standards Update (ASU) No. 2009-14, Topic 985: "Certain Revenue Arrangements That Include Software Elements". ASU No. 2009-14 modifies ASC 985-605, Software Revenue, such that the following products would be considered non-software deliverables and therefore excluded from the scope of ASC 985-605: - Tangible products that contain software elements and non-software elements that function together to deliver the tangible product's essential functionality. 19 - Undelivered elements that are essential to the above described tangible product's functionality. ASU No. 2009-13 and ASU No. 2009-14 must be adopted no later than the beginning of the Company's fiscal year 2011 and early adoption is allowed and may be adopted either under the prospective method, whereby the guidance will apply to all revenue arrangements entered into or materially modified after the effective date, or under the retrospective application, whereby the guidance will apply to all revenue arrangements for all periods presented. An entity may elect to adopt ASU No. 2009-13 and ASU No. 2009- 14 in a period other than their first reporting period of a fiscal year under the prospective method but must adjust the revenue of prior reported periods such that all new revenue arrangements entered into, or materially modified, during the fiscal year of adoption are accounted for under this guidance. The adoption of ASU No. 2009-13 and ASU No. 2009-14 will allow the separation of deliverables under more arrangements which may result in less revenue deferral. For such arrangements, the application of the relative-selling price method of allocating the revenue of an arrangement and the elimination of the residual method of allocation may result in a different reallocation of revenue from product revenue, which is recognized upon delivery, to support revenue, which is recognized ratably over the support period. The Company is currently evaluating the impact of these pronouncements on its financial position and results of operations. Note 4. Earnings (Loss) Per Share Basic earnings or loss per share is based on the weighted average number of common shares outstanding. Diluted earnings or loss per share is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. The computation of earnings (loss) per share is net earnings (loss) available to common stockholders (numerator) divided by the weighted average number of common shares outstanding (denominator) during 20 the periods presented. All earnings or loss per share amounts in the financial statements are basic earnings or loss per share, as defined by ASC Topic 260, "Earnings Per Share". Diluted loss per share does not differ from basic loss per share for all periods presented. Convertible securities that could potentially dilute basic earnings per share in the future are not included in the computation of diluted loss per share because to do so would be anti- dilutive. All per share and per share information are adjusted retroactively to reflect stock splits and changes in par value, when applicable. Three months ended Nine months ended January 31, January 31, _______________________________________________ 2010 2009 2010 2009 _______________________________________________ Numerator - net income (loss) available to common stockholders $ (1,343,789) $ (1,216,906) $ (3,382,671) $ (3,561,041) ____________________________________________________ Denominator - weighted average number of common shares ourstanding 26,645,547 22,916,167 25,419,087 22,385,974 ____________________________________________________ Basic and diluted loss per common share $ (0.05) (0.05) (0.13) (1.16) Note 5. Prepaid Expenses and Other Receivables As of January 31, 2010 and April 30, 2009, prepaid expenses and other receivables consist of the following: January 31, April 30, 2010 2009 _________________________________ Prepaid trade expenses $ - $ 13,968 Prepaid consultants and corporate expenses 20,050 40,000 Money advanced to offices and staff for expenses to be incrrred for the Company - 598,117 ________________________________ $ 20,050 $ 652,085 ________________________________ Note 6. Equipment Equipment as of January 31, 2010 and April 30, 2009 is summarized as follows: 21 January 31, April 30, 2010 2009 ________________________________ Computer equipment $ 58,624 $ 54,556 Office equipment 9,659 8,864 ________________________________ 68,283 63,420 Less: accumulated depreciation (18,031) (8,185) ________________________________ $ 50,252 $ 55,235 The depreciation expense incurred during the three-month and nine-month periods ended January 31, 2010 and 2009 were $3,311 (2009: $2,721) and $9,852 (2009: $5,246), respectively. Note 7. Accounts Payable and Accrued Liabilities As of January 31, 2010 and April 30, 2009, accounts payable and accrued liabilities consist of the following: Note 8. Capital Stock (a) Preferred Stock The Company is authorized to issue up to 100,000,000 shares of Preferred Stock with a par value of $0.00001 per share under terms and conditions as set forth in its Articles of Incorporation. At January 31, 2010, the Company did not have any outstanding preferred stock. (b) Common Stock The Company is authorized to issue up to 100,000,000 shares of Common Stock with a par value of $0.00001 per share under terms and conditions as set forth in its Articles of Incorporation. On July 17, 2008, the Company completed the sale of 1,666,667 units of its securities (the "Units"), with each 22 Unit consisting of (a) one share of the Company's Common Stock, par value $0.00001 per share (the "Common Stock"), (b) a warrant to purchase one share of Common Stock at a purchase price of $6.00 per share of Common Stock (the "Group A Warrant"), and (c) a warrant to purchase one share of Common Stock at a purchase price of $9.00 per share of Common Stock (the "Group B Warrant"), for a purchase price of $3.00 per Unit. The aggregate proceeds from the sale of the Units, prior to expenses incurred in connection with the offer and sale of the Units, was $5,000,000. The Company sold the Units to a single investor pursuant to applicable exemptions from registration under the Securities Act of 1933, as amended. The total cost for the $5,000,000 private placement was $406,164, resulting in net proceeds of $4,593,836. The proceeds from the issuance of the Units were allocated between the warrants and the common shares on the basis of relative fair values. The fair value of the warrants of $893,371 was calculated using the Black-Scholes model using the following assumptions: Volatility of 14.25%, expected term of 5 years, risk free interest rate of 3.35%. The Group A Warrant has an exercise price of $6.00 per share and is exercisable for a five-year period commencing on July 17, 2008, to purchase 1,666,667 shares of Common Stock in the aggregate. The Group A Warrant is subject to proportional adjustment for stock splits, stock dividends, recapitalizations, reclassifications, and similar corporate events. The Group A Warrant may not be exercised on a cashless basis. The Company may redeem the Group A Warrant at its option at a price of $0.05 per share if the closing bid price of the Company's Common Stock exceeds $8.00 per share for a period of 20 consecutive trading days, provided that the Company's redemption right will not be in effect during any period during which the Company does not have in place an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), registering the shares of Common Stock issuable upon exercise of the Group A Warrant. The Group B Warrant is exercisable to purchase 1,666,667 shares of Common Stock. The terms of the Group B Warrant 23 are identical to the Group A Warrant, except that the exercise price is $9.00 per share of Common Stock, and the price per share of Common Stock initiating the Company's repurchase rights is $12.00 per share. The Units, including the shares of Common Stock and Group A Warrant and Group B Warrant included therein, were issued without registration under the Securities Act in reliance upon the exemption from registration set forth in Rule 506 of Regulation D ("Regulation D"), promulgated pursuant to Section 4(2) of the Securities Act, Regulation S promulgated under the Securities Act, and Section 4(6) of the Securities Act. The Company based such reliance upon representations made by the purchaser of the Units to the Company regarding such purchaser's investment intent, sophistication, and status as an "accredited investor," as defined in Regulation D, and on the investor's representations as to its residency and the offshore purchase of the Units, among other things. The Units, including the shares of Common Stock and Group A Warrant and Group B Warrant included therein, and the shares of Common Stock issuable upon exercise of the Group A Warrant and Group B Warrant, may not be offered or sold in the United States absent registration pursuant to the Securities Act or an applicable exemption from the registration requirements of the Securities Act. The share certificates for the Common Stock and the Group A Warrant and Group B Warrant bear restrictive legends permitting the transfer of the securities only in compliance with applicable securities laws. On October 8, 2008, the Company issued 112,500 shares of Common Stock at a fair market value of $641,250 to employees, and the amount was recorded as compensation expense. In November 2008, the Company entered into a financing and investor relations agreement for eight months. Under this agreement the Company issued 900,000 shares of Common Stock valued at market totaling $5,130,000 and $25,000 in cash. The agreement was cancelled in February 2009 and 850,000 shares issued were returned for cancellation. The net consideration of $310,000 ($25,000 cash and $285,000 market value of 50,000 shares of common stock) was expensed $193,750 in the year ended April 30,2009 and $116,250 in the three months ended July 31, 2009. 24 Effective July 31, 2009, the Company authorized the release of a total of 3,679,380 Escrow Shares and cancellation of a total of 520,620 Escrow Shares in connection with the achievement of performance thresholds relating to the 16 months ended April 30, 2009 (see Note 1). The Company reflected the $919,845 estimated fair value of the 3,679,380 released Escrow Shares as general and administrative expenses in the accompanying consolidated statement of operations for the three months ended July 31, 2009 and increased additional paid-in capital by the same amount. Note 9. Related Party Balances/Transactions During the three-month and nine-month periods ended January 31, 2010, the Company accrued $3,424 (2008: $3,762) and $11,093 (2008: $26,186) in consulting fees to a related party of the Company's President and CEO, respectively. As of January 31, 2010, the Company owes $15,964 (April 30, 2009: $3,942) to this related party for services rendered. At January 31, 2010, the balance due the Company's President and CEO for expenses paid on behalf of the Company is $4,155 (April 30, 2009: $4,144), which is non- interest bearing, unsecured, and due on demand. At January 31, 2010, the balance that the Company advanced to an officer of the Company for expenses to be incurred for the Company is $nil (April 30, 2009: $2,200). $2,200 was repaid or reported as operating expenses during the nine months ended January 31, 2010. For the purpose of currency conversion, the Company sends foreign currency to an agent in China which is a related party to the Company, and then receives Renminbi back from the agent right after the conversion. The shareholder of the agent is the father of the Company's CFO and one of its shareholders. During the three month period ended January 31, 2010, the Company expensed $251,044 in service fees paid to this agent (which is included in general and administrative expenses). Note 10. Concentrations and Credit Risk The Company operates principally in China and grants credit 25 to its customers in this geographic region. Although China is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company's operations. For the three-month period ended January 31, 2010 net revenues of $660,539 included $36,800 from barter transactions. For the three months ended January 31, 2010, one customer accounted for 72% of net revenues. For the nine-month period ended January 31, 2010 net revenues of $3,517,875 included $732,969 from barter transactions. For the nine months ended January 31, 2010, four customers accounted for 39%, 16%, 13% and 13% of net sales, respectively. Note 11. Statutory Reserves Pursuant to Chinese regulations and laws, K's Media and K's Media Broadcasting are required to make appropriations to the reserve funds and staff welfare fund, based on after tax net income determined in accordance with generally accepted accounting principles of the People's Republic of China ("China GAAP"). Appropriations to the reserve funds should be at least 10% of the after tax net income determined in accordance with China GAAP until the reserve is equal to 50% of the respective entity's registered capital. The reserve funds are established for covering corporate obligations in the event of business liquidation. Any additional appropriations to the reserve funds over the 10% requirement are made at the discretion of the Board of Directors. The reserve funds and staff welfare funds are recorded as part of the retained earnings but are not