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 September 30, 2017

[ ]	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.)

Unit 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 2714 2020 Fax: +603 2714 2121

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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 December 15, 2017 was 11,593,899,627 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.

Median Group Inc.

Condensed Consolidated Financial Statements

(Unaudited)

(Expressed In United States Dollars)

Condensed Consolidated Balance Sheets as of September 30, 2017 and December 31, 2016 (Audited)

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2017 and 2016

Condensed Consolidated Statements of Comprehensive Loss for the three months and nine months ended September 30, 2017 and 2016

Condensed Consolidated Statement of Stockholders’ Equity for the nine months ended September 30, 2017

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2017 and 2016

Notes to Condensed Consolidated Financial Statements

F-1

MEDIAN GROUP INC

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2017 AND DECEMBER 31, 2016

		September 30 2017	December 31 2016
	Notes	(Unaudited)	(Audited)
		US$	US$
ASSETS
Current assets:
Cash and cash equivalents		24,286	797,230
Accounts receivables		32,307	-
Prepayments and deposits		153,180	113,981
Amounts due from related parties	8	1,075,359	2,229
Total current assets		1,285,132	913,440

Non-current assets:
Intangible assets - goodwill		541,307	-
Property and equipment	4	42,433	-
		583,740	-

Total assets		1,868,872	913,440

LIABILITIES AND STOCKHOLDERS' DEFICITS
Current liabilities:
Accounts payable		63,397	-
Other payables and accruals	7	750,041	651,880
Amounts due to related parties	8	973,665	806,812
Total current liabilities		1,787,103	1,458,692

Long-term debts:
Shareholder loan	9	2,000,000	2,000,000
Total non-current liabilities		2,000,000	2,000,000

Total liabilities		3,787,103	3,458,692

Commitments and contingencies	12

Stockholders' equity:
Common stock, no par value, 85,000,000,000 shares authorized, 11,593,899,627 (2016: 11,427,232,960) shares issued and outstanding	5	4,728,563	4,095,230
Accumulated deficits		(6,655,780)	(6,519,665)
Accumulated other comprehensive income		(108,748)	(120,817)
Total Median Group Inc. stockholders' deficits		(2,035,965)	(2,545,252)
Non-controlling interest		117,734	-
Total stockholders’ deficits		(1,918,231)	(2,545,252)
Total liabilities and stockholders’ deficits		1,868,872	913,440

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 NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

(UNAUDITED)

	Three Months Ended September 30		Nine Months Ended September 30
	2017	2016	2017	2016
	US$	US$	US$	US$

Net Revenue	23,479	7,350	358,534	40,726
Cost of revenue	(63,287)	(6,615)	(240,460)	(31,464)

Gross (loss) profit	(39,808)	735	118,074	9,262

Operating expenses:
Administration expenses	(94,448)	(158,691)	(187,563)	(357,074)
Selling and distribution expenses	-	-	-	-
Total operating expenses	(94,448)	(158,691)	(187,563)	(357,074)

Operating loss from operations	(134,256)	(157,956)	(69,489)	(347,812)

Other income (expenses)
Other income	28,776	223	79,615	741
Finance charges	(34)	(35)	(114)	(192)
Interest expenses	(40,000)	(40,000)	(120,000)	(120,000)

Loss before taxation	(145,514)	(197,768)	(109,988)	(467,263)
Recovery of tax	-	-	19	-
Net loss	(145,514)	(197,768)	(109,969)	(467,263)
Less: net (loss) income attributable to non-controlling interests	(47,209)	(44,825)	26,146	(115,584)
Net loss attributable to Median Group Inc.	(98,305)	(152,943)	(136,115)	(351,679)


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 *	11,593,899,627	11,307,232,960	11,493,167,026	11,307,232,960

*	Weighted average number of shares used to compute basic and diluted loss per share for the three months and nine months ended September 30, 2017 and 2016 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 NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

(UNAUDITED)

		Three Months Ended September 30		Nine Months Ended September 30
		2017	2016	2017	2016
	Note	US$	US$	US$	US$

Net loss		(145,514)	(197,768)	(109,969)	(467,263)

Other comprehensive income, net of tax
Foreign currency translation gain		13,364	56	15,239	3,107
Total comprehensive loss		(132,150)	(197,712)	(94,730)	(464,156)
Less: net (loss) income attributable to non-controlling interests		(47,209)	(44,825)	26,146	(115,584)
Less: other comprehensive income attributable to non-controlling interests - foreign currency translation income		2,004	33	3,170	6,655
Total comprehensive loss attributable to Median Group Inc.		(86,945)	(152,920)	(124,046)	(355,227)

