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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 June 30, 2014

or

o
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
 
mLight Tech, Inc.
(Exact name of registrant as specified in its charter)
 
Florida
 
27-3436055
(State or other jurisdiction of incorporation or organization)
 
(I.R.S. Employer Identification No.)

Todd Sudeck
3100 Airway Avenue, Suite 141
Costa Mesa, CA 92626

 949-981-3464
(Registrant’s telephone number, including area code)

 Not Applicable
(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 o

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 o No x

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.

Large accelerated filer
o
Accelerated filer
o
Non-accelerated filer
o
Smaller reporting company
x
(Do not check if smaller reporting company)
 
 

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. 206,500,000 shares of common stock are issued and outstanding as of August 14, 2014.
 


 
 

 
TABLE OF CONTENTS

 
 
 
Page No.
 
PART I – FINANCIAL INFORMATION
     
 
 
     
Item 1.
Consolidated Financial Statements
 
 4
 
 
Balance Sheets (unaudited)
   
4
 
 
Statements of Operations (unaudited)
   
5
 
 
Statements of Stockholders’ Equity (Deficit) (unaudited)
   
6
 
 
Statements of Cash Flows (unaudited)
   
7
 
 
Notes to Financial Statements (unaudited)
   
8
 
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
   
15
 
 
 
       
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
   
19
 
 
 
       
Item 4.
Controls and Procedures
   
19
 
 
 
       
PART II – OTHER INFORMATION
       
 
 
       
Item 1.
Legal Proceedings
   
21
 
 
 
       
Item 1A.
Risk Factors
   
21
 
 
 
       
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
   
21
 
 
 
       
Item 3.
Defaults Upon Senior Securities
   
21
 
 
 
       
Item 4.
Mine Safety Disclosures
   
21
 
 
 
       
Item 5.
Other Information
   
21
 
 
 
       
Item 6.
Exhibits
   
22
 

 
2

 
 
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 and the notes thereto and the risks described in our Annual Report on Form 10-K for the fiscal year ended September 30, 2013. 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 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 mLight Tech, Inc., a Florida corporation, and its consolidated subsidiary.
 
 
3

 
 
PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.
 
mLight Tech, Inc. and Subsidiary
Consolidated Balance Sheets
 
   
June 30, 2014
   
September 30, 2013
 
   
(Unaudited)
   
(Unaudited)
 
ASSETS
Current assets
           
Cash and cash equivalents
  $ 13,253     $ -  
Accounts receivable
    4,898       88,583  
Total current assets
    18,151       88,583  
                 
Property and equipment, net
    6,952       5,428  
Security deposit
    6,270       6,270  
Total Assets
  $ 31,373     $ 100,281  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
               
Bank overdraft
  $ -     $ 3,499  
Accounts payable
   
40,124
      6,616  
Accrued expenses
    55,919       71,645  
Accrued interest
    77,673       71,523  
Refundable deposits
    9,300       800  
Payable to officer
    500       -  
Purchase commitments
    397,137       397,137  
Notes payable
    133,000       164,970  
Total current liabilities
   
713,653
      716,189  
                 
Total Liabilities
   
713,653
      716,189  
                 
Commitments and contingencies (Note 7)
               
                 
Stockholders' equity (deficit)
               
Common stock, $0.0001 par value, 300,000,000 shares authorized; 206,500,000 shares and
    204,000,000 shares issued and outstanding at June 30, 2014 and September 30, 2013, respectively
    20,650       5,000  
Accumulated deficit
   
(702,930
)     (620,908 )
Total stockholders' equity (deficit)
   
(682,280
)     (615,908 )
                 
Total Liabilities and Stockholders' Equity (Deficit)
  $ 31,373     $ 100,281  
 
The accompanying notes are an integral part of these unaudited financial statements.
 
 
4

 

mLight Tech, Inc. and Subsidiary
Consolidated Statements of Operations
(Unaudited)
 
   
For the three months ended June 30,
   
For the nine months ended June 30,
 
   
2014
   
2013
   
2014
   
2013
 
                         
Revenues
  $ 343,479     $ 222,716     $ 821,920     $ 554,267  
                                 
Cost of revenues
    154,177       88,005       399,760       211,788  
                                 
Gross profit
    189,302       134,711       422,160       342,479  
                                 
Operating expenses
                               
Selling, general and administrative
    182,855       90,251       476,707       186,979  
Depreciation and amortization
    628       434       1,575       788  
Total operating expenses
    183,483       90,685       478,282       187,767  
                                 
Income (loss) from continuing operations
    5,819       44,026       (56,122 )     154,712  
                                 
Other income (expenses)
                               
Interest expense
    (3,325 )     (4,020 )     (10,250 )     (10,818 )
Total other income (expenses)
    (3,325 )     (4,020 )     (10,250 )     (10,818 )
                                 
Income (loss) from continuing operations before income tax
    2,494       40,006       (66,372 )     143,894  
                                 
Provision for income tax
    -       -       -       -  
                                 
Net income (loss)
  $ 2,494     $ 40,006     $ (66,372 )   $ 143,894  
                                 
Basis and diluted net income (loss) per share
  $ 0.00     $ 0.00     $ 0.00     $ 0.00  
                                 
Weighted average number of common shares outstanding
    206,500,000       204,000,000       206,216,117       204,000,000  
 
The accompanying notes are an integral part of these unaudited financial statements.
 
