Kun Peng International Ltd. - Quarter Report: 2017 December (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission File Number: 333-169805

(011) (86) 755-26412816

(Registrant's Telephone Number, Including Area Code)

___________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark 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 preceding 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 mark 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 "smaller reporting company" in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes x No ¨

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of February 9, 2018, we have 14,486,670 shares of common stock, par value $0.0001 per share issued and outstanding (given effect of the reverse stock split).

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Certain statements in this report contain or may contain forward-looking statements. These statements, identified by words such as "plan", "anticipate", "believe", "estimate", "should", "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward - looking statements. These forward-looking statements were based on various factors and were derived utilizing numerous assumptions and other factors that could cause our actual results to differ materially from those in the forward-looking statements. These factors include, but are not limited to, our ability to secure suitable financing to continue with our existing business or change our business and conclude a merger, acquisition or combination with a business prospect, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors. Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. Readers should carefully review this report in its entirety, including but not limited to our financial statements. We advise you to carefully review the reports and documents we file from time to time with the Securities and Exchange Commission (the "SEC"), particularly our annual report on Form 10-K, quarterly reports on Form 10-Q and our current reports on Form 8-K. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER PERTINENT INFORMATION

When used in this report, the terms, "we," the "Company," "our," and "us" refers to CX Network Group, Inc. a Neveda corporation (previously known as mLight Tech, Inc., a Florida corporation), and its consolidated subsidiary, as applicable.

SPECIAL NOTE REGARDING REVERSE STOCK SPLIT

Effective July 11, 2017, we completed a reverse stock split in which each one (1) shares of common stock of MLGT (as defined herein below) were automatically converted into 0.0667 outstanding share of common stock of CXKJ (as defined herein below) at the one-for-fifteen reverse split ratio. As of the effective date of the reverse stock split, the per share exercise price of, and the number of shares of common stock underlying, any stock options, warrants and other derivative securities issued by us were automatically proportionally adjusted, based on the one-for-fifteen reverse split ratio, in accordance with the terms of such options, warrants or other derivative securities, as the case may be. All share numbers, stock option numbers, warrant numbers, other derivative security numbers and exercise prices appearing in this Report on Form 10-Q have been adjusted to give effect to this reverse stock split, unless otherwise indicated or unless the context suggests otherwise.

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

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

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

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

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 1 – Nature of Operations and Going Concern

The Company was incorporated in the State of Florida on September 3, 2010 under the name of “mLight Tech, Inc.” (“MLGT”). On July 11, 2017, MLGT merged with and into CX Network, Group, Inc., a Nevada corporation (“CX”) and our wholly owned subsidiary ("CXKJ"), with CX as the surviving corporation that operates under the name “CX Network Group, Inc.”(the “Name Change”), pursuant to an agreement and plan of merger (the "Merger Agreement") dated July 3, 2017.

Pursuant to the Merger Agreement, immediately after the effective time of the Merger, the Company’s corporate existence is governed by the laws of the State of Nevada and the Articles of Incorporation and bylaws of CXKJ (the “Domicile Change”), and each outstanding share of MLGT’s common stock, par value $0.0001 per share was converted into 0.0667 outstanding share of common stock of CXKJ, par value $0.0001 per share at a one-for-fifteen reverse split ratio (the “Reverse Stock Split”) which resulted in reclassification of capital from par value to capital in excess of par value. Immediately prior to the effectiveness of the reverse stock split, we had 217,300,000 shares of common stock of MLGT issued and outstanding. Immediately upon the effectiveness of the reverse stock split, we had 14,486,670 shares of common stock of CXKJ issued and outstanding. All share and per share data for the three months ended December 31, 2017 and comparative periods included within our consolidated financial statements and related footnotes have been adjusted to account for the effect of the Reverse Stock Split.

The Name Change, Domicile Change, and Reverse Stock Split went effective on June 12, 2017. Subsequently, the Company’s trading symbol for its common stock was changed to “CXKJ” and the new CUSIP number is 12672T 108. 

