UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For
the quarterly period ended
For the transition period from __
________ to _________
SEC
File No.
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction | (IRS I.D.) | |
| of incorporation or organization) |
(Address of principal executive offices)
Issuer’s
telephone number: 1 (
(Former name, former address and telephone number, if changed since last report)
Check
whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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.
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 ☐
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”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☐ | Smaller Reporting Company | ||
| Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act: None
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of May 15, 2023, there were shares issued and outstanding of the registrant’s common stock.
TABLE OF CONTENTS
| PAGE | ||
| PART I. FINANCIAL INFORMATION | ||
| Item 1 | Unaudited Consolidated Financial Statements | F-1 |
| Item 2 | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 3 |
| Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 10 |
| Item 4 | Controls and Procedures | 10 |
| PART II. OTHER INFORMATION | ||
| Item 1 | Legal Proceedings | 11 |
| Item 1A | Risk Factors | 11 |
| Item 2 | Unregistered Sales of Equity Securities and Use of Proceeds | 11 |
| Item 3 | Defaults Upon Senior Securities | 11 |
| Item 4 | Mine Safety Disclosures | 11 |
| Item 5 | Other Information | 11 |
| Item 6 | Exhibits | 12 |
| 2 |
RAYONT INC. AND SUBSIDIARY
Unaudited Consolidated Financial Statements
For the NINE AND three months ended MARCH 31, 2023 and 2022
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
| F-1 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, 2022 | June 30, 2022 | |||||||
| (Not Reviewed) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivables | ||||||||
| Inventories | ||||||||
| Prepaid expense | ||||||||
| Due from related parties | ||||||||
| Other receivables | ||||||||
| Total Current Assets | ||||||||
| Non-Current Assets: | ||||||||
| Property and equipment, net | ||||||||
| Intangible assets | ||||||||
| Other receivables | ||||||||
| Goodwill | ||||||||
| Right of use asset | ||||||||
| Other assets | ||||||||
| Total Non-Current Assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES AND STOOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Due to related parties | ||||||||
| Loan payable | ||||||||
| Finance lease payable | ||||||||
| Operating lease liabilities | ||||||||
| Other payables | ||||||||
| Total Current Liabilities | ||||||||
| Non-Current Liabilities: | ||||||||
| Finance lease payable | ||||||||
| Operating lease liabilities | ||||||||
| Loan payable | ||||||||
| Total Non-Current Liabilities | ||||||||
| TOTAL LIABILITIES | $ | $ | ||||||
| COMMITMENTS AND CONTNGENCIES | ||||||||
| Stockholders’ Equity: | ||||||||
| Common stock, $ par value; shares authorized; and shares issued and outstanding as of March 31, 2023 and June 30, 2022, respectively | $ | $ | ||||||
| Preferred stock, $ par value; shares authorized; share issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Reserve | ( | ) | ||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-2 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| March 31, 2023 | March 31, 2022 | March 31, 2023 | March 31, 2022 | |||||||||||||
| (Not Reviewed) | Unaudited | (Not Reviewed) | Unaudited | |||||||||||||
| Revenue | $ | $ | $ | $ | ||||||||||||
| Cost of Revenue | ( | ) | ( | ) | ( | ) | - | |||||||||
| Gross profit | ||||||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||
| Depreciation and amortization expense | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating Loss | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other (expense) / income: | ||||||||||||||||
| Interest income | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Other income, net | ||||||||||||||||
| Total other income / (expense) | ||||||||||||||||
| Income / loss before income taxes | ( | ) | ( | ) | ( | ) | ||||||||||
| Income tax expense | ||||||||||||||||
| Net income / (loss) | ( | ) | ( | ) | ( | ) | ||||||||||
| Other comprehensive items | ||||||||||||||||
| Foreign currency translation gain / (loss) | ( | ) | ||||||||||||||
| Total other comprehensive gain / (loss) | ( | ) | ||||||||||||||
| Total comprehensive income / (loss) | ( | ) | ( | ) | ||||||||||||
| Less: comprehensive income attributable to noncontrolling interest | ||||||||||||||||
| Total Comprehensive income / (loss) attributable to shareholders of the Company | $ | ( | ) | $ | $ | $ | ( | ) | ||||||||
| Weighted average shares, basic and diluted | ||||||||||||||||
| Net loss per common share, basic and diluted | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-3 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(NOT REVIEWED)