available for distribution to the owners of the Company other than in liquidation. Appropriations to the staff welfare fund are at a percentage, as determined by the Board of Directors, of the after tax net income determined in accordance with China GAAP. The staff welfare fund is established for the purpose of providing employee facilities and other collective benefits to the employees. The appropriations are made on an annual basis. Due to the entities' losses, no appropriations have been made to the reserve funds and staff welfare fund. 26 Note 12. Commitments The Company has entered into agreements with various Karaoke ("KTV") and night clubs for rental of space in karaoke rooms and broadcasting fees for advertisements. As of January 31, 2010, future rental and fee commitments are payable as follows: Year ended April 30, 2010 $ 462,085 2011 1,827,905 2012 1,484,293 2013 1,389,298 2014 306,317 _____________ $ 5,469,898 _____________ Note 13. Subsequent Events The Company has evaluated subsequent events through the filing date of this Form 10-Q and has determined that there were no subsequent events to recognize or disclose in these financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This section of this report includes a number of forward- looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions. Overview of the Company's Business On January 18, 2008 (the "Closing Date"), Kinglake Resources, Inc., ( later changed name to K's Media, here 27 after refers to as the "Registrant" or the "Company") completed a Share Exchange Agreement (the "Share Exchange Agreement") dated December 23, 2007, with Orient Come Holdings Limited, a company organized under the laws of British Virgin Island ("Orient Come") and Beijing K's Media Advertising Ltd. Co., a limited liability company organized under the laws of the People's Republic Of China ("Chinese Advertising Company" or K's Media). Pursuant to the terms of the Share Exchange Agreement, the shareholders of Orient Come (the "Orient Come Shareholders") transferred to us all of the Orient Come shares in exchange for the issuance of 13,000,000 shares of our common stock (the "Acquisition"). As a result of the Acquisition, Orient Come became our wholly-owned subsidiary. In connection with the Share Exchange Agreement we issued 2,000,000 shares of our common stock to Sino Return Holdings Limited, a non-affiliate party as finder's fee. On February 22, 2008, Orient Come assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's Media Broadcasting") pursuant to an Assignment Agreement dated February 22, 2008 (the "Assignment Agreement"). Under the Assignment Agreement Orient Come assigned all of its right, title and interest in and to the Business Cooperation Agreement and K's Media Broadcasting agreed to assume all of Orient Come's obligations under the Business Cooperation Agreement. K's Media Broadcasting, a company organized under the laws of the People's Republic of China, is a wholly owned subsidiary of the Company. Prior to the Acquisition, we were a public "shell" company with nominal assets. We were incorporated in the State of Nevada in April 14, 2006 and engaged in the business of conducting research in the form of exploration of our mining interest. In September 2007, a review of the aeromagnetic of our property shows no apparent anomalies and the geologist recommend no further work on this property. Our management then began to pursue an acquisition strategy, whereby we sought to acquire businesses that provide room for growth. As a result of the acquisition, we engaged in media and advertising throughout China. The Chinese Advertising 28 Company is an emerging media company that targets high end consumers in China by placing premium brand advertising in entertainment clubs on behalf of top-tier consumer products clients. Entertainment clubs are popular entertainment establishments in Asia that rent private rooms containing karaoke singing equipment, typically to groups of friends and business colleagues. Concurrent with the Share Exchange Agreement, Orient Come, our wholly-owned subsidiary has signed a Business Cooperation Agreement with the Chinese Advertisement Company. We do not have an equity interest with the Chinese Advertisement Company. In order to meet ownership requirements under Chinese law, which restricts foreign companies with less than three years of operation history in advertising industry from operating in the advertising industry in China, we and Orient Come executed a series of exclusive contractual agreements. These contractual agreements allow us to, among other things, to secure significant rights to influence the Chinese Advertisement Company's business operations, policies and management, approve all matters requiring shareholder approval, and the right to receive 80% income earned by the Chinese Advertisement Company. In addition, to ensure that the Chinese Advertisement Company and its shareholders perform their obligations under these contractual arrangements, the shareholders have pledged to Orient Come all of their equity interests in the Chinese Advertisement Company. At such time that current restrictions under People's Republic Of China (PRC) law on foreign ownership of Chinese companies engaging in the advertising industry in China are lifted, or we have acquired a non-Chinese advertisement company that has over three years operation in advertising industry ("Qualified Advertising Subsidiary"), Orient Come may exercise its option to purchase the equity interests in the Chinese Advertisement Company and transfer the ownership to the Qualified Advertising Subsidiary. Orient Come later assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd., another wholly owned subsidiary of the Company incorporated in People's Republic of China. The Chinese Advertising Company signs advertising agreements with companies in the cosmetics, beverage, automobile and other consumer goods sectors. K's Media also 29 signs advertisement placement agreements with top entertainment clubs chains in Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou and other major Chinese cities. K's Media then promotes its clients brands at the entertainment clubs via advertising and promotional events. K's Media has signed agreements with more than three hundred top- ranked entertainment clubs in Beijing, Shanghai, Guangzhou, Shenzhen and other large cities, representing thousands of screens. Advertisements will be placed on screens in each room of each club signed by K's Media. A critical component of K's Media's marketing and distribution to entertainment clubs is its partnership with Shine MultiMedia Co., Ltd. ("Shine"), one of the China's largest VOD (video on demand) system distributors with deals in over 3,000 entertainment clubs and more than 100,000 entertainment rooms in China. Shine and other VOD system distributors that signed up with K's Media has bundled K's Media's proprietary CRM software with its VOD system and also pursue advertising agreements with the entertainment clubs on behalf of K's Media. The parties have entered into the Service Agreement whereby VOD system distributors arrange exclusive agency contracts between K's Media and entertainment clubs. VOD system distributors also installed and maintained advertisement equipment at the entertainment clubs during the terms of the contracts. K's Media supplements these VOD system distributors? marketing efforts with its own team of club agents that is responsible for signing up entertainment clubs, renewing contracts, and providing other follow-up services such as media channel maintenance and ad placements. VOD system distributors will receive a fee from K's Media for each contract executed and monthly maintenance fee for services provided by them over the term of each contract. Our ability to generate revenues from advertising sales largely depends upon our ability to provide a large network of screens that show our programs in entertainment clubs, which requires us to obtain Ad Licensing rights contracts to operate in entertainment clubs, as well as how fast the advertising clients can accept us as a new media focusing high end consumers. The Registrant changed its name to K's Media on March 11, 2008, which will be more consistent with its business activities in the media and advertising in China. 30 Need for Additional Capital There is no historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have generated insufficient revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to price and cost increases in services. The capital raised from the issuance of our common stock can not guarantee the Company to sustain for a year. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our activities. Equity financing could result in additional dilution to existing shareholders. Recent Developments The Company has signed up over 300 KTV lounges in tier 1 cities including Beijing, Shanghai, Guangzhou and Shenzhen by January 31, 2010. K's Media selects KTV clubs that are frequented by high earners such as business owners and professiona ls with active lifestyles. Especially attractive are clubs that appeal to the top 5% of China's population by income. K's Media will reach these individuals by being sure to only contract with mid- to high-end KTV lounges, starting from tier 1 city. Result of Operations Three Months ended January 31, 2010 Compared to Three Months ended January 31, 2009. Operating Revenues. Operating revenues for the three months ended January 31 of 2010 and three months ended January 31 of 2009 were $660,539 and $604,840 respectively. The increase of the revenue was caused by the development of 31 the Company's advertising business. The Company started sales from September 2008. Operating Expenses. The Company's operating expenses totaled $1,541,859 for the quarter ended January 31 of 2010, compared to $1,080,668 for the same quarter of 2009. The change was mainly attributable to the $476,103provision for doubtful accounts in 2010. Loss from Operations. The Company has recorded a loss of $1,343,303 for the quarter ended January 31 of 2010, compared to a loss of $1,227,935 for the same quarter last year. The difference was caused mainly by $476,103 provision for doubtful accounts in 2010, offset partially by $945,829 improvement in gross profit. Net Loss. The Company had a net loss of $1,340,577 for the quarter ended January 31 of 2010, compared to a net loss of $1,216,906 for the same quarter last year. The slight difference between Loss from Operations and Net Loss is caused by the interest income and foreign exchange gain. Liquidity and Capital Resources The Company has financed its operations by issuance of its common stock which raised $5 million gross proceeds in July 2008 through a private placement. Cash as of January 31 of 2010 and April 30, 2009 were $21,013 and $1,102,634 respectively. Net cash used in financing activities was $4,372 for the nine months ended January 31 of 2010, compared to $4,421,286 net cash provided by financing activities in 2009. Net cash used in operating activities was $1,071,262 for the nine months ended January 31 of 2010 as a result primarily of the $3,376,874 net loss, offset partially by noncash stock-based compensation of $1,036,095, a $632,035 decrease in prepaid expenses and other receivables, and a $577,498 increase in accounts payable and accrued liabilities. 32 Net cash used in investing activities, which consists of purchase of fixed assets were $4,935 for the nine months ended January 31 2010 and $42,752 for the nine months ended January 31 2009. Off Balance Sheet Arrangements We do not have any obligations that meet the definition of an off-balance-sheet arrangement that have or are reasonably likely to have a material effect on our financial statements, which has not been consolidated. Critical Accounting Policies The preparation of financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available for such items as depreciable lives. The Company revises the recorded estimates when better information is available, facts change or actual amounts can be determined. These revisions can affect operating results. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK None ITEM 4. CONTROLS AND PROCEDURES Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a- 15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, have concluded that, 33 based on the evaluation of these controls and procedures, that our disclosure controls and procedures were effective. There were no changes in our internal controls or in other factors during the period covered by this report that have materially affected, or are likely to materially affect the Company's internal controls over financial reporting. PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS None. ITEM 1A- RISK FACTORS There were no material changes to Risk Factors disclosed in the Form 10-K for the year ended April 30, 2008 filed on July 28, 2008. ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS None. ITEM 3 - DEFAULTS UPON SENIOR SECURITIES None. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5 - OTHER INFORMATION None. 34 ITEM 6 - EXHIBITS (a) The following exhibits are included herein: 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2 Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 22rd day of March, 2010. K's Media (the "Registrant") BY: James Wei James Wei CEO 35

