Median 10-Q 2016 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, 2016
[   ]	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.

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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.)

Lot 17-01, Level 17, Tower 2, Bank Rakyat Twin Tower, No.33 Jalan Rakyat 50470, Kuala Lumpur, Malaysia	-----
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(Address of Company's principal executive offices)	(Zip Code)

Tel: +603 2716 4195    Fax: +603 2716 4194

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(Company's Telephone Number, Including Area Code)

(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 July 15, 2016 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", "MGI", and "the Company" mean Median Group Inc. and its subsidiaries unless otherwise indicated.

- 1 -

PART I

Item 1. Condensed Consolidated Financial Statements

Median Group Inc.

Condensed Consolidated Financial Statements

(Unaudited)

(Expressed In United States Dollars)

Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 (Audited)

Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2016 and 2015

Condensed Consolidated Statements of Comprehensive Loss for the three months and six months ended June 30, 2016 and 2015

Condensed Consolidated Statement of Stockholders’ Equity for the six months ended 30 June 2016

Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2016 and 2015

Notes to Condensed Consolidated Financial Statements

F-1

MEDIAN GROUP INC

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2016 AND DECEMBER 31, 2015

		June 30 2016	December 31 2015
	Notes	(Unaudited)	(Audited)
		US$	US$
ASSETS
Current assets:
Cash and cash equivalents		4,878	77,164
Accounts receivables		-	6,970
Prepayments and deposits		95,715	102,025
Amount due from a related party		236,049	146,835
		336,642	332,994
Non-current assets:
Fixed assets		196,736	1,211
		196,736	1,211
Total assets		533,378	334,205
LIABILITIES AND STOCKHOLDERS' DEFICITS
Current liabilities:
Accounts payable		-	6,273
Other payables and accruals	7	1,072,442	827,384
Amounts due to related parties	8	675,253	448,421
Total current liabilities		1,747,695	1,282,078
Long-term debts:
Long term loan	9	2,000,000	2,000,000
Total non-current liabilities		2,000,000	2,000,000
Total liabilities		3,747,695	3,282,078
Commitments and contingencies	12
Stockholders'equity:
Common stock, no par value, 85,000,000,000 shares authorized, 11,307,232,960 (2015: 11,307,232,960) shares issued and outstanding	4	2,775,230	2,775,230
Accumulated deficits		(6,041,521)	(5,842,785)
Accumulated other comprehensive income		(1,240)	2,331
Total Median Group Inc. stockholders' deficits		(3,267,531)	(3,065,224)
Non-controlling interest		53,214	117,351
Total stockholders’ deficits		(3,214,317)	(2,947,873)
Total liabilities and stockholders’ deficits		533,378	334,205

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

F-2

MEDIAN GROUP INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(UNAUDITED)

		Three Months Ended June 30		Six Months Ended June 30
		2016	2015	2016	2015
	Note	US$	US$	US$	US$
Net Revenue		12,479	-	33,376	-
Cost of revenue		(11,231)	-	(24,849)	-
Gross profit		1,248	-	8,527	-
Operating expenses:
Administration expenses		(57,335)	(9,787)	(198,383)	(16,942)
Selling and distribution expenses		-	-	-	-
Total operating expenses		(57,335)	(9,787)	(198,383)	(16,942)
Operating loss from continuing operations		(56,087)	(9,787)	(189,856)	(16,942)
Other income / (expenses)
Other income		53	-	518	-
Finance charges		(77)	-	(157)	-
Interest expenses		(40,000)	(40,000)	(80,000)	(80,000)
Loss from continuing operations		(96,111)	(49,787)	(269,495)	(96,942)
Discontinued operations, net of tax	6	-	(891,273)	-	(2,184,933)
Net loss		(96,111)	(941,060)	(269,495)	(2,281,875)
Less: Net loss attributable to non-controlling interests		(44,624)	(464,933)	(70,759)	(941,060)
Net loss attributable to Median Group Inc.		(51,487)	(476,127)	(198,736)	(1,340,815)
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	11,307,232,960

* Weighted average number of shares used to compute basic and diluted loss per share for the three months and six months ended June 30, 2016 and 2015 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

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(UNAUDITED)

