Median 10-Q 2014 Q2 Quarterly report

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 quarterly period ended June 30, 2015
[  ]	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
	For the transition period from [     ] to [     ]

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Commission File Number: 000-50431

 

MEDIAN GROUP INC.

(Formerly Clixster Mobile Group Inc.)

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(Exact name of small business issuer as specified in its charter)

Texas	7310	32-0034926
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(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

Level 7, Tower 7, Avenue 5, The Horizon Bangsar South, No.8 Jalan Kerinchi, 59200, Kuala Lumpur, Malaysia	-----
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(Address of Company's principal executive offices)	(Zip Code)

Tel: +603 2242 3995    Fax: +603 2242 4317

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(Company's Telephone Number, Including Area Code)

CLIXSTER MOBILE GROUP INC.

No. 18-2, Jalan Sri Hartamas 8, Taman Sri Hartamas

50480 Kuala Lumpur, Malaysia

CHINA MEDIA GROUP CORPORATION

No. 55 Jalan Snuker 13/28, Tadisma Business Park,

Section 13, 40100 Shah Alam, Selangor Malaysia

(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report)

Indicate by check whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [ x ]     No [    ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ x ]      No [    ]

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

Large Accelerated Filer [  ]  Accelerated Filer [  ]   Non-Accelerated Filer [  ]   Smaller Reporting Company [ x ]

SEC 1296 (03-10) Potential persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [   ]     No[ x ]

The number of common equity shares outstanding as of December 15, 2015 was 11,307,232,960 shares of Common Stock, no par value.

FORWARD-LOOKING STATEMENTS

This quarterly report contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "will", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors” that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States Dollars.

As used in this quarterly report, the terms "we", "us", "our", "CHMD", and "the Company" mean Median Group Inc. (formerly known as Clixster Mobile Group Inc. with effect from April 3, 2014 and prior to that date China Media Group Corporation) and its subsidiaries unless otherwise indicated.

- 1 -

PART I

Item 1. Condensed Consolidated Financial Statements

Median Group Inc.

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

Condensed Consolidated Financial Statements

(Unaudited)

(Expressed In United States Dollars)

Condensed Consolidated Balance Sheets as of June 30, 2015 and December 31, 2014 (Audited)

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014

Condensed Consolidated Statements of Comprehensive Loss for the three months and six months ended June 30, 2015 and 2014

Condensed Consolidated Statement of Stockholders’ Equity for the six months ended 30 June 2015

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014

Notes to Condensed Consolidated Financial Statements

F-1

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2015 AND DECEMBER 31, 2014

		June 30 2015	December 31 2014
	Notes	(Unaudited)	(Audited)
		US$	US$
ASSETS
Current assets:
Prepayments and deposits		550	4,538
Assets of operations held for sale	6	7,249,857	7,389,418
		7,250,407	7,393,956
Total current assets		7,250,407	7,393,956
LIABILITIES AND STOCKHOLDERS' DEFICITS
Current liabilities:
Other payables and accruals	7	648,816	639,248
Amounts due to related parties	8	226,667	146,667
Liabilities of operations held for sale	6	13,926,445	12,289,736
Total current liabilities		14,801,928	13,075,651
Long-term debts:
Shareholders loan	9	2,000,000	2,000,000
Total non-current liabilities		2,000,000	2,000,000
Total liabilities		16,801,928	15,075,651
Commitments and contingencies	12
Stockholders'equity:
Common stock, no par value, 85,000,000,000 shares authorized, 11,307,232,960 (2014: 11,307,232,960) shares issued and outstanding	4	2,775,230	2,775,230
Accumulated deficits		(10,618,052)	(9,140,232)
Accumulated other comprehensive income		676,408	414,748
Total Median Group Inc. stockholders' deficits		(7,166,414)	(5,950,254)
Non-controlling interest		(2,385,107)	(1,731,441)
Total stockholders’ deficits		(9,551,521)	(7,681,695)
Total liabilities and stockholders’ deficits		7,250,407	7,393,956

The accompanying notes are an integral part of these condensed consolidated financial statements

F-2

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014

(UNAUDITED)

		Three Months Ended June 30		Six Months Ended June 30
		2015	2014	2015	2014
	Note	US$	US$	US$	US$
Net Revenue		-	-	-	-
Cost of revenue		-	-	-	-
Gross profit		-	-	-	-
Operating expenses:
Administration expenses		(9,787)	(5,000)	(16,942)	(12,798)
Selling and distribution expenses		-	-	-	-
Total operating expenses		(9,787)	(5,000)	(16,942)	(12,798)
Operating loss from continuing operations		(9,787)	(5,000)	(16,942)	(12,798)
Other income / (expenses)
Other income		-	-	-	400,050
Gain on disposal of subsidiaries		-	-	-	420,362
Interest expenses		(40,000)	(40,000)	(80,000)	(66,667)
(Loss) / income from continuing operations		(49,787)	(45,000)	(96,942)	740,947
Discontinued operations, net of tax	6	(891,273)	(729,495)	(2,184,933)	(1,248,232)
Net loss		(941,060)	(774,495)	(2,281,875)	(507,285)
Less: Net loss attributable to non-controlling interests		(464,933)	(268,456)	(941,060)	(459,351)
Net loss attributable to Median Group Inc.		(476,127)	(506,039)	(1,340,815)	(47,934)
Net loss per share attributable to Median Group Inc. Shareholders - Basic and diluted
Continuing operations		(0.00)	(0.00)	(0.00)	(0.00)
Discontinued operations		(0.00)	(0.00)	(0.00)	(0.00)
		(0.00)	(0.00)	(0.00)	(0.00)
Basic and diluted weighted average number of common shares *		11,307,232,960	11,307,232,960	11,307,232,960	9,561,366,111

* Weighted average number of shares used to compute basic and diluted loss per share for the three months and six months ended June 30, 2015 and 2014 are the same since the effect of dilutive securities are anti-dilutive.

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-3

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2015 AND 2014

(UNAUDITED)

		Three Months Ended June 30		Six Months Ended June 30
		2015	2014	2015	2014
	Note	US$	US$	US$	US$
Net loss		(941,060)	(774,495)	(2,281,875)	(507,285)
Other comprehensive income, net of tax
Foreign currency translation gain / (loss)		143,791	(37,077)	412,049	(62,670)
Release of exchange reserve arising from disposal of subsidiaries		-	-	-	(82,615)
Total comprehensive loss		(797,269)	(811,572)	(1,869,826)	(652,570)
Less: Net loss attributable to non-controlling interests		(327,988)	(268,456)	(804,055)	(459,351)
Less: Other comprehensive income / (loss) attributable to non-controlling interests - foreign currency translation gain/(loss)		52,641	(13,639)	150,389	(21,823)
Total comprehensive loss attributable to Median Group Inc.		(521,922)	(529,477)	(1,216,160)	(171,396)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-4

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2015

(UNAUDITED)