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10 Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 FOR THE QUARTER ENDED OCTOBER 31, 2009

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT of 1934 FOR THE TRANSITION PERIOD FROM _____

K's Media

(Name of small business issuer in its charter)

Commission File Number 000-52760

Nevada	75-3263792
(State or Other Jurisdiction of Organization)	(IRS Employer Identification #)

Rm.1909,Tower A, The Spaces International Center.No.8,Dongdaqiao Road,

ChaoYang District, Beijing 100020, P.R China

(Address of Principal Executive Offices) (Zip Code)

86-10-5921-2200

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

The Company is a Shell company: Yes [ ] No [X]

As of December 17, 2009, the Company has 33,466,167 shares of common stock issued and outstanding.

K's Media

Form 10-Q for the period ended October 31, 2009

TABLE OF CONTENTS

				Page
PART I - FINANCIAL INFORMATION
	ITEM 1 - FINANCIAL STATEMENTS (Unaudited)
		Condensed Consolidated Balance Sheets
		Condensed Consolidated Statements of Operations
		Consolidated Statement of Stockholders' Equity (Deficiency)
		Condensed Consolidated Statements of Cash Flows
		Notes to Consolidated Financial Statements
	ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
	ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
	ITEM 4 - CONTROLS AND PROCEDURES
PART II - OTHER INFORMATION
	ITEM 1 - LEGAL PROCEEDINGS
	ITEM		1A- RISK FACTORS
	ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
	ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
	ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
	ITEM 5 - OTHER INFORMATION
	ITEM 6 - EXHIBITS
	SIGNATURES

ITEM 1. FINANCIAL STATEMENTS

K's Media
(Previously known as Kinglake Resources Inc.)
Consolidated Balance Sheets
October 31 and April 30, 2009
				October 31,		April 30,
(Expressed in U.S. Dollars)				2009		2009
				(Unaudited)		(Audited)
ASSETS
Current assets
	Cash		$	95,539	$	1,102,634
	Accounts receivable, net of allowance for doubtful accounts
	of $2,043,675 and $ 250,772, respectively			864,965		580,440
	Prepaid expenses and other receivables (Note 5)			606,134		652,085
	Inventory			44,407		107,066
	Amount due from related party (Note 9)			251,811		249,232
Total current assets				1,862,856		2,691,457
Equipment, net (Note 6)				53,571		55,235
Total assets			$	1,916,427	$	2,746,692
LIABILITIES
Current liabilities
	Accounts payable and accrued liabilities (Note 7)		$	582,514	$	355,463
	Amount due to related parties (Note 9)			16,593		8,086
	Unearned revenue			163,566		226,602
Total liabilities				762,673		590,151
STOCKHOLDERS' EQUITY
Stockholders' Equity (Note 8)
	Preferred stock, $0.00001 par value;
		authorized 100,000,000 shares,
		issued and outstanding 0 and 0 shares, respectively		-		-
	Common stock, $0.00001 par value;
		authorized 100,000,000 shares,
		32,945,547 and 33,466,167 shares issued and
		26,645,547 and 22,966,167 shares oustanding, respectively		329		335
	Additional paid-in capital			7,947,695		7,027,844
	Deferred consulting services			-		(116,250)
	Accumulated other comprehensive loss			45,989		48,574
	Accumulated deficit			(6,840,259)		(4,803,962)
Total stockholders' equity				1,153,754		2,156,541
Total liabilities and stockholders' equity			$	1,916,427	$	2,746,692
The accompanying notes are an integral part of these consolidated financial statements.

K's Media
(Previously known as Kinglake Resources Inc.)
Consolidated Statements of Operations and Comprehensive Loss
For the three and six months ended October 31, 2009 and 2008
(Unaudited)
			Three months ended				Six months ended
			October 31,				October 31,
(Expressed in U.S. Dollars)			2009		2008		2009		2008
Advertising revenues at contracted amounts		$	1,434,178	$	49,479	$	3,046,152	$	49,479
Adjustments for barter transactions			-		-		(188,816)		-
Net revenues			1,434,178		49,479		2,857,336		49,479
Rental and broadcasting fees due entertainment clubs			469,158		575,841		953,806		852,289
Gross profit (loss)			965,020		(526,362)		1,903,530		(802,810)
Selling, general and adminitrative expenses:
	Selling expenses		152,553		-		583,789		-
	General and administrative (including stock-based
	compensation of $0, $709,863, $1,036,095
	and $778,476, respectively)		267,057		1,168,964		1,565,866		1,528,980
	Provision for doubtful accounts		814,115		-		1,792,201		-
Total			1,233,725		1,168,964		3,941,856		1,528,980
Loss from operations			(268,705)		(1,695,326)		(2,038,326)		(2,331,790)
Other income and expenses
Interest income			904		7,339		3,568		15,129
Foreign exchange loss			(285)		(26,527)		(267)		(25,231)
Interest and bank charges			(665)		(1,212)		(1,272)		(2,243)
Other income and expenses (net)			(46)		(20,400)		2,029		(12,345)
Net Loss			(268,751)		(1,715,726)		(2,036,297)		(2,344,135)
Other Comprehensive Income (Loss)			1,356		6,834		(2,585)		26,753
Comprehensive Loss		$	(267,395)	$	(1,708,892)	$	(2,038,882)	$	(2,317,382)
Net loss per share
Basic and diluted		$	(0.01)	$	(0.08)	$	(0.08)	$	(0.11)
Number of common shares used to
compute net loss per share
	Basic and diluted		26,645,547		22,833,015		24,805,857		22,120,877
The accompanying notes are an integral part of these consolidated financial statements.

K's Media
(Previously known as Kinglake Resources Inc.)
Consolidated Statements of Cash Flows
For the six months ended October 31, 2009 and 2008
(Unaudited)
(Expressed in U.S. Dollars)				2009		2008
Cash flows used in operating activities
	Net loss		$	(2,036,297)	$	(2,344,135)
	Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation expense			6,541		2,525
	Non-cash employee benefits			-		641,250
	Provision for doubtful accounts			1,792,201		-
	Stock-based compensation			1,036,095		137,226
	Changes in operating assets and liabilities:
		Accounts receivable		(2,077,167)		(49,722)
		Prepaid expenses and other receivable		45,312		(726,749)
		Inventory		62,516		-
		Accounts payable and accrued liabilities		227,227		(16,238)
		Amount due from related party		1,464		-
		Amount due to related parties		8,497		(226,889)
		Unearned revenue		(62,771)		-
Net cash used in operating activities				(996,381)		(2,582,732)
Cash flows used in investing activities
	Purchase of fixed assets			(4,934)		(38,141)
Net cash used in investing activities				(4,934)		(38,141)
Cash flows provided by (used in) financing activities
	Issuance of common stock and warrants			-		4,593,836
	Advance to related parties			(4,297)		-
Net cash provided by (used in) financing activities				(4,297)		4,593,836
Effect of foreign exchange rate changes				(1,483)		26,254
Increase (decrease) in cash				(1,007,095)		1,999,217
Cash, beginning of period				1,102,634		1,152,852
Cash, end of period			$	95,539	$	3,152,069
Supplemental disclosure of cash flow information:
	Interest paid		$	30	$	-
	Income tax paid		$	-	$	-
The accompanying notes are an integral part of these consolidated financial statements.