 
5

 
 
mLight Tech, Inc. and Subsidiary
Statements of Stockholders' Equity (Deficit)
From October 1, 2013 to June 30, 2014
(Unaudited)
 
   
Common Stock
   
Shareholder Advance
   
Accumulated deficit
   
Total
 
Balance - October 1, 2012 (Unaudited)
    204,000,000     $ 5,000     $ -     $ (1,169,149 )   $ (1,164,149 )
                                         
Advances
    -       -       (68,432 )             (68,432 )
Net Income
    -       -       -       72,505       72,505  
Balance - December 31, 2012
    204,000,000       5,000       (68,432 )     (1,096,644 )     (1,160,076 )
                                         
Compensation in lieu of payment
    -       -       68,432       -       68,432  
Net Income
    -       -       -       475,736       475,736  
Balance at September 30, 2013 (Unaudited)
    204,000,000       5,000       -       (620,908 )     (615,908 )
                                         
Recapitalization
    -       15,400       -       (15,400 )     -  
Issuance of new shares
    2,500,000       250       -       (250 )     -  
Net loss
    -       -       -      
(66,372
)    
(66,372
)
Balance - June 30, 2014 (Unaudited)
    206,500,000     $ 20,650     $ -     $
(702,930
)   $ (682,280 )
 
The accompanying notes are an integral part of these unaudited financial statements.
 
 
6

 
 
mLight Tech, Inc. and Subsidiary
Consolidated Statements of Cash Flows
(Unaudited)
 
   
For the nine months ended June 30,
 
   
2014
   
2013
 
Cash flows from operating activities
           
Net income (loss)
  $ (66,372 )   $ 143,894  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
               
Depreciation and amortization
   
1,575
      788  
Bad debts
    2,077          
Changes in operating assets and liabilities
               
Accounts receivable
    56,607       (106,659 )
Other current assets
    -       102  
Bank overdraft
    (3,499 )     -  
Accounts payable
    28,028       17,604  
Accrued expenses
   
(15,724
)     9,816  
Accrued interest
    6,150       (37,182 )
Refundable deposits
    8,500       (29,300 )
Net cash provided by (used in) operating activities
   
17,342
     
(938
)
                 
Cash flows from investing activities
               
Acquisition of property and equipment
   
(3,099
)     (630 )
Net cash used in investing activities
   
(3,099
)     (630 )
                 
Cash flows from financing activities
               
Cash proceeds from notes payable
    15,000       105,000  
Repayment of note payable
    (16,490 )     (24,682 )
Cash advanced to officer
    -       (80,768 )
Cash received from officer
    500       -  
Net cash used in financing activities
    (990 )     (450 )
                 
Net increase (decrease) in cash and cash equivalents
    13,253       (2,017 )
                 
Cash and cash equivalents at beginning of period
    -       15,551  
                 
Cash and cash equivalents at the end of period
  $ 13,253     $ 13,534  
                 
Supplemental disclosures of cash flows information:
               
Cash paid for income taxes
  $ -     $ -  
Cash paid for interest
  $ 4,100     $ -  
                 
Supplemental disclosures of non-cash investing and financing activities:
               
Settlement of debt against accounts receivable
  $ 25,000     $ -  
Recapitalization from acquisition
  $ 15,650     $ -  
Settlement of note payable against purchases
  $ 5,480     $ -  
 
The accompanying notes are an integral part of these unaudited financial statements.
 
 
7

 

mLight Tech, Inc. and Subsidiary
Notes to the Consolidated Financial Statements
June 30, 2014
(Unaudited)
 
NOTE 1 – Nature of Operations and Going Concern

As used herein and except as otherwise noted, the term “Company”, “it(s)”, “our”, “us”, “we” and “mLight” shall mean mLight Tech, Inc., a Florida corporation, and its consolidated subsidiary.
 
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 all of the capital stock of the Ding King Training Institute, Inc. (“DKTI”), a California corporation, in exchange for 2,500,000 shares of its common stock. As a result of DKTI’s acquisition, DKTI became a wholly-owned subsidiary of the Company. DKTI is the acquirer for financial reporting purposed and mLight is the acquired company. The merger is being accounted for as a recapitalization. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the merger will be those of DKTI and will be recorded at the historical cost basis of DKTI. Subsequent to the merger, the operations of mLight are consolidated with the operations of DKTI. The Company elected to retain September 30 to be its fiscal year end. The share amounts for mLight Tech, Inc. have been presented to reflect equity as if the merger had occurred as of the first period presented.
 
The principal business of DKTI is training individuals for a career as a technician in the Automotive Appearance Industry, which includes paintless dent repair, interior restoration, windshield repair, window detailing, odor removal, detailing and alloy wheel repair. The individual students are normally employees of auto body shops, car dealers and entrepreneurs looking to start their own businesses.
 