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 NINE MONTHS ENDED SEPTEMBER 30, 2017

(UNAUDITED)


	Number of Shares	Common Stock Amount	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficits	Non-controlling Interest	Total Stockholders' (Deficits) Equity
		US$	US$	US$	US$	US$

Balance at January 1, 2017 (Audited)	11,427,232,960	4,095,230	(120,817)	(6,519,665)	-	(2,545,252)
Issue of shares	166,666,667	633,333	-	-	88,418	721,751
Other comprehensive income - foreign currency translation gain	-	-	12,069	-	3,170	15,239

Net income (loss) for the period	-	-	-	(136,115)	26,146	(109,969)

Balance at September 30, 2017	11,593,899,627	4,728,563	(108,748)	(6,655,780)	117,734	(1,918,231)

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 NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

(UNAUDITED)


	Nine Months Ended September 30
	2017	2016
	US$	US$
Cash flows from operating activities:
Net (loss)	(109,969)	(467,263)
Adjusted for non cash items:
Depreciation	2,960	3,651
	(107,009)	(463,612)
Changes in asset and liabilities
(Increase)/decrease in assets
Accounts receivables	(30,558)	6,970
Prepayments and deposits	164,825	9,409
Amount due from a related party	(901,731)	(81,296)
Increase/(decrease) in liabilities:
Accounts payable	61,251	20,689
Other payables and accruals	(228,913)	248,422
Net cash used in operating activities	(1,042,135)	(259,418)

Cash flows used in investing activities
Purchase of fixed assets	-	(193,628)
Net cash used in investing activities	-	(193,628)

Cash flows from financing activities :
Cash acquired on acquisition of subsidiary	87,099	-
Amounts due to related parties	166,853	376,851
Net cash from financing activities	253,952	376,851

Effect of exchange rate in comprehensive income	15,239	3,107
Net decrease in cash and cash equivalents	(772,944)	(73,088)
Cash and cash equivalents - net, beginning	797,230	77,164

Cash and cash equivalents - net, ending	24,286	4,076

Supplemental disclosure of cash flow information:
Interests paid	-	-

Income tax paid	-	-

Supplemental disclosure of non-cash investing and financing activities:
Issuance of shares for the acquisition of subsidiary	633,333	-

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. (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.

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 in exchange of 10,193,609,664 shares of common stock of the Company. 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.

During the year, on July 28, 2015, the Company disposed of its 63.2% of CMSB to refocus the business of the Group to sell post-paid rather than prepaid telecom services for the mobile network virtual operator (“MNVO”) operation, with a gain of approximately $5 million.

As announced in a Form 8-K on December 16, 2015 on December 11, 2015 the Company acquired 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. NIMC has an exclusive agreement with MyAngkasa Holdings Sdn. Bhd. (“MyAngkasa”) for the provision of telecom services to members of the National Cooperative Malaysia Bhd and known as Angkatan Koperasi Kebangsaan Malaysia Berhad (“Angkasa”). 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. Our director Ahmad Shukri Abdul Ghani is a 30% shareholder of NIMC. MyAngkasa is a shareholder of the Company holding 50 million shares or about 0.44% of the issued share capital of the Company.

In October 2016, the Company raised $1,320,000 from independent third parties by issuing 120,000,000 shares at $0.011 per share. This fund raised was used for working capital.

On December 2, 2016, the Company disposed its 51% interest in NIMC for a fair market value of RM1,000,001 or about US$224,574 to a company owned by directors of the Company, and realized a gain of $194,947. On or about the same date, our subsidiary company, Median Digital Sdn. Bhd (formerly Grid Mobile Sdn. Bhd.) (“MDSB”) entered into a Master Distribution Agreement with NIMC whereby NIMC would appoint MDSB to be its preferred distributor of its mobile products and services in Malaysia for two years. Under this Master Distribution Agreement, MDSB would need to pay a refundable deposits of RM3,000,000 or about $668,747 to NIMC and MDSB would not procure, engage or appoint any other company that offers the same services as NIMC.

