CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements which relate to future events or
our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may", "should", "expects",
"plans", "anticipates", "believes", "estimates", "predicts", "potential" or
"continue" or the negative of these terms or other comparable terminology. These
statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are
based, are made in good faith and reflect our current judgment regarding the
direction of our business, actual results will almost always vary, sometimes
materially, from any estimates, predictions, projections, assumptions or other
future performance suggested herein. Except as required by applicable law,
including the securities laws of the United States, we do not intend to update
any of the forward-looking statements to conform these statements to actual
results.
Description of Business
Arion Group Corp. was incorporated in the State of Nevada on November 7, 2016
and established a fiscal year end of January 31. We are currently a start-up
company exploring various manufacturing and distribution business opportunities
in the dietary ingredient and nutritional supplement industry. However, as of
the filing of this statement 10-Q, no definitive agreement has been entered into
in connection with our business plan related to the above targeted industry.
On November 21, 2018 (the "Closing Date"), a change in control of the Company
occurred, pursuant to which Mr. Mingyong Huang acquired a total of 5,000,000
shares of the Company's common stock (or approximately 65.53% of the total
issued and outstanding shares of the Company as of the date of acquisition) from
Ms. Nataliia Kriukova, the previous principal shareholder of the Company.
Pursuant to the SPA and other related agreements, Ms. Nataliia Kriukova resigned
from all management and Board positions. The Company also paid off shareholder
loan owed to Ms. Kriukova in the amount of $2,663 with cash and inventory on
hand pursuant to the SPA on November 21, 2018.
On May 5, 2020, Hui Song, a member of the Board of Directors of Arion Group
Corp. (the "Company"), resigned as a director. On June 3, 2020, Mr. Mingyong
Huang entered into another Stock Purchase Agreement (the "2020 SPA"), pursuant
to which Mr. Huang sold all of his 5,000,000 shares of the Company's common
stock to Mr. Jay Hamilton. Currently, the Buyer is the Company's majority, and
controlling stockholder. On June 4, 2020, Maria Itzel Torres Siegrist resigned
as Secretary. In connection with the change of control as of June 17, 2020 the
Board appointed Jay Hamilton to the Company's Board of Directors. Also, as of
June 17, 2020, the Board appointed Mr. Hamilton as President/CEO and Ms. Brenda
Bin Wang as CFO and Mr. Mingyong Huang as Secretary. Mr. Huang remains the
Company's Director and officer.
Prior to November 21, 2018, we distributed an assortment of cedar phyto barrels
in the USA and Europe. Our products were offered at prices marked-up from 80% to
100% of our cost. Our customers were asked to pay us 100% in advance. We filled
placed orders and supplied the products within a period of thirty days (30) days
or less following receipt of any written order. Customers were responsible for
the custom duties, taxes, insurance or any other additional charges that might
incur. The business of distribution of cedar phyto barrels was discontinued
after November 21, 2018.
Concurrent with change of control, we have changed our business plan to focus on
medical & health care industry, including consulting services provided to third
parties for planning, design and compliance of cannabis cultivation in the USA.
However, as of April 30, 2020, we have not generated additional revenue since
the period ending April 30, 2019, whereby $6,000 of revenue was generated from
consulting services.
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RESULTS OF OPERATIONS
As of April 30, 2020, we had total assets of $5,441 and total liabilities of
$81,932. We have incurred recurring losses to date. Our financial statements
have been prepared assuming that we will continue as a going concern and,
accordingly, do not include adjustments relating to the recoverability and
realization of assets and classification of liabilities that might be necessary
should we be unable to continue in operation.
We expect we will require additional capital to meet our long-term operating
requirements. We expect to raise additional capital through, among other things,
the sale of equity or debt securities.
We discontinued our cedar phyto barrels distribution business upon the change in
control occurred on November 21, 2018 and started to implement a new business
plan to pursue business opportunities in manufacturing and distribution of
certain dietary ingredient and nutritional supplement products. As of April 30,
2020, we have not entered into any definitive agreement in connection with the
business plan. Our net loss for the three-month period ended April 30, 2020 was
$9,776, as compared to a net loss of $12,563 during the three-month period ended
April 30, 2019.
Three Months Ended April 30, 2020 compared to Three Months Ended April 30, 2019
Revenue, Cost of Revenue, and Gross Profit
During the three-month period ended April 30, 2020 and April 30, 2019, we
generated $0 and $6,000 in revenue, respectively. We discontinued cedar phyto
barrel business activities in the year ended January 31, 2019, following the
change in control of November 21, 2018.
The $6,000 revenue was generated in the three-months ended April 30, 2019 by
providing consulting services to a third party for planning, design and
compliance of cannabis cultivation in the USA. We were unable to generate any
revenue in the three months ended April 30, 2020.