		Three Months Ended June 30		Six Months Ended June 30
		2016	2015	2016	2015
	Note	US$	US$	US$	US$
Net loss		(96,111)	(941,060)	(269,495)	(2,281,875)
Other comprehensive (loss) / income, net of tax
Foreign currency translation (loss) / income		(3,488)	143,791	3,051	412,049
Total comprehensive loss		(99,599)	(797,269)	(266,444)	(1,869,826)
Less: Net loss attributable to non-controlling interests		(44,624)	(327,988)	(70,759)	(804,055)
Less: Other comprehensive (loss) income attributable to non-controlling interests – foreign currency translation loss		(3,585)	52,641	6,622	150,389
Total comprehensive loss attributable to Median Group Inc.		(51,390)	(521,922)	(202,307)	(1,216,160)

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

F-4

MEDIAN GROUP INC

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

FOR THE SIX MONTHS ENDED JUNE 30, 2016

(UNAUDITED)

	Number of Shares	Common Stock Amount	Accumulated Other Comprehensive Income	Accumulated Deficits	Non-controlling Interest	Total Stockholders’ Equity
		US$	US$	US$	US$	US$
Balance at January 1, 2016 (Audited)	11,307,232,960	2,775,230	2,331	(5,842,785)	117,351	(2,947,873)
Other comprehensive (loss) / income - foreign currency translation gain	-	-	(3,571)	-	6,622	3,051
Net loss for the period	-	-	-	(198,736)	(70,759)	(269,495)
Balance at June 30, 2016	11,307,232,960	2,775,230	(1,240)	(6,041,521)	53,214	(3,214,317)

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

F-5

MEDIAN GROUP INC

(Formerly China Media Group Corporation)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2016 AND 2015

(UNAUDITED)

	Six Months Ended June 30
	2016	2015
	US$	US$
Cash flows from operating activities:
Net loss	(269,495)	(2,281,875)
Adjusted for non cash items:
Depreciation	1,573	-
	(267,922)	(2,281,875)
Changes in asset and liabilities
(Decrease) increase in assets
Accounts receivables	6,970	-
Prepayments and deposits	6,310	3,988
Amount due from a related party	(89,214)	-
Increase (decrease) in liabilities:
Asset of operations held for sale – net liabilities	-	1,776,270
Accounts payable	(6,273)	-
Other payables and accruals	245,058	9,568
Net cash used in operating activities	(105,071)	(492,049)
Cash flows used in investing activities
Purchase of fixed assets	(197,098)	-
Net cash used in investing activities	(197,098)	-
Cash flows from financing activities :
Amounts due to related parties	226,832	80,000
Net cash from financing activities	226,832	80,000
Effect of exchange rate in comprehensive income	3,051	412,049
Net decrease in cash and cash equivalents	(72,286)	-
Cash and cash equivalents - net, beginning	77,164	-
Cash and cash equivalents - net, ending	4,878	-
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

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 telecom services.

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.

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 12 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, 2015. 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, 2015 included in the Company Form 10-K filed with the Securities and Exchange Commission.

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

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, 2016 include the financial statements of the Company and its wholly owned subsidiary Alpha Sunray Sdn. Bhd., its 50.001% equity interest subsidiary Naim Indah Mobile Communications Sdn. Bhd. (“NIMC”). In the prior year the Company disposed its subsidiary companies namely its 63.2% equity interest subsidiary Clixster Mobile Sdn. Bhd. and its 50% subsidiary ATC Marketing Limited (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, 2016 and 2015 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

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, 2016.

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

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”. As of June 30, 2016, the comprehensive loss was $1,240.

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

MEDIAN GROUP INC

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, 2016, the Company has incurred an accumulated deficits totaling $6,041,521 and its current liabilities exceed its current assets by $1,411,053. 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

As of June 30, 2016, 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 2015, the Company had issued a total of 6,522,309 shares to its staff and consultants for their service provided.