On June 15, 2017 the Company acquired 51% equity interest in GNS Technology (M) Sdn. Bhd. (“GNS Malaysia”) by the issuance of 166,666,667 new shares in the Company. GNS is engaged in the provision of network design, construction and maintenance services for fibre optics backbone and Fiber-to-the-Home (FTTH”) broadband services. Pursuant to the acquisition agreement, the Vendors are entitled to an additional consideration of US$1,500,000 provided that GNS Malaysia accumulated audited profits record at least US$3,000,000 for the 5 year period from December 31, 2017 to December 31, 2022. The additional consideration shall be paid by the issuance of new shares in the Company at a price equal to the higher of (i) US$0.006 per share and (ii) the 20 days average closing share price immediately prior to the parties agreeing on the accumulated audited profits stated above.

The principal activities of GNS Malaysia are provision of network design, construction and maintenance services for fiber optics backbone and Fiber-to-the-Home (FTTH) broadband services. Currently GNS Malaysia is currently engaged in the provisioning of the design and construction of network monitoring center in Malaysia. The goodwill arising on the acquisition of GNS Malaysia is $541,307. The management believes that based on the business plans and the forecasted results of the GNS Malaysia that the goodwill will not need to provide for any diminution in value.

On acquisition, GNS had $45,393 in fixed assets of, $1,749 in trade receivables, $87,099 in cash, $204,024 in prepayments and deposits and $171,399 in amounts due from related party for a total assets of $509,664; GNS also had $2,129 in trade payables and $327,091 in advance revenue for a total liabilities of $329,220 and a net assets of $180,444.

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, 2016. 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, 2016 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 September 30, 2017 include the financial statements of the Company and its wholly owned subsidiaries Alpha Sunray Sdn. Bhd and Median Digital Sdn. Bhd (formerly Grid Mobile Sdn. Bhd.) and also include 51% equity interest subsidiary GNS Technology (M) Sdn. Bhd. from the date of acquisition on June 15, 2017.

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 September 30, 2017 and 2016 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.

Property and Equipment

Property and equipment is stated at costs. Depreciation are computed using the straight-line method over the estimated economic useful lives as follows:

Office equipment and computers	5 years
Motor vehicle	5 years

Expenditure for maintenance and repairs is expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference.

Intangible Assets

The Company evaluates intangible assets for impairment, at least on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable from its estimated future cash flows. Recoverability of intangible assets, other long-lived assets and, goodwill is measured by comparing their net book value to the related projected undiscounted cash flows from these assets, considering a number of factors including past operating results, budgets, economic projections, market trends and product development cycles. If the net book value of the asset exceeds the related undiscounted cash flows, the asset is considered impaired, and a second test is performed to measure the amount of impairment loss

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 our branded 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.

Network design services income is recognized as revenue when the services has been substantially provided..

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 September 30, 2017.

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 September 30, 2017, the comprehensive loss was $108,748.

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 September 30, 2017, the Company has incurred an accumulated deficits totaling $6,655,780 and its current liabilities exceed its current assets by $501,971. 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

PROPERTY AND EQUIPMENT, NET

Property and equipment is summarized as following:

	September 30 2017	December 31 2016
	US$	US$
Cost
Furniture, fixtures and equipment	23,043	-
Motor vehicle	25,392	-
	48,435	-
Accumulated depreciation	(6,002)	-
Balance at end of period	42,433	-

NOTE 5

STOCKHOLDERS’ EQUITY

*Common Stock*
	On October 17, 2016, the Company issued 120,000,000 shares of the Company to 3 independent parties at a price of $0.011 per share to raise a total cash proceed of approximately $1,320,000. The proceeds for this placement shall be used for working capital of the Company. On June 15, 2017 the Company issued 166,666,667 shares at the then market price of $0.0038 per share for a total share consideration of 633,333 to satisfy the consideration for acquiring 51% equity interest in GNS Technology (M) Sdn. Bhd.
	As of September 30, 2017, the Company had a total of 11,593,899,627 shares of its common stock issued and outstanding.

NOTE 6

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

During the years from 2014 to September 30, 2017, the Company did not issue any share options under the 2007 Plan.

As at September 30, 2017 and December 31, 2016, there were i) no outstanding stock options and ii) 31,877,691 shares available to be issued under the 2007 Plan.

In October 2017, the 2007 Stock Incentive Plan expired together with all the then shares available for issue.

