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 March 31, 2020 and 2019
Revenues
For the three months ended March 31, 2020 and 2019, the Company generated
revenue in the amount of $95,944 and $113,948 respectively. Our gross
profits/(loss) for the three months ended March 31, 2020 and 2019 was $48,107
and $64,039, respectively.
General and administrative expenses
For the three months ended March 31, 2020 and 2019, we have had general and
administrative expenses in the amount of $258,575 and $460,768 respectively, an
decrease of $202,193 or 44% due to the information technology development
expenses and marketing expenses in year 2019 are higher than that in year 2020.
These expenses are comprised of motor vehicle expenses of $7,942, marketing
expenses of $8,644, payroll expenses of $98,348 and entertainment of $50,969 for
the three months ended March 31, 2020.
3
Net loss
Our net loss for the three months ended March 31, 2020 and 2019 was $211,881 and
$395,926 respectively. The net loss mainly derived from the general and
administrative expenses incurred.
For the nine months ended March 31, 2020 and 2019
Revenues
For the nine months ended March 31, 2020 and 2019, the Company generated revenue
in the amount of $312,685 and $319,136 respectively. Our gross profits for the
nine months ended March 31, 2020 and 2019 was $136,865 and $86,483, with gross
profit margins of 44% and 27% respectively, an increased of 17% due to the
Company improve the efficiency of management and the cost of materials decreased
bringing the gross profit up.
General and administrative expenses
For the nine months ended March 31, 2020 and 2019, we have had general and
administrative expenses in the amount of $744,933 and $996,573 respectively, an
decrease of $251,640 or 25% due to the consultant services fee for IT support
and marketing expenses in year 2019 are higher than that in year 2020. These
expenses are comprised of advertising and promotion expenses of $7,600,
marketing expenses of $34,713, information technology development expenses of
$17,580, payroll expenses $243,822, motor vehicle $11,258 and entertainment of
$63,595 for the nine months ended March 31, 2020.
Net loss
Our net loss for the nine months ended March 31, 2020 and 2019 was $611,557 and
$908,684 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 $554,665 for the nine months ended
March 31, 2020 as compared to net cash used in operating activities of
$1,157,020 for the nine months ended March 31, 2019. The cash used in operating
activities was a result of our net loss attributable to payroll expenses,
marketing expenses and advertising and promotion.
Cash Provided in/(Used in) Investing Activities
Net cash provided in/(used in) investing activities was $1,921 and $52,473 for
the nine months ended March 31, 2020 and 2019, respectively. The cash used in
investing activities for the nine months ended March 31, 2020 was resulted from
the disposal of plant and equipment.
Cash Provided by Financing Activities
Net cash provided by financing activities were $289,650 and $552,044 for the
nine months ended March 31, 2020 and 2019 respectively. The cash provided by
financing activities was contributed from the aggregate proceeds of $300,000
from the issuance of shares in private placement and advances from holding
company of $12,902 during the nine months ended March 31, 2020, offset by the
repayment of director, bank borrowings and interest of $13,683, $6,523 and
$3,046 respectively.
4
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 March 31, 2020, the Company suffered an accumulated deficit of $4,585,259
and incurred a continuous net operating loss of $611,557 for the nine months
ended March 31, 2020. 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 March 31, 2020.
Related party transactions
For the nine months ended
March 31,
2020 2019
Professional fee paid to:
- Related party A $ 15,726 $ 11,562
- Related party B 13,350 17,103
- Related party C 2,982 287
Website design and maintenance fee paid to:
- Related party D 445 441
Advance from holding company
- Related party E (12,902 ) -
$ 19,601 $ 29,393Related 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
5
Contractual Obligations
As of March 31, 2020, the Company has no contractual obligations involved.
© Edgar Online, source Glimpses
RITO GROUP CORP. 