	Number of Shares	Common Stock Amount	Accumulated Other Comprehensive Income	Accumulated Deficits	Non-controlling Interest	Total Stockholders' Equity
	US$	US$	US$	US$	US$	US$
Balance at January 1, 2015 (Audited)	11,307,232,960	2,775,230	414,748	(9,140,232)	(1,731,441)	(7,681,695)
Other comprehensive income - foreign currency translation gain	-	-	261,660	-	150,389	412,049
Net loss for the period	-	-	-	(1,477,820)	(804,055)	(2,281,875)
Balance at June 30, 2015	11,307,232,960	2,775,230	676,408	(10,618,052)	(2,385,107)	(9,551,521)

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-5

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2015 AND 2014

(UNAUDITED)

	Six Months Ended June 30
	2015	2014
	US$	US$
Cash flows from operating activities:
Net loss	(2,281,875)	(507,285)
Changes in asset and liabilities
Decrease in assets
Prepayments and deposits	3,988	-
Increase / (Decrease) in liabilities:
Asset of operations held for sale - net liabilities	1,776,270	904,778
Other payables and accruals	9,568	(403,734)
Amounts due to related parties	80,000	66,667
Net cash (used in) generated from operating activities	412,049	60,426
Cash flows from investing activities	-	-
Cash flows from financing activities :	-	-
Effect of exchange rate in comprehensive income	412,049	(60,426)
Net increase in cash and cash equivalents	-	-
Cash and cash equivalents - net, beginning	-	-
Cash and cash equivalents - net, ending	-	-
Supplemental disclosure of cash flow information:
Interests paid	-	-
Income tax paid	-	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-6

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 ORGANIZATION

Median Group Inc. (formerly known as Clixster Mobile Group Inc. with effect from April 3, 2014 and prior to that date known as China Media Group Corporation) (the "Company") is a Texas corporation, incorporated on October 1, 2002.

In January 2006, the Company established a wholly owned subsidiary Ren Ren Media Group Limited, a company incorporated in Hong Kong, as its operating company in Hong Kong. In March 2007, the Company acquired all the outstanding shares of Good World Investments Limited, a British Virgin Islands corporation that holds 50% of Beijing Ren Ren Health Culture Promotion Limited, a company incorporated in China in the advertising and media business in China.

In May 2009, the Group established a 50/50 joint venture company, ATC Marketing Limited, which is to be in the business of marketing and distributing of convergent multimedia communication and internet devices.  

In June 2012, the Company acquired 100% equity interests of A-Team Resources Sdn. Bhd. (“A-Team”), a distributor of electronics and light appliances, at a consideration price of $2,011,607 by the issuance of 558,779,837 shares, at a price of $0.0036 per share.

The Group is engaged in the distribution of electronics and light appliances and the marketing and distribution of convergent devices and the consultancy of resources management.  During the period, the Group derived its revenue from consultancy services and in the distribution of electronic products.

On January 15, 2014, the Company sold its subsidiaries namely Ren Ren Media Group Limited, A-Team Resources Sdn Bhd, Good World Investments Limited and Beijing Ren Ren Health Culture Promotion Limited (the “Disposed Subsidiaries”) containing its light appliances distribution business and advertising business in China.

On January 31, 2014, the Group closed the transaction to acquire 63.2% of Clixster Mobile Sdn. Bhd. (“CMSB”), a company incorporated in Malaysia by the issuance of 10,193,609,664 in the Company at a price of at a price of $0.025 per share. CMSB is a mobile virtual network provider and principally engaged in providing cellular and mobile broadband services in Malaysia. CMSB was treated as the acquirer for accounting purpose since the original stockholders of CMSB owned a majority (85%) of the shares of the Company’s common stock immediately following the completion of the transaction. CMSB was the legal acquiree but deemed to be the accounting acquirer. The Company was the legal acquirer but deemed to be the accounting acquiree in the reverse merger. The historical financial statements prior to the acquisition are those of the accounting acquirer (CMSB). Historical stockholders’ equity of the acquirer prior to the merger are retroactively restated (a recapitalization) for the equivalent number of shares received in the merger. Operations prior to the merger are those of the acquirer. After completion of the transaction, the Company’s consolidated financial statements include the assets and liabilities, the operations and cash flow of the Company and its subsidiaries.

Subsequent to the period end, on July 28, 2015, the Company disposed of its 63.2% of CMSB to refocus the business of the Group to sell prepaid telecom cards rather than operating a mobile network virtual operator (“MNVO”) operation, with a gain of approximately $5 million. Also, on December 11, 2015 the Company acquired shares in Naim Indah Mobile Communication Limited (“NIMC”), a company engaged in providing mobile communication services through MVNO platform. NIMC has an exclusive agreement with MyAngkasa Holdings Sdn. Bhd. for the provision of telecom services to Angkasa members. Further details can be found in Note 13 of the financial statements enclosed herein this report. The Company intends to focus on post-paid customers in working with Angkasa.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS

Basis of Presentation

The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and the rules of the U.S. Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2014. As permitted under the rules of the SEC for interim reporting, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the notes to the financial statements for the year ended December 31, 2014 included in the Company Form 10-K filed with the Securities and Exchange Commission.

At the date of this report, the Company has filed Form 8-K to effect a reverse merger between the Company and CMSB at January 31, 2014. The Company’s consolidated financial statements include the assets and liabilities, the operations and cash flows of CMSB before the transaction and the Company and its subsidiaries after the transaction.

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of financial position and results of operations for the interim period presented have been included. Operating results for the interim period are not necessary indicative of the results that may be expected for the respective full year.

F-7

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)

Principles of Consolidation

The condensed consolidated financial statements for the period ended June 30, 2015 include the financial statements of the Company and its wholly owned subsidiary Qultec Sdn. Bhd. (formerly known as CMG Resources Sdn. Bhd.), its 50% equity interest subsidiary ATC Marketing Limited (“ATC”) and its 63.2% equity interest subsidiary Clixster Mobile Sdn. Bhd. (“CMSB”). The Company consolidated the 50% subsidiary ATC during the period as it controls the board of director of this ATC.  Subsequent to the period of this report, in July and August 2015, the Company disposed its subsidiary companies namely its 63.2% subsidiary in CMSB and its 50% subsidiary ATC (collectively the “Disposed Companies”). Accordingly the operating results of the Disposed Companies are disclosed as Discontinued Operations - Net of Tax in the condensed statement of income for all period presented.  In addition, the assets and liabilities of these Disposed Companies are reported as Assets of Operations Held for Sale and Liabilities of Operations Held for Sale, as appropriate, in the condensed consolidated balance sheet.

The results of subsidiaries acquired or sold during the period are consolidated from their effective dates of acquisition or through their effective dates of disposition, respectively.

All significant inter-company transactions and balances have been eliminated on consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with generally accepted accounting principles requires management 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Net Loss Per Share

Basic earnings per share were computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted loss per common share for the period ended June 30, 2015 and 2014 respectively, are not presented as it would be anti-dilutive.

Fair Value Measurements and Disclosures

ASC 820 "Fair Value Measurements and Disclosures" codified SFAS No. 107, "Disclosures about Fair Value of Financial Instruments". ASC 820 applies to all entities, transactions, and instruments that require or permit fair value measurements, with specific exceptions and qualifications. The Company is required to disclose estimated fair values of financial instruments. Unless otherwise indicated, the fair values of all reported assets and liabilities, which represent financial instruments, none of which are held for trading purposes, approximate their respective carrying values of such amounts.