K's Media
(Previously known as Kinglake Resources Inc.)
Consolidated Statements of Stockholders' Equity
For the six months ended October 31, 2009 and year ended April 30, 2009
													Accumulated
									Deferred				other		Total
			Common Stock				Additional		Consulting		Accumulated		comprehensive		Stockholders'
(Expressed in U.S. Dollars)			Shares		Amount		paid-in capital		Services		Deficit		income		Equity
Balance, April 30, 2008			31,637,000	$	317	$	1,507,776	$	(217,263)	$	(389,133)	$	16,558	$	918,255
	Common stock issued in private placement
		in July 2008 (at $3.00 per share)	1,666,667		16		3,700,449								3,700,465
	Issuance of warrants in private placement
		in July 2008					893,371								893,371
	Issuance of common shares as employee benefits		112,500		1		641,249								641,250
	Issuance of shares for services rendered		50,000		1		284,999		(285,000)						-
	Amortization of deferred consulting services								386,013						386,013
	Foreign translation adjustment												32,016		32,016
	Net loss for the year ended April 30, 2009										(4,414,829)				(4,414,829)
Balance, April 30, 2009 (audited)			33,466,167	$	335	$	7,027,844	$	(116,250)	$	(4,803,962)	$	48,574	$	2,156,541
	Release and cancellation of Escrow Shares (Note 1)		(520,620)		(6)		919,851								919,845
	Amortization of deferred consulting services								116,250						116,250
	Foreign translation adjustment												(2,585)		(2,585)
	Net loss for the six months ended October 31, 2009										(2,036,297)				(2,036,297)
Balance, October 31, 2009 (unaudited)			32,945,547	$	329	$	7,947,695	$	-	$	(6,840,259)	$	45,989	$	1,153,754
The accompanying notes are an integral part of these consolidated financial statements.

K's MEDIA

(Previously known as Kinglake Resources Inc.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

October 31, 2009

(Unaudited)

Note 1. Nature of Operations and Going Concern

Nature of Operations

K’s Media (the "Company") was incorporated in the State of Nevada on April 14, 2006 under the name Kinglake Resources Inc., which was changed to K’s Media on March 11, 2008. In April 2006, the Company acquired a mining claim in the Province of British Columbia. The mining claim expired April 18, 2007. During the year ended April 30, 2009, the Company ceased to be a development stage enterprise as it commenced its planned principal operations.

On January 18, 2008, the Company completed a Share Exchange Agreement (the "Share Exchange Agreement") dated December 23, 2007 with Orient Come Holdings Limited, a company organized under the laws of British Virgin Islands ("Orient Come") and Beijing K's Media Advertising Ltd. Co. ("K's Media"), a limited liability company organized under the laws of the People's Republic of China ("China"). Pursuant to the terms of the Share Exchange Agreement, the shareholders of Orient Come (the "Orient Come Shareholders") transferred to the Company all of the Orient Come shares in exchange for the issuance of 13,000,000 shares of the Company's common stock (the "Acquisition"). As a result of the Acquisition, Orient Come became the Company's wholly-owned subsidiary and the Orient Come Shareholders and/or their designated third parties acquired in the aggregate approximately 62% of the Company’s issued and outstanding stock. In connection with the Share Exchange Agreement, the Company issued 2,000,000 shares of its common stock as a finder's fee to a third party.

Concurrent with the Share Exchange Agreement, the Company entered into a series of agreements with K's Media and the shareholders of K's Media (see Note 1(a) to (d) for details). Included among these agreements is a Business Cooperation Agreement. Under this agreement the Company effectively controls K's Media. As a result of the Business Cooperation Agreement, K’s Media is deemed to be a subsidiary of the Company under FASB Interpretations - FIN 46(R): Consolidation of Variable Interest Entities (as amended) ("FIN 46 (R)") and Emerging Issue Task Force 97-2 (“EITF 97-2”): Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Practice Management Entities and Certain Other Entities with Contractual Management Arrangements.

On February 22, 2008, Orient Come assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's Media Broadcasting") (see Note 1(b) for details). K's Media Broadcasting, a company organized under the laws of China, is a wholly owned subsidiary of the Company.

As a result of the Share Exchange Agreement, the Company is involved in the advertising business that targets high end consumers in China by placing premium brand advertising in "entertainment" clubs on behalf of top-tier consumer products clients. Entertainment clubs are popular entertainment establishments in Asia that rent private rooms containing karaoke singing equipment, typically to groups of friends and business colleagues.

The Share Exchange Agreement has been considered a reverse acquisition as Orient Come effectively assumed control of the Company. The Company (the legal acquirer of Orient Come) in substance is the accounting acquiree and Orient Come (the legal acquiree of the Company) is the accounting acquirer. The consolidated financial statements presented are those of Orient Come, the accounting acquirer, at historical cost, from June 18, 2007 to January 18, 2008, and combined with the Company thereafter. Orient Come commenced operations on June 18, 2007.

At December 23, 2007, the president of the Company was the brother of a significant stockholder of Orient Come and K’s Media.

The following agreements were entered into concurrent with the Share Exchange Agreement:

(a) Escrow Agreement

The Company entered into an Escrow Agreement (“Escrow Agreement”) with K's Media and shareholders of K's Media effective December 23, 2007. Pursuant to the Escrow Agreement, 10,500,000 Escrow Shares of Company common stock were deposited and held in an escrow account with an escrow agent. The Escrow Agreement, as amended January 31, 2008, September 4, 2008, June 4, 2009, August 4, 2009, and September 7, 2009, provides for the release and delivery to K’s Media stockholders and designees of up to 10,500,000 Escrow Shares of Company common stock based on the achievement of certain Performance Thresholds and the cancellation of the remaining shares, as follows:

Performance Threshold	Escrow Shares Deliverable	Performance Threshold	Minimum Performance Threshold
K's Media Signed Sales:
16 Months ended April 30, 2009	2,625,000	$1,900,000	$1,059,395
Year ended April 30, 2010	2,625,000	$14,380,000	$7,990,224
Year ended April 30, 2011	2,625,000	$33,230,000	$18,464,803
Number of Agreements with entertainment clubs initiated by K' s Media’s stockholders and designees:
16 months ended April 30, 2009	1,575,000	600	300
Year ended April 30, 2010	525,000	300	300
Year ended April 30, 2011	525,000	300	300
Total	10,500,000

Under the Escrow Agreement, as amended, if the applicable Performance Threshold is met, the respective parties are to be delivered the Escrow Shares deliverable. If the Minimum Performance Threshold is not met, the applicable Escrow Shares are to be returned to the Company and cancelled. If the Minimum Performance Threshold is met but the Performance Threshold is not met, then a proportionate number of the 10,500,000 Escrow Shares (actual results divided by the Performance Threshold) are to be delivered to the respective parties and the remainder is to be returned to the Company and cancelled.

Effective July 31, 2009, the Company authorized the release of a total of 3,679,380 Escrow Shares and cancellation of a total of 520,620 Escrow shares in connection with the achievement of performance thresholds relating to the 16 months ended April 30, 2009. After such release and cancellation, there are 6,300,000 Escrow shares remaining.

(b) Business Cooperation Agreement

Pursuant to the provisions of the Business Cooperation Agreement, which has a term of 20 years, K's Media retained the services of Orient Come in relation to the current and proposed operations of K's Media's business in China ("Orient Come's Services"). Under the Business Cooperation Agreement, K's Media will remit a quarterly consulting fee, equal to 80% of its quarterly revenues after deduction of direct operating costs, expenses and taxes in consideration of Orient Come's services.

On February 22, 2008, Orient Come assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's Media Broadcasting") pursuant to an Assignment Agreement dated February 22, 2008 (the "Assignment Agreement"). Under the Assignment Agreement, Orient Come assigned all of its right, title and interest in and to the Business Cooperation Agreement and K’s Media Broadcasting agreed to assume all of Orient Come's obligations under the Business Cooperation Agreement. K's Media Broadcasting, a company organized under the laws of China, is a wholly owned subsidiary of the Company.

Under an Option Agreement entered into by and among Orient Come, shareholders of K's Media and K's Media effective as of December 23, 2007, the shareholders of K's Media, irrevocably granted to Orient Come or its designated party an exclusive option to purchase, to the extent permitted by China law, a portion or all of their respective equity interests in K's Media for a purchase price of $100. Orient Come or its designated party has the sole discretion to decide when to exercise the option, whether in part or in full. The agreement has a term of 20 years.

(d) Equity Pledge Agreement

Under an Equity Pledge Agreement entered into by and among Orient Come, K's Media and shareholders of K's Media dated December 23, 2007, the shareholders of K's Media pledged, all of their equity interests in K's Media to guarantee the performance of K's Media in its obligations under the Business Cooperation Agreement. If K's Media or any of its shareholders breaches his/her respective contractual obligations under this agreement, or upon the occurrence of one of the events regarded as an event of default under each such agreement, Orient Come, as pledgee, will be entitled to certain rights, including the right to dispose of the pledged equity interests. The shareholders of K's Media agree not to dispose of the pledged equity interests or take any actions that would prejudice Orient Come's interest, and to notify the Company of any events or upon receipt of any notices which may affect Orient Come's interest in the pledge. The term of the Pledges shall last until all obligations under the Exclusive Business Cooperation Agreement have been satisfied by K’s Media.

Going Concern

The Company has incurred net operating losses since inception. The Company faces all the risks common to companies that are relatively new, including under capitalization and uncertainty of funding sources, high initial expenditure levels, uncertain revenue streams, and difficulties in managing growth. At October 31, 2009, the Company has accumulated losses of $6,840,259 since inception. The Company's recurring losses raise substantial doubt about its ability to continue as a going concern. The Company's consolidated financial statements do not reflect any adjustments that might result from the outcome of this uncertainty. The Company expects to incur losses from its business operations and will require additional funding during the year ended April 30, 2010. The future of the Company hereafter will depend in large part on the Company's ability to successfully raise capital from external sources to pay for planned expenditures and to fund operations.