As at June 30, 2016 and December 31, 2015, 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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 DISCONTINUED OPERATIONS HELD FOR SALE

In the prior year, 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 to a third party buyer. The buyer paid $8,500 and the assuming of debts withour recourse in the Disposed Subsidiaries which resulted in a gain of $5,091,189 to the Company. 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
	2016	2015	2016	2015
	US$	US$	US$	US$
Net Revenue	-	5,741	-	645,121
Less: sales discount	-	-	-	(65,670)
Cost of revenue	-	(523,282)	-	(1,084,346)
Gross loss	-	(517,541)	-	(504,895)
Administrative expenses	-	(223,245)	-	(960,050)
Selling and distribution expenses	-	-	-	-
Loss from operations	-	(740,786)	-	(1,464,945)
Other income / (expenses)
Foreign exchange gain	-	(140,854)	-	(610,431)
Other income	-	80,367	-	70,443
Interest expenses	-	(90,000)	-	(180,000)
Net loss from discontinued operation before taxation	-	(891,273)	-	(2,184,933)
Taxation	-	-	-	-
Loss from discontinued operation	-	(891,273)	-	(2,184,933)

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

NOTE 7 OTHER PAYABLES AND ACCRUALS

Other payables and accruals consist of the following:

	June 30 2016	December 31 2015
	US$	US$
Potential tax penalty liability	410,000	410,000
Other payables and accruals	662,442	417,384
	1,072,442	827,384

NOTE 8 AMOUNTS DUE TO RELATED PARTIES

	June 30 2016	December 31 2015
	US$	US$
Amounts due to related parties:
- Trade	-	-
- Non-trade	675,253	448,421
	675,253	448,421

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

F-12

MEDIAN GROUP INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 LONG TERM LOAN

	June 30 2016	December 31 2015
	US$	US$
Long term loan	2,000,000	2,000,000

This long term loan is due to a former shareholder of the Company. This loan is unsecured and repayable on November 25, 2017, and bears interest of 8% per annum. The accrued interest for the six months ended June 30, 2016 was $80,000 (2015: 80,000).

NOTE 10 RELATED PARTY TRANSACTIONS

For the six months period ended June 30, 2016, the Company no remuneration (2015: $20,439) to its directors and its officers remuneration for their services provided to the Company.

For the six months period ended June 30, 2016 the Company did not make any sales (2015: $202,576) 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.

In the prior year, 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 in interests expenses relating to these promissory notes. 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.

NOTE 11 INCOME TAXES

No provision was made for income tax for the six months ended June 30, 2016 and 2015, since the Company and its subsidiaries had significant net operating loss. In the six months ended June 30, 2016 and 2015, the Company and its subsidiaries incurred net operating losses for tax purposes of approximately $269,495 and $142,156, respectively. Total net operating losses carry forward as at June 30, 2016 and 2015, (i) for Federal and State purpose were $11,810,918 and $11,573,707, respectively and (ii) for its entities outside of the United States $281,728 and $80,515. 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, 2016 and December 31, 2015 was approximately $5,116,740 and $5,019,034, 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:

	2016	2015
Malaysia statutory rate	25%	25%
Tax allowance	-	-
Valuation allowance – Loss carryforward under Malaysia rate	(25%)	(25%)
Provision for income tax	-	-

F-13

MEDIAN GROUP INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 COMMITMENTS AND CONTINGENCIES

The Company’s commitments and contingencies are set out below as follows:-

(a) As announced in a Form 8K on December 16, 2015 on December 11, 2015 the Company acquired and 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 Abdul Ghani is a 30% shareholder of NIMC.   Our subsidiary Naim Indah Mobile Communication Sdn. Bhd. (“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”). 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 US$120,000) 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.

NOTE 13 SUBSEQUENT EVENTS

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

F-14

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, 2016.

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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.  In January 2014 the Company disposed the loss making light appliances and advertising operation to streamline the operation and to focus on its new acquisition on telecom services business unit.

On January 31, 2014 the Company acquired 63.2% in Clixster Mobile Sdn Bhd (“CMSB”), a mobile virtual network operator (“MVNO”) in order 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.

The operation in CMSB incurred significant losses in 2014 and in 2015. The Group determined to re-focus the operation in the higher margin post-paid rather than pre-paid telecom services. As a result, on July 28, 2015, the Group disposed of its investment in CMSB to refocus its MVNO business from pre-paid to post-paid telecom services and a digital service provider.

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 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.

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.