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Stock | Other | ||||||||||||||||||||||||||||||
| Common Stock | Paid-In | To Be | Accumulated | Comprehensive | ||||||||||||||||||||||||||||
| Shares | Amount | Capital | Issued | Reserve | Deficit | Income / (Loss) | Total | |||||||||||||||||||||||||
| For the nine and three months ended March 31, 2022 | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2021 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Common Stock issued for business acquisition of a subsidiary under common control | ( | ) | ||||||||||||||||||||||||||||||
| Common Stock issued for acquisition of a property | ||||||||||||||||||||||||||||||||
| Common Stock issued for cash | ||||||||||||||||||||||||||||||||
| Common Stock issued for services | ||||||||||||||||||||||||||||||||
| Foreign currency translation loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net loss for the six months ended December 31, 2021 | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance as of December 31, 2021 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Common Stock issued for services | ||||||||||||||||||||||||||||||||
| Foreign currency translation gain | - | |||||||||||||||||||||||||||||||
| Net income for the three months ended March 31, 2022 | - | |||||||||||||||||||||||||||||||
| Balance as of March 31, 2022 | ( | ) | ||||||||||||||||||||||||||||||
| For the nine and three months ended March 31, 2023 | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Common Stock issued for acquisition of assets | ||||||||||||||||||||||||||||||||
| Common Stock issued as a prepayment for business acquisition | ||||||||||||||||||||||||||||||||
| Adjustments of additional paid-in capital | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Reserve | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation gain | - | |||||||||||||||||||||||||||||||
| Net income for the six months ended December 31, 2022 | - | |||||||||||||||||||||||||||||||
| Balance as of December 31, 2022 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Foreign currency translation loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net loss for the three months ended March 31, 2023 | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Balance as of March 31, 2023 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-4 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended March 31, 2023 | For the nine months ended March 31, 2022 | |||||||
| (Not Reviewed) | Unaudited | |||||||
| Operating Activities: | ||||||||
| Net income / (loss) | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net income / (loss) to net cash provided by operating activities: | ||||||||
| Non-cash portion of share based compensation for service | ||||||||
| Depreciation and amortization expense | ||||||||
| Gain on Disposal of Investments | ( | ) | ( | ) | ||||
| Debt waiver by payable | ( | ) | ( | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ||||||||
| Accounts payable | ||||||||
| Accrued liabilities | ( | ) | ||||||
| Prepaid expense | ( | ) | ||||||
| Other assets | ( | ) | ( | ) | ||||
| Other receivables | ( | ) | ||||||
| Other payable | ||||||||
| Net cash used in operating activities | ||||||||
| Investing Activities: | ||||||||
| Acquisition of subsidiaries, net of cash and cash equivalents | ( | ) | ||||||
| Purchases of intangible assets | ( | ) | ( | ) | ||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Financing Activities: | ||||||||
| Proceeds / repayment from related party | ( | ) | ||||||
| Proceeds from loan payable | ||||||||
| Issuance of common stock | ||||||||
| Net cash provided by financing activities | ||||||||
| EFFECT OF EXCHANGE RATE ON CASH | ( | ) | ( | ) | ||||
| Net decrease in cash and cash equivalents | ( | ) | ( | ) | ||||
| Cash and cash equivalents at beginning of the period | ||||||||
| Cash and cash equivalents at end of the period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE: | ||||||||
| Interest paid | $ | $ | ||||||
| Income tax paid | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE FOR NONCASH INVESTING AND FINANCING ACITIVIES: | ||||||||
| Issuance of common stock for services | $ | $ | ||||||
| Issuance of common stock for business acquisitions | $ | $ | ||||||
| Issuance of common stock issued for acquisition of property and equipment, net | $ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
| F-5 |
RAYONT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION
Rayont Inc. (formerly Velt International Group Inc., or “Rayont” or the “Company”) is a Nevada corporation formed on February 7, 2011. Rayont uses scientific tools such as DNA, microbiome, iridology and other tests to diagnose and personalize the prescription of natural complementary medicine products, services and treatments to our patients in the markets we operate.