F-11

MEDIAN GROUP INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7

OTHER PAYABLES AND ACCRUALS

Other payables and accruals consist of the following:

	September 30 2017	December 31 2016
	US$	US$

Potential tax penalty liability	410,000	410,000
Other payables and accruals	340,041	241,880
	750,041	651,880

NOTE 8

AMOUNTS DUE FROM (TO) RELATED PARTIES

	September 30 2017	December 31 2016
	US$	US$

Amounts due from related parties:
- Trade	-	-
- Non-trade	1,075,359	2,229
	1,075,359	2,229

Amounts due to related parties:
- Trade	-	-
- Non-trade	(973,665)	(806,812)
	(973,665)	(806,812)

The non-trade receivables due from related parties which the two of our directors have interests, is non-secured, non-interest bearing and repayable on demand. The funds were advanced to the related parties in respect of paying a deposits under the Master Distribution Agreement (Note 10(3)).

The non-trade receivable amount due from a related party, a director of the Company, is unsecured, non-interest bearing and repayable on demand.

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
			September 30 2017	December 31 2016
			US$	US$

Shareholder loan			2,000,000	2,000,000

	This long term shareholder loan is due to a shareholder of the Company. This loan is unsecured and repayable on November 25, 2018, and bears interest of 8% per annum. The accrued interest for the nine months ended September 30, 2017 was $120,000 (2016: $120,000).

NOTE 10

RELATED PARTY TRANSACTIONS

For the nine months period ended September 30, 2017, the Company paid no remuneration (2016: NIL) to its directors and its officers for their services provided to the Company.

During the period a Group subsidiary provided consulting services amount to USD23,479 to a company owned and controlled by our directors.

In early December 2016, the Company entered into a Master Distribution Agreement with a company beneficially owned by two of our directors. Pursuant to the agreement, the Company would pay a refundable deposit of RM3 million or about US$677,000 to be the preferred distributor of telecom products and services (including access to the MVNO platform) in the territory of Malaysia for a period of two years. The Company may receive certain rebates if it achieves sales of over RM10 million (about US$2,257,000) for each anniversary year, and such rebates shall vary by products and services to be agreed by the parties.

F-12

MEDIAN GROUP INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11

INCOME TAXES

No provision was made for income tax for the nine months ended September 30, 2017 and 2016, since the Company and its subsidiaries had significant net operating loss. In the nine months ended September 30, 2017 and 2016, the Company and its subsidiaries incurred net losses for tax purposes of approximately $109,969 and $467,263, respectively. Total net operating losses carry forward as at September 30, 2017 and 2016, (i) for Federal and State purpose were $12,261,959 and $11,859,918, respectively and (ii) for its entities outside of the United States $49,679 and $387,185. 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 September 30, 2017 and December 31, 2016 was approximately $5,061,841 and $5,170,610 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 Malaysia statutory rate and the Group's provision for income tax is as follows:

	2017	2016

Malaysia statutory rate	24%	25%
Tax allowance	-	-
Valuation allowance - Loss carryforward under Malaysia rate	(24%)	(25%)

Provision for income tax	-	-

NOTE 12

COMMITMENTS AND CONTINGENCIES

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

The Company has operating lease of its corporate office in Malaysia for 3 years ending April 1, 2019. The annual lease is RM406,998 (approximately US$90,720).

Pursuant to the acquisition of 51% equity interest in GNS Technology (M) Sdn. Bhd. (“GNS Malaysia”), the Company shall pay the vendors an additional consideration of US$1,500,000 provided that GNS Malaysia accumulated audited profits record at least US$3,000,000 for the 5 year period from December 31, 2017 to December 31, 2022. The additional consideration shall be paid by the issuance of new shares in the Company at a price equal to the higher of (i) US$0.006 per share and (ii) the 20 days average closing share price immediately prior to the parties agreeing on the accumulated audited profits stated above.

NOTE 13

SUBSEQUENT EVENTS

The Company evaluated subsequent events through the date the financial statements were issued and filed with this Form 10-Q. There were no subsequent events that required recognition or disclosure.

F-13

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 September 30, 2017.

- 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. 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 2016. 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. Previously we were in discussion with a Malaysia Telecom operator on rolling out our MVNO services. However, these discussions have been terminated during the period, and we are now exploring other operating structures for our telecom and digital services.

At the date of this report, the Group will mainly concentrate on its Telecommunications and Mobile Business Unit and the network design and construction business. The Group will terminate and streamline its adverting business unit and product services unit until a viable business opportunity is available. During this three months period ended September 30, 2017, the revenue generated from the newly acquired network design, construction and maintenance service for broadband services was $23,479. The revenue generated from the telecom services and the newly acquired network design, construction and maintenance service for broadband services during the nine months period ended September 30, 2017 was $6,120 and $352,414, respectively.