Cash and Cash Equivalents

The Company considers all liquid investments with a maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents.

Impairment of long-lived assets

In accordance with the provisions of ASC Topic 360, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. There has been no impairment charge for the year/period presented.

F-8

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)

Revenue

The Company recognizes its revenue in accordance with the Securities and Exchange Commissions ("SEC") Staff Accounting Bulletin No. 104, "Revenue Recognition in Financial Statements" ("SAB 104"). Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. The recognition of revenues involves certain management judgments. The amount and timing of our revenues could be materially different for any period if management made different judgments or utilized different estimates.

Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue.

Prepaid telecom revenues are collected by its distributors and/or resellers through the sale of “Clixster” prepaid or reload cards, which are sold in a form of SIM/reload cards to its final customers through its distributors and/or resellers. The sale of Sim, prepaid or reload cards is recognized as revenue when the products are delivered to its distributors and/or resellers, based upon their request. Prepaid cards will expire two years after the date of card production if they have never been activated. The proceeds from the expired cards are recognized as revenue upon expiration of cards.

Cost of revenue

Cost of revenue consists primarily of cost of SIM and prepaid/reload cards, telecommunication services and traffic charges which are directly attributable to the delivery of telecom service upon the activation of prepaid and/or reload cards.

Comprehensive Income

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

Segment Reporting

ASC Topic 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about geographical areas, business segments and major customers in financial statements. The Company operates in one reportable operating segment in Malaysia during the period ended June 30, 2015 and the year ended December 31, 2014.

Related Parties

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

F-9

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES & REALIZATION OF ASSETS (Continued)

Income Taxes

The Company accounts for income taxes under ASC 740 “Income Taxes”. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations.

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

(a)

Current Tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Current taxes are recognized in the statement of income except to the extent that the tax relates to items recognized outside the statement of income, either in other income or directly in equity.

(b)

Deferred Tax

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance for deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

Foreign Currency Translation

The accounts of the Company's Hong Kong and Malaysia subsidiaries are maintained in Hong Kong dollars (HK) and Malaysia Ringgit (RM), respectively. Such financial statements are translated into U.S. Dollars (USD) in accordance with ASC 830 “Foreign Currency Translation” which codified Statement of Financial Accounts Standards ("SFAS") No. 52, "Foreign Currency Translation," with the respective currency as the functional currency. According to the Statement, all assets and liabilities were translated at the exchange rate on the balance sheet date, stockholder's equity are translated at the historical rates and statement of operations items are translated at the weighted average exchange rate for the year. The resulting translation adjustments are reported under other comprehensive income in accordance with SFAS No. 130, “Reporting Comprehensive Income”.

Recently Issued Accounting Pronouncements

The Company does not expect the adoption of any recently issued accounting pronouncements to have a significant impact to its financial position, results of operations or cash flows.

Reclassifications

Certain comparative amounts have been reclassified to conform to the current period’s presentation.

F-10

CLIXSTER MOBILE GROUP INC

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

The Company's condensed consolidated financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. As of June 30, 2015, the Company has incurred an accumulated deficits totaling $10,618,052 and its current liabilities exceed its current assets by $7,551,521. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying balance sheets is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to raise additional capital, obtain financing and to succeed in its future operations. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Management has taken the following steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue as a going concern. The Company is actively pursuing additional funding and potential merger or acquisition candidates and strategic partners, which would enhance stockholders' investment. Management believes that the above actions will allow the Company to continue operations through the next fiscal year.

NOTE 4 STOCKHOLDERS’ EQUITY

Common Stock

On January 31, 2014, the Company issued 10,193,609,664 shares of its common stock in consideration for the acquisition of 63.2% equity interests in Clixster Mobile Sdn Bhd (Note 1).

As of June 30, 2015, the Company had a total of 11,307,232,960 shares of its common stock issued and outstanding.

NOTE 5 STOCK OPTIONS

The Company adopted ASC 718 “Compensation - Stock Compensation” and requires companies to measure and recognize the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value.

2007 Stock Incentive Plan

On February 19, 2007, the Company adopted the 2007 Stock Incentive Plan (the "2007 Plan") allowing for the awarding of options to acquire shares of common stock. This plan provides for the grant of incentive stock options to key employees, directors and consultants. Options issued under this plan will expire over a maximum term of ten years from the date of grant.

On March 8, 2007, the Company registered 38,400,000 shares underlying stock options under the 2007 Stock Incentive Plan with the SEC pursuant to a registration statement on Form S-8.

During the year 2007 to 2013, the Company had issued a total of 6,522,309 shares to its staff and consultants for their service provided.

As at June 30, 2015 and December 31, 2014, there were i) no outstanding stock options and ii) 31,877,691 shares available to be issued under the 2007 Stock Incentive Plan.  

F-11

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 DISCONTINUED OPERATIONS HELD FOR SALE

Subsequent to the period end, the Company sold its subsidiaries namely its 63.2% subsidiary Clixster Mobile Sdn. Bhd. on July 28, 2015 and its 50% subsidiary ATC Marketing Limited on August 3, 2015 (the “Disposed Subsidiaries”) containing its MVNO business and electronics trading company (Note 13). As a result of the sale, the historical activities and balances of these operations are reported as discontinued operations held for sale in the accompanying condensed consolidated financial statements for all periods presented.

The following table provides the components of Discontinued operations - net of tax

		Three Months Ended June 30		Six Months Ended June 30
		2015	2014	2015	2014
	Note	US$	US$	US$	US$
Net Revenue		5,741	1,247,985	645,121	2,158,262
Less: sales discount		-	(222,560)	(65,670)	(337,023)
Cost of revenue		(523,282)	(1,042,011)	(1,084,346)	(1,694,137)
Gross (loss) / profits		(517,541)	(16,586)	(504,895)	127,102
Administrative expenses		(223,245)	(742,032)	(960,050)	(1,389,250)
Selling and distribution expenses		-	-	-	-
Loss from operations		(740,786)	(758,618)	(1,464,945)	(1,262,148)
Other income / (expenses)
Foreign exchange (loss) / gain		(140,854)	118,134	(610,431)	168,333
Other income		80,367	989	70,443	10,583
Interest expenses		(90,000)	(90,000)	(180,000)	(165,000)
Net loss from discontinued operation before taxation		(891,273)	(729,495)	(2,184,933)	(1,248,232)
Taxation			-	-	-
Loss from discontinued operation		(891,273)	(729,495)	(2,184,933)	(1,248,232)

The following table provides the components of assets and liabilities of operations held for sale:

	June 30 2015	December 31 2014
	US$	US$
Current assets:
Cash and cash equivalents	24,134	21,245
Trade receivables	137,310	445,959
Prepayments, deposit and other receivables	971,215	801,721
Due from related parties	5,487,012	5,764,813
Inventories	44,225	32,007
Property and equipment, net	284,793	313,673
Intangible assets	8,925	-
Other assets	292,243	-
Assets of operations held for sale	7,249,857	7,389,418
Trade payables	2,172,685	1,214,890
Other payables and accruals	720,770	480,130
Due to related parties	2,067,314	1,555,907
Term loans - non-current	8,965,676	9,038,809
Liabilities of operations held for sale	13,926,445	12,289,736

The net cash flows of our discontinued operations for each of the categories of operating, investing and financing activities are not significant for any period presented.