As used herein and except as otherwise noted, the term "Company", "it(s)", "our", "us", "we" and "mLight" shall mean CX Network Group, Inc,, mLight Tech, Inc., a Florida corporation, and Ding King Training Institute, Inc., a California corporation ("DKTI"), its wholly-owned subsidiary until March 31, 2017.

mLight Tech, Inc. was incorporated in the State of Florida on September 3, 2010, to provide software solutions that simplify the management of networked personal computers. On October 31, 2013, the Company acquired 100% of the issued and outstanding capital stock of DKTI, a California corporation, in exchange for 2,500,000 shares of its common stock, par value $0.0001 per share. As a result, DKTI became a wholly-owned subsidiary of the Company. DKTI was the acquirer for financial reporting purposes and mLight was the acquired company. The merger was accounted for as a recapitalization. Subsequent to the merger, the operations of mLight were consolidated with the operations of DKTI. The Company elected to retain September 30 to be its fiscal year end.

On March 31, 2017, the Company entered into a spin-off agreement (the “Spin-Off Agreement”) with DKTI and Todd Sudeck (“Mr. Sudeck”). Pursuant to the Spin-Off Agreement, Mr. Sudeck received all of the issued and outstanding capital stock of DKTI in exchange for 2,500,000 shares of common stock of the Company owned by Mr. Sudeck (the “Spin-Off”). Immediately after the closing of the Spin-Off, Mr. Sudeck has become the sole equity owner of DKTI and the Company has no further interest in DKTI.

Before the Spin-Off, the Company, through DKTI, was in the business of training individuals for a career as a technician in the Automotive Appearance Industry, which includes paint less dent repair, interior restoration, windshield repair, window detailing, odor removal, detailing and alloy wheel repair. The potential students are employees of auto body shops, car rental companies and car dealers as well as entrepreneurs looking to start their own businesses. DKTI is a California state licensed vocational school with the Bureau for Private Post-Secondary Education (BPPE #301591) and authorized to sell business opportunities in the automotive appearance training industry.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 1 – Nature of Operations and Going Concern (continued)

The financial information presented in these notes to the Company's unaudited consolidated financial statements is for the three months ended December 31, 2017 and 2016, respectively.

As shown in the accompanying consolidated financial statements, the Company has faced significant liquidity shortages. As of December 31, 2017, the Company's total liabilities exceeded its total assets by $184,331. The Company has a net loss of $35,983 for the three months ended December 31, 2017 and has recorded an accumulated deficit of $337,981 as of December 31, 2017. The Company has had difficulty in raising capital. On December 31, 2017 and as of the date of this report, due to the Spin-Off Agreement, the Company does not have substantial operations. These factors raise a substantial doubt about the Company's ability to continue as a going concern. If the Company is unable to obtain adequate capital through borrowings or sale of its common stock, it could be forced to cease to exist. The Company cannot provide any assurance that new financing will be available to us on commercially. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 2 – Summary of Significant Accounting Policies

The following summary of significant accounting policies is presented to assist in the understanding of the Company's consolidated financial statements. The consolidated financial statements and notes are the representation of the Company's management who is responsible for their fair presentation. The consolidated financial statements of the Company conform to generally accepted accounting principles in the United States of America (U.S. GAAP).

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of CXKJ and its wholly-owned subsidiary DKTI through March 31, 2017, at which date DKTI was spun-off. All intercompany balances and transactions are eliminated in consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company's estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 2 – Summary of Significant Accounting Policies (continued)

Accounts Receivable

Through March 31, 2017, accounts receivable represent income earned from training provided to students for which the Company has not yet received payment. Payment plans are offered to students to pay off remaining tuition on an installment basis over periods not to exceed one year. Accounts receivable are recorded at the invoiced amount and stated at the amount management expect to collect from balances outstanding at period-end. The Company estimates the allowance for doubtful accounts based on an analysis of specific accounts and an assessment of the customer's ability to pay. The Company recorded bad debt expense of $0 and $19,055 for the three months ended December 31, 2017 and 2016, respectively.

Property and Equipment

Property and equipment are stated at cost. Depreciation of property and equipment is calculated based on the straight-line method over the estimated useful lives of the related assets as summarized below. Major renewals and betterments are capitalized while maintenance costs are expensed as incurred. Depreciation and amortization expense for the three months December 31, 2017 and 2016 was $0 and $763, respectively.