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.

- 3 -

2017 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 December 2016, we signed a Master Distribution Agreement with our then 51% subsidiary, Naim Indah Mobile Communications Sdn. Bhd. (“NIMC”) for us to sell telecom services on NIMC’s MVNO telecom platform. As a result of the Master Distribution Agreement, we determined to concentrate on the provision of services rather than the running of the MVNO Platform ourselves, and in December 2016 we sold NIMC to a company owned by two of our directors. In the first 3 quarters of 2017, we derived $6,120 in telecom services and no revenue in the last quarter just then ended. Given the competitive telecom services market, we have scaled back our telecom services division until we can identify a niche market we can compete in. In the meantime, our newly acquired network design, construction and maintenance service recorded a revenue of $23,479 for this quarter ended September 30, 2017 and a total of $352,414 since the acquisition on June 15, 2017. We will continue to pursue the sale of telecom services and concentrate on postpaid customers, where the margins are higher, through our partner networks.

A more thorough discussion on becoming a digital service provider and infrastructure provider are discussed below.

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 past 3 months where we are building a solid eco-system that will enable us to offer attractive and disruptive services to the market.

- 4 -

Key Business Focus: Digital Service Provider

While MVNO remains as its business focus, the Company would now focus on developing its Next Generation Intelligent Network (NGIN) and Business Support System (BSS) as a platform to support White Label MVNO businesses. This platform is aimed to provide a leading-edge telecommunication services as part of our Digital Services eco-system alongside the financial technology (“fintech”) solutions vis-a-vis an integrated mobile payment equipped with virtual account and digital wallet connected to membership, debit, prepaid and/or credit cards.

Our Mission Critical System

The NGIN and BSS systems are 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 some 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. The SAP B1 system provides a complete visibility and better control help us 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 provider. We expect to complete the deployment of these systems by the end of Q2.

Infrastructure Provider

The principal activities of GNS are provision of network design, construction and maintenance services for fiber optics backbone and Fiber-to-the-Home (FTTH) broadband services.

The telecommunications industry comprised of many types of companies at different levels within the industry, all making products and/or providing a service to supply local and long distance telephone service, internet service, and new technologies (including VoIP, CATV, HDTV, and security) to the end users (residential, business, and institutional).

A large portion of the telecommunications industry is comprised of equipment manufacturers (switch, router, and network component companies) producing products that make and/or route connections from point-to-point via a central office location. Whether these products are used in networks supporting wired or wireless applications, the ultimate goal for equipment manufacturers is to produce an efficient, cost effective, and reliable product to support network service providers.

Solution providers is another level of the telecommunications industry which is large in size. In this segment, companies source, develop, and implement the network infrastructure that ‘service providers’ will use to supply communication connections to the end users. As a segue between component manufacturers and service providers, solutions providers greatly influence network structures, protocols, and the successful implementation of emerging technologies.

The other large segment of the telecommunications industry is service providers. This market is focused on providing communications, in one form or other, to the end users. For most people, this segment is viewed as the face of the industry, delivering the final product/service that the equipment manufacturers and solutions providers support. The most common applications for this segment are premises networks, LAN (local area networks), WAN (wide area networks), and wireless networks.

GNS’s offerings are that of connectivity at multiple levels of the telecommunications industry ranging from standard cable assemblies and loopbacks for the equipment manufacturing segment to optical drop cables to support service provider networks.

- 5 -

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.

Industry Overview and Competition

Telecommunication Market

Asia Pacific

Asia Pacific has been the biggest contributor to global subscriber growth in recent years and still has considerable room for growth over the rest of the decade. As of the end of 2016, there were 2.7 billion unique subscribers in Asia Pacific, accounting for two thirds of the region’s population. More than half the world’s mobile subscribers live in Asia Pacific - mostly in China and India.

Over the last few years there has been a dramatic shift towards higher speed mobile technology in Asia Pacific. In 2016, mobile broadband (3G and above) became the dominant technology, accounting for just over half of total connections across the region, up from 20% in 2012. 2016 was also the year 4G connections overtook 3G connections.

Other previously ‘laggard’ 4G markets such as Malaysia, Indonesia, Myanmar, the Philippines and India are now beginning to see an accelerating migration to 4G, driven by ongoing network investment by mobile operators, increased competition, falling device prices and growing consumer appetite for higher speed mobile. Overall in the region, 4G will account for 48% of total connections by 2020.