Given the acquisition of THF Holdings Pty Ltd and Rayont International (Labuan) Inc as well as the cancer treatment assets that the Company has invested on, Rayont has been focusing on commercializing these investments. The commercialization of the current assets for cancer treatment requires medical board approval for almost all of the countries subject to the license. Rayont has conducted the initial study to identify the requirements for obtaining the approvals for using PDT to treat cancer across different jurisdictions in Sub-Saharan Africa (“SSA”). The same PDT technology has been licensed in China, Australia and New Zealand. It is currently undergoing medical trials in Australia and China. The recent announcements show positive results that the technology works. The Company believes that it will take time before it can start commercializing these assets and start to generate revenues and operating profits. THF Holdings Pty Ltd has subsequently changed name to Rayont (Australia) Pty Ltd.
On August 26, 2020, the Company established Rayont Technologies Pty Ltd. (Rayont Technologies) through Rayont Australia. Rayont Technologies is an Australian corporation and IOT providing services such as end-to-end employee engagement and experience platform for businesses in Australia and globally.
Rayont
Technologies Pty Ltd entered an agreement on October 15, 2020 with Ms. Kayla Ranee Smith to purchase the assets of Workstar Tech (Aust)
Pty Ltd for AUD
On December 23, 2020, Rayont Australia Pty Ltd, a wholly-owned subsidiary of Rayont Inc. (the “Company”), acquired all of the issued and outstanding capital stock of Prema Life Pty Ltd, an Australian company (“Prema Life”), from TheAlikasa (Australia) Pty Ltd, Prema Life’s sole shareholder. The acquisition of Prema Life was completed, and Prema Life became a subsidiary of the Company. Prema Life is a HACCP certified manufacturer and supplier of functional foods and supplements, and of practitioner only naturopathic and homeopathic medicines. Prema Life produces an extensive range of products including proteins, green blends, sports nutrition, weight management and maintenance, and health and wellness products. In addition, the acquisition was accounted for business combination under common control. The method of accounting for such transfers, as well as the acquisition of businesses, was similar to the pooling of interest’s method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity. The amount by which the proceeds paid by the Company differs from Prema Life’s historical carrying value of the acquired business is accounted for as a return of capital or contribution of capital. In addition, transfers of net assets between entities under common control were accounted for as if the transfer occurred from the date that the Company and the acquired business were both under the common control and had begun operations. Prema Life Pty Ltd was sold on September 1, 2022.
| F-6 |
On
December 23, 2020, pursuant to an Acquisition Agreement, Rayont Australia Pty Ltd, a wholly-owned subsidiary of Rayont Inc. (the “Company”),
acquired all of the issued and outstanding capital stock of GGLG Properties Pty LTD, an Australian company (“GGLG”), from
TheAlikasa (Australia) Pty Ltd, GGLG’s sole shareholder (the “Seller”). The Seller is an affiliate of the Company and
therefore the acquisition is being treated as a related party transaction. In addition, the acquisition was accounted for business combination
under common control. The method of accounting for such transfers, as well as the acquisition of businesses, was similar to the pooling
of interest’s method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each
combining entity are carried forward to the balance sheet of the combined entity. The amount by which the proceeds paid by the Company
differs from GGLG ‘s historical carrying value of the acquired business is accounted for as a return of capital or contribution
of capital. In addition, transfers of net assets between entities under common control were accounted for as if the transfer occurred
from the date that the Company and the acquired business were both under the common control and had begun operations. The purchase price
is $
On
February 18, 2021 the Foreign Investment Review Board approved the capital stock transferring of GGLG Properties Pty Ltd to the Rayont
Australia Pty Ltd. On March 9, 2021, the parties agreed to amend the acquisition agreements for the GGLG Properties Pty Ltd and as per
Board Resolution, the Company issued shares of its common stocks in leu of payment by Rayont Australia Pty Ltd of approximately
$
On
December 29, 2020, the Company incorporated Rayont Malaysia Sdn Bhd with a paid-up capital of $
On
April 1, 2022 under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty Ltd, acquired
1.