The financial information presented in these notes to the Company’s consolidated financial statements are for the three months and nine months ended June 30, 2014 and 2013, respectively, and are unaudited.
 
As shown in the accompanying unaudited consolidated financial statements, the Company has a history of losses from operations. As of June 30, 2014, the Company’s total liabilities exceeded its total assets by $682,280. The Company has incurred a net loss of $66,372 for the nine months ended June 30, 2014 and has an accumulated deficit of $702,930 as of June 30, 2014. The Company has had difficulty raising capital or obtaining trade credit from vendors. Additionally, the Company’s has been unable to satisfy its purchase commitments to vendors. 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, it could be forced to cease operations. On October 31, 2013, the Company acquired mLight and believes this transaction will provide an improved capital raising opportunity to initiate expansion opportunities and increase advertising capabilities. Management believes these factors will contribute towards achieving profitability of the Company. 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 of the Company 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 integrity and objectivity. The consolidated financial statements of the Company conform to accounting principles generally accepted in the United States of America (U.S. GAAP).
 
 
8

 
 
mLight Tech, Inc. and Subsidiary
Notes to the Consolidated Financial Statements
June 30, 2014
(Unaudited)
 
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of mLight Tech, Inc. and its wholly-owned subsidiary Ding King Training Institute, Inc. 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 short-term investments with a maturity of three months or less, when acquired, including money market accounts, to be cash equivalents. Periodically, the Company maintains cash balances at a bank in excess of the Federal Deposit Insurance Corporation (FDIC) insurance limit. Management does not believe there is significant credit risk associated with this financial institution.
 
Accounts Receivable
Accounts receivable represent income earned from licensing revenue from a previously affiliated entity (Note 8) and training provided to students for which the Company has not yet received payment. 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.
 
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 was $628 and $1,575 for the three months and nine months ended June 30, 2014, and was $434 and $788 for the same comparable periods ended June 30, 2013.
 
Machinery and equipment
5 - 15 years
Office equipment and equipment 
7 years
Leasehold improvements
Shorter of lease term or useful life
 
 
9

 
 
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.
 
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
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, 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 and no credit is extended, therefore there is no collection risk.

 
10

 
 
The Company also receives licensing revenue by granting an exclusive license to sell Dent Tools Direct, USA Inc. (“Dent Tools”) merchandise online under the Ding King name and logo on the DKTI website (Note 8). Management has recognized revenue for this transaction as the Company has satisfied its conditions for recognition of revenues and believes collectability is reasonably assured given the current rate of collections and additional collections subsequent to the period end.

Income Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial reporting requirements and those imposed under federal and state tax laws. Deferred taxes are provided for timing differences in the recognition of revenue and expenses for income tax and financial reporting purposes and 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. Deferred income tax expense represents the change during the period in the deferred tax assets and liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Realization of the deferred tax asset is dependent on generating sufficient taxable income in future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
 
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 month and nine month periods ended June 30, 2014 and 2013, there were no potentially dilutive common shares outstanding during the period.
 
Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidation financial statements.  Management has evaluated other recent accounting pronouncements that are effective for future periods and believes that the only recently issued pronouncement that may have a material effect on the Company’s consolidated financial statements is ASU No. 2014-09 Revenues from Contracts with Customers. Management is in the process of evaluating the impact of this standard.
 
NOTE 3 – Acquisition of Ding King Training Institute, Inc.
 
On October 31, 2013, the Company entered into an Agreement of Purchase and Sale of Stock (the “Agreement”) with Ding King Training Institute, Inc. and the individual standing as the sole equity-holder of DKTI (the “Equity-Holder”). The Equity-Holder is also the majority shareholder, sole Director, Chief Executive Officer, President, Secretary, Chief Financial Officer and Treasurer of mLight. Pursuant to the terms of the Agreement, the Company acquired one hundred percent (100%) of the issued and outstanding capital stock of DKTI in exchange for the issuance of Two Million Five Hundred Thousand (2,500,000) restricted shares of the Company's common stock. For the accounting treatment, the merger is being accounted for as a recapitalization. DKTI is the acquirer for financial reporting purposes and mLight Tech, Inc. is the acquired company.
 
 
11

 
 
DKTI’s balance sheet (unaudited) as of October 31, 2013, the date of acquisition is as follows:

Assets acquired:
     
Cash & cash equivalents
 
$
7,938
 
Accounts receivable
   
66,334
 
Other current assets
   
2,077
 
Property & equipment, net
   
6,220
 
Security deposits
   
6,270
 
Total Assets acquired
 
$
88,839
 
 
       
Liabilities assumed:
       
Accounts payable
 
$
6,615
 
Accrued liabilities
   
71,424
 
Accrued interest
   
72,835
 
Notes payable
   
157,380
 
Purchase commitments
   
397,137
 
Total Liabilities assumed
   
705,391
 
 
       
Stockholder's deficit:
       
Common stock
   
5,000
 
Accumulated deficit
   
(621,552
)
Total stockholder's deficit
   
(616,512
)
 
       
Total Liabilities and Stockholder's Deficit
 
$
88,839
 
 
NOTE 4 – Payroll Taxes
 
The Company has accrued for payroll taxes for the periods ended June 30, 2014 and September 30, 2013; however, all of these amounts have not been remitted to the appropriate taxing authorities and are delinquent. The remaining outstanding balance as of June 30, 2014 is $50,538. Management intends to pay this obligation as soon as sufficient funds become available. The Company may be liable for penalties, including interest for these delinquent taxes. No provision for penalties or interest for these delinquent payments has been accrued as the amounts cannot be reasonably estimated.
 