Management believes that its current and future plans will enable it to continue as a going concern. The Company's ability to achieve these objectives cannot be determined at this time. These financial statements do not give effect to any adjustments which would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

Note 2. Statement of Information Furnished

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with Form 10-Q instructions and in the opinion of management contain all adjustments (which are of a normal recurring nature) necessary to present fairly the financial position as of October 31, 2009, and the results of operations and cash flows for the three and six months ended October 31, 2009 and 2008. These results have been determined on the basis of generally accepted accounting principles and practices in the United States and applied consistently with those used in the preparation of the Company's 2009 Annual Report on Form 10-K. Operating results for the three and six months ended October 31, 2009 are not necessarily indicative of the results that can be expected for the year ending April 30, 2010.

These consolidated financial statements include the accounts of K's Media (Registrant, formerly known as Kinglake Resources Inc.), Oriental Come Holdings Limited (100% owned subsidiary), Beijing K's Media Broadcasting Ltd. Co. (100% owned subsidiary) and Beijing K's Media Advertising Ltd. Co., which is deemed to be a Variable Interest Entity of the Company through contractual relationship. This consolidation is required by the standards of Accounting Research Bulletin 51, Consolidated Financial Statements, Statement 94 of the Financial Accounting Standards Board (“FASB”), Consolidation of All Majority-Owned Subsidiaries, FASB Interpretation 46(R), Consolidation of Variable Interest Entities, Issue 04-05 of the Emerging Issues Task Force of the FASB, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights, and FASB Staff Position SOP 78-9-1, Interaction of AICPA Statement of Position (“SOP”) 78-9 and Emerging Issues Task Force (“EITF”) Issue 04-05.

Note 3. Changes in Accounting Policies

The Company adopted the following accounting policies during the period:

(i) Disclosures about Derivative Instruments and Hedging Activities

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”. This statement is intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity’s derivative instruments and hedging activities and their effects on the entity’s financial position, financial performance, and cash flows. SFAS 161 applies to all derivative instruments within the scope of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities” as well as related hedged items, bifurcated derivatives, and non-derivative instruments that are designated and qualify as hedging instruments. Entities with instruments subject to SFAS 161 must provide more robust qualitative disclosures and expanded quantitative disclosures. The adoption of this statement did not have any material effect on the Company's consolidated financial statements.

(ii) Determination of the Useful Life of Intangible Assets

In April 2008, the FASB issued an amendment to ASC No. 350 entitled “Determination of the Useful Life of Intangible Assets”, which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset. The amendment did not have a material impact on the Company’s financial statements.

(iii) Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)

In May 2008, the FASB issued FSP APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”. The FSP clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP requires issuers to account separately for the liability and equity components of certain convertible debt instruments in a manner that reflects the issuer's nonconvertible debt (unsecured debt) borrowing rate when interest cost is recognized. The FSP requires bifurcation of a component of the debt, classification of that component in equity and the accretion of the resulting discount on the debt to be recognized as part of interest expense in our consolidated statement of operations. The FSP requires retrospective application to the terms of instruments as they existed for all periods presented. The adoption of FSP APB 14-1 did not have any material effect on the Company's consolidated financial statements.

(iv) The Hierarchy of Generally Accepted Accounting Principles

In May 2008, the FASB issued SFAS 162, "The Hierarchy of Generally Accepted Accounting Principles". SFAS 162 identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements. The implementation of this standard did not have a material impact on the Company's consolidated financial position and results of operations.

(v) Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity's Own Stock

In June 2008, the FASB ratified the consensus reached on Emerging Issues Task Force (“EITF”) Issue No. 07-05, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (EITF 07-05), as codified in FASB ASC topic 815, “Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entity’s Own Stock” (ASC 815). ASC 815 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument's contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. Adoption of EITF 07-5 did not have any material effect on the Company’s consolidated financial position and results of operations.

(vi) Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities

In June 2008, the FASB issued ASC No. 260, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”. Under this standard, unvested share-based payment awards that contain rights to receive non-forfeitable dividends (whether paid or unpaid) are participating securities, and should be included in the two-class method of computing EPS. The adoption of this pronouncement did not have a material impact on the Company’s financial statements.

(vii) Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement

In September 2008, the FASB issued EITF 08-5 “Issuer’s Accounting for Liabilities Measured at Fair Value with a Third-Party Credit Enhancement”. This FSP determines an issuer’s unit of accounting for a liability issued with an inseparable third-party credit enhancement when it is measured or disclosed at fair value on a recurring basis. Adoption of EITF 08-5 did not have any material effect on the Company’s consolidated financial position and results of operations.

(viii) Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of SFAS 133 and FIN 45; and Clarification of the Effective Date of SFAS 161

In September 2008, the FASB issued FSP FAS 133-1, “Disclosures about Credit Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation No. 45; and Clarification of the Effective Date of FASB Statement No. 16.”. This FSP amends SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”, to require disclosures by sellers of credit derivatives, including credit derivatives embedded in a hybrid instrument. The FSP also amends SFAS 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others”, to require additional disclosure about the current status of the payment/performance risk of a guarantee. Finally, this FSP clarifies the Board’s intent about the effective date of SFAS 161, “Disclosures about Derivative Instruments and Hedging Activities”. Adoption of FSP FAS 133-1 did not have any material effect on the Company’s consolidated financial position and results of operations.

(ix) Equity Method Investment Accounting Considerations

In November 2008, the FASB issued EITF 08-6 “Equity Method Investment Accounting Considerations.” EITF 08-6 clarifies accounting for certain transactions and impairment considerations involving the equity method. Transactions and impairment dealt with are initial measurement, decrease in investment value, and change in level of ownership or degree of influence. Adoption of EITF 08-6 did not have any material effect on the Company’s consolidated financial position and results of operations.

(x) Accounting for Defensive Intangible Assets

In November 2008, the FASB issued EITF 08-7, “Accounting for Defensive Intangible Assets”. EITF 08-7 clarifies how to account for defensive intangible assets subsequent to initial measurement. EITF 08-7 applies to all defensive intangible assets except for intangible assets that are used in research and development activities. EITF 08-7 is effective for intangible assets acquired on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. Adoption of EITF 08-7 did not have any material effect on the Company’s consolidated financial position and results of operations.

(xi) Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity’s Consolidated Subsidiary

In November 2008, the FASB issued FSP EITF 08-8, “Accounting for an Instrument (or an Embedded Feature) with a Settlement Amount That is Based on the Stock of an Entity’s Consolidated Subsidiary”. EITF 08-8 clarifies whether a financial instrument for which the payoff to the counterparty is based, in whole or in part, on the stock of an entity’s consolidated subsidiary is indexed to the reporting entity’s own stock. EITF 08-8 also clarifies whether or not stock should be precluded from qualifying for the scope exception of SFAS 133, “Accounting for Derivative Instruments and Hedging Activities”, or from being within the scope of EITF 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock”. Adoption of EITF 08-8 did not have any material effect on the Company’s consolidated financial position and results of operations.

(xii) Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities

In December 2008, the FASB issued FSP FAS 140-4 and FIN 46(R) -8, “Disclosures by Public Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest Entities.” This FSP amends SFAS 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” to require public entities to provide additional disclosures about transfers of financial assets. FSP FAS 140-4 also amends FIN 46(R)-8, “Consolidation of Variable Interest Entities”, to require public enterprises, including sponsors that have a variable interest entity, to provide additional disclosures about their involvement with a variable interest entity. FSP FAS 140-4 also requires certain additional disclosures, in regards to variable interest entities, to provide greater transparency to financial statement users. Adoption of FSP FAS 140-4 did not have any material effect on the Company’s consolidated financial position and results of operations.

(xiii) Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests that Continue to be Held by a Transferor in Securitized Financial Assets

In January 2009, The FASB released FSP No. EITF 99-20-1, “Amendments to the Impairment Guidance of EITF Issue No. 99-20”. The guidance, which modifies EITF Issue No. 99-20, “Recognition of Interest Income and Impairment on Purchased Beneficial Interests and Beneficial Interests That Continue to Be Held by a Transferor in Securitized Financial Assets”.

The amendment allows for the use of other-than-temporary impairment assessments established in SFAS No. 115, “Accounting for Certain Investments in Debt and Equity Securities”, for securities that had previously been subject to the impairment assessment under EITF Issue No. 99-20. SFAS No. 115 allows a reporting entity to assess an impaired security that is classified as either available-for-sale or held-to-maturity debt in order to determine whether the impairment should be recognized as other-than-temporary and recognized in earnings.

SFAS No. 115 gives management more discretion than EITF Issue No. 99-20, in deciding whether the loss is permanent. EITF Issue No. 99-20 required the use of market prices to assess the impairments of debt securities that are beneficial interests in some securitized financial transactions. Under the amended guidance, management can base the value it reports in the financial statements on its judgment of its ability to collect all the contracted amounts due.

Adoption of FSP EITF 99-20-1 did not have any material effect on the Company’s consolidated financial position and results of operations.

(xiv) Interim Disclosures About Fair Value of Financial Instruments

In April 2009, the FASB issued accounting standards under ASC Topic 825, “Financial Instruments” (previously FASB Staff Position FAS No. 107-1 and Accounting Principles Board Opinion No. 28-1) which extend the annual financial statement disclosure requirements for financial instruments to interim reporting periods of publicly traded companies. The adoption of ASC Topic 825 did not have a material impact on the Company’s consolidated financial statements.

(xv) Recognition and Presentation of Other-Than-Temporary Impairments

In April 2009, the FASB issued guidance included in ASC Topic 320, “Investment - Debt and Equity Securities”, which amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments in the financial statements. The guidance requires that an entity evaluate for and record an other-than-temporary impairment even when it concludes that it does not intend to sell an impaired security and does not believe it likely that it will be required to sell the security before recovery of the amortized cost basis. Once an entity has determined that an other-than-temporary impairment has occurred, it is required to record the credit loss component of the difference between the securities’s amortized cost basis and the estimated fair value in earnings, whereas the remaining difference is to be recognized as a component of other comprehensive income and amortized over the remaining life of the security. This guidance is effective for interim and annual reporting periods ending after June 15, 2009. The adoption of this guidance did not have a material impact on our consolidated financial position or results of operations.