F-12

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 OTHER PAYABLES AND ACCRUALS

Other payables and accruals consist of the following:

	June 30 2015	December 31 2014
	US$	US$
Potential tax penalty liability	410,000	410,000
Other payables and accruals	238,816	229,248
	648,816	639,248

NOTE 8 AMOUNTS DUE TO RELATED PARTIES

	June 30 2015	December 31 2014
	US$	US$
Amounts due to related parties:
- Trade	-	-
- Non-trade	226,667	146,667
	226,667	146,667

The amounts due to related parties are unsecured, non-interest bearing and repayable on demand. Imputed interest on these amounts is considered insignificant.

NOTE 9 SHAREHOLDER LOAN

	June 30 2015	December 31 2014
	US$	US$
Shareholder loan	2,000,000	2,000,000

This long term shareholder loan is due to Central High Limited, a major shareholder of the Company. This loan is unsecured and repayable on November 25, 2015, and bears interest of 8% per annum. The accrued interest for the six months ended June 30, 2015 was $80,000 (2013: 66,667).

NOTE 10 RELATED PARTY TRANSACTIONS

For the six months period ended June 30, 2015, the Company paid $20,439 (2014: $105,426) to its directors and its officers remuneration for their services provided to the Company.

For the six months period ended June 30, 2015 the Company paid a rebate of $202,576 (2014: sold $809,332) telecom SIM/reload cards through two distributors that are owned and controlled by the directors of the Company. The terms of trade with these distributors are similar to the other third-party distributors of the Company.

For the six months period ended June 30, 2015 the Company purchased no (2014: $1,402,691) telecom services from a related company. The terms of trade was negotiated at arms-length.

A Group company has $8,000,000 promissory notes from a company that is beneficially owned by directors of the Company. The promissory note bears interest at a rate of 4.5% per annum, and $4,000,000 is payable in November 2018 and the remaining $4,000,000 is payable in February 2019. During the six months ended June 30, 2015 the Group company recorded $180,000 (2014: $165,000) in interests expenses relating to these promissory notes. Subsequent to this fiscal year, on July 28, 2015, this Group company was disposed together with these promissory notes, and the Group was no longer liable for these promissory notes as a result.

F-13

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 INCOME TAXES

No provision was made for income tax for the six months ended June 30, 2015 and 2014, since the Company and its subsidiaries had significant net operating loss. In the six months ended June 30, 2015 and 2014, the Company and its subsidiaries incurred net operating losses for tax purposes of approximately $142,156 and $18,180, respectively. Total net operating losses carry forward as at June 30, 2015 and 2014, (i) for Federal and State purpose were $11,573,707 and $11,336,825, respectively and (ii) for its entities outside of the United States $80,515 and $2,298. The net operating loss carry-forwards may be used to reduce taxable income through the year 2025. The availability of the Company's net operating loss carry-forwards are subject to limitation if there is a 50% or more change in the ownership of the Company's stock.

There was no significant difference between reportable income tax and statutory income tax. The gross deferred tax asset balance as at June 30, 2015 and December 31, 2014 was approximately $4,963,278 and $4,845,845, respectively. A full valuation allowance has been established against the deferred tax assets, as the utilization of the loss carry-forwards cannot reasonably be assured.

A reconciliation between the income tax computed at the Hong Kong and PRC China statutory rate and the Group's provision for income tax is as follows:

	2015	2014
Malaysia statutory rate	25%	25%
Tax allowance	-	-
Valuation allowance - Loss carryforward under Malaysia rate	(25%)	(25%)
Provision for income tax	-	-

NOTE 12 COMMITMENTS AND CONTINGENCIES

(a) The Company leases office premises for its operations in Malaysia under operating leases. As of June 30, 2015 the future minimum rental payments under non-cancelable operating leases in the next 12 months are $395.

F-14

MEDIAN GROUP INC

(Formerly Clixster Mobile Group Inc.)

(Formerly China Media Group Corporation)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 SUBSEQUENT EVENTS

The Group has evaluated all subsequent events through the date these consolidated financial statements were issued, and determined that, other than as disclosed below, there were no subsequent events or transactions that require recognition or disclosures in the financial statements.  

(a) On August 3, 2015 the Company sold its 50% interests in ATC Marketing Limited (“ATC”) for a nominal cash consideration and it resulted in a nominal loss on the disposal of this subsidiary company.

(b) As announced in a Form 8K on December 16, 2015 the Company finalized in a series of transactions the disposal of the rights to the Clixster brand name in the sale of its 63.2% subsidiary in Clixster Mobile Sdn Bhd (“CMSB”) to Zainal Abidin bin Zohdi (“Purchaser”) for a total cash consideration of $8,500 and the assumption of certain debts pursuant to a sale and purchase agreement (“SP Agreement”) and entered into a two year licensing agreement for the Clixster brand form the Purchaser for the China market for a fee of US$5,000 to be paid at the commencement of the second year of the licensing agreement. The company and the Clixster brand sold were engaged in the distribution of prepaid mobile services under the MVNO platform.

(c) As announced in a Form 8K on December 16, 2015 on December 11, 2015 the Company agreed to acquire and hold a 51% interests in Naim Indah Mobile Communication Sdn. Bhd. (“NIMC”), a company engaged in providing mobile communication services through MVNO platform. NIMC has a registered capital of RM2,000,001 (or about US$480,000) of which the Company is required to pay RM1,000,001 (or about US$240,000) for its 51% interests. Our director Ahmad Shukri Abudl Ghani is a 30% shareholder of NIMC.   NIMC has an exclusive business partnership agreement (“Exclusive Agreement”) with MyAngkasa Holdings Sdn Bhd. (“MyAngkasa”), a wholly owned company of the National Cooperative Malaysia Bhd and known as Angkatan Koperasi Kebangsaan Malaysia Berhad (“Angkasa”). MyAngkasa is the business development and sales/marketing entity of Angkasa which is the representative of 12,000 cooperatives with 7.4 million active members in Malaysia. MyAngkasa owns and operates a network of payment terminals that offer services and products to subscribers and customers for the purchase of prepaid top-ups, postpaid ticketing, online transaction services, registration, loyalty point programs and bill payment collections via internet banking, mobile banking, mobile payment and electronic data capture (EDC) terminals. Under this contract, both parties agree to implement the brand “MyAngkasa” mobile telecommunications program based on NIMC’s Mobile Virtual Network Aggregator (MVNA) platform that includes the provision of mobile telecommunication services to co-operative and members of the co-operatives under Angkasa as registered Pre/Post-Paid subscribers of NIMC services. The Exclusive Agreement has a fix term of 5 years ending in August 2020 and subject to renewal by mutual consent. Pursuant to this agreement, MyAngkasa agrees to use NIMC’s services under the trade name of “Median Mobile” products to co-operatives and members of the co-operatives under Angkasa and to exclusively appoint NIMC as the official mobile telecommunication services based on MVNA platform to Angkasa members. MyAngkasa agrees to undertake to deliver certain number of subscribers for pre/post-paid services (“Targeted Subscribers”) for each year. In return, NIMC agrees to a profit share scheme whereby MyAngkasa will receive RM100,000 (or about US$24,000) for the first financial year of the contract, and for each financial year thereafter the higher of RM500,000 (or about USD120,000) and a set percentage of NIMC’s net annual profit after tax, less any unapplied accumulative losses brought forward from previous years. If the Targeted Subscribers are not achieved for any each then the set percentage to be applied will be the pro-rate of the actual subscribers to the Targeted Subscribers for that year.   MyAngkasa is a shareholder of the Company holding 50 million shares or about 0.44% of the issued share capital of the Company.