Fair value of Financial Instruments and Fair Value Measurements

ASC 820, "Fair Value Measurements and Disclosures", requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument's categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

Level 1

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

Level 2

Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

Level 3

Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 2 – Summary of Significant Accounting Policies (continued)

Fair value of Financial Instruments and Fair Value Measurements (continued)

The Company's financial instruments consist principally of cash, accounts receivable, accounts payable, accrued liabilities, and short term loans. Pursuant to ASC 820 and ASC 825, "Financial Instruments", the fair value of our cash equivalents is determined based on "Level 1" inputs, which consist of quoted prices in active markets for identical assets. The Company believes that the recorded values of all of the other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. The Company had no financial assets or liabilities carried and measured on a non-recurring basis during the reporting periods. Financial assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared.

Revenue Recognition

Through March 31, 2017, the Company's tuition packages vary in price according to the different types of training programs purchased by the students. Upon commencement of the courses, the Company recognizes as revenue any deposits previously received, as they are non-refundable upon commencement of the courses. The remaining tuition from the student or the student's employer, which is received upon the commencement of the course or extended credit over a period of one to three months or as agreed upon, is recognized as revenue upon the completion of the training courses. The training course duration is from one to two weeks.

The Company's revenue recognition policy is based on the revenue recognition criteria established under the SEC's Staff Accounting Bulletin No. 104. The criteria and how the Company satisfies each element are as follows: (1) persuasive evidence of an arrangement - the Company and the student or the student's employer (the customer) enters into a signed contract with the Company; (2) delivery has occurred - as noted above, upon the commencement of the course, the deposit is non-refundable per the terms of the signed contract and upon completion of the course, the Company has provided all services to be delivered to the student under the contract; (3) the price is fixed and determinable - the signed contract indicates a fixed dollar amount for the tuition for the courses enrolled by the student; (4) collectability is reasonable assured - the Company receives as payment a deposit and the balance of the tuition before the course is completed, or credit is extended for installment payments, as evidenced by promissory note not to exceed one year.

The Company records licensing revenue by granting an annual exclusive license to sell Dent Tools Direct, USA Inc. ("Dent Tools") merchandise online under the name of DKTI and logo on the DKTI website. The Company recognizes licensing revenue ratably monthly as the Company earns revenue and satisfies conditions for recognition of revenues.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 2 – Summary of Significant Accounting Policies (continued)

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. The Company follows the provisions of ASC 740-10, "Accounting for Uncertain Income Tax Positions." When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

On December 22, 2017, the “Tax Cuts and Jobs Act” (the “Act”) was signed into law. Substantially all of the provisions of the Act are effective for taxable years beginning after December 31, 2017. The Act includes significant changes to the Internal Revenue Code of 1986 (as amended, the “Code”), including amendments which significantly change the taxation of individuals, and business entities. The Act contains numerous provisions impacting the Company, the most significant of which reduces the Federal corporate statutory tax rate from 34% to 21%. The staff of the US Securities and Exchange Commission (“SEC”) has recognized the complexity of reflecting the impacts of the Act, and on December 22, 2017 issued guidance in Staff Accounting Bulletin 118 (“SAB 118”), which clarifies accounting for income taxes under ASC 740 if information is not yet available or complete and provides for up to a one year period in which to complete the required analyses and accounting (the measurement period). SAB 118 describes three scenarios (or “buckets”) associated with a company’s status of accounting for income tax reform: (1) a company is complete with its accounting for certain effects of tax reform, (2) a company is able to determine a reasonable estimate for certain effects of tax reform and records that estimate as a provisional amount, or (3) a company is not able to determine a reasonable estimate and therefore continues to apply ASC 740, based on the provisions of the tax laws that were in effect immediately prior to the Act being enacted.

The various provisions under the Act deemed most relevant to the Company have been considered in preparation of its financial statements as of December 31, 2017. To the extent that clarifications or interpretations materialize in the future that would impact upon the effects of the Act incorporated into the December 31, 2017 financial statements, those effects will be reflected in the future as or if they materialize. 