(xvi) Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly

In April 2009, the FASB issued guidance included in ASC Topic 820, “Fair Value Measurement and Disclosures”, for estimating fair value when the volume and level of activity related to the asset or liability has significantly decreased. This also includes guidance on identifying circumstances that indicate a transaction is not orderly and emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and is applied prospectively. The adoption of this standard did not have a material impact on our consolidated financial position or results of operations.

(xvii) Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arise from Contingencies

In April 2009, the FASB issued Staff Position SFAS No. 141(R)-1 (“SFAS 141(R)-1”), “Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies” which amends and clarifies FASB Statement No. 141 (revised 2007), “Business Combinations”, to address application issues on initial and subsequent recognition and measurement arising from contingencies in a business combination. SFAS 141(R)-1 is effective for assets or liabilities arising from contingencies in business combinations beginning with the first annual period on or after December 15, 2008. The adoption of SFAS 141(R)-1 did not have an impact on the Company’s consolidated financial statements.

(xviii) Subsequent Events

ASC 855, “Subsequent Events”, was amended and defines subsequent events as transactions that occur after the balance sheet date but before financial statements are issued or are available to be issued. The amendment defines two types of subsequent events: (i) events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements (that is, recognized subsequent events); and (ii) events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date (that is, non-recognized subsequent events). In addition, the amendment requires an entity to disclose the date through which subsequent events have been evaluated, as well as whether that date is the date the ﬁnancial statements were issued or the date the ﬁnancial statements were available to be issued. The amendment was effective for periods ending after June 15, 2009. The adoption of the amendment, effective June 30, 2009, did not have any effect on our financial position, results of operations or cash flows.

(xix) The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles

On July 1, 2009, the FASB launched the “FASB Accounting Standards Codification” (the “FASB ASC”) as the single source of authoritative non-governmental U.S. GAAP. The FASB ASC did not change current U.S. GAAP, but simplified user access to all authoritative U.S. GAAP by organizing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents were superseded and all other accounting literature not included in the FASB ASC is now considered non-authoritative. The FASB ASC was effective for the Company’s financial statements for the quarter ended October 31, 2009. The adoption of the FASB ASC did not have an impact on the Company’s consolidated financial statements.

(xx) Measuring Liabilities at Fair Value

On September 1, 2009, the Company adopted ASU No. 2009-05, “Measuring Liabilities at Fair Value”, or ASU 2009-05, which amends ASC 820 to provide clarification of a circumstances in which a quoted price in an active market for an identical liability is not available. A reporting entity is required to measure fair value using one or more of the following methods: 1) a valuation technique that uses a) the quoted price of the identical liability when traded as an asset or b) quoted prices for similar liabilities (or similar liabilities when traded as assets) and/or 2) a valuation technique that is consistent with the principles of ASC 820. ASU 2009-05 also clarifies that when estimating the fair value of a liability, a reporting entity is not required to adjust to include inputs relating to the existence of transfer restrictions on that liability. The adoption of this ASU did not have an impact on its financial statements.

Recent Accounting Pronouncements

(i) Transfers and Servicing

ASC 860, “Transfers and Servicing”, was amended to improve the relevance, representational faithfulness and comparability of the information that a reporting entity provides in its ﬁnancial reports about a transfer of ﬁnancial assets; the effects of a transfer on its ﬁnancial position, ﬁnancial performance, and cash flows; and a transferor’s continuing involvement in transferred ﬁnancial assets. The amendments to ASC 860 are effective as of the beginning of an entity’s first annual reporting period that begins after November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. The amendments must be applied to transfers occurring on or after the effective date. While we are still analyzing the effects of the adoption of the amendments, we do not believe that the adoption will have a material effect on our financial position, results of operations or cash flows.

(ii) Consolidation of Variable Interest Entities

In June 2009, the FASB issued an amendment to ASC 810, entitled “Consolidation of Variable Interest Entities”, which changes how a company determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. This amendment requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and will require a company to provide additional disclosures about its involvement with variable interest entities, any significant changes in risk exposure due to that involvement and how its involvement with a variable interest entity affects the company’s financial statements. This amendment will be effective at the start of the Company’s fiscal year beginning May 1, 2010. The Company is currently evaluating the impact, if any, that the adoption of this amendment will have on its financial statements.

(iii) Fair Value Measurements and Disclosure

In September 2009, the FASB issued ASU No. 2009-12, “Fair Value Measurements and Disclosure”, or ASU 2009-12, which provides additional guidance on using the net asset value per share, provided by an investee, when estimating the fair value of an alternate investment that does not have a readily determinable fair value and enhances the disclosures concerning these investments. ASU 2009-12 is effective for interim and annual periods ending after December 15, 2009. The Company is currently evaluating the impact, if any, that the adoption of this amendment will have on its financial statements.

(iv) Revenue Recognition: Multiple Deliverable Revenue Arrangements and Certain Revenue Arrangements That Include Software Elements

In October 2009, FASB issued ASU No. 2009-13, “Revenue Recognition (Topic 605): “Multiple Deliverable Revenue Arrangements” (a Consensus of the FASB EITF). ASU No. 2009-13 modifies ASC 605-25, “Revenue Recognition - Multiple-Element Arrangements” (formerly EITF 00-21). ASU No. 2009-13 requires an entity to allocate the revenue at the inception of an arrangement to all of its deliverables based on their relative selling prices. This guidance eliminates the residual method of allocation of revenue in multiple deliverable arrangements and requires the allocation of revenue based on the relative-selling-price method. The determination of the selling price for each deliverable requires the use of a hierarchy designed to maximize the use of available objective evidence, including, VSOE, third party evidence of selling price (TPE), or estimated selling price (ESP).

In October 2009, FASB issued Accounting Standards Update (ASU) No. 2009-14, Topic 985: “Certain Revenue Arrangements That Include Software Elements” (a Consensus of the FASB Emerging Issues Task Force Issue (“EITF”)). ASU No. 2009-14 modifies ASC 985-605, Software Revenue, such that the following products would be considered non-software deliverables and therefore excluded from the scope of ASC 985-605:

· Tangible products that contain software elements and non-software elements that function together to deliver the tangible product’s essential functionality.

· Undelivered elements that are essential to the above described tangible product’s functionality.

ASU No. 2009-13 and ASU No. 2009-14 must be adopted no later than the beginning of the Company’s fiscal year 2011 and early adoption is allowed and may be adopted either under the prospective method, whereby the guidance will apply to all revenue arrangements entered into or materially modified after the effective date, or under the retrospective application, whereby the guidance will apply to all revenue arrangements for all periods presented. An entity may elect to adopt ASU No. 2009-13 and ASU No. 2009-14 in a period other than their first reporting period of a fiscal year under the prospective method but must adjust the revenue of prior reported periods such that all new revenue arrangements entered into, or materially modified, during the fiscal year of adoption are accounted for under this guidance.

The adoption of ASU No. 2009-13 and ASU No. 2009-14 will allow the separation of deliverables under more arrangements which may result in less revenue deferral. For such arrangements, the application of the relative-selling price method of allocating the revenue of an arrangement and the elimination of the residual method of allocation may result in a different reallocation of revenue from product revenue, which is recognized upon delivery, to support revenue, which is recognized ratably over the support period.

The Company is currently evaluating the impact of these pronouncements on its financial position and results of operations.

Note 4. Earnings (Loss) Per Share

Basic earnings or loss per share is based on the weighted average number of common shares outstanding. Diluted earnings or loss per share is based on the weighted average number of common shares outstanding and dilutive common stock equivalents. The computation of earnings (loss) per share is net earnings (loss) available to common stockholders (numerator) divided by the weighted average number of common shares outstanding (denominator) during the periods presented. All earnings or loss per share amounts in the financial statements are basic earnings or loss per share, as defined by ASC 260, “Earnings Per Share”. Diluted loss per share does not differ from basic loss per share for all periods presented. Convertible securities that could potentially dilute basic earnings per share in the future are not included in the computation of diluted loss per share because to do so would be anti-dilutive. All per share and per share information are adjusted retroactively to reflect stock splits and changes in par value, when applicable.

		Three months ended		Six months ended		(June 18, 2007)
		October 31,		October 31,		to January 31,
		2009	2008	2009	2008	2009
Numerator - net income (loss) available to
	common stockholders	$ (268,751)	$(1,715,726)	$(2,036,297)	$(2,344,135)	$ (3,950,174)
Denominator - weighted average number
	of common shares outstanding	26,645,547	22,833,015	24,805,857	22,120,877	21,698,074
Basic and diluted net loss per common share		$ (0.01)	$ (0.08)	$ (0.08)	$ (0.11)	$ (0.18)

Note 5. Prepaid Expenses and Other Receivables

As of October 31, 2009 and April 30, 2009, prepaid expenses and other receivables consist of the following:

	October 31,	April 30,
	2009	2009
Prepaid trade expenses	$ -	$ 13,968
Prepaid consultants and corporate expenses	20,050	40,000
Money advanced to offices and staff for expenses
to be incurred for the Company	586,084	598,117
	$ 606,134	$ 652,085

Note 6. Equipment

Equipment as of October 31, 2009 and April 30, 2009 is summarized as follows:

	October 31,	April 30,
	2009	2009
Computer equipment	$ 58,632	$ 54,556
Office equipment	9,660	8,864
	68,292	63,420
Less: accumulated depreciation	(14,721)	(8,185)
	$ 53,571	$ 55,235

The depreciation expense incurred during the three-month and six-month periods ended October 31, 2009 and 2008 were $3,310 (2008: $1,725) and $6,541 (2008: $2,525), respectively.