As smartphone adoption continues to rise in the region (just over half of total connections were smartphones at the end of 2016) and as more users come online, an increasing range of mobile services are being consumed, including video, social media, e-commerce and financial services.¹

For the period ending January 2018 within the South East Asia nations, mobile connections as against the country’s population was led by Indonesia with a penetration rate of 157% followed by Vietnam (153%), Singapore (150%), Thailand (135%) and Malaysia (133%). On the other hand, mobile broadband penetration was highest in Singapore (150%) and followed by Thailand (134%), Malaysia (107%) Indonesia (84%) and Philippines (65%) with the worldwide average at 63%.³

On mobile social media penetration, Singapore was ahead with 75% with Malaysia and Thailand closing in at 69%, 67% respectively. They were followed by Philippines (59%), Vietnam (52%) and Indonesia (45%) with the worldwide average at 39%.

Meanwhile, Thailand led the mobile banking penetration rate with 56% followed by Singapore and Malaysia (47% each), Vietnam (30%), Philippines (28%) and Indonesia (27%)

The active M-commerce countries were Thailand with a penetration rate of 52%, Malaysia (40%), Singapore (39%), Vietnam (33%) and Indonesia (31%).⁴

Malaysia

The information and communication subsector continued to record a strong growth of 8.7% during the first six months of 2016 (January - June 2015: 9.4%). The communication segment remained as the major contributor to growth, sustaining its pace at 10.1% (January - June 2015: 10.1%) following new and expansion of internet-based applications as well as enhanced data plans. This was supported by growing number of information and communications technology (ICT) devices as well as continuous initiatives to enhance network coverage and communication access. Growth of the subsector was partly driven by infrastructure expansion to cater for the rising demand for reliable and high-speed internet, including 4G Long Term Evolution (LTE) network and fiber optic.²

In the third quarter of 2017 (3Q2017), mobile-cellular penetration rate was at 131.8% (2Q2017: 133.7%) with 34.1 million (2Q2017: 33.4 million) mobile broadband subscriptions. There were 32.4 million (2Q2017: 33.0 million) prepaid subscriptions and 10.0 million (2Q2017: 9.8 million) postpaid subscriptions.⁵

¹ The Mobile Economy Asia Pacific 2017 - GSMA

² Bank Negara Malaysia Annual Report 2016

³ Digital in 2018 : Global Overview - we are social & Hootsuite

⁴ Digital in 2018 : Southeast Asia - we are social & Hootsuite

⁵ Malaysian Communications and Multimedia Commission - Communications and Multimedia : Facts and Figures 3Q 2017

- 6 -

Fibre Internet in Malaysia

Fiber internet represents a faster broadband than practically any other type of broadband in Malaysia. “Faster” means that more data transfers per second than other types of broadband services. Essentially, fibre optic technology converts electrical signals that carry data into light, which are transferred via hair-thin glass cables. Fiber also supports simultaneous access to internet, voice and television connections.

Fibre-optics is a fairly recent development worldwide and particularly in Malaysia. It is available to limited areas because of the infrastructure required. In Malaysia, it is typically known as Fibre to the Home (FTTH), and it is replacing ADSL in urban centres, bringing with it a shift to 24-month package contracts typical of a UK or US internet provider.

Fiber internet services in Malaysia typically provide speeds ranging from 5 Mbps to 100 Mbps. Companies offering FTTH include Time dotCom, Telekom Malaysia’s UniFi and Maxis among others. The fibre options are typically much faster than the ADSL and Wireless Broadband options. However, fibre broadband in Malaysia is still not as fast as some fibre broadband options in the United States, like Google Fibre, which offers up to 1 Gbps.

In the third quarter of 2017 (3Q2017), household broadband penetration rate is 84.5% (2Q2017:83.7%) with 2.5 million fixed broadband subscriptions. ¹

¹ Malaysian Communications and Multimedia Commission - Communications and Multimedia : Facts and Figures 3Q 2017

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.

We have cash and cash equivalents of $24,286 as of September 30, 2017; a decrease of about 97% from the previous period end of December 31, 2016. In the opinion of management, the current 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 digital service provider and infrastructure provider. 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.

- 7 -

Results of operation.

FOR THE THREE MONTHS AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2017 COMPARED TO THE THREE MONTHS AND NINE MONTHS PERIOD ENDED SEPTEMBER 30, 2016

REVENUES.