Earnings (Loss) Per Common Share

The Company computes net earnings (loss) per share in accordance with ASC 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted net earnings per share ("EPS") on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive. For the three months ended December 31, 2017 and 2016, there were no potentially dilutive common shares outstanding during the period.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 2 – Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements

In December 2016, the FASB issued ASU 2016-19; the amendments cover a wide range of topics in the Accounting Standards Codification, including differences between original guidance and the Accounting Standards Codification, guidance clarification and reference corrections, simplification and minor improvements. The adoption of ASU 2016-19 is effective for annual periods, including interim periods, within those annual periods, beginning after December 15, 2016. The Company is currently evaluating the effect of this standard on its financial statements. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers. The amendments in this update are of a similar nature to the items typically addressed in the ASU 2016-19, Technical Corrections and Improvements. The FASB elected to issue a separate update for technical corrections and improvements to Topic 606 as well as other Topics amended by ASU 2014-09 to increase public awareness of the proposals and to expedite improvements to ASU-2014-9. The adoption of ASU 2016-20 is effective from the periods beginning after December 31, 2017, including interim reporting periods within that reporting period. Early adoption is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The Company is currently evaluating the effect of this standard on its financial statements. In addition, the Financial Accounting Standards Board (“FASB”) has issued certain accounting standards updates as of December 29, 2017 that will become effective in subsequent periods.

The Company currently has no revenue. The Company will evaluate the impact of the pronouncement once a new source of revenue is obtained.

In February 2016, the FASB issued ASU 2016-02, "Leases (Topic 842)." The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. The Company has not begun to evaluate this guidance to determine the impact it may have on its financial statements.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 2 – Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements (continued)

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” The main objective of this update is to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information. The new guidance addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company does not believe this guidance will have material impacts on its financial statements.

Management believes the Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 3 – Payroll Taxes

On January 21, 2016, the Company negotiated a settlement with the Internal Revenue Service ("IRS") taxing authority and agreed to a monthly payment of $756 starting March 15, 2016, to pay previously unpaid payroll tax obligations of $18,130 over a period of 24 months. The Company had accrued a total obligation of $44,442 which included an estimate for penalties and interest. The IRS has agreed to waive the charge for penalties and interest, provided the Company submits a written request to the IRS for waiver of penalties and interest. The monthly payment of $756 had been deferred by the IRS pending resolution of the Company's waiver request. Management has reduced the payroll tax liability by $26,312 as a change in estimate in the prior fiscal year. On October 19, 2016, the Company paid IRS $18,806 in full settlement of its unpaid payroll tax obligations.

NOTE 4 – Notes Payable

Notes payable consists of:

On April 19, 2017, the Company entered into a securities purchase agreement (the “Debenture Purchase Agreement”) pursuant to which the Company issued and sold in a private placement to a non-U.S. persona series A convertible debenture in an aggregate principal amount of $150,000 (the “Debenture”) with a 8% annual interest convertible into shares of Common Stock (the “Conversion Share(s)”) at price of $0.15 per share. The note is due on April 18, 2018. For the three ended December 31, 2017, the Company recorded interest expense of $ 3,025 related to the Debenture.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 5 – Commitments and Contingencies Operating Lease

The Company’s previous lease commitments were all signed under DKTI. In connection with the Spin-Off Agreement, the Company no longer has ownership of DKTI, as of March 31, 2017. The Company currently does not have any outstanding lease agreements or commitments. The total rent expense including common area maintenance charges was $0 and $20,223, for the three months ended December 31, 2017 and 2016, respectively.

Legal Matters

From time to time the Company may become a party to litigation matters involving claims against the Company. Management believes that there are no current matters that would have a material effect on the Company's financial position or results of operations.

NOTE 6 – Related Party Transactions with the Shareholder

Cash received by a Company’s formal principal shareholder/Officer has been recorded as compensation to officer. The Company has recorded $0 and $19,317 as compensation expense for the three months ended December 31, 2017 and 2016, respectively.

In December 2017, the Company advanced $13,020 to an affiliate company of the Company’s CEO. The advance is non-interest bearing and due on demand and the amount is expected to be repaid within three months.

The Company’s current officer provided a short-term advance to the Company in the amount of $22,832 and $0 as of December 31, 2017 and September 30, 2017, respectively, towards the Company's working capital requirements. The advance is non-interest bearing and due on demand.

NOTE 7 – Stockholders' Equity

On July 11, 2017, the Company’s board of directors authorized a 1 for 15 Reverse Stock Split (defined hereinafter). The record date of the split was July 11, 2017 and the effective date was July 12, 2017. On All prior period shares and per share calculations in these financial statements and elsewhere in this report have been retroactively adjusted to reflect this stock split.