In December 2015, the Company acquired 51% interests in Naim Indah Mobile Communications Sdn Bhd (“NIMC”). NIMC is a newly established MVNO holding all the necessary licenses to operate as an MNVO. Currently, we are in advance discussion with a Malaysian telecom operator to roll out our MVNO services. Due to certain unexpected delays, it is now planned that the roll out will commence in the second half of 2016.

At the date of this report, the Group will mainly concentrate on its Telecommunications and Mobile Business Unit. The Group will terminate and streamline its adverting business unit and product services unit until a viable business opportunity is available. The revenue generated from the telecom services during this quarter is $33,376.

OUR BUSINESS REVIEW AND FUTURE STRATEGY. The Group has 3 business units namely “Advertising”, “Products and Services” and “Telecommunication and Mobile Computing”. The management has determined to only focus our business in the Telecommunications and Mobile Computing business unit going forward, and have the Advertising and Products and Services business units remain inactive until viable business opportunities are presented.

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Products & Services Overview

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. We have seen over the years the importance of advertising through social media using telecommunication services.

In the fiscal year 2015, the Group restructured its business to focus on mobile digital business and becoming a digital service provider. In December 2015, the Group acquired Naim Indah Mobile Communication Sdn Bhd which 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. 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 customer.

We shall focus on the business of providing mobile digital service under the MVNA platform across South East Asian countries. NIMC is poised to be one of the first MVNA that specifically catered for these markets, operating as a digital service provider (DSP). A digital service provider applies the principles of Internet service delivery, meaning its delivery architecture is integrated, seamless, intelligent, automated, simple and in real time.

Towards Becoming A Digital Service Provider

The decision to become a DSP rests solely on providing the needs of a new generation of consumers. There has been a great shift in consumers’ behaviors. The way purchases are made, the types of media consumed, the way information are obtained and the way trust and relationships are built. These have created new rules of consumer engagement where mobile platform is highly utilized, allowing consumers to communicate, transact and gain almost instantaneous feedback and response. E-commerce now is evolving into M-Commerce (mobile-commerce) and into S-Commerce (social-commerce) allowing customers to instantly transact and share.

We must seize the opportunity to build our business model around this market segment through our offerings with three main differentiators:

(i) An advanced set of products and services that will disrupt the market landscape;

(ii) A customer engagement model that is currently not offered by others; and

(iii) A technology superiority and scalability that will support future growth.

The first challenge to become a digital service provider involves a change in the mindset and culture; we need to view ourselves not as a communication service provider but as a genuine digital competitor. We need to shift away from serving as a channel and toward creating a platform, and the way for us to capitalize on the opportunities in the digital services domain and its associated revenue is to build our business as a digital service provider. Our journey towards becoming a DSP has progressed well over the recent months where we are building a solid eco-system that will enable us to offer attractive and disruptive services to the market.

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Key Business Focus: White label MVNOs

NIMC white label MVNO program allows corporations and organizations to offer more than just prepaid and post-paid mobile services, including voice, data, SMS and mobile broadband at a minimum upfront set-up cost. With the white-label program, NIMC is helping companies to grow their additional revenue and profits in their segment by expanding their reach and exposure.

NIMC builds, operates and manages mobile digital services and enables corporations to give access to their own resellers to a full platform for activation, billing and subscriber lifecycle management, customer care, and management support without spending anything on software development. Businesses can now compete on a more even playing field by offering a virtual 24×7 online retail store with full service customer care.  NIMC helps minimize operating costs by implementing strategic web based marketing initiatives, utilizing automated processes such as ordering, payment and collection, and inventory management, plus expands MVNO reach up to nationwide market opportunities through e-commerce.

NIMC’s first white label customer is expected to be the National Co-operatives Organization (Angkasa) targeting the co-operative sectors. NIMC is currently negotiating with at least 4 other corporations as potential clients under the white label program. We know that success in the wireless business depends on a strong, agile and flexible platform that integrates new and innovative solutions. The solutions that count are those that allow the white label MVNOs to position them in such a way that the customer receives a seamless white label experience.

Our Mission Critical System

The current traditional billing, Next Generation Intelligent Network (NGIN) and Business Support System (BSS) running today have limited capabilities in serving today’s consumers’ demand. Most operators (MNOs and MVNOs) struggle to fulfil the demand of current consumers and find it very hard to cater for future business trend and unpredictable cost for the future changes. This is simply because the current back-end billing and BSS were not designed for 4G and beyond.