For the three months period ended September 30, 2017, the Group realized $23,479 in revenue, $63,287 in cost of revenue, achieving $39,808 in gross loss from its operations. For the three months ended September 30, 2016 the Group realized $7,350 in revenue, $6,615 in cost of revenue, achieving $735 in gross profit from its operations. The Company derived revenue of $23,479 from network design services for the three months ended September 30, 2017 as compared to $7,350 in telecom services for the three months ended September 30, 2016.

For the nine months period ended September 30, 2017, the Group realized $358,534 in revenue, $240,460 in cost of revenue, achieving $118,074 in gross profit from its operations. For the nine months ended September 30, 2016 the Group realized $40,726 in revenue, $31,464 in cost of revenue, achieving $9,262 in gross profit from its operations. The Company derived revenue of $6,120 from telecom services and $352,414 from network design services for the nine months ended September 30, 2017 as compared to $40,726 in telecom services for the nine months ended September 30, 2016.

OPERATING EXPENSES.

For the three months period ended September 30, 2017, we had $39,808 in gross loss and our total operating expenses were $94,448, all of which were selling, general and administrative expenses. We also had $28,776 in other income, $34 in finance charges, and $40,000 in interest expenses so that the net loss to our shareholders from our operations for the three months period ended September 30, 2017 was $145,514. This was in comparison in the three months period ended September 30 2016, we had $735 in gross profit and our total operating expenses were $158,691 all of which were selling, general and administrative expenses. We also had $223 in other income, $35 in finance charges, and $40,000 in interest expenses, so that the net loss to our shareholders from our operations for the three months period ended September 30, 2016 was $197,768.

For the nine months period ended September 30, 2017, we had $118,074 in gross profit and our total operating expenses were $187,563, all of which were selling, general and administrative expenses. We also had $79,615 in other income, $114 in finance charges, $120,000 in interest expenses and $19 in recovery of taxation, so that the net loss to our shareholders from our operations for the nine months period ended September 30, 2017 was $109,969. This was in comparison in the nine months period ended September 30 2016, we had $9,262 in gross profit and our total operating expenses were $357,074, all of which were selling, general and administrative expenses. We also had $741 in other income, $192 in finance charges, and $120,000 in interest expenses, so that the net loss to our shareholders from our operations for the nine months period ended September 30, 2016 was $467,263.

Liquidity and Capital Resources

As at September 30, 2017, the Company had cash and cash equivalents totaling $24,286 and the other current assets consisted of $32,307 in accounts receivables, $153,180 in prepayments and deposits, $1,075,359 in due from related parties, $541,307 in goodwill and $42,433 in property and equipment. Therefore our total assets was $1,868,872 as of September 30, 2017. We also had current liabilities of $1,787,103 which were represented by $63,397 in accounts payables, $750,041 in other payables and accruals and $973,665 in amounts due to related parties. We also had $2,000,000 in long-term shareholder loan as of September 30, 2017, making our total liabilities $3,787,103.

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 2017.

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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 nine months ended September 30, 2017 the Company incurred net loss of $109,969 and has accumulated losses of $6,655,780 as at September 30, 2017. 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, the developing the digital services business and the newly acquired network design and maintenance services for fiber optics backbone and Fiber-to-the-Home broadband services. 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 September 30, 2017, 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	Sale and Purchase Agreement between GNS Technology Co. Ltd, Kim Chul Woo, GNS Technology (M) Sdn. Bhd. and Median Group Inc.(7)

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.(5)
3.1.4	Certificate of Amendment to Articles of Incorporation, as amended.(6)
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 June 5, 2017.

* 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 23, 2018
	-----------------------------------------------------
	Dato Haji Abdul Fattah Abdullah
Its:	Director

By:	/s/ Andrew Hwan Lee	March 23, 2018
	-----------------------------------------------------
	Andrew Hwan Lee
Its:	President, Chief Executive Officer, Director

By:	/s/ Ahmad Shukri Abdul Ghani	March 23, 2018
	-----------------------------------------------------
	Ahmad Shukri Abdul Ghani
Its:	Director

By:	/s/ Mohd. Suhaimi bin Rozali	March 23, 2018
	-----------------------------------------------------
	Mohd Suhaimi bin Rozali
Its:	Chief Financial Officer, Company Secretary, Treasurer

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Median Group Inc 10-Q