Achievement of EBIDTA of USD
2. Former owner remain and transition the business until December 31, 2022.
3. Complete the opening of new branch by December 31,2022.
As
of June 30, 2022 the business failed to meet the first condition so the amount of the USD
No More Knots is home to over 45 tertiary qualified therapists who specialize in Remedial Massage and Myotherapy
As of this filing date, the Company has not completed and file its Form 8K as required by the SEC rules and regulations. The Company is in the process of completing all necessary documentation for the Form 8K filling in due time. The Staff of the SEC has requested a time line for filing of Form 8-K/A and the Company has committed to file it on or before July 5, 2023.
On
May 14, 2022 Wonderfoods Retail Pty Ltd, a wholly owned subsidiary of Rayont (Australia) Pty Ltd, entered into an agreement with Jovestone
Pty Ltd to purchase the business of Go Vita at Capalaba in consideration for USD
On
June 29, 2022 Rayont (Australia) Pty Ltd (“Asset Seller”), Rayont International (L) Limited (“License Seller”)
and Nova Medical Group Pty Ltd (“Buyer”) signed the Asset Sale Agreement for sale of Next Generation Photo Dynamic Therapy
(NGPDT) License for Sub-Sahara Africa and its equipment for a consideration of USD
●
License for Sub-Sahara Africa – USD
●
Equipment – USD
| F-7 |
On
July 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots (Ipswich) Pty Ltd, acquired the business
of the Ipswich Massage from buyer OneDose Pty Ltd, in exchange for AUD
On
August 22, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Rayont Australia Pty Ltd, acquired
On November 25, 2022, the Company received a termination request from the former shareholders of The SkinDNA Company Pty Ltd. Both parties are discussing ways how to resolve the concerns each party has through informal mediation.
On
September 1, 2022, Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty Ltd incorporated Biomimic Pty Ltd for
the amount of $
On
September 1, 2022, Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty Ltd incorporated Health Script Pty Ltd
for the amount of $
On
September 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired the assets from
Tugun Compounding Pty Ltd, in exchange for AUD
The Company is in the midst of assessing this acquisition whether should be accounted for as an acquisition of business or a group of assets under ASC805 “Business Combination”.
On
September 1, 2022, under the agreement Rayont Inc., sold
On
September 3, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired intangible and
tangible assets from Prema Life Pty Ltd, in exchange for AUD
About Rayont Inc
Rayont Inc is a Nevada USA company. Rayont operates in the personalized natural healthcare sector in USA and Australia.
Rayont uses scientific tools such as DNA, microbiome, iridology and other tests to personalize diagnoses, prescription and treatments of natural complementary and alternative medicine products, services and treatments to our patients in the markets we operate.
| F-8 |
As of March 31, 2023, the company group structure consisted of the following companies:
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K for the year ended June 30, 2022. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K for the year ended June 30, 2022, have been omitted.
| F-9 |
Use of Estimates
The preparation of our consolidated financial statements and accompanying notes in conformity with GAAP requires us to make certain estimates and assumptions. Actual results could differ from those estimates.
Going Concern
The
Company had an operating loss of $
The Company did not generate enough revenues to cover its operating expense during the nine months ended March 31, 2023. The Company plans to continue obtaining funding from the majority shareholder and the President of the Company to support the Company’s normal business operating. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company.
The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Concentration of Risk
The Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash in bank.