On August 1, 2013, in a private transaction, Todd Sudeck, the sole director and officer of the Company, acquired a total of 12,000,000 shares of the Company's common stock from Edward Sanders, the Company's former director and officer and principal shareholder.

On October 31, 2013, the Company acquired all 100% of the issued and outstanding capital stock of DKTI by issuing 166,667 shares of its Common Stock valued at $250. The acquisition is being accounted as recapitalization. At the closing of the acquisition, the Company recorded an increase in common stock of $15,400 as a result of recapitalization.

In connection with the Spin-Off Agreement, the Company received 166,667 shares of common stock from Mr. Sudeck and the Company returned those shares into treasury shares. The Company recorded a decrease in common stock of $250 as a result of the Spin-Off.

CX Network Group, Inc.

(Formerly known as mLight Tech, Inc.)

Notes to the Consolidated Financial Statements

December 31, 2017

(Unaudited)

NOTE 7 – Stockholders' Equity (Continued)

On April 17, 2017, the Company entered into the Conversion Agreement with three Converters to convert the promissory notes issued pursuant to them pursuant to the Spin-Off Agreement into shares of Common Stock. Pursuant to the Conversion Agreement, the entire principal amount of the Notes was converted into shares of Common Stock at a conversion price of $.15 per share, for an aggregate number of 886,667 shares. Pursuant to the Conversion Agreement, all the Converters agree to waive their rights to receive the payment of accrued and outstanding interest under these promissory notes as of the date of the Conversion Agreement.

On July 11, 2017, the Company merged with and into CXKJ with CXKJ as the surviving corporation that operates under the name “CX Network Group, Inc.”, pursuant to the Merger Agreement. Immediately after the effectiveness of the Merger, the Company’s corporate existence is governed by the laws of the State of Nevada and the Articles of Incorporation and bylaws of CXKJ, and each outstanding share of MLGT’s common stock, par value $0.0001 per share was converted into 0.0667 outstanding share of common stock of CXKJ, par value $0.0001 per share at a one-for-fifteen reverse split ratio. Immediately prior to the effectiveness of the Reverse Stock Split, we had 217,300,000 shares of common stock of MLGT issued and outstanding. Immediately upon the effectiveness of the Reverse Stock Split, we had 14,486,670 shares of common stock of CXKJ issued and outstanding.

The trading symbol for the Company was changed to “CXKJ” on November 3, 2017 and the new CUSIP number is 12672T 108. 

As a result of the above, the Company had 14,486,670 shares of common stock issued and outstanding at December 31, 2017 and as of September 30, 2017.

ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As used herein and except as otherwise noted, the term "Company", "it(s)", "our", "us", "we" and "CXKJ" shall mean CX Network Group, Inc., a Nevada corporation (previously known as mLight Tech, Inc., a Florida corporation), and its consolidated subsidiary, as applicable.

This Form 10-Q contains forward-looking statements. Our actual results could differ materially from those set forth as a result of general economic conditions and changes in the assumptions used in making such forward-looking statements. The following discussion and analysis of our financial condition and results of operations should be read together with the audited financial statements and accompanying notes and the other financial information appearing in the 2017 Annual Report filed with the Securities and Exchange Commission on December 21, 2017 and elsewhere in this report. The analysis set forth below is provided pursuant to applicable Securities and Exchange Commission regulations and is not intended to serve as a basis for projections of future events.

Overview of the Business

We are currently a “shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating company.

We were incorporated in the State of Florida on September 3, 2010 under the name of “mLight Tech, Inc.” (“MLGT”). On July 11, 2017, MLGT merged with and into CX Network, Group, Inc., a Nevada corporation and our wholly owned subsidiary ("CXKJ"), with CXKJ as the surviving corporation that operates under the name “CX Network Group, Inc.”(the “Name Change”), pursuant to an agreement and plan of merger (the "Merger Agreement") dated July 3, 2017.