(d) On September 27, 2015 the Board approved the change of company name from Clixster Mobile Group Inc. to Median Group Inc. and the name change was effected on October 7, 2015.

F-15

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT. FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, SUCH AS "MAY", "SHALL", "COULD", "EXPECT", "ESTIMATE", "ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS, HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM AND AMONG REASONABLE ALTERNATIVES REQUIRE THE EXERCISE OF JUDGMENT. TO THE EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTY THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE ANY SUCH FORWARD-LOOKING STATEMENTS.

Critical Accounting Policy and Estimates

Our Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations section discusses our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our consolidated financial statements include estimates as to the appropriate carrying value of certain assets and liabilities which are not readily apparent from other sources. These accounting policies are described at relevant sections in this discussion and analysis and in the notes to the consolidated financial statements included in our Quarterly Report on Form 10-Q for the period ended June 30, 2015.

- 2 -

Overview

DESCRIPTION OF BUSINESS

OUR BACKGROUND. The Company was incorporated in Texas on October 1, 2002 and in 2005 changed its business focus to advertising and media in the emerging China market. Under the then new management, the Company commenced to position the Company to capitalize on the growth of the Chinese advertising market where global companies are rushing into China to try to grab and hold the attention of its 1.3 billion citizens.

Our mission then was to become one of China's new age media companies through the use of new technologies and devices combined with traditional media of TV, Newspapers, Magazines, Billboards and Internet to reach today's mobile society. In order to facilitate this, the Company established 3 strategic business units being "Advertising", "Telecommunications and Mobile Computing", and "Products and Services".  However due to limited financial resources we were not able to implement our business plans in the China media sector.  

In June 2012, the Group acquired A-Team Resources Sdn. Bhd. a company that distributes light appliances products in South East Asia and Middle East to strengthen our Products and Services Business Unit.

As announced in a Form 8K filed on October 29, 2013, the Company and Samata Ventures Sdn Bhd (“Samata”) and Clixster Sdn Bhd (“CSB”) (jointly referred to as the “Vendors”) entered into a conditional Sales and Purchase Agreement (“SP Agreement”) for the Company to acquire 63.2% equity interests in Clixster Mobile Sdn Bhd (“CMSB”) from the Vendors.

On January 31, 2014 following the fulfillment of all the conditions set forth in and otherwise in accordance with the terms of the SP Agreement, this merger transaction was consummated and CMSB became a subsidiary of the Company. As a result of the closing of the SP Agreement, we will now focus our business plans to pursue the mobile virtual network operator (“MVNO”) business and to expand our telecommunication business unit with a focus on provision of mobile telecom service through a MVNO platform initially in Malaysia and then to other regions.

Upon the closing of the SP Agreement, the Company issued to Samata and CSB 5,760,898,203 shares and 4,432,711,461 shares in the Company, respectively, for a total issuance of 10,193,609,664 shares in the Company, representing approximately 90.15% in the issued share capital of the Company.

On January 31, 2014 Samata transferred 4,301,422,970 to CSB and 1,459,475,233 shares to the newly appointed directors of the Company. After the above transfers, Samata did not hold any shares in the Company and CSB held a total of 8,734,134,431 shares, representing approximately 77.24% in the Company, becoming the new controlling shareholder of the Company. On the same date following the completion of the SP Agreement, the changes to the board of directors were announced in the Form 8K filed on February 6, 2014. On June 17, 2014 CSB transferred 550,000,000 shares to one of the Company’s partners and on October 1, 2014 CSB transferred 2,000,000,000 shares to a director of the Company. After these two transfers, CSB held 6,184,134,431 shares representing approximately 54.69% in the Company.

On January 15, 2014 the Group disposed of its loss making light appliances and advertising operation. The management believes that this transaction affords the Company the opportunity to streamline its trading operation and focus on its Products and Services Business Unit.

On July 28, 2015, the Group disposed of its investment in Clixster Mobile Sdn. Bhd. to refocus its MVNO business from pre-paid to post-paid telecom services.    

In September, 2015, New China Electronics Limited, a company wholly owned by our director, Mr. Ching Chiat Kwong, acquired a total of 7,130,134,431 shares representing about 63.06% interests in the Company from CSB and all the other directors’ shares to become the controlling shareholder of the Company. On January 8, 2016, New China then transferred 350,000,000 shares to each of Andrew Hwan Lee and Ahmad Shukri Bin Abdul Ghani, both directors of the Company. New China then held 6,430,134,431 shares representing 56.87% in the Company.

In December 2015, the Company acquired 51% interests in Naim Indah Mobile Communications Sdn Bhd (“NIMC”). NIMC has entered into an exclusive partnership agreement with MyAngkasa Holdings Sdn Bhd (“MHSB”) for the implementation of the “MyAngkasa” mobile program. Under the agreement, MHSB will undertake to market and sale to its members for NIMC’s post-paid mobile phone services. The Group views this as a strategic anchor customer that will provide the subscriber base to roll out its telecom services, focusing in post-paid customers.

In March 2016, the Company is in advance discussion with a Malaysian telecom operator to roll out these services to the MyAngkasa customers. It is planned that the roll out commencing in July 2016.

At the date of this report, the Group will focus on its Telecommunications and Mobile Business Unit and its Products and Services Business Unit. The Group will terminate its adverting business until a viable advertising business opportunity is available.

- 3 -

2014 Products & Services Overview

We have established 3 business units namely “Advertising”, “Product Services” and “Telecommunication and Mobile”. A brief review and description of these three business units' strategies and operations are described below.

Advertising Unit

On March 13, 2007, the Company acquired 100% of the issued and outstanding shares of Good World Investments Limited, which owns 50% of the registered capital of Beijing Ren Ren Health Culture Promotion Limited ("BRR"). BRR is working with the Chinese Government on a benevolent project named "Great Wall of China Project" to advertise and promote health education and health awareness in China. We believe BRR provides a strategic advertising platform for us to launch our advertising operations in China as it can advertise in hospitals and districts in China. However the capital requirement to activate this project on the national and provincial level will require us to raise at least US$2 million which was difficult given the financial situation of the Group.  Therefore in 2012, we had determined to defocus from the BRR program and to focus on other advertising activities going forward. During the period, the Company did not derive any advertising income from the BRR project.  In 2014, the Group divested from its investment in BRR and the Group will suspend the advertising business unit until other advertising opportunities that are synergistic to the Groups business. During the period under review, the Group did not derive any revenue from this business unit.

