Knightscove Media Corp announces its audited annual 2007 financial results



    TORONTO, Jan. 30 /CNW/ - KNIGHTSCOVE MEDIA CORP (TSXV: KC/OTCQX: KCMDF)
("Company", "Knightscove" www.knightscove.com) has filed its audited annual
consolidated financial statements for the fiscal eight-month period ended
August 31, 2007. The Company generated revenue of $916,145 compared to
$290,462 in the fiscal year ended December 31, 2006, an increase of 215%. The
operations of Knightscove's recently acquired wholly owned subsidiary,
Morningstar Entertainment Inc. (www.morningstarent.com) were consolidated in
the Company's financial statements from the date of acquisition on May 18,
2007 to August 31, 2007. During that three month period Morningstar generated
revenue of $888,000. Total assets increased to $4,263,291 as at August 31,
2007 from $667,547 in December 31, 2006, an increase of over 500%. Current
annual net sales for Morningstar are approximately $3.5 million from the
distribution of its 1,400 title DVD library. The Company changed its fiscal
year end from December 31 to August 31 to coincide with Morningstar's year
end.
    As Morningstar is fully integrated into the Company, the sales revenue
from the library and from Knightscove's other initiatives are expected to
provide a solid foundation for growth and enhancing shareholder value
consistent with the board and management's strategic direction. With the
consolidation of Morningstar, the Company incurred costs of goods sold expense
in the amount of $331,264, generating a gross profit of $584,881 for the
eight-month period ended August 31, 2007. Supporting Morningstar's marketing
plan, CoGS are related to the production, printing and manufacturing of DVD
product. The DVD product is marketed and distributed to customers including
Blockbuster, Wal-Mart, Costco., Future Shop, Best Buy, HMV, among others.
General and administrative expenses for the period increased 18% from $889,811
in the 12 month year ended December 31, 2006 to $1,050,661. The increase is
due to the acquisition of Morningstar and related costs such as the additional
of nine new personnel. As a result, Knightscove incurred a net loss for the
period of $1,197,958 ($0.07 per share) compared with a net loss of $832,103
($0.06 per share) for the fiscal year ended December 31, 2006. As Knightscove
continues to implement its business strategy by building or acquiring new
revenue generating entities, expenses may increase but are expected to
decrease as a percentage of revenue. The Company is currently in discussions
with other entertainment entities and expects to acquire additional media
properties as these opportunities are identified and assessed.
    President and CEO, Leif Bristow stated "Although the audit process to
consolidate the companies was complex due to the fact that Morningstar
reported as a private company over the past 15 years, it was of great value to
management in many areas. Most significantly, management was able to confirm
and start to unlock the potential value for which the acquisition was
originally undertaken. Operational modifications in warehousing and
fulfillment should dramatically enhance shareholder value through increased
profit margins. We expect to mine the value of Morningstar's distribution
rights in a 1,400 title library to increase revenue opportunities. Strategic
actions are now being implemented and should help streamline and support
future acquisitions. While time consuming and arduous, the entire management
team and staff have become galvanized through the audit by a sense of
accomplishment and desire to expand on this new foundation."

    About Knightscove and Morningstar:

    Knightscove Media Corp. along with its wholly owned subsidiaries,
Morningstar Entertainment Inc. ("Morningstar") and Knightscove Family Films
Inc., is an integrated Canadian entertainment company specializing in the
distribution, acquisition and creation of high quality live-action feature
films and television productions for the whole family. With the acquisition of
Morningstar, one of Canada's leading independent home entertainment
distribution companies in the home video and DVD markets, Knightscove has
executed the first step in its strategy to distribute family film product to
the theatrical, home video/DVD, pay, specialty and free television markets in
North America and internationally. Established 15 years ago, Morningstar has
over 1,400 titles in its DVD library.
    Knightscove currently has 19,495,808 common shares outstanding.
Additional information regarding the business of Knightscove may be found on
www.knightscove.com on SEDAR at www.sedar.com and on www.OTCQX.com. The
audited annual consolidated financial statements and MD&A may be found at
http://www.sedar.com

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.




For further information:

For further information: Knightscove Media Corp.: Leif Bristow,
President and CEO, (416) 444-7900 x222; Annette Grot, VP Finance, (416)
444-7900 x231

Organization Profile

KNIGHTSCOVE MEDIA CORP.

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