Pursuant to the Merger Agreement, immediately after the effective time of the Merger, the Company’s corporate existence is governed by the laws of the State of Nevada and the Articles of Incorporation and bylaws of CXKJ (the “Domicile Change”), and each outstanding share of MLGT’s common stock, par value $0.0001 per share was converted into 0.0667 outstanding share of common stock of CXKJ, par value $0.0001 per share at a one-for-fifteen reverse split ratio (the “Reverse Stock Split”). Immediately prior to the effectiveness of the reverse stock split, we had 217,300,000 shares of common stock of MLGT issued and outstanding. Immediately upon the effectiveness of the reverse stock split, we have 14,486,670 shares of common stock of CXKJ issued and outstanding.

The Name Change, Reverse Stock Split and Domicile Change took effect at the open of business on July 12, 2017. AS a result, the Company’s trading symbol for its common stock was changed to “CXKJ” and the new CUSIP number is 12672T 108. 

Our limited business until March 31, 2017, when control of our company changed (the “Change of Control”), pursuant to a share purchase agreement and a spin-off agreement described elsewhere in this Report (respectively “Change of Control SPA” and the “Spin-Off Agreement”), through DKTI, was to train individuals for a career as a technician in the Automotive Appearance Industry.

We are now exploring business combination opportunities with existing business.

Current Business

Based on proposed business activities, we are a “blank check” company. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

Our principal business is to achieve long-term growth potential through acquiring, engaging in a share exchange, share reconstruction and amalgamation with, purchasing all or substantially all of the assets of, entering into contractual arrangements with, or engaging in any other similar business combination with one or more businesses or entities (a “Business Combination”.)

The analysis of new business opportunities will be undertaken by or under the supervision of the Company’s officers. As of the date of this Report, we have not entered into any agreement with any party regarding acquisition opportunities for us. We have unrestricted flexibility in seeking, analyzing and participating in potential business opportunities. In its efforts to analyze potential acquisition targets, we will consider the following kinds of factors:

In applying the foregoing criteria, no one of which will be controlling, management will attempt to analyze all factors and circumstances and make a determination based upon reasonable investigative measures and available data. Potentially available acquisition opportunities may occur in many different industries, and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. We may not discover or adequately evaluate adverse facts about the business to be acquired. In addition, we will be competing against other entities that possess greater financial, technical and managerial capabilities for identifying and completing business combinations. In evaluating a prospective business combination, we will conduct as extensive a due diligence review of potential targets as possible given the lack of information that may be available regarding private companies, our limited personnel and financial resources.

We expect that our due diligence will encompass, among other things, meetings with the target business’s incumbent management and inspection of its facilities, as necessary, as well as a review of financial and other information which is made available to us. This due diligence review will be conducted either by our management or by unaffiliated third parties we may engage. Our lack of funds and the lack of full-time management will likely make it impracticable to conduct a complete and exhaustive investigation and analysis of a target business before we consummate a business combination. Management decisions, therefore, will likely be made without detailed feasibility studies, independent analysis, market surveys and the like which, if we had more funds available to us, would be desirable. We will be particularly dependent in making decisions upon information provided by the promoters, owners, sponsors or other associated with the target business seeking our participation.

The time and costs required to select and evaluate a target business and to structure and complete a business combination cannot be presently ascertained with any degree of certainty. Any costs incurred with respect to the indemnification and evaluation of a prospective business combination that is not ultimately completed will result in a loss to us.

Additionally, we are in a highly competitive market for a small number of business opportunities, which could reduce the likelihood of consummating a successful business combination. We are, and will continue to be, an insignificant participant in the business of seeking mergers with, joint ventures with and acquisitions of small private and public entities. A large number of established and well-financed entities, including small public companies and venture capital firms, are active in mergers and acquisitions of companies that may be desirable target candidates for us. Nearly all these entities have significantly greater financial resources, technical expertise and managerial capabilities than we do; consequently, we will be at a competitive disadvantage in identifying possible business opportunities and successfully completing a business combination. These competitive factors may reduce the likelihood of our identifying and consummating a successful business combination.

Historical Activities

Change of Control

On March 31, 2017, we entered into the Spin-Off Agreement with Ding King Training Institute, Inc., the Company’s wholly owned subsidiary (“DKTI”), and Todd Sudeck (“Mr. Sudeck”). Pursuant to the Spin-Off Agreement, Mr. Sudeck received all of the issued and outstanding capital stock of DKTI in exchange for approximately 166,667 shares of common stock of CXKJ (pre-split 2,500,000 shares of common stock of MLGT) owned by Mr. Sudeck. Immediately upon the closing of the Spin-Off Agreement, Mr. Sudeck is the sole equity owner of DKTI and the Company has no further interest in DKTI.