Products Services Units

We have commenced a Products Services Unit to build brands recognition and to take advantage of our contacts networks, distribution channel and trading partners. We intended to leverage on our advertising platform to develop our own brands name for select products. This will uniquely position our Product Services for brand awareness as well as develop a long term business unit that will serve both consumers and industries markets. We had a distribution of electronics and light electronics in 2012 but we ran into difficulties and the market conditions changed such that the Company recorded a loss in 2012. In view of our focus on Telecommunications we determined to divest of our investment in Ateam in 2014. Accordingly the sales and operational results were disclosed as Operations held for sale in the Company’s condensed consolidated balance sheet and income statement. During this quarter, the Group did not derive any revenue from this business unit.  

Telecommunications Unit

In 2006, the Company announced the establishment of the Telecommunications and Mobile Computing Division to focus on the new media advertising where we would take advantage of new convergent devices for telecommunications advertising. The business of selling advertising and services through telecommunications media and devices is growing and the Group intends to enter into this business sector. No revenue has been generated from advertising through telecommunications media and devices during this reporting period.

Advertising through mobile devices is becoming more prominent to reach the mobile society of today. The goal of the Telecommunications and Mobile Computing Unit is to provide the Company with entry into the new sector of advertising through telecommunication media and devices. Our strategy on gaining access in telecommunication media is through cooperation with existing networks or establishes select networks. However our longer term strategy is to partner with network operators to provide extensive network access for our advertising media. We had secured the distribution rights for M.A.G.I.C. Convergent Device for the territory of China and Hong Kong, and we are still waiting for the delivery of its commercial products in 2013. However, in 2014 we divested from this product and instead we determined to focus on other telecommunication products and services. In October 2013, we entered into a conditional agreement to acquire Clixster Mobile Sdn. Bhd. a Mobile Virtual Network Operator (“MVNO”) operation in Malaysia. This transaction closed on January 31, 2014. Going forward, we will focus on developing the MVNO business and building a brand in Malaysia and then throughout the region. During the six months ended June 30, 2015, the Group derived $645,121 in telecom services revenue from this business unit.

- 4 -

Industry Overview and Competition

Telecommunication Market

During the first half of 2014, the Malaysia telecommunication subsector increased by 10% (January - June 2013: 9.4%) with the continued increase in the number of cellular phone subscribers as well as higher use of data services. Cellular phone subscriptions grew 2.8% to 43.8 million to reach a penetration rate of 145.5% as at end-June 2014 (end-June 2013: 9.1%; 42.6 million; 143.4%), with the prepaid segment dominating 82% of total subscriptions. Growth was spurred by increased take-up of affordable smartphones and attractive packages offered by service providers. In addition, higher use of data services was supported by increased third-generation (3G) subscriptions which recorded 18 million in 2013 (2012: 14.5 million).²

The broadband segment grew 3.1% to 6.4 million subscriptions with a household penetration rate of 67.2% as at end-June 2014 (end-June 2013: 6.9%; 6.2 million; 66.8%). Growth was largely driven by promotional activities and awareness programmes as well as improved network coverage due to offerings of bundled services with attractive pricing plans and improved network coverage. The National Broadband Initiative (“NBI”) which was introduced in March 2010 to increase household broadband penetration, addresses the provision of infrastructure and facilities through the implementation of High-Speed Broadband (“HSBB”) and Broadband to General Population (“BBGP”). Through public-private partnership, the Government has implemented the HSBB project in areas covering inner Klang Valley, Iskandar Malaysia and selected industrial areas. At the same time, under the BBGP initiative, broadband projects will be implemented across the country through various technologies such as Asymmetric Digital Subscriber line (“ADSL”), Hybrid Fibre Coax (“HFC”), High-Speed Downlink Packet Access (“HSDPA”) and Worldwide Interoperability for Microwave Access (“WiMax”). ²

In Malaysia, the major mobile network operators (MNOs) are Maxis, Celcom and DiGi. According to RHB Research Institute Sdn Bhd (“RHB Research”), despite the mixed showing in their fourth quarter 2014 reporting, the Big Three will still face challenges. This is especially in terms of effectively monetizing data in the medium term while traditional revenues will continue to suffer from structural pressure. The research house noted that the industry posted a slight contraction in service revenue of 1.1% in 2014, mainly due to the continued erosion in SMS and voice revenues and telco-specific issues. That said, RHB Research noted that mobile internet revenue sustained its double-digit growth trajectory, up 24.9% for the year. Unsurprisingly, it further noted that the traditional SMS and voice revenues continued on their declining trend this quarter, contracting by 27.9% and 5.4% y-o-y respectively in 4Q14. The research house expects the pressure on legacy revenues to continue in 2015, as the industry’s smartphone penetration, currently in the mid-40s, is expected to trend higher on the back of a wider array of affordable smartphones available in the market and the telcos dishing out more data bundled packages to spur data demand. That said, the research house noted the operators are ramping up efforts to better monetise data alongside investments to improve the quality of networks and additional LTE sites.

¹ Malaysia Economic Report 2014/2015

² Malaysia’s telco sector still likely to see challenges in the medium term - The Borneo Post Online 16/3/15

Subscriber Market

Mobile connections in Malaysia has long surpassed the 100% mark and was reported to attain 137% ¹ as at March 2015; putting her as one of the countries in Asia Pacific with penetration rates above 100%. In a statistical report conducted by We Are Social involving 30 countries in the Asia Pacific region, Macau, Hong Kong, Singapore and Thailand attained a mobile subscription rate of 269%, 175%, 152% and 150% respectively compared to their national populations.

By 2015, the Malaysian market is expected to reach a mobile subscriber base of over 50 million (as at 2013: 42.6 million¹). Although growth is expected to slow down as the market approaches saturation but it is still expected to register a CAGR of 6.0% from 2011-2015. Riding on increasing demand for internet access, 3G subscriptions reached 14.5 million with an annual growth of 41.0% in 2012 and are expected to cross 18.4 million by December 2013. Broadband internet has also been expanding strongly in recent years and as at first quarter of 2014, reached a 67% household penetration with more than half of households having some form of broadband access.¹ Also from the report by We Are Social, the mobile broadband penetration rate in March 2015 of Macau, Hong Kong, Thailand and Singapore were at 264%, 122%, 112% and 106% respectively whilst Malaysia achieved 78%.¹ The Malaysian Communications and Multimedia Commission reported a rate of 72.2% for the first half of 2015. ²

Greater affordability of mobile services, development of platforms and mobile enabled services including mobile payments, information services and educational tools) and entry of non-traditional players into the ecosystem including technology companies and content provider are key indicators to the potential future growth opportunities of the market.

¹ Digital, Social and Mobile in APAC 2015 - We Are Social Singapore

² MCMC - Pocket Book of Statistics, Q2 2015

- 5 -

Mobile Virtual Network Operator Market

The explosive growth of wireless is one of the most striking aspects of the telecom industry since the 1990s. Demand for low-cost and high-value cellular service has been driving the mobile industry towards price wars. As the industry continue to mature, Mobile Network Operators (MNO’s) recognize that future growth depends on the pursuit of new markets beyond the conventional method of direct acquisition of new subscribers. The growth driven by bundled service offerings with slashed rates is only a short-term remedy. A new strategic model through alliances with Mobile Virtual Network Operator (MVNO) offered a far sighted solution. The MVNO model is seen as both, a solution as well as an opportunity for MNOs to pursue new markets that present sustainable growth and retention.