The system is required to provide a real-time unified charging across all services and devices, and payment methods with differentiated service offerings with a quick time-to-market advantage to allow NIMC to quickly capitalize and execute on market opportunities. Our BSS platform combines payment methods, with ‘on demand’ payments for our services and recurring subscription models for others.

*	Online charging system (OCS) is the central system that governs all subscribers’ charging and rating. It is a system that allows an operator to charge their customers, in real time, based on event or session service usage.
*	Policy & Charging Rules Function (PCRF), a software component designated in real-time to determine policy rules that accesses subscriber databases and other specialized functions, such as a charging system PCRF supports the creation of rules and then automatically making policy decisions for each subscriber active on the network.
*	Business Support Systems (BSS) are the components that we use to run its business operations towards customers. Together with operations support systems (OSS), these are used to support various end-to-end telecommunication services. BSS and OSS have their own data and service responsibilities.
*	Enterprise Resource Planning (ERP) is a system that handles all essential business functions such as accounting, HR, sales, marketing, service, warehousing, and more on cloud. The cloud-based system provides a complete visibility and better control for us to run our end-to-end business processes professionally.

We are now at the final stage of negotiating the purchase of these systems from the respective solution providers. We expect to complete the deployment of these robust systems by the end of Q3.

Access Agreement with a Host Operator

We have submitted an official application request for network access to a host mobile network operator (MNO) in middle February. Since then, we have gone through several rounds of negotiations for both technical and commercial elements. All the technical matters have been given a preliminary clearance for the next round of detailed scoping and implementation. As for the commercial negotiation, we are currently negotiating on the wholesale rates with the MNO. The MNO has given its commitment and assurance that agreement shall be concluded within 120 days from the date of submission. This is due to the involvement of many parties within the organization, ranging from technical, legal, financial and board of directors. With this in mind, we anticipate that the agreement will be signed in May 2016.

Moving Forward

Moving forward, we will continue to strive in executing our roadmap for growth which encompasses five key areas namely, strengthening our talents and resources, expanding our product range, widening our geographical reach, improving customers’ journey and experience and enhancing our internal process. The positive results from these areas would create a stable platform for the Group to spread its wings regionally and globally to unveil the vast potential of the digital services market segment. Talks and negotiations are ongoing with several mobile network enablers and operators in the South East Asian region. This would promulgate further the Group’s vision and commitment in becoming a regional mobile service operator with an assortment of deliverables that would satisfy the ravishing appetite of the customers. Being in a competitive industry where customers’ satisfaction is uncompromising, we are continuously ensuring that customers’ experience would be the fundamental element in all facets of our operation.

Technology is the staple food of today’s consumers, which is ever changing, we will be investing our resources into R&D, talent enhancement, product innovation, and technology adoption in our delivery processes. This will enable us to be more efficient in providing an unmatched customers’ experience, which will translate into a faster and higher subscribers’ acquisition. We will continue to jointly work closely with mobile enablers to penetrate new markets and opportunities this year and beyond.

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Industry Overview and Competition

Telecommunication Market

During the first half of 2015, growth in the information and communications subsector remained robust at 9.5% (January - June 2014: 9.8%) led by strong demand for mobile internet, especially data and computer services. As at end-June 2015, cellular phone subscriptions grew marginally by 0.7% to 44.2 million to reach a penetration rate of 144.8% (end-June 2014: 35; 43.9 million; 145.8%) with the prepaid segment dominating 81% of total subscriptions. The marginal growth was due to a marked shift in consumer preference to Over-the-Top communication channels and social media. As a result, there was a sharp decline in voice and SMS usage.¹

The take-up rate of mobile broadband services has further accelerated partly driven by the “Smart Device with Internet Package” product under the Universal Service Provision (USP) programme. The broadband segment stood at 27.9 million subscriptions as at end-June 2015 with mobile broadband accounting for the largest share at about 85% of the total broadband subscriptions. In addition, the Ministry of Communications and Multimedia had announced earlier this year that basic broadband package prices would be reduced in line with the aspiration of transforming Malaysia into a digital nation.¹

According to Mr. Ajay Sunder, Vice President of Telecoms, Frost & Sullivan Asia Pacific, overall mobile subscriber penetration is expected to remain stable. However, churns rates will increase because of intensified competition. The Malaysian mobile services market observed very intense competition. As mobile subscriber growth stagnates, operators get desperate to gain subscription market share to drive up their service revenues. MNOs are targeting newer customer segments through innovative pricing plans that integrate voice, data and digital services. Voice revenues were negatively impacted by free calls offered to compensate the increased burden from GST, particularly in the prepaid segment. Non-voice revenue is expected to contribute just under 50% of total service revenues. Digital Media services such as E-Commerce will drive the next generation non-data service revenues for Malaysian telcos.