On March 31, 2017, Mr. Sudeck entered into the Change of Control SPA with certain purchasers listed therein (the “Purchasers”), whereby the Purchasers acquired 12,000,000 shares of common stock of CXKJ (pre-split 180,000,000 shares of common stock of MLGT) from Mr. Sudeck for an aggregate purchase price of $325,000, which represented approximately 87.17% of issued and outstanding equity of MLGT at that time, resulting in a change of the control of MLGT.

In connection with the Change of Control, Mr. Sudeck, the former President, former Chief Executive Officer, former Chief Financial Officer, former Secretary and former sole director, resigned from all his positions with the Company.

Simultaneously, Mr. Huibin Su was appointed as the Company’s Chief Executive Officer, Chief Financial Officer and a director, Mr. Jiyin Li was appointed as the Chairman of the board of the directors, and Zizhong Huang was appointed as the Company’s Chief Operating Officer, all effective immediately.

Business Prior to the Change of Control

Until March 31, 2017, MLGT, through its wholly-owned subsidiary, DKTI, was in the business of training individuals for a career as a technician in the Automotive Appearance Industry. The potential students are employees of auto body shops, car rental companies and car dealers as well as entrepreneurs looking to start their own business. DKTI is a California State Licensed Vocational School with the Bureau for Private Post-Secondary Education (BPPE #301591) and also authorized to sell business opportunities in the Automotive Appearance Training industry.

Financial Operations Overview

Results of Operations for the three months ended December 31, 2017 and 2016.

The consolidated results of operations for the three months ended December 31, 2017 and 2016 included the results of operations of DKTI (for the period ended December 31, 2016) and MLGT.

Revenues for the three months ended December 31, 2017 and 2016 were $0 and $663,461, respectively. We did not generate any revenues for the three months ended December 31, 2017 as the DKTI was spun off at March 31, 2017. We recorded $0 in tuition income for the three months ended December 31, 2017 compared to $655,882 in tuition income for the same comparable period in 2016. We recorded $0 in shipping income for the three months ended December 31, 2017 compared to $7,579 in shipping income for the same comparable period in 2016. While we have been evaluating acquisition opportunities since March 31, 2017, we cannot assure that we will identify any suitable target candidates or, if identified, that we will be able to complete the acquisition of such candidates on favorable terms or at all.

Cost of sales for the three months ended December 31, 2017 and 2016 was $0 and $322,096, respectively. Cost of sales as a percentage of tuition revenue was 48.5% for 2016. The Company offered discounted pricing for additional courses to students in 2016. There are no direct costs associated with revenues derived from our licensing revenues.

Operating expenses for the three months ended December 31, 2017 were $32,819 compared to $292,862 for the same comparable period in 2016. Operating expenses primarily consist of selling, general and administrative expense ("S, G&A"). S, G&A decreased by $260,043 or 88.8% during the three months ended December 31, 2017 as compared to the same period in 2016, primarily due to no employees’ compensation, decrease in administrative and consulting expenses, decrease in provision for bad debts, and decrease in legal and professional fees. Management expects our costs to continue to fluctuate until we begin to generate substantial increase in revenues.

Depreciation expense for the three months ended December 31, 2017 was $0 compared to $763 for the same comparable periods in 2016.

Other expenses for the three months ended December 31, 2017 and 2016 was $140 and $0, respectively. Other expenses consisted of banking fees.

Interest expense for the three months ended December 31, 2017 and 2016 was $3,025 and $11,125, respectively. Interest expense decreased by $8,100 or 72.8% for the three months ended December 31, 2017 as compared to the same period in 2016 because the Company reduced its outstanding loan payable amount by approximately $49,000 in April 2017.

As a result of the above explanations, the Company recorded a net loss of $35,983 for the three months ended December 31, 2017 compared to a net income of $37,378 for the same comparable period in 2016.