Note 7. Accounts Payable and Accrued Liabilities

As of October 31, 2009 and April 30, 2009, accounts payable and accrued liabilities consist of the following:

	October 31,	April 30,
	2009	2009
Accounts payable	$ 552,261	$ 325,180
Other payables	30,253	30,283
	$ 582,514	$ 355,463

(a) Preferred Stock

The Company is authorized to issue up to 100,000,000 shares of Preferred Stock with a par value of $0.00001 per share under terms and conditions as set forth in its Articles of Incorporation. At October 31, 2009, the Company did not have any outstanding preferred stock.

(b) Common Stock

The Company is authorized to issue up to 100,000,000 shares of Common Stock with a par value of $0.00001 per share under terms and conditions as set forth in its Articles of Incorporation.

On July 17, 2008, the Company completed the sale of 1,666,667 units of its securities (the "Units"), with each Unit consisting of (a) one share of the Company's Common Stock, par value $0.00001 per share (the "Common Stock"), (b) a warrant to purchase one share of Common Stock at a purchase price of $6.00 per share of Common Stock (the "Group A Warrant"), and (c) a warrant to purchase one share of Common Stock at a purchase price of $9.00 per share of Common Stock (the "Group B Warrant"), for a purchase price of $3.00 per Unit. The aggregate proceeds from the sale of the Units, prior to expenses incurred in connection with the offer and sale of the Units, was $5,000,000. The Company sold the Units to a single investor pursuant to applicable exemptions from registration under the Securities Act of 1933, as amended. The total cost for the $5,000,000 private placement was $406,164, resulting in net proceeds of $4,593,836. The proceeds from the issuance of the units were allocated between the warrants and the common shares on the basis of relative fair values. The fair value of the warrants of $893,371 was calculated using the Black-Scholes model using the following assumptions: Volatility of 14.25%, expected term of 5 years, risk free interest rate of 3.35%.

The Group A Warrant has an exercise price of $6.00 per share and is exercisable for a five-year period commencing on July 17, 2008, to purchase 1,666,667 shares of Common Stock in the aggregate. The Group A Warrant is subject to proportional adjustment for stock splits, stock dividends, recapitalizations, reclassifications, and similar corporate events. The Group A Warrant may not be exercised on a cashless basis.

The Company may redeem the Group A Warrant at its option at a price of $0.05 per share if the closing bid price of the Company's Common Stock exceeds $8.00 per share for a period of 20 consecutive trading days, provided that the Company's redemption right will not be in effect during any period during which the Company does not have in place an effective registration statement under the Securities Act of 1933, as amended (the "Securities Act"), registering the shares of Common Stock issuable upon exercise of the Group A Warrant.

The Group B Warrant is exercisable to purchase 1,666,667 shares of Common Stock. The terms of the Group B Warrant are identical to the Group A Warrant, except that the exercise price is $9.00 per share of Common Stock, and the price per share of Common Stock initiating the Company's repurchase rights is $12.00 per share.

The Units, including the shares of Common Stock and Group A Warrant and Group B Warrant included therein, were issued without registration under the Securities Act in reliance upon the exemption from registration set forth in Rule 506 of Regulation D ("Regulation D"), promulgated pursuant to Section 4(2) of the Securities Act, Regulation S promulgated under the Securities Act, and Section 4(6) of the Securities Act. The Company based such reliance upon representations made by the purchaser of the Units to the Company regarding such purchaser's investment intent, sophistication, and status as an "accredited investor," as defined in Regulation D, and on the investor's representations as to its residency and the offshore purchase of the Units, among other things. The Units, including the shares of Common Stock and Group A Warrant and Group B Warrant included therein, and the shares of Common Stock issuable upon exercise of the Group A Warrant and Group B Warrant, may not be offered or sold in the United States absent registration pursuant to the Securities Act or an applicable exemption from the registration requirements of the Securities Act. The share certificates for the Common Stock and the Group A Warrant and Group B Warrant bear restrictive legends permitting the transfer of the securities only in compliance with applicable securities laws.

On October 8, 2008, the Company issued 112,500 shares of Common Stock at a fair market value of $641,250 to employees, and the amount was recorded as compensation expense.

In November 2008, the Company entered into a financing and investor relations agreement for eight months. Under this agreement the Company issued 900,000 shares of Common Stock valued at market totaling $5,130,000 and $25,000 in cash. The agreement was cancelled in February 2009 and 850,000 shares issued were returned for cancellation. The net consideration of $310,000 ($25,000 cash and $285,000 market value of 50,000 shares of common stock) was expensed $193,750 in the year ended April 30,2009 and $116,250 in the three months ended July 31, 2009.

Effective July 31, 2009, the Company authorized the release of a total of 3,679,380 Escrow Shares and cancellation of a total of 520,620 Escrow Shares in connection with the achievement of performance thresholds relating to the 16 months ended April 30, 2009 (see Note 1). The Company reflected the $919,845 estimated fair value of the 3,679,380 released Escrow Shares as general and administrative expenses in the accompanying consolidated statement of operations for the three months ended July 31, 2009 and increased additional paid-in capital by the same amount.

Note 9. Related Party Balances/Transactions

During the three-month and six-month periods ended October 31, 2009, the Company accrued $3,315 (2008: $6,508) and $7,669 (2008: $22,424) in consulting fees to a related party of the Company’s President and CEO, respectively. As of October 31, 2009, the Company owes $12,439 (April 30, 2009: $3,942) to this related party for services rendered.

At October 31, 2009, the balance due the Company’s President and CEO for expense paid on behalf of the Company is $4,154 (April 30, 2009: $4,144), which is non-interest bearing, unsecured, and due on demand.

At October 31, 2009, the balance that the Company advanced to an officer of the Company for expenses to be incurred for the Company is $733 (April 30, 2009: $2,200). $1,467 was repaid or reported as operating expenses during the six-month ended October 31, 2009.

For the purpose of currency conversion, the Company sends foreign currency to an agent in China which is a related party to the Company, and then receives Renminbi back from the agent right after the conversion. The shareholder of the agent is the father of the Company’s CFO and one of its shareholders. During the six-month period ended October 31, 2009, the Company sent $170,181 to the agent, and the agent returned $166,135 to the Company. As of filing date of this Form 10-Q, the remaining balance of $251,078 (April 30, 2009: $247,032) has not yet been returned to the Company.

Note 10. Concentrations and Credit Risk

The Company operates principally in China and grants credit to its customers in this geographic region. Although China is economically stable, it is always possible that unanticipated events in foreign countries could disrupt the Company’s operations.

For the three-month period ended October 31, 2009 net revenues of $1,434,178 included $378,529 from barter transactions. For the three months ended October 31, 2009, four customers accounted for 31%, 21%, 13% and 13% of net revenues, respectively.

For the six-month period ended October 31, 2009 net revenues of $2,857,336 included $696,169 from barter transactions. For the six months ended October 31, 2009, four customers accounted for 31%, 20%, 16% and 16% of net sales, respectively.

Note 11. Statutory Reserves

Pursuant to Chinese regulations and laws, K’s Media and k’s Media Broadcasting are required to make appropriations to the reserve funds and staff welfare fund, based on after tax net income determined in accordance with generally accepted accounting principles of the People’s Republic of China (“China GAAP”). Appropriations to the reserve funds should be at least 10% of the after tax net income determined in accordance with China GAAP until the reserve is equal to 50% of the respective entity’s registered capital. The reserve funds are established for covering corporate obligations in the event of business liquidation. Any additional appropriations to the reserve funds over the 10% requirement are made at the discretion of the Board of Directors. The reserve funds and staff welfare funds are recorded as part of the retained earnings but are not available for distribution to the owners of the Company other than in liquidation. Appropriations to the staff welfare fund are at a percentage, as determined by the Board of Directors, of the after tax net income determined in accordance with China GAAP. The staff welfare fund is established for the purpose of providing employee facilities and other collective benefits to the employees. The appropriations are made on an annual basis.

Due to the entities’ losses, no appropriations have been made to the reserve funds and staff welfare fund.

Note 12. Commitments

The Company has entered into agreements with various Karaoke (“KTV”) and night clubs for rental of space in karaoke rooms and broadcasting fees for advertisements. As of October 31, 2009, future rental and fee commitments are payable as follows:

Year ended April 30,
	2010	$	924,171
	2011		1,827,905
	2012		1,484,293
	2013		1,389,298
	2014		306,318
		$	5,931,985

Note 13. Subsequent Events

The Company has evaluated subsequent events through the filing date of this Form 10-Q and has determined that there were no subsequent events to recognize or disclose in these financial statements.

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

This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking states are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Overview of the Company's Business

On January 18, 2008 (the "Closing Date"), Kinglake Resources, Inc., ( later changed name to K's Media, here after refers to as the "Registrant" or the "Company") completed a Share Exchange Agreement (the "Share Exchange Agreement") dated December 23, 2007, with Orient Come Holdings Limited, a company organized under the laws of British Virgin Island ("Orient Come") and Beijing K's Media Advertising Ltd. Co., a limited liability company organized under the laws of the People's Republic Of China ("Chinese Advertising Company" or ¨K's Media"). Pursuant to the terms of the Share Exchange Agreement, the shareholders of Orient Come (the "Orient Come Shareholders") transferred to us all of the Orient Come shares in exchange for the issuance of 13,000,000 shares of our common stock (the "Acquisition"). As a result of the Acquisition, Orient Come became our wholly-owned subsidiary.