All operators saw significant increase in their data revenue; however, overall non-voice revenues were negatively impacted because of sharply declining SMS revenues. "SMS revenue was negatively impacted by the adoption of OTT messenger Apps such as WhatsApp and WeChat. In order to promote data adoption, operators rolled-out data bundles with devices and also offered free basic data that offered unlimited access to key instant messaging apps. These further sliced out SMS revenues," said Mr. Sunder.

"The Malaysian E-Commerce market is slowly but steadily gaining strong momentum. With strong adoption of smartphones and tablets as well as mobile internet and broadband, it is going to be over USD6 billion business in next couple of years," said Mr. Sunder.

The development of mobile payment ecosystems and growth in mobile-commerce (m-commerce) urge many E-Commerce companies to launch mobile applications and mobile websites. ²

The telecommunication industry is expected to continue its growth trajectory at the same pace going forward despite the penetration of OTT applications that has been causing disruption to the traditional telecommunication business model with service providers seeing a downtrend of users’ minutes of use (MOU) for voice call. In contrast, increased usage of OTT applications has also indirectly heightened service provider’s profit in the mobile internet section as it spurs mobile data usage. Apps are the core of mobile devices’ functionality judging from the steady upward trend both in apps revenue and downloads which indicates a higher demand for mobile internet. Industry vendors such as Ericsson noted that apps reviews and curiosity to try out a new app are the main factors that drive users to download apps, especially apps that enable communication.

Data consumption per individual in Malaysia averaged 819MB per month in 2014 and is expected to hit 2GB in 2018 according to Ericsson’s Mobility Report. This is expected to be driven by the growing consumption of video content especially from YouTube and Facebook in particular. In line with this is Cisco’s Visual Networking Index which states video content as one of the fastest growing segment of mobile data which takes up 55% of global mobile data traffic in 2014.

In view of all the above-mentioned prospects and expansion indicators, the telecommunication industry is looking ahead with various ICT and data driven opportunities where new services will emerge to fulfil the digital lifestyle that inevitably forms a significant part of the future.

¹ Malaysia Economic Report 2015/2016

² Digital Media Services Will Drive Next Generation Non-Data Service Revenues for Malaysia Telcos – Frost and Sullivan December 8, 2015.

Read more:
http://www.theborneopost.com/2015/03/16/malaysias-telco-sector-still-likely-to-see-challenges-in-the-medium-term-analysts/#ixzz3n5gZbILzThe

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Telecommunication Market

Mobile connections in Malaysia has long surpassed the 100% mark and was reported to attain 142% ¹ as at January 2016; putting her as one of the countries in Asia Pacific with penetration rates above 100%. In a statistical report conducted by We Are Social, Hong Kong, Vietnam and Singapore attained a mobile connection rate of 178%, 152% and 145% respectively compared to their national populations. Prepaid connections still dominated postpaid with 77% and 23% respectively.

Mobile broadband connections compared to the total population of Malaysia was 93% as at January 2016 behind Macau, Singapore, Hong Kong and Thailand which registered 308%, 143%, 128% and 119% respectively. With a total population of 30.54 million, Malaysia’s active internet users stood at 20.62 million, a penetration rate of 68% and mobile connections of 43.43 million (i.e. 142%) and active mobile social users of 16 million (a penetration rate of 52%). ¹

¹Digital in 2016 – We Are Social Singapore

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.

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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 $4,878 in our operation held for sale as of June 30, 2016; a decrease of about 94% from the previous period end of December 31, 2015. 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, 2016 COMPARED TO THE THREE MONTHS AND SIX MONTHS PERIOD ENDED JUNE 30, 2015

REVENUES.

