China Green Channel from Financials China Green Channel International
On November 14, 2011, the Company invested $150,000 USD in China Green Channel International
("CGCI"), a Hong Kong-registered company with a Beijing-registered wholly-owned subsidiary, for 1% of
the shares (common stock). CGCI is a joint Canadian and Chinese government sanctioned broadcast
service and online venture that will allow CGCI access to program blocks of time on the China Education
Channel 3 Primetime ("CETV 3") and its Early Learning Channel ("CELC") and to build the program and
channel assets of China Television's Early Learning Channel.
Under the agreement,
a) The Company will have the first right of refusal on the balance of the $2.5 million USD investment that
CGCI is seeking for 20% ownership in CGCI and Board membership, with this investment intended to
close on or before January 31, 2012, with a projected minimum gross revenue of $12.5 million USD in
the first year, which, if not achieved, will result in a 2% penalty for a total of 22% ownership;
b) The Company will be further entitled to an additional 5% ownership in CGCI on warrants at the same
rate as in (a) above plus 20%, to be exercised within 6 months, closing on or before May 31, 2012;
c) The Company will have favored nation status, providing the automated translation software of Ortsbo
to CGCI at a price that matches or is less than found elsewhere; and
d) The Company and CGCI will work together to bring Ortsbo and other Intertainment software
applications to the Chinese market, utilizing CGCI's media relationships in China.
As at the release date of these financial statements the transaction described in a) above has not closed.
The Company is in the process of performing due diligence and related activities in connection with a
further investment in CGCI as described above.
CGGI is a private company and the investment does not trade in the public markets. The Company
estimates the fair value of this investment as at December 31, 2011 is equivalent to that of the investment
date of November 14, 2011. The Company will assess impairment at the end of each reporting period.