In connection with the Share Exchange Agreement we issued 2,000,000 shares of our common stock to Sino Return Holdings Limited, a non-affiliate party as finder's fee.

On February 22, 2008, Orient Come assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd. ("K's Media Broadcasting") pursuant to an Assignment Agreement dated February 22, 2008 (the "Assignment Agreement"). Under the Assignment Agreement Orient Come assigned all of its right, title and interest in and to the Business Cooperation Agreement and K's Media Broadcasting agreed to assume all of Orient Come's obligations under the Business Cooperation Agreement. K's Media Broadcasting, a company organized under the laws of the People's Republic of China, is a wholly owned subsidiary of the Company.

Prior to the Acquisition, we were a public "shell" company with nominal assets. We were incorporated in the State of Nevada in April 14, 2006 and engaged in the business of conducting research in the form of exploration of our mining interest. In September 2007, a review of the aeromagnetic of our property shows no apparent anomalies and the geologist recommend no further work on this property. Our management then began to pursue an acquisition strategy, whereby we sought to acquire businesses that provide room for growth.

As a result of the acquisition, we engaged in media and advertising throughout China. The Chinese Advertising Company is an emerging media company that targets high end consumers in China by placing premium brand advertising in entertainment clubs on behalf of top-tier consumer products clients. Entertainment clubs are popular entertainment establishments in Asia that rent private rooms containing karaoke singing equipment, typically to groups of friends and business colleagues.

Concurrent with the Share Exchange Agreement, Orient Come, our wholly-owned subsidiary has signed a Business Cooperation Agreement with the Chinese Advertisement Company. We do not have an equity interest with the Chinese Advertisement Company. In order to meet ownership requirements under Chinese law, which restricts foreign companies with less than three years of operation history in advertising industry from operating in the advertising industry in China, we and Orient Come executed a series of exclusive contractual agreements. These contractual agreements allow us to, among other things, to secure significant rights to influence the Chinese Advertisement Company's business operations, policies and management, approve all matters requiring shareholder approval, and the right to receive 80% income earned by the Chinese Advertisement Company. In addition, to ensure that the Chinese Advertisement Company and its shareholders perform their obligations under these contractual arrangements, the shareholders have pledged to Orient Come all of their equity interests in the Chinese Advertisement Company. At such time that current restrictions under People's Republic Of China (PRC) law on foreign ownership of Chinese companies engaging in the advertising industry in China are lifted, or we have acquired a non-Chinese advertisement company that has over three years operation in advertising industry ("Qualified Advertising Subsidiary"), Orient Come may exercise its option to purchase the equity interests in the Chinese Advertisement Company and transfer the ownership to the Qualified Advertising Subsidiary. Orient Come later assigned its rights and obligations under the Business Cooperation Agreement to K's Media Broadcasting Cultural Co. Ltd., another wholly owned subsidiary of the Company incorporated in People's Republic of China.

The Chinese Advertising Company signs advertising agreements with companies in the cosmetics, beverage, automobile and other consumer goods sectors. K's Media also signs advertisement placement agreements with top entertainment clubs chains in Beijing, Shanghai, Guangzhou, Shenzhen, Hangzhou and other major Chinese cities. K's Media then promotes its clients brands at the entertainment clubs via advertising and promotional events. K's Media has signed agreements with more than three hundred top-ranked entertainment clubs in Beijing, Shanghai, Guangzhou, Shenzhen and other large cities, representing thousands of screens. Advertisements will be placed on screens in each room of each club signed by K's Media. A critical component of K's Media's marketing and distribution to entertainment clubs is its partnership with Shine MultiMedia Co., Ltd. ("Shine"), one of the China's largest VOD (video on demand) system distributors with deals in over 3,000 entertainment clubs and more than 100,000 entertainment rooms in China. Shine and other VOD system distributors that signed up with K’s Media has bundled K’s Media's proprietary CRM software with its VOD system and also pursue advertising agreements with the entertainment clubs on behalf of K's Media. The parties have entered into the Service Agreement whereby VOD system distributors arrange exclusive agency contracts between K's Media and entertainment clubs. VOD system distributors also installed and maintained advertisement equipment at the entertainment clubs during the terms of the contracts. K's Media supplements these VOD system distributorsˇ marketing efforts with its own team of club agents that is responsible for signing up entertainment clubs, renewing contracts, and providing other follow-up services such as media channel maintenance and ad placements. VOD system distributors will receive a fee from K's Media for each contract executed and monthly maintenance fee for services provided by them over the term of each contract.

Our ability to generate revenues from advertising sales largely depends upon our ability to provide a large network of screens that show our programs in entertainment clubs, which requires us to obtain Ad Licensing rights contracts to operate in entertainment clubs, as well as how fast the advertising clients can accept us as a new media focusing high end consumers.

The Registrant changed its name to K's Media on March 11, 2008, which will be more consistent with its business activities in the media and advertising in China.

Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are a development stage corporation and have generated insufficient revenues from activities. We cannot guarantee we will be successful in our business activities. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, and possible cost overruns due to price and cost increases in services.

The capital raised from the issuance of our common stock can not guarantee the Company to sustain for a year. We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our activities. Equity financing could result in additional dilution to existing shareholders.

Recent Developments

On August 27, 2009, K's Media (the "Company") furnished a Form 8-K under Item 4.01 announcing the dismissal of Goldman Parks Kurland Mohidin LLP as the Company's Certifying Accountant, and the engagement of Michael T. Studer as the Company's new Certifying Accountant.

The Company has made 5 amendments by the end of October 31, 2009 to its Escrow Agreement. Please refer to note 1 to Consolidated Financial Statements and Form 8-K filed by the Company to the Securities Exchange Committee for reference.

The Company has signed up over 300 KTV lounges in tier 1 cities including Beijing, Shanghai, Guangzhou and Shenzhen by October 31, 2009.

K’s Media selects KTV clubs that are frequented by high earners such as business owners and professionals with active lifestyles. Especially attractive are clubs that appeal to the top 5% of China's population by income. K’s Media will reach these individuals by being sure to only contract with mid- to high-end KTV lounges, starting from tier 1 city.

Result of Operations

Three Months ended October 31, 2009 Compared to Three Months ended October 31, 2008.

Operating Revenues. Operating revenues for the three months ended October 31 of 2009 and three months ended October 31 of 2008 were $1,434,178 and $49,479 respectively. The increase of the revenue was caused by the development of the Company’s advertising business. The Company started sales from September 2008.

Operating Expenses. The Company's operating expenses totaled $1,233,725for the quarter ended October 31 of 2009, compared to $1,168,964 for the same quarter of 2008. The change was contributed to the payment made to the signed entertainment clubs for screen license fee as well as increased administrative and selling expenses associated with selling and other activities.

Loss from Operations. The Company has recorded a loss of $268,705 for the quarter ended October 31 of 2009, compared to a loss of $1,695,326 for the same quarter last year. The difference was caused by several reasons. First, there was stock based compensation for the quarter ended October 31 of 2008 for $709,863, which is nil for this quarter. Second, since there was substantial change in the Company's recent development of advertising business, revenue increased from $49,479 to $1,434,178, associated with the increased revenue is a provision for doubtful accounts of $814,115 for this quarter, which was nil for the same quarter last year.

Net Loss. The Company had a net loss of $$268,751 for the quarter ended October 31 of 2009, compared to a net loss of $1,715,726 for the same quarter last year. The slightly difference between Loss from Operations and Net Loss is caused by the interest income and foreign exchange gain.

Liquidity and Capital Resources

The Company has financed its operations by issuance of its common stocks and raised $5 million in July 2008 through a private placement.

Cash as of October 31 of 2009 and July 31, 2009 were $95,539 and $446,223.

Net cash used by financing activities was $4,297 for the six months ended October 31 of 2009. Net cash provided by financing activities was $38,141 for the six months ended October 31 of 2008. The Company's operating activities are primarily financed by issuance of stocks.

Net cash used in operating activities was $996,381 for the six months ended October 31 of 2009 as a result of increased provision for doubtful accounts, increased stock based compensation, increased accounts receivable and decreased accounts payable which are associated with increased sales revenue, as long as expenditures for general administration fee, entertainment clubs' license fee, sales signed up commission and other professional fee. The net cash used in operating activities for the six months ended October 31 of 2008 was $2,852,732.

Net cash used in investing activities, which mainly included purchase of fixed assets were $4,934 for the six months ended October 31 of 2009, $38,141 for the periods ended October 31 of 2008.

Off Balance Sheet Arrangements

We do not have any obligations that meet the definition of an off-balance-sheet arrangement that have or are reasonably likely to have a material effect on our financial statements, which has not been consolidated.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S., or GAAP, requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In recording transactions and balances resulting from business operations, the Company uses estimates based on the best information available for such items as depreciable lives. The Company revises the recorded estimates when better information is available, facts change or actual amounts can be determined. These revisions can affect operating results.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None

ITEM 4. CONTROLS AND PROCEDURES

Our Principal Executive Officer and Principal Financial Officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, have concluded that, based on the evaluation of these controls and procedures, that our disclosure controls and procedures were effective.

There were no changes in our internal controls or in other factors during the period covered by this report that have materially affected, or are likely to materially affect the Company's internal controls over financial reporting.

PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

None.

ITEM 1A- RISK FACTORS

There were no material changes to Risk Factors disclosed in the Form 10-K for the year ended April 30, 2008 filed on July 28, 2008.

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

None.

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 - EXHIBITS

(a) The following exhibits are included herein:

31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 20th day of December, 2009

K's Media (the "Registrant") BY: Ke Wang Ke Wang Chairman

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