 
12

 
 
NOTE 5 – Notes Payable
 
   
June 30, 2014
(Unaudited)
   
September 30,
2013
(Unaudited)
 
Notes payable consist of:
           
Note payable to related party individual (Note 8), unsecured, non-interest bearing, no stated maturity date
 
$
-
   
$
8,000
 
Note payable to an individual, unsecured, $1,000 interest per month
   
-
     
25,000
 
Note payable to related party (Note 8), unsecured, non-interest bearing, no stated maturity date
   
-
     
5,480
 
Note payable to individual, unsecured, 10% interest, due December 31, 2014    
50,000
     
50,000
 
Note payable to individual, unsecured, 10% interest, due December 31, 2014
   
68,000
     
68,000
 
Note payable to individual, unsecured, 10% interest, due December 31, 2014
   
15,000
     
-
 
Note payable to related party individual (Note 8), unsecured, non-interest bearing.
   
-
     
7,590
 
Note payable to an individual, unsecured, 10% interest
   
-
     
900
 
 
   
133,000
     
164,970
 
Total
 
$
133,000
   
$
164,970
 
 
The Company has been late in making payments on certain notes payable. The Company has made cash payments of $16,490 towards the notes payable, and settled $28,403 of note obligations during the nine months ended June 30, 2014. The Company also executed a promissory note to an individual and received $15,000 in cash proceeds during the nine months ended June 30, 2014. The Company has recorded interest expense of $3,325 and $10,250 for the three months and nine months ended June 30, 2014 and interest expense of $4,020 and $10,818 for the comparable periods ended June 30, 2013, respectively.
 
NOTE 6 – Commitments and Contingencies
 
Operating Lease
The Company leases real property under an operating lease for a monthly rental payment of $2,090, which commenced in August of 2012 for a two-year term, expiring in July 2014. The Company executed a lease extension for an additional thirty-six (36) months commencing August 1, 2014 and expiring on July 31, 2017. During the extended term, the Company shall pay an initial monthly base rent of $1,843.50 plus its share of monthly direct expense charge of $566.13 for a total initial monthly rent of $2,409.63 for a period of twelve (12) months. The monthly base rent will increase to $1,898.81 commencing August 1, 2015 and continuing through July 31, 2016, and to $1,955.77 commencing August 1, 2016 and continuing through July 31, 2017, respectively. The monthly direct expense charge is subject to adjustment pursuant to the terms of the lease.

The total rent expense including common area maintenance charges was $6,271 and $16,930 for the three months and nine months ended June 30, 2014 as compared to $6,271 and $12,739 for the same comparable periods ended June 30, 2013, respectively, including common area maintenance charges. The minimum future payments for the leases are summarized below:

For the remainder of the year ending September 30:
 
Payments
 
2014
  $ 7,229  
2015
    29,081  
2016
    30,092  
2017
    7,566  
Total
  $ 73,968  
 
 
13

 
 
NOTE 7 – Purchase Commitments
 
The Company received $430,000 in advances for anticipated rebates from purchases of paint and related products from a manufacturer and distributor. In exchange for the advanced funds, the Company agreed to exclusively purchase paint and related products from the manufacturer and distributor over a five and seven year period commencing in 2007 up to a certain dollar volume amount (the “Rebate Agreement(s)”). The Company initially recorded the amount of the advances as a liability on the balance sheet under “Purchase commitments”. Based on the volume of products the Company purchases, this liability is reduced on a pro-rata basis. The Company has not purchased the volume of products at the rate anticipated in the Rebate Agreements. Based on the amount of products purchased to date by the Company, the remaining amount of the rebates advanced is $397,137 as of June 30, 2014 and September 30, 2013.

The total dollar amount of products the Company is required to buy under the Rebate Agreement from the distributor was $4.2 million. The Company’s original distributor ceased operations and sold its business to the Company’s current distributor, and management believes the Rebate Agreement was assigned to the current distributor. The Rebate Agreement with the distributor expired in November 2012. The Company has contacted the current distributor regarding its purchase commitments and is currently negotiating an extension or concessions to repay its obligation and/or settlement. Management anticipates they will be able to successfully negotiate a revised agreement to fulfill the purchase commitment or obtain a concession from the distributor as the Company is currently purchasing products in the ordinary course of business. In the event the Company cannot negotiate a satisfactory agreement, other vendors exist in the market to purchase these products and management believes there would be no significant impact on the operations of the Company. If the Company is unable to negotiate an extension or concessions to repay the obligation, the Company may incur legal costs of litigation for breach of contract.
 