There
is no customer who accounted for
There
is no supplier who accounted for
Fair Value of Financial Instruments
The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments. As of March 31, 2023 and June 30, 2022, the Company’s notes payable has stated borrowing rates that are consistent with those currently available to the Company and, accordingly, the Company believes the carrying value of these debt instruments approximates their fair value.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
| ● | Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; | |
| ● | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and | |
| ● | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Cash and Cash Equivalents
The
Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
As of March 31, 2023 and June 30, 2022, the Company had cash in bank of $
Accounts Receivable and Allowance for Doubtful Accounts
Accounts receivable recorded by the Company are customer obligations due under normal trade terms. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary. Management reviews the composition of accounts receivable and analyses the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. Uncollectible account balances are written off when management determines the probability of collection is remote. The allowance for doubtful accounts was as of March 31, 2023 and June 30, 2022.
Inventories
Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the weighted average method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Statements of Operations and Comprehensive Income.
| F-10 |
Intangible assets
Intangible assets for purchased are recognized and measured at cost upon acquisition and consist of the Company’s exclusive license with various useful life.
As
of March 31, 2023 and June 30, 2022, the Company had intangible assets of $
In
addition, on February 5, 2021 Rayont Technologies (M) Sdn Bhd entered into an Asset Purchase Agreement with Sage Interactive Sdn Bhd
to purchase intangible assets include software for remote learning, customer contracts and digital content. As of June 30, 2021, the
carrying amount of this asset is $
For
other intangible assets, company determined the useful life of the asset as
On
September 3, 2022, the Company’s subsidiary, Health Script Pty Ltd, acquired the assets of Prema Life Pty Ltd, in exchange for
AUD
These
assets include intangible and tangible assets. Intangible assets are customer and formulation database in the amount of USD
Another intangible asset is a software program in the amount of $
Amortization
is computed using the straight-line method over the
The Company tests for indefinite lived intangibles impairment in the fourth quarter of each year and whenever events or circumstances indicate that the carrying amount of the asset exceeds its fair value and may not be recoverable. In accordance with its policies, the Company performed a qualitative assessment of indefinite lived intangibles at March 31, 2023, and determined there was no impairment of indefinite lived intangibles.
Property and equipment
Property and equipment are carried at cost and, less accumulated depreciation. The cost of repairs and maintenance is expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income in the year of disposal. The Company examines the possibility of decreases in the value of property and equipment when events or changes in circumstances reflect the fact that their recorded value may not be recoverable.
The
Company’s property and equipment mainly consists of computer and laser equipment. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, which range from
Impairment of Long-lived Assets
The Company reviews long-lived assets when changes in circumstances or event could impact the recoverability of the carrying value of the assets. Recoverability of long-lived assets is determined by comparing the estimated undiscounted cash flows related to the long-lived assets to their carrying value. Impairment is determined by comparing the present value of future undiscounted cash flows, or some other fair value measure, to the carrying value of the asset. For the nine months ended March 31, 2023 and March 31, 2022, no impairment of long-lived assets was indicated, and no impairment loss was recorded.
| F-11 |
Revenue Recognition
Revenue is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those products and services. We enter into contracts that include products and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers.
The Company’s contracts with customers may include multiple performance obligations. Revenue relating to agreements that provide more than one performance obligation is recognized based upon the relative fair value to the customer of each performance obligation as each obligation is earned. The Company derives its revenues the follows:
Sale of Services: Remedial Massage & Myotherapy
Revenue from remedial massage & myotherapy is recognized when the entity has provided the services to the clients which typically occurs when the service is completed.
Sale of Goods - Medicinal Supplements:
Revenue from these sales is recognized when the entity has delivered the products to locations specified by its customers and the customers have accepted the products in accordance with the sales contract.
Products are sold to certain customers with volume discount and these customers also have the right to return within a reasonable time frame. Revenue from these sales is recorded based on the contracted price less the estimated volume discount and returns at the time of sale.