Operating Expenses
During the three-month period ended April 30, 2020, we incurred $9,776 in
general and administrative expenses compared to $18,563 in the same period of
2019, which represents a decrease in the amount of $8,787. General and
administrative expenses incurred are mostly related to professional and
corporate compliance services. Legal and professional fees for the three-month
period ended April 30, 2020 decreased since the Company was operating on a
minimal scale and did not require as much legal and professional support and
services.
Our net loss for the three months ended April 30, 2020 was $9,776, which is a
decrease for $2,787 compared to net loss of $12,563 for the three months ended
April 30, 2019. Despite the lack of revenue generated in the three months ended
April 30, 2020, the Company incurred less expenses with a decrease in all
operating expenses that eliminated the decrease in revenue and resulted in a net
decrease in net loss as compared to the same period ended April 30, 2019.
LIQUIDITY AND CAPITAL RESOURCES
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has not yet established an
ongoing source of revenues sufficient to cover its operating costs. This raises
substantial doubt about its ability to continue as a going concern.
Our independent auditor's report accompanying our January 31, 2020 and 2019
audited financial statements contains an explanatory paragraph expressing
substantial doubt about our ability to continue as a going concern. These
financial statements have been prepared "assuming that we will continue as a
going concern," which contemplates that we will realize our assets and satisfy
our liabilities and commitments in the ordinary course of business. This
assumption may, however, not hold true for a variety of reasons, many of which
are out of our control.
As at April 30, 2020 our current assets were $5,163 compared to $5,999 in
current assets at January 31, 2020. As at April 30, 2020 our total assets were
$5,441 compared to $6,277 in total assets at January 31, 2020. As at April 30,
2020, our current liabilities were $81,932, or an increase in the amount of
$8,940 (or 12.25%) compared to $72,992 as of January 31, 2020. As of April 30,
2020, we had Loan from shareholder in the total amount of $70,432, or 85.96% of
our total liabilities, as we have not been able to generate a steady cash flow
to cover our operating expenses and have to rely heavily on the financial
support from our shareholder.
Total Stockholders' deficit was $76,491 as of April 30, 2020, compared to
$66,715 as of January 31, 2020, representing an increase in the amount of
$9,776.
Cash Flows from Operating Activities
For the three months ended April 30, 2020, net cash used by operating activities
was $10,836, consisting of net loss of $9,776 and a decrease in accounts payable
for $1,060.
For the three months ended April 30, 2019, net cash used by operating activities
was $11,030, consisting of net loss of $12,563, a non-cash expense of
depreciation of $116, an increase in prepaid expense for $10,000 and an increase
in accounts payable for $11,417.
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Cash Flows from Investing Activities
Cash flows used in investing activities for the three months ended April 30,
2020 and 2019 were $0 and $0, respectively.
Cash Flows from Financing Activities
Cash flows provided by financing activities for the three months ended April 30,
2020 and 2019 were $10,000 and $10,000, respectively. We were able to borrow an
additional $10,000 loan from one of our former major shareholders in both
quarters ended April 2020 and 2019 to pay operating expenses.
PLAN OF OPERATION AND FUNDING
We have no lines of credit or other bank financing arrangements. Currently we
are financed by our major shareholders. Our working capital requirements for the
next 12 months are expected to increase if and when we are able to execute on
our current business plan. As of April 30, 2020, we had a working capital
deficit in the amount of $76,769.
We also intend to finance our operating expenses and business development costs
with further issuances of securities and debt issuances. Additional issuances of
equity or convertible debt securities will result in dilution to our current
shareholders. Further, such securities might have rights, preferences or
privileges senior to our common stock. Additional financing may not be available
upon acceptable terms, or at all. If adequate funds are not available or are not
available on acceptable terms, we may not be able to take advantage of
prospective new business endeavors or opportunities, which could significantly
and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Quarterly Report, we do not have any material
commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant equipment during the next twelve
months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report, we do not have any off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, changes in financial condition, revenues or
expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.
RECENT DEVELOPMENTS
In December 2019, a strain of coronavirus entitled COVID-19 emerged in China and
spread to other countries including to the United States. In March 2020, the
World Health Organization declared COVID-19 to be a public health pandemic of
international concern, which has resulted in travel restrictions and in some
cases, prohibitions of non-essential activities, disruption and shutdown of
businesses and greater uncertainty in global financial markets.
In the United States in which we and our customers, and partners operate, the
health concerns as well as political or governmental developments in response to
COVID-19 could result in economic, social or labor instability or prolonged
contractions in certain end markets. These events could have a material adverse
effect on the business and results of operations and financial condition.
At this time, it is difficult to predict the extent to which the COVID-19
outbreak will impact our business or operating results, which is highly
dependent on uncertain future developments, including the severity of the
pandemic and the actions taken or to be taken by governments and private
businesses in relation to its containment. The Company's plan pf conducting new
businesses might be delayed and the effect of the outbreak may not be fully
reflected in our operating results until future periods.
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