The total dollar amount of products the Company is required to buy under the Rebate Agreement from the manufacturer was $1,780,000. The contract with the manufacturer expires in November 2014. If the Company cannot fulfill the purchase obligation, management anticipates they will be able to negotiate a time extension to fulfill the purchase commitment. If the Company is unable to negotiate extensions or concessions to repay the obligation, the Company may incur legal costs of litigation for breach of contract.
 
NOTE 8 – Related Party Transactions
 
Transactions with the Shareholder
The principal shareholder/officer of the Company utilized the Company’s banking function for personal expenses prior to DKTI’s acquisition by the Company. Cash advances received by the shareholder have been recorded as compensation to officer. The Company has recorded $32,398 and $36,809 as compensation expense for the three months and nine months ended June 30, 2014. In addition, the same officer provided a short-term advance of $500 as of June 30, 2014 towards the working capital requirements of the Company.
 
Purchases and Advances from Affiliated Entity
The Company purchases its paintless repair tools from Dent Tools, a previously affiliated entity through common ownership. On January 17, 2014, the principal shareholder of the Company divested his ownership interest in Dent Tools for $1 consideration. For the three months and nine months ended June 30, 2014, the Company purchased $36,312 and $87,536 of tools from Dent Tools, of which no amounts were outstanding as payables at June 30, 2014. For the three months and nine months ended June 30, 2013, the Company purchased $24,984 and $38,721 of tools from Dent Tools.
 
On January 4, 2013, DKTI entered into a licensing agreement with Dent Tools whereby, DKTI granted an exclusive license to Dent Tools to sell Dent Tools merchandise online under the Ding King name and logo on the DKTI website. Dent Tools agreed to pay DKTI a royalty of $300,000 over a 24 month period. The payment terms agreed for licensing were a monthly payment of $20,000 for the calendar year 2013 and the remaining balance of $60,000 to be paid at the monthly amount of $5,000 over the next twelve months. The Company recorded $15,000 and $90,000 in licensing revenues for the three months and nine months ended June 30, 2014 as compared to $60,000 and $120,000 for the three months and nine months ended June 30, 2013. In addition, Dent Tools agreed to settle on behalf of DKTI a note payable to an individual in the amount of $25,000 in lieu of payment towards the licensing fee during the nine months ended June 30, 2014. The Company has recorded a payable of $1,279 to Dent Tools for the excess amount received for licensing income as of June 30, 2014 and had recorded a receivable for licensing income of $56,279 at September 30, 2013, respectively.
 
Dent Tools had advanced $10,960 to the Company in 2011 of which $0 remained outstanding at June 30, 2014 and $5,480 remained outstanding at September 30, 2013, respectively (Note 5).
 
Borrowing from Relative
The Company has borrowed $20,836 from the principal shareholder’s sister in previous years. The Company paid $0 and $17,667 towards the promissory note during the three months and nine months ended June 30, 2014. The net amount outstanding at June 30, 2014 and September 30, 2013 was $0 and $15,590, respectively (Note 5).
 
NOTE 9 – Subsequent Events
 
Management has evaluated subsequent events through August 14, 2014, the date the financial statements were available to be issued.
 
 
14

 
 
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
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 elsewhere. 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.
 
The merger between mLight Tech, Inc. and Ding King Training Institute, Inc. (“DKTI”) is being accounted for as a reverse-merger and recapitalization. DKTI is the acquirer for financial reporting purposes and mLight is the acquired company. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the merger will be those of DKTI. The assets and liabilities of mLight will be recorded at their historical cost basis, and the consolidated financial statements after completion of the merger will include the assets and liabilities of DKTI and mLight, and the historical operations of DKTI and operations of the combined company from the closing date of the merger.
 
As used herein and except as otherwise noted, the term “Company”, “it(s)”, “our”, “us”, “we” and “mLight” shall mean mLight Tech, Inc., a Florida corporation, and its consolidated subsidiary.

Overview of the Business

As a result of our merger with Ding King Training Institute, Inc. (“DKTI”) on October 31, 2013, our business became the business of DKTI. DKTI is in the business of training individuals for a career as a technician in the Automotive Appearance Industry, which includes paintless 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 also authorized to sell business opportunities in the Automotive Appearance Training industry.

During the three months ended June 30, 2014 and 2013, DKTI graduated 22 students and 21 students in various course programs offered by DKTI, and during the nine months ended June 30, 2014 and 2013, DKTI graduated 71 students and 59 students, with the majority having completed courses in paintless dent repair and interior restoration. DKTI offers its courses at one location in Costa Mesa, California. No online classes are presently offered by DKTI. DKTI currently has 3 non-employee instructors who teach the courses offered by DKTI.

DKTI offers the following courses at the tuition rates which include a $75 registration fee and all tools and equipment necessary, where applicable:
 
·  
Paintless Dent Repair (“PDR”) - The objective of the PDR course is to provide intensive training to an individual who has the goal to continue his hands-on training at home or on-the-job upon graduation. Graduates will have the knowledge to properly access and remove door dings and minor dents from a vehicle without sanding, filling, or painting.
 