Basic earnings per share is computed by dividing net income / (loss) attribute to stockholders of common stock by the weighted-average number of common shares outstanding for the period. Diluted net earnings per share is computed by dividing net income / (loss) by the weighted average number of common shares outstanding plus equivalent shares.
Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through convertible notes and preferred stock when the effect would be dilutive. The Company only issued common stock and does not have any potentially dilutive instrument as of March 31, 2023 and March 31, 2022.
Translation of Foreign Currency
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.
The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s Australian subsidiaries maintain their books and record in a local currency, Australian Dollars (“AUD”), which is functional currency as being the primary currency of the economic environment in which the entity operates. The Company’s Malaysian subsidiaries maintain their books and record in US$.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income.
| F-12 |
Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years:
| Average Rate for the nine months ended March 31, | ||||||||||||||||
| 2023 | 2022 | |||||||||||||||
| Australian dollar (AUD) | AUD | AUD | ||||||||||||||
| Exchange Rate at | ||||||||||||||||
| March 31, 2023 | June 30, 2022 | |||||||||||||||
| Australian dollar (AUD) | AUD | AUD | ||||||||||||||
Recent Accounting Pronouncements
Management believes none of the recently issued accounting pronouncements will have a material impact on the consolidated financial statements.
NOTE 3 – INVENTORIES
As of March 31, 2023 and June 30, 2022, inventories were composed of the following:
| March 31, 2023 | June 30, 2022 | |||||||
| Raw materials | $ | $ | ||||||
| Working in progress | ||||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
NOTE 4 – PROPERTY AND EQUIPMENT, NET
As of March 31, 2023 and June 30, 2022, property and equipment consisted of the following:
| March 31, 2023 | June 30, 2022 | |||||||
| Land | $ | $ | ||||||
| Building | ||||||||
| Leasehold improvements | ||||||||
| Different equipment | ||||||||
| Vehicle | ||||||||
| Computer equipment | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
| F-13 |
On
June 30, 2018, the Company purchased computers in the amount of $
On
January 22, 2019, the Company’s subsidiary, Rayont (Australia) Pty. Ltd, purchased the cancer treatment equipment for USD
On
June 26, 2020, the Company’s subsidiary, GGLG Properties Pty Ltd, purchased a property located at 11 Aldinga Street Brendale QLD
4500, Australia for USD
On
May 4, 2022, Rayont Properties Pty Ltd (formerly known as GGLG Properties Pty Ltd) acquired two properties. First property is located
at 85 Juliette St, Greenslopes (lot 272) QLD 4120 Australia and has a surface land of 405m2 and surface of building of 280m2.
Its purchase price is USD
Second
property is located at 44 Marquis Street, Greenslopes QLD 4120 Australia and has a surface land of 405m2 and surface of building
of 115m2. Its purchase price is USD
On
October 15, 2020, the Company entered into an agreement to purchase the assets of Workstar Tech (Aust) Pty Ltd, from an individual towards
purchase of fair value of USD
These
assets include intangible assets like trademark, website, software in the amount of USD
On
October 28, 2020, the Company’s subsidiary obtained a Finance Lease for vehicle in the amount of $
On
June 28, 2021, the Company’s subsidiary, Prema Life Pty Ltd, purchased a property which consist of 2720m2 land and 1760m2 building
located at 32 French Avenue, Brendale QLD 4500, Australia for a total amount of USD
In
addition, Prema Life has done leasehold improvements in the amount of $
On
September 23, 2021, the Company’s subsidiary, Rayont (Australia) Pty Ltd, purchased a new property located at 900 Sandgate Road,
Clayfield QLD, 4011, Australia for USD
No