Liquidity and Capital Resources

The accompanying consolidated financial statements for the three months ended December 31, 2017 have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have recorded a net loss of $35,983 for the three months ended December 31, 2017 and net cash flows used by operating activities of $34,227. In addition, we have an accumulated deficit of $337,981 and a working capital deficiency of $184,321 as of December 31, 2017. Management's plans include raising capital by borrowing and/or sale of common shares to continue as a going concern and acquiring business to generate revenue. However, there is no assurance that these plans will be realized.

Operating Activities

Net cash flows used by operating activities for the three months ended December 31, 2017 was $34,227, primarily due to the net loss of $35,983, increased by other receivable of $13,020 and offset by increase in accounts payable of $11,751 and accrued interest of $3,025.

Investing Activities

There was no cash flows provided or used in investing activities for the three months ended December 31, 2017.

Financing Activities

Net cash flows used in financing activities for the three months ended December 31, 2017 was $22,832 due to $22,832 cash advanced from the officer for the Company's working capital requirements.

As a result of the above activities, our cash balance at December 31, 2017 was $2,216.

Before March 31, 2017, we financed our operations primarily through borrowings from our former President/Chief Executive Officer and by executing promissory notes for our working capital requirements. After March 31, 2017 and up to date, we have financing our operations primarily through a private placement. We may need to obtain additional funding to support our operations and consummate a Business Combination. Management’s plans include the raising of capital through the debt and equity markets to fund future operations and complete a Business Combination. Failure to raise adequate capital and consummate a Business Combination could result in the Company having to continuously incur loss and operating expenses.

Additionally, even if the Company does raise sufficient capital to support its operating expenses and generate adequate revenues, there can be no assurances that the revenues will be sufficient to enable it to consummate a Business Combination where it will generate profits and positive cash flows from operations.  These matters raise substantial doubt about the Company’s ability to continue as a going concern.  However, the accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.  These consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern. 

Effects of Inflation

We do not believe that inflation has had a material impact on our business.

Critical Accounting Estimates and Policies

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and judgments related to the application of certain accounting policies.

While we base our estimates on historical experience, current information and other factors deemed relevant, actual results could differ from those estimates. We consider accounting estimates to be critical to our reported financial results if (i) the accounting estimate requires us to make assumptions about matters that are uncertain and (ii) different estimates that we reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have material impact on our financial statements.

We consider our policy for revenue recognition due to the continuously evolving standards and industry practices related to revenue recognition, wherein any changes could materially impact the way we report revenues. Accounting policies related to income taxes are also considered to be critical as these policies involve considerable subjective judgment and estimation by management. Critical accounting policies and our procedures related to these policies are described below.

Revenue Recognition

The Company's tuition packages vary in price according to the different types of training programs purchased by the students. Upon commencement of the courses, the Company recognizes as revenue any deposits previously received, as they are non-refundable upon commencement of the courses. The remaining tuition from the student or the student's employer, which is received upon the commencement of the course or extended credit over a period of one to three months, is recognized as revenue upon the completion of the training courses, the duration of which is one to two weeks.

The Company's revenue recognition policy is based on the revenue recognition criteria established under the SEC's Staff Accounting Bulletin No. 104. The criteria and how the Company satisfies each element are as follows: (1) persuasive evidence of an arrangement - the Company and the student or the student's employer (the customer) enters into a signed contract with the Company; (2) delivery has occurred - as noted above, upon the commencement of the course, the deposit is non-refundable per the terms of the signed contract and upon completion of the course, the Company has provided all services to be delivered to the student under the contract; (3) the price is fixed and determinable - the signed contract indicates a fixed dollar amount for the tuition for the courses enrolled by the student; (4) collectability is reasonable assured - the Company receives as payment a deposit and the balance of the tuition before the course is completed, or credit is extended for installment payments, as evidenced by promissory note not to exceed one year.

Recent Accounting Pronouncements

See Note 2 of our Financial Statements included in this report for discussion of recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December 31, 2017, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, and as discussed more fully in our Annual Report on Form 10-K for the year ended September 30, 2017 filed on December 21, 2017, our Certifying Officers concluded that, as of December 31, 2017, our disclosure controls and procedures were not effective.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Changes in internal controls over financial reporting

There was no change in our internal controls over financial reporting that occurred during the period covered by this report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting, including any efforts to remediate our material weakness.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Not applicable to a smaller reporting company.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

+ filed herewith 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.