For the three months period ended June 30, 2016, the Group realized $12,479 in revenue, $11,231 in cost of revenue and no sales discount, achieving $1,248 in gross profit from its continuing operations. For the three months ended June 30,2016 the Group did not realize any revenue, costs of revenue and sales discount and no gross profit from its operations held for sale (Note 6).

For the three months period ended June 30, 2015, the Group did not realize any revenue, costs of revenue and sales discount and 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 (Note 6).

For the six months period ended June 30, 2016, the Group realized $33,376 in revenue, $24,849 in cost of revenue and no sales discount, achieving $8,527 in gross profit from its continuing operations. For the six months ended June 30,2016 the Group did not realize any revenue, costs of revenue and sales discount and no gross profit from its operations held for sale (Note 6).

For the six months period ended June 30, 2015, the Group did not did not realize any revenue, costs of revenue and sales discount and no gross profit from its continuing operations. 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. (Note 6).

OPERATING EXPENSES.

For the three months period ended June 30, 2016, from our continuing operations, we had $1,248 in gross profit and our total operating expenses were $57,335, all of which were selling, general and administrative expenses. We also had $53 in other income, $77 in finance charges and $40,000 in interest expenses, so that the net loss to our shareholders from continuing operations for the three months period ended June 30, 2016 was $96,111. This was in comparison in the three months period ended June 30 2015, we had no gross profits and out total operating expenses were $9,787 which were all general and administrative expenses. We also had $40,000 in interest expenses so that our net loss to our shareholders from continuing operations for the three months period ended June 30, 2015 was $49,787.

We had no operation held for sale for the three months period ended June 30, 2016. As a result for the three months period ended June 30, 2016 we had a loss of $96,111 to our shareholders before non- controlled interests. This was in comparison for the three months period ended June 30, 2015, 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.

For the six months period ended June 30, 2016, from our continuing operations, we had $8,527 in gross profit and our total operating expenses were $198,383, all of which were selling, general and administrative expenses. We also had $518 in other income, $157 in finance charges and $80,000 in interest expenses, so that the net loss to our shareholders from continuing operations for the six months period ended June 30, 2016 was $269,495. This was in comparison in the six months period ended June 30 2015, we had no gross profits and out total operating expenses were $16,942 which were all general and administrative expenses. We also had $80,000 in interest expenses so that our net loss to our shareholders from continuing operations for the six months period ended June 30, 2015 was $96,942.

We had no operation held for sale for the six months period ended June 30, 2016. As a result for the six months period ended June 30, 2016 we had a loss of $269,495 to our shareholders before non- controlled interests. This was in comparison for the six months period ended June 30, 2015, 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.

Liquidity and Capital Resources

As at June 30, 2016, the Company had cash and cash equivalents totaling $4,878 and the other current assets consisted of $95,715 in prepayments and deposits, $236,049 in due from a related party and $196,736 in fixed assets. Therefore our total assets was $533,378 as of June 30, 2016. We also had current liabilities of $1,747,695 which were represented by $1,072,442 in other payables and accruals and $675,253 in amounts due to related parties. We also We also had $2,000,000 in long-term shareholders loan as of June 30, 2016, making our total liabilities $3,747,695.

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 2016.

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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, 2016 the Company incurred net losses of $269,495 and has accumulated losses of $6,041,521 as at June 30, 2016. 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 the 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, 2016, 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	August 19, 2016
	-----------------------------------------------------
	Dato Haji Abdul Fattah Abdullah
Its:	Director

By:	/s/  Andrew Hwan Lee	August 19, 2016
	-----------------------------------------------------
	Andrew Hwan Lee
Its:	President, Chief Executive Officer, Director

By:	/s/  Ahmad Shukri Abdul Ghani	August 19, 2016
	-----------------------------------------------------
	Ahmad Shukri Abdul Ghani
Its:	Director

By:	/s/ Ching Chiat Kwong	August 19, 2016
	-----------------------------------------------------
	Ching Chiat Kwong
Its:	Director

By:	/s/ Mohd. Suhaimi bin Rozali	August 19, 2016
	-----------------------------------------------------
	Mohd Suhaimi bin Rozali
Its:	Chief Financial Officer, Company Secretary, Treasurer

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