More Knots (Taringa) Pty Ltd, the new company acquired on April 1, 2022, has done leasehold improvements in the amount of $
No
More Knots (Clayfield) Pty Ltd, the company incorporated on January 19, 2022, has done leasehold improvements in the amount of $
On
September 1, 2022, the Company’s subsidiary, Health Script Pty Ltd, acquired the assets of Tugun Compounding Pty Ltd, in exchange
for AUD
These
assets include tangible assets like office assets, laboratories’ assets, storage room, in the amount of USD
For
the nine months ended March 31, 2023 and 2022, the depreciation expenses were $
| F-14 |
NOTE 5 – INTANGIBLE ASSETS
On
October 15, 2020, the Company entered into an agreement to purchase the assets of Workstar Tech (Aust) Pty Ltd, from an individual towards
purchase of fair value of USD
These
assets include intangible assets like trademark, website, software in the amount of USD
Amortization
is computed using the straight-line method over the
On
February 5, 2021 Rayont Technologies (M) Pty Ltd entered into an Asset Purchase Agreement with Sage Interactive Sdn Bhd to purchase its
assets in consideration of the payment of USD
Amortization
is computed using the straight-line method over the
The
Company had evaluated the useful life of
On
September 3, 2022, the Company’s subsidiary, Health Script Pty Ltd, acquired the assets of Prema Life Pty Ltd, in exchange for
AUD
These
assets include intangible and tangible assets. Intangible assets are customer and formulation database in the amount of USD
During
the period October 2022 – March 2023, the subsidiary Health Script has invested an amount of $
Amortization
is computed using the straight-line method over the
| F-15 |
As of March 31, 2023 and June 30, 2022, intangible assets, consisted of the following:
| March 31, 2023 | June 30, 2022 | |||||||
| Customer and Formulation Database | $ | $ | ||||||
| Trademark, website, software | ||||||||
| Software Development | ||||||||
| Total | ||||||||
| Less: accumulated amortization | ( | ) | ||||||
| Total intangible assets, net | $ | $ | ||||||
For
the nine months ended March 31, 2023 and 2022, the amortization expenses were $
NOTE 6 – LOANS PAYABLE
As of March 31, 2023 and June 30, 2022, loans payable, consisted of the following:
| Current loan payable: | March 31, 2023 | June 30, 2022 | ||||||
| Mortgage loan | $ | $ | ||||||
| Loan - Mazars (Quickfee) | ||||||||
| Note payable -1800 Diagonal | ||||||||
| Lydia Loh Holdings Loan | ||||||||
| Loan - Trevor Townsend | ||||||||
| HP Liability - Label Applicator | ||||||||
| Attavest Insurance Loan | ||||||||
| Loan - Biz Cap | ||||||||
| Loan Kelly Townsend | ||||||||
| Kova Brendale Pty Ltd | ||||||||
| Kova Properties Pty lTd | ||||||||
| Kova Clayfield Pty Ltd | ||||||||
| Loan Ervin | ||||||||
| Total current loan payable | $ | $ | ||||||
| Non-current loan payable: | ||||||||
| Mortgage loan | ||||||||
| Total non-current loan payable: | $ | $ | ||||||
| Total loan payable | $ | $ | ||||||
| F-16 |
Mortgage loan
On
June 28, 2021, the Company’s subsidiary purchased a property which consist of 2720m2 land and building 1760m2. Since the intention
was to settle the property prior to June 30, 2021as per the Sale & Purchase Contract, the liability of the loan had to be recognized,
even though the agreement date of the loans for this property is on August 6, 2021 and on September 1, 2021. This transaction is an adjusting
event for the balance sheet at June 30, 2021. The Company’s subsidiary obtained on August 6, 2021 a mortgage loan of $
The
Company’s subsidiary obtained on September 1, 2021 a mortgage loan of $
On May 4, 2022 some subsidiaries of the group in Australia received loans from Commonwealth Bank as described below:
Prema
Life Pty Ltd received a loan in the amount of USD
Rayont
(Australia) Pty Ltd received a loan in the amount of USD
Rayont
Holdings Pty Ltd (formerly known as No More Knots Holdings Pty Ltd) received a loan in the amount of USD
Wonder
Foods Retail Pty Ltd received a loan in the amount of USD
Rayont