MVNO’s typically do not own a network but lease the network of a service provider that does have a network. An MVNO business consists of managing two key relationships; Mobile Network Operator (MNO) and the end-users. MVNO provides mobile services without owning spectrum and relies on the MNO network infrastructure. Notably, this business arrangement allows smaller service providers to be focused on specific aspects of the mobile business by offering specialized services and enriching the industry service offerings through optimization usage of the network infrastructure.

MVNOs provide lower operational costs for mobile operators through billing, sales, customer service, marketing, increase revenue through new applications, value added services and attractive rates. As such, the opportunity for mobile operators to take advantage of MVNOs generally outweighs the competitive threat.

Type of MVNO’s

Discount	Provides very low call rates to market segments for example, the foreign workers market
Lifestyle	Focuses on specific niche market demographics for example on the high income executives with specific interests
Advertising-funded	Earns advertising revenue in order to provide free voice, SMS and data to its subscribers
Ethnic	Provides services to certain ethnic groups in the country. For e.g. XOX caters to the Chinese community in Malaysia, other MVNOs like Lycamobile, Lebara, iCard Mobile, Globalcell Mobile and Dialog Vizz who target ethnic communities by providing inexpensive calls to their home country
Data	Focuses on selling data subscriptions to end-users. Amazon in US and Dell in Japan are Data MVNOs. Merchantrade in Malaysia is a Data MVNO.

Examples of other MVNO’s in Malaysia

Merchantrade	A strong presence in the foreign workers’ in the Malaysia on Celcom network
XOX	Focus to serve the Chinese community offering services riding on Maxis network
Redtone	Serving the small and medium-sized enterprises market segment. A spin-off of Redtone International Bhd riding on Maxis
Tune Talk	A lifestyle service offering as sister companies Tune Hotels and Tune Money. Operates on Celcom’s network
Smart Pinoy	A service zooming into over 700,000 Filipino migrant workers in Malaysia, a joint venture between Celcom and Philippines Long Distance Telecom (PLDT)
Tron	Offering a yearlong validity for Tron user community numerous incentives. Rides on DiGi network
MyEvolution	Malaysia’s first Machine-to-Machine (M2M) MVNO service on DiGi network\
Tesco	Affinity program via Clubcard (Tesco loyalty card) on Maxis network
SpeakOut	Targeting students, youth, business travelers, tourists, migrant workers and telco-blacklisted individuals
Buzz Me	A prepaid mobile services operating on U Mobile targeting the urban young market
FRiENDi	A joint venture between Virgin Mobile Middle East & Africa and Kumpulan Perangsang Selangor
Altel	A MVNO under Puncak Semangat, within the Al-Bukhary group, in collaboration with CELCOM. No clear direction or target market.

- 6 -

Plan of operations

OUR PLAN OF OPERATION FOR THE NEXT TWELVE MONTHS.

We hope to generate additional revenues in the next twelve months by engaging business operations through internal growth and through strategic acquisitions and cooperative advertising agreements, as described more fully under "Overview" above.

We have cash and cash equivalents of $24,134 in our operation held for sale as of June 30, 2015; a decrease of about 4% from the previous period end of December 31, 2014. In the opinion of management, these funds will not satisfy our working capital requirements to operate at our current level of activity for the next twelve months. To effectuate our business plan, during the next twelve months, we must arrange for adequate funding to implement our plans of increasing our advertising offerings and promote our advertising services, through cooperation agreements and otherwise.

Financing and funding

Management intends to continue to raise additional financing through debt and equity financing or other means and interests that it deems necessary, with a view to implementing our business plan and building a revenue base. We plan to use the proceeds of such financings to provide working capital to our operations and increase our capital expenditure for marketing and working with our co-operative partners. There can be no assurances that sufficient financing will be available on terms acceptable to us or at all. Our forecast for the period for which financial resources will be needed to support our operations involves risks and uncertainties and actual results could fail as a result of a number of factors.

Specifically, we hope to accomplish the steps as set out in this report to implement our business plan in respect of developing and integrating the MVNO business. The success of our plans is subject to our ability to obtain adequate funding. Such additional capital may be raised through public or private equity financing, borrowings, or other sources, such as contributions from our officers and directors. If we are unable to obtain funds necessary to implement our business plan, we may revise or scale back our business plan.

We are not currently conducting any research and development activities, other than the continual development of our website. We do not anticipate conducting any other research and development activities in the near future. In the event that we expand our business scope, then we may need to hire additional employees or independent contractors as well as purchase or lease additional equipment and open new office locations.

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Results of operation.

FOR THE THREE MONTHS AND SIX MONTHS PERIOD ENDED JUNE 30, 2015 COMPARED TO THE THREE MONTHS AND SIX MONTHS PERIOD ENDED JUNE 30, 2014

REVENUES.

For the three and six months period ended June 30, 2015, the Group did not realize any revenue and cost of revenue, resulting in no gross profit from its continuing operations. In the same period in 2014, for the three months and six months ended June 30, 2014, there was no revenue and no cost of sales, resulting in no gross profit from its continuing operations.

For the three months period ended June 30, 2015, the Group realized $5,741 in revenue, $523,282 in cost of revenue and no sales discount, achieving $517,541 in gross loss from its operations held for sale. In comparison, for the three months ended June 30, 2014 the Group realized $1,247,985 in revenue and $1,042,011 in cost of revenue and $222,560 in sales discount, achieving $16,586 in gross loss from its operations held for sale.

For the six months period ended June 30, 2015, the Group realized $645,121 in revenue, $1,084,346 in cost of revenue and $65,670 in sales discount, achieving $504,895 in gross loss from its operations held for sale. In comparison, for the six months ended June 30, 2014 the Group realized $2,158,262 in revenue and $1,694,137 in cost of revenue and $337,023 in sales discount, achieving $127,102 in gross profit from its operations held for sale.

OPERATING EXPENSES.

For the three months period ended June 30, 2015, from our continuing operations, we had no gross profit and $9,787 in administrative expenses. We had $40,000 interest expenses resulting in a loss of $49,787 from continuing operations. During this period, from our operations held for sale, we had gross loss of $517,541 and our total operating costs was $223,245 which were general and administrative expenses. We also had $140,854 in currency exchange loss, $80,367 in other income and $90,000 in interest expenses so that our net loss from our operations held for sale was $891,273. In total, for the three months ended June 30, 2015, the loss attributable to our shareholders before non-controlled interests was $941,060.

In comparison for the three months period ended June 30, 2014, from our continuing operations, we had no gross profit and $5,000 in administrative expenses. We had $40,000 interest expenses resulting in a loss of $45,000 from continuing operations. During this period, from our operations held for sale, we had gross loss of $16,586 and our total operating costs was $742,032 which were general and administrative expenses. We also had $118,134 in currency exchange gains, $989 in other income and $90,000 in interest expenses so that our net loss from our operations held for sale was $729,495. In total, for the three months ended June 30, 2014, the loss attributable to our shareholders before non-controlled interests was $774,495.