·  
SMART Paint Repair - The objective of the SMART Paint Repair program is to provide extensive training to an individual who has the goal to properly repair a wide variety of paint damage utilizing new paint technology. Upon completion, DKTI certifies the graduate for the field. The course is the ultimate for learning everything required to become a professional mobile or shop paint repair technician.
 
·  
Chip King - The objective of the Chip King course is to provide training to an individual who has the goal to properly estimate and repair minor paint chips, scratches and nicks on a vehicle. Students will also receive on-going technical support by phone.
 
·  
Interior Restoration - The objective of the Interior Restoration course is to teach each student the correct principles in repairing all types of interior/upholstery damage. Graduates will be skilled in repairing all types of interior/upholstery damage including seats, carpets, panels, dashboards, headliners, etc.
 
 
15

 
 
·  
Windshield Repair - The objective of the Windshield Repair course is to teach each student the correct skills and principles in repairing various types of windshield damage. Graduates will be skilled in repairing various types of windshield damage. They will learn to repair Star Breaks, small cracks and Bulls Eyes. 

·  
Window Tinting - The objective of the Window Tinting course is to teach students to properly apply and remove film on all types of glass and windows. This program is designed to provide extensive “hands-on” training in all aspects of the window tinting trade. 

·  
Detailing - The objective of the Detailing course is to provide extensive intensive training to an individual who has the goal to properly estimate and detail a vehicle from start to finish. The student will also receive on-going technical support by phone. This program is designed to provide hands-on training in all aspects of the Auto Detailing system. The Auto Detailing system is a complete and comprehensive package designed to make any vehicle look like is just came off the showroom floor by removing scratches, acid rain, oxidation, over-spray, and other minor blemishes without burning the paint or leaving swirl marks. 

·  
Odor Removal - The objective of the Odor Removal course course is to teach the student correct principles in odor removal from a vehicle. The Odor Removal System eliminates unwanted odors from the inside of a vehicle. It's not a cover-up, but a true odor-oxidizing agent that wipes out odors permanently, leaving the interior of the vehicle smelling like new.

·  
Alloy Wheel Repair - The objective of the Alloy Wheel Repair course is to provide extensive and intensive training to an individual who has the goal to properly estimate and repair a wide variety of wheel damage. The Alloy Wheel Repair system is a complete comprehensive package offering the tools and equipment needed for all types of wheel repairs, including minor chips and scratches, scuffs and gouges, rust spots and clear coat damage. 
 
Financial Operations Overview

Results of Operations for the three months and nine months ended June 30, 2014 and 2013
 
The consolidated results of operations for the three months and nine months ended June 30, 2014 include the results of operations of DKTI and mLight for the three months ended June 30, 2014, and the results of operations for the nine months include (a) the results of operations of mLight for the eight months from November 1, 2013 to June 30, 2014 as a result of merger on October 31, 2013, and (b) the results of operations of DKTI for the nine months ended June 30, 2014. The results of operations for the three months and nine months ended June 30, 2013 include only the results of DKTI’s operations.
 
Revenues for the three months ended June 30, 2014 and 2013 were $343,479 and $222,716, respectively. Revenues primarily comprise of training courses offered, sale of tools and accessories, and licensing income earned by marketing online trade name and shopping cart. Revenues increased in 2014 by $120,762 or 54% primarily due to the increase in student enrollments and training course completions during the three months ended June 30, 2014 as compared to 2013. During the three months ended June 30, 2014, 22 students graduated who were enrolled in 44 training courses as compared to 21 students graduated enrolling in 28 courses in 2013. The Company recorded $258,111 in revenues earned from training courses completed in 2014 as compared to $119,373 in revenues earned from training courses completed for the same comparable period in 2013. The Company sold tools and accessories to its students and recorded $70,368 in revenues for the three months ended June 30, 2014 as compared to $43,343 for the same comparable period in 2013. The Company recorded $15,000 and $60,000 in licensing income for the three months ended June 30, 2014 and 2013, respectively. The Company executed an exclusive license in 2013 to an affiliated entity, Dent Tools Direct USA, Inc., to market online its trade name and shopping cart. The Company also offered additional training courses in 2013 which also helped in increasing enrollment of students resulting in an increase in training revenues.
 
Revenues for the nine months ended June 30, 2014 and 2013 were $821,920 and $554,267, respectively. Revenues increased in 2014 by $267,653 or 48% primarily due to the increase in student enrollments (12 students) and training course completions (30 courses) in 2014 as compared to 2013. The Company recorded $558,777 in revenues earned from training courses completed in nine months ended June 30, 2014 as compared to $275,188 in revenues earned from training courses completed for the same comparable period in 2013. The Company sold tools and accessories to its students and recorded $173,143 in revenues for the nine months ended June 30, 2014 as compared to $159,079 for the same comparable period in 2013. The Company recorded $90,000 in licensing income for the nine months ended June 30, 2014 as compared to $120,000 in licensing income for the same comparable period in 2013.
 
