The information contained in this Form 10-Q is intended to update the
information contained in our Annual Report on Form 10-K for the year ended June
30, 2019 and presumes that readers have access to, and will have read, the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and other information contained in such Form 10-K. The following
discussion and analysis also should be read together with our financial
statements and the notes to the financial statements included elsewhere in this
Form 10-Q.
The following discussion contains certain statements that may be deemed
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements appear in a number of places in
this Report, including, without limitation, "Management's Discussion and
Analysis of Financial Condition and Results of Operations. "These statements are
not guarantees of future performance and involve risks, uncertainties and
requirements that are difficult to predict or are beyond our control.
Forward-looking statements speak only as of the date of this quarterly report.
You should not put undue reliance on any forward-looking statements. We strongly
encourage investors to carefully read the factors described in our Form S-1
Amendment No.6, dated April 18, 2016, in the section entitled "Risk Factors" for
a description of certain risks that could, among other things, cause actual
results to differ from these forward-looking statements. We assume no
responsibility to update the forward-looking statements contained in this
transition report on Form10-Q. The following should also be read in conjunction
with the unaudited Condensed Consolidated Financial Statements and notes thereto
that appear elsewhere in this report.
Company Overview
Rito Group Corp is a company that operates through its wholly owned subsidiary,
Sino Union International Limited, a Company organized under the laws of the
British Colony, Anguilla. It should be noted that our wholly owned subsidiary,
Sino Union International Limited. owns 100% of Rito International Enterprise
Company Limited, a Hong Kong Company, and Rito International Enterprise Company
Limited owns 100% of ???????????, a Company organized in Shenzhen, China.
At this time, we operate exclusively through our wholly owned subsidiary and
share the same business plan of our subsidiary which is the sale of
miscellaneous retail goods. Sino Union International Limited also shares the
same business plan of Rito International Enterprise Company Limited and
???????????.
We are a development stage Company. Thus far the Company has been actively
searching for companies that may be interested in listing their own products for
sale on our "Rito Online Mall", which is now still at the designing stage and is
believed to be launched once the development is finalized. The Rito Online Mall
provides a platform for merchants and customers to facilitate transactions and
take advantage of the growth opportunity we have identified in Hong Kong's
E-Commerce Industry.
Results of Operation
For the three months ended December 31, 2019 and 2018
Revenues
For the three months ended December 31, 2019 and 2018, the Company generated
revenue in the amount of $121,032 and $105,613 respectively. Our gross profits
for the three months ended December 31, 2019 and 2018 was $53,628 and $36,086,
respectively.
General and administrative expenses
For the three months ended December 31, 2019 and 2018, we have had general and
administrative expenses in the amount of $217,060 and $275,630 respectively, an
decrease of $58,570 or 20%. These expenses are comprised of advertising and
promotion expenses of $7,603, marketing expenses of $26,081, information
technology development expenses of $17,441 and entertainment of $12,633 for the
three months ended December 31, 2019.
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Net loss
Our net loss for the three months ended December 31, 2019 and 2018 was $164,428
and $242,091 respectively. The net loss mainly derived from the general and
administrative expenses incurred.
For the six months ended December 31, 2019 and 2018
Revenues
For the six months ended December 31, 2019 and 2018, the Company generated
revenue in the amount of $216,741 and $205,188 respectively. Our gross profits
for the six months ended December 31, 2019 and 2018 was $88,758 and $22,444,
respectively.
General and administrative expenses
For the six months ended December 31, 2019 and 2018, we have had general and
administrative expenses in the amount of $486,357 and $535,804 respectively, an
decrease of $49,447 or 9%. These expenses are comprised of advertising and
promotion expenses of $15,177, marketing expenses of $43,445, information
technology development expenses of $30,937, payroll expenses $67,379 and
entertainment of $12,633 for the three months ended December 31, 2019.
Net loss
Our net loss for the six months ended December 31, 2019 and 2018 was $399,676
and $512,757 respectively. The net loss mainly derived from the general and
administrative expenses incurred.
Liquidity and Capital Resources
Cash Used in Operating Activities
Net cash used in operating activities was $447,827 for the six months ended
December 31, 2019 as compared to net cash used in operating activities of
$686,539 for the six months ended December 31, 2018. The cash used in operating
activities was a result of our net loss attributable to payroll expenses,
marketing expenses and advertising and promotion.
Cash Used in Investing Activities
Net cash used in investing activities was $0 and $54,690 for the six months
ended December 31, 2019 and 2018, respectively. The cash used in investing
activities for the six months ended December 31, 2018 was resulted from the no
addition of plant and equipment.
Cash Provided by Financing Activities
Net cash provided by financing activities were $131,255 and $283,994 for the six
months ended December 31, 2019 and 2018 respectively. The cash provided by
financing activities was contributed from the aggregate proceeds of $100,000
from the issuance of shares in private placement and advances from holding
company and directors of $12,840 and $24,929 respectively during the six months
ended December 31, 2019, offset by the repayment of bank borrowings and interest
of $4,390 and $2,124 respectively.
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In regards to all of the above transactions we claim an exemption from
registration afforded by Section 4(a)(2) and/or Regulation S of the Securities
Act of 1933, as amended ("Regulation S") for the above sales of the stock since
the sales of the stock were made to non-U.S. persons (as defined under Rule 902
section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no
directed selling efforts were made in the United States by the issuer, a
distributor, any of their respective affiliates, or any person acting on behalf
of any of the foregoing.
Going Concern
As of December 31, 2019, the Company suffered an accumulated deficit of
$4,373,378 and incurred a continuous net operating loss of $399,676 for the six
months ended December 31, 2019. These matters raise substantial doubt about our
ability to continue as a going concern. Our unaudited condensed consolidated
financial statements included elsewhere in this report have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplate our continuation as a going concern and the
realization of assets and satisfaction of liabilities in the normal course of
business. The carrying amounts of assets and liabilities presented in the
condensed consolidated financial statements do not necessarily purport to
represent realizable or settlement values. The condensed consolidated financial
statements do not include any adjustment that might result from the outcome of
this uncertainty.
Off-balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition,
changes in our financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources that are material to our
stockholders as of December 31, 2019.
Related party transactions
For the six months ended
December 31,
2019 2018
Professional fee paid to:
- Related party A $ 14,155 $ 1,746
- Related party B 7,000 10,803
- Related party C 783 294
Website design and maintenance fee paid to:
- Related party D 299 179
Due to related company
- Related party E (12,812 ) -
$ 9,425 $ 13,023Related party A, B, C and D are the fellow subsidiaries of a corporate
shareholder of the Company, E is the holding company of the Company.
The related party transactions are generally transacted in an arm-length basis
at the current market value in the normal course of business
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Contractual Obligations
As of December 31, 2019, the Company has no contractual obligations involved.
© Edgar Online, source Glimpses
RITO GROUP CORP. 