For the six months period ended June 30, 2015, from our continuing operations, we had no gross profit and $16,942 in operating expenses which were all administrative expenses. We had $80,000 interest expenses resulting in a loss of $96,942 from continuing operations. During this period, from our operations held for sale, we had gross loss of $504,895 and our total operating costs was $960,050 which were general and administrative expenses. We also had $610,431 in currency exchange loss, $70,443 in other income and $180,000 in interest expenses so that our net loss from our operations held for sale was $2,184,933. In total, for the six months ended June 30, 2015, the loss attributable to our shareholders before non-controlled interests was $2,281,875.

In comparison for the six months period ended June 30, 2014, from our continuing operations, we had no gross profit and $12,798 in operating expenses which were all administrative expenses. We had $66,667 interest expenses, $420,362 gain on disposal of subsidiaries and other income on write-off of liabilities of $400,050 resulting in an income of $740,947 from continuing operations. During this period, from our operations held for sale, we had gross profit of $127,102 and our total operating costs was $1,389,250 which were general and administrative expenses. We also had $168,333 in currency exchange gains, $10,583 in other income and $165,000 in interest expenses so that our net loss from our operations held for sale was $1,248,232. In total, for the six months ended June 30, 2014, the loss attributable to our shareholders before non-controlled interests was $507,285.

Liquidity and Capital Resources

As at June 30, 2015, the Company had cash and cash equivalents totaling $24,134 held by assets of operations held for sale and had, other current assets of $7,250,407 consisting of prepayments and deposits of $550 and assets held for sale of $7,249,857. The Company had total current liabilities of $14,801,928 which were represented by $648,816 in other payables and accruals, $226,667 due to related parties and $13,926,445 in liabilities of assets held for sale as of June 30, 2015. We also had $2,000,000 in long-term shareholders loan as of June 30, 2015, making our total liabilities $16,801,928.

At present the Company does not have sufficient cash resources to provide for all general corporate operations in the foreseeable future. The Company will be required to raise additional capital in order to continue and expand its operations in fiscal 2015.

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Going Concern

The Company's financial statements are presented on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The Company has experienced significant losses from operations in recent periods. For the six months ended June 30, 2015 the Company incurred net losses of $2,281,875 and has accumulated losses of $10,618,052 as at June 30, 2015. The Company's ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered in developing markets and the competitive environment in which the Company operates. The Company is pursuing financing for its operations seeking additional investment in the Group. In addition, the Company is seeking to expand its revenue base in its consulting business and in developing and integrating its newly acquired MVNO business in Malaysia. Failure to secure such financing, to raise additional equity capital and to expand its revenue based may result in the Company depleting its available funds and not being able to pay its obligations. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern.

Off Balance Sheet Arrangements

As of June 30, 2015, there were no off balance sheet arrangements. The Company has no off balance sheet obligations nor guarantees and has not historically used special purpose entities for any transactions.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

Quantitative and Qualitative Disclosures about Market Risk:

The Company is exposed to various market risks, including changes in interest rates. Market risk is the potential loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates. The Company does not enter into derivatives or other financial instruments for trading or speculative purposes. The Company also has not entered into financial instruments to manage and reduce the impact of changes in interest rates and foreign currency exchange rates, although we may enter into such transactions in the future.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures:

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our principal executive and financial officer have reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) within the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that the disclosure controls and procedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner as the Company did not have proper staffing of accounting personnel to prepare the accounts in timely manner. However, this deficiency has since been rectified as we have now staffed 6 accountants in our accounting department to ensure that our financial reporting will be prepared and presented timely. Except for the staffing of the accounting department noted above, there were no significant changes in our internal controls or in other factors that could significantly affect these controls subsequent to the last day they were evaluated by our principal executive and financial officers.

Changes in Internal Controls over Financial Reporting:

There have been no changes in the Company's internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Submissions of Matters to a Vote of Security Holders

None.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description of Exhibit
2.1	Shareholders’ Agreement between Good World Investments Limited, Advance Tech Communications Sdn. Bhd. And ATC Marketing Limited(7)
2.2	Sale and Purchase Agreement entered by Good World Investments Limited to acquire 5% equity interest in Advance Tech Communications Sdn. Bhd.(8)
2.3	Sale and Purchase Agreement between Good World Investments Limited and ECE Technologies Sdn. Bhd. (9)
2.4	Sale and Purchase Agreement between the Company and Samata Ventures Sdn Bhd and Clixster Sdn Bhd. (10)
2.5	Sale and Purchase Agreement between the Company and KR Global Ventures Sdn Bhd. (11)
2.6	Sale and Purchase Agreement between the Company and Mohamad Puzi Bin Khalid, and the brand licensing agreement between the Company and Mohamad Puzi Bin Khalid(12)
3.1	Articles of Incorporation(1)
3.1.1	Certificate of Amendment to Articles of Incorporation(2)
3.1.2	Certificate of Amendment to Articles of Incorporation, as amended.(3)
3.1.3	Certificate of Amendment to Articles of Incorporation, as amended.(4)
3.1.4	Certificate of Amendment to Articles of Incorporation, as amended.(5)
3.2	Bylaws(1)
10.1	2007 Stock Incentive Plan (4)
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.

1.	Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on April 15, 2003.
2.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 3, 2005.
3.	Incorporated by reference to our Registration Statement on Form SB-2 as filed with the SEC on September 26, 2005.
4.	Incorporated by reference to our Registration Statement on Form S8 as filed with the SEC on March 8, 2007.
5.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on April 7, 2014.
6.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on October 12, 2015.
7.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on May 26, 2009.
8.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 22, 2011.
9.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on March 16, 2012.
10.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on February 6, 2014.
11.	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on January 16, 2014.
12	Incorporated by reference to our Current Report on Form 8-K as filed with the SEC on December 16, 2015

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 34, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Median Group Inc

a Texas corporation

  /s/  Andrew Hwan Lee

---------------------------------------

Andrew Hwan Lee

Chief Executive Officer

  /s/ Mohd Suhaimi bin Rozali

---------------------------------------

Mohd Suhaimi bin Rozali

Chief Financial Officer

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/  Dato Haji Abdul Fattah Abdullah	March 25, 2016
	-----------------------------------------------------
	Dato Haji Abdul Fattah Abdullah
Its:	Director

By:	/s/  Andrew Hwan Lee	March 25, 2016
	-----------------------------------------------------
	Andrew Hwan Lee
Its:	President, Chief Executive Officer, Director

By:	/s/  Ahmad Shukri Abdul Ghani	March 25, 2016
	-----------------------------------------------------
	Ahmad Shukri Abdul Ghani
Its:	Director

By:	/s/ Ching Chiat Kwong	March 25, 2016
	-----------------------------------------------------
	Ching Chiat Kwong
Its:	Director

By:	/s/ Mohd. Suhaimi bin Rozali	March 25, 2016
	-----------------------------------------------------
	Mohd Suhaimi bin Rozali
Its:	Chief Financial Officer, Company Secretary, Treasurer

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