Cost of sales for the three months ended June 30, 2014 and 2013 were $154,177 and $88,005, respectively. Cost of sales as a percentage of revenue increased to 45% for 2014 as compared to 40% in 2013 since the Company offered discounted pricing for additional courses to students in 2014 and 2013, and had decreased student to instructor ratio which increased cost of sales ratio. There are no direct costs associated with revenues derived from our licensing revenues.

 
16

 
 
Cost of sales for the nine months ended June 30, 2014 and 2013 were $399,760 and $211,788, respectively. Cost of sales as a percentage of revenue increased to 49% for 2014 as compared to 38% for the comparable period in 2013 primarily because the Company offered discounted pricing for additional courses to students in 2014 and had increased student to instructor ratio which increased cost of sales ratio. There are no direct costs associated with revenues derived from the licensing revenues.

Operating expenses for the three months ended June 30, 2014 were $183,483 compared to $90,685 for the same comparable period in 2013. Operating expenses primarily consist of selling, general and administrative expenses and depreciation. Selling, general and administrative expenses (S,G&A) for the three months ended June 30, 2014 and 2013 were $182,855 and $90,251, respectively. S,G&A as a percentage of revenue increased by $92,604 or 103% in 2014 primarily due to increase in sales and marketing promotions expense incurred by the Company to enroll new students, increase in legal and professional fees as a result of being a public company, and administrative and consulting fees. Management expects our costs to continue to fluctuate until we begin to generate a substantial increase in revenues.

Operating expenses for the nine months ended June 30, 2014 were $478,282 compared to $187,767 for the same comparable period in 2013. S,G&A for the nine months ended June 30, 2014 and 2013 were $476,707 and $186,979, respectively. S,G&A as a percentage of revenue increased by $289,727 or 155% in 2014 as compared to 2013 primarily due to increase in sales and marketing promotions expense incurred by the Company to enroll new students, increase in legal, audit and professional fees as a result of being a public company, and administrative and consulting fees related to the merger of DKTI with mLight.
 
Interest expense for the three months ended June 30, 2014 and 2013 was $3,325 and $4,020, respectively. Interest expense decreased by $695 in 2014 due to the settlement of promissory notes in 2014 as compared to the same comparable period in 2013.

Interest expense for the nine months ended June 30, 2014 and 2013 was $10,250 and $10,818, respectively. Interest expense decreased by $569 during the nine months ended June 30, 2014 due to the settlement of five promissory notes in the amount of $46,970 and addition of one promissory note of $15,000.
 
As a result of the above explanations, the net income for the three months was $2,494 and net loss for the nine months ended June 30, 2014 was $66,372 as compared to a net income of $40,006 and $143,894 for the same comparable periods in 2013.
 
Liquidity and Capital Resources
 
The accompanying consolidated financial statements for the nine months ended June 30, 2014 and 2013 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 incurred a net loss of $66,372 for the nine months ended June 30, 2014 and net cash flows provided by operating activities were $17,342. In addition, we have an accumulated deficit of $702,930 and working capital deficiency of $695,502 as of June 30, 2014. These conditions raise a substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern depends on our ability to enroll additional students and provide a wide variety of training courses that generates sufficient revenue and cash flows to meet our obligations and our ability to obtain additional financing or sell common stock as may be required to fund our current operations. Management’s plans include generating income by offering additional training courses to cover operating costs to generate sufficient cash flows and raise capital by sale of common shares to continue as a going concern. There is no assurance these plans will be realized.
 
Net cash flows provided by operating activities for the nine months ended June 30, 2014 was $17,342, primarily due to the net loss of $66,372, offset by depreciation and amortization expense of $1,575, bad debt expense of $2,077, decrease in accounts receivable of $56,607, decrease in bank overdraft of $3,499, increase in accounts payable of $28,028, decrease in accrued expenses of $15,724, increase in accrued interest of $6,150 and increase in refundable deposits of $8,500. Net cash flows used in operating activities for the nine months ended June 30, 2013 was $938 primarily due to the net income of $143,894, offset by depreciation expense of $788, increase in accounts receivable of $106,659, decrease in other assets of $102, increase in accounts payable of $17,604, increase in accrued expenses of $9,816, decrease in accrued interest of $37,182, and decrease in refundable deposits of $29,300.
 
Net cash flows used in investing activities for the nine months ended June 30, 2014 was $3,099 due to the acquisition of property and equipment. Net cash flows used in investing activities for the nine months ended June 30, 2013 was $630 due to the acquisition of property and equipment.

Net cash flows used in financing activities for the nine months ended June 30, 2014 was $990 principally due to receipt of cash proceeds from notes payable of $15,000, repayments of notes payable of $16,490 and cash received from officer of $500 as an advance for working capital requirements. Net cash flows provided by financing activities for the nine months ended June 30, 2013 was $450 due to receipt of cash proceeds of $105,000 from notes payable, cash repayments of $24,682 of notes payable, and cash advances to officer amounting to $80,768 for expenses.
 
 
17

 
 
As a result of the above activities, we experienced a net increase in cash and cash equivalents of $13,253 for the nine months ended June 30, 2014, and net decrease in cash and cash equivalents of $2,017 for the nine months ended June 30, 2013. Cash and cash equivalents at June 30, 2014 amounted to $13,253.
 
To date, we have financed our operations primarily through borrowings from our President and Chief Executive Officer and more recently by executing promissory notes for our working capital requirements. Our working capital and other capital requirements for the next twelve months to bring our proposed training programs to commercial viability will vary based upon a number of factors, including but not limited to obtaining approvals from various states to open new training schools in their states, and signing up for federally funded programs to open training schools.  However, because several factors related to the growth of our operations remain outside of our control e.g. timing of the approvals by states for us to open training schools, there can be no assurance we will achieve commercial viability. Due to the limited funds available, the Company has partnered with its former students to act as instructors in Missouri and Texas, and sub-leasing their facilities to offer training courses to students.
 
We believe that existing funds, funds generated from our operations, plus those we raise from borrowings will be sufficient to support our operations for the next twelve months. However, it is possible that we will not be able to maintain our training programs and other services through such period or we will not raise sufficient additional funds from and borrowings to cover operational expenses. Under those circumstances, we will need to obtain additional funding to support our operations. Because we have no contractual commitments with respect to any of these initiatives, there can be no assurance that additional funds for operations will be available on commercially reasonable terms or in the necessary amounts. Our inability to obtain any needed additional financing would have a material adverse effect on us, including possibly requiring us to significantly curtail our operations.
 
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 (“U.S. 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, 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 and no credit is extended, therefore there is no collection risk.

The Company also receives licensing revenue by granting an exclusive license to sell Dent Tools merchandise online under the Ding King name and logo on the DKTI website. Management has recognized revenue for this transaction as the Company has satisfied its conditions for recognition of revenues and believes collectability is reasonably assured given the current rate of collections and additional collections subsequent to the period end.
 
 
18

 
 
Environmental Matters

Our operations are subject to evolving federal, state and local environmental laws and regulations related to the discharge of materials into the environment. Our process is not expected to produce harmful levels of emissions or waste by-products. However, these laws and regulations would require us to remove or mitigate the environmental effects of the disposal or release of substances at our site should they occur. Compliance with such laws and regulations can be costly. Additionally, governmental authorities may enforce the laws and regulations with a variety of civil and criminal enforcement measures, including monetary penalties and remediation requirements. We are not aware of any area of non-compliance with federal, state or local environmental laws and regulations as of the date of this report. Management has not recorded a reserve for any contingencies related to this area, however that is based on management current understanding of the applicable laws and regulations that are subject to interpretation by the regulatory authorities.
 
Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial reporting requirements and those imposed under federal and state tax laws. Deferred taxes are provided for timing differences in the recognition of revenue and expenses for income tax and financial reporting purposes and 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. Deferred income tax expense represents the change during the period in the deferred tax assets and liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Realization of the deferred tax asset is dependent on generating sufficient taxable income in future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
 
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

Evaluation of Disclosure Controls and Procedures. We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon 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. Based on his evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, our President, who serves as both our principal executive officer and principal financial and accounting officer, concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our President, to allow timely decisions regarding required disclosure as a result of the material weaknesses in our internal control over financial reporting.

 
19

 
 
Management’s Remediation Initiatives

In an effort to remediate the material weaknesses and other deficiencies previously identified in our assessment of internal control over financial reporting as disclosed in our annual report on Form 10-K and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us. In the interim, we have engaged an independent consultant to remediate the deficiencies in accounting functions. In addition, we plan to appoint one or more outside directors to our board of directors who shall be appointed to an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.

Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.
 
We anticipate that these initiatives will be at least partially, if not fully, implemented by September 30, 2014. Such initiatives are dependent on funds available for successful implementation. Additionally, we plan to test our updated controls and remediate our deficiencies by September 30, 2014.
 
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.
 
 
20

 
 
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.
 
 
21

 
 
ITEM 6. EXHIBITS.

31.1
 
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer
 
 
 
31.2
 
Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial and accounting officer
 
 
 
32.1
 
Section 1350 Certification of principal executive officer and principal financial and accounting officer
 
 
 
101 *
 
Interactive Data Files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.
 
101.INS **
 
XBRL Instance Document
     
101.SCH **
 
XBRL Taxonomy Extension Schema Document
     
101.CAL **
 
XBRL Taxonomy Extension Calculation Linkbase Document
     
101.DEF **
 
XBRL Taxonomy Extension Definition Linkbase Document
     
101.LAB **
 
XBRL Taxonomy Extension Label Linkbase Document
     
101.PRE **
 
XBRL Taxonomy Extension Presentation Linkbase Document
________________
* In accordance with Regulation S-T, the Interactive Data Files in Exhibit 101 to the Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed”.
 
** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
 
 
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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.
 
 
 
mLight Tech, Inc.
 
 
 
 
 
August 14, 2014
By:
/s/ Todd Sudeck
 
 
 
Todd Sudeck
President, Secretary, Treasurer,
Principal Executive Officer,
Principal Financial and Accounting Officer and Sole Director
 
 
 
 
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