Properties Pty Ltd received two loans: The first loan is in the amount of USD
As
of March 31, 2023 and June 30, 2022 the Company had outstanding current balances of $
| F-17 |
The
Company’s subsidiary obtained on October 15, 2021 a loan of $
COVID-19 loan
On
June 29, 2020, the Company’s subsidiary obtained a COVID-19 loan of $
Rayont
inc, received on May 23, 2022 a note payable in the amount of
Rayont
(Australia) Pty Ltd has received on June 10, 2022 a private loan in the amount of USD
Rayont
(Australia) Pty Ltd has received on May 4, 2022 a private loan in the amount of USD
Rayont
(Australia) Pty Ltd has received two small private loans on December 12, 2021 and April 4, 2022 in the amount of USD
Rayont
Holdings Pty Ltd (formerly known as No More Knots Holdings Pty Ltd) has received on May 4, 2022 a private loan in the amount of USD
No
More Knots Pty Ltd has received on May 12, 2022 two private loans in the amount of USD
| F-18 |
No
More Knots Pty Ltd received on August 24, 2022 another private loan in the amount of USD
No
More Knots (Taringa) Pty Ltd has received on May 12, 2022 one private loan in the amount of USD
No
More Knots (Taringa) Pty Ltd received on August 24, 2022 another private loan in the amount of USD
No
More Knots (Newmarket) Pty Ltd has received on May 12, 2022 one private loan in the amount of USD
No
More Knots (Newmarket) Pty Ltd received on August 24, 2022 another private loan in the amount of USD
No
More Knots (Ipswich) Pty Ltd has received on August 24, 2022 one private loan in the amount of USD
Prema
Life Pty Ltd has received on April 21, 2022 one private loan in the amount of USD
On February 9, 2023, Rayont Holdings Pty Ltd
obtained an unsecured loan of USD
The
Company has received during the nine months ended March 31, 2023 from Kova Brendale Pty Ltd, Kova Properties Pty Ltd and Kova Clayfield
Pty Ltd the amounts of $
For
the nine months ended March 31, 2023 and 2022 the interest expenses were $
NOTE 7 – FINANCE LEASE PAYABLE
| Current finance lease: | March 31, 2023 | June 30, 2022 | ||||||
| Finance lease for vehicle | $ | $ | ||||||
| Total current finance lease | $ | $ | ||||||
| Non-current finance lease: | ||||||||
| Finance lease for vehicle | ||||||||
| Total non-current finance lease: | $ | $ | ||||||
| Total finance lease | $ | $ | ||||||
On
the 28th of October 2020, the Company’s subsidiary ( Rayont Properties Pty Ltd ) obtained a Finance Lease for vehicle
in the amount of $
Finance lease activity is included in property and equipment, net.
| F-19 |
NOTE 8 – CONCENTRATION
(a) Major Customers
At
March 31, 2023 there was no customer who accounted for
(b) Major Suppliers
At
March 31, 2023 and June 30, 2022 there was no supplier who accounted for
NOTE 9 – STOCKHOLDERS’ EQUITY
Capital Stock Issued
During
the nine months ended March 31, 2022, the Company issued shares of common stock to the The AliKasa Pty Ltd for the purchase of
the GGLG, the Corporation’s wholly owned subsidiary, totaling $
On
September 23, 2021 the Company issued shares of common stock to the AMH Corporate Pty Ltd for the purchase of a property and
building located at 900 Sandgate Road, Clayfield QLD, 4011 Australia from Rayont (Australia) Pty Ltd, the Corporation’s wholly
owned subsidiary, totaling $
During
the period from July 2021 through March 2022, the Company sold and issued shares of common stock to 2 independent investors pursuant
to a private placement; shares at $; shares at $; for a total amount of $
On
December 16, 2021 the Company issued shares of common stock to the Board of Directors for their services rendered to the Company,
totaling $
On
March 31, 2022 the Company issued shares of common stock to the Board of Directors for their services rendered to the Company,
totaling $
During
the nine months ended March 31, 2023, the Company issued of its shares to the shareholder of record of The Skin DNA Company
Pty Ltd. for the acquisition
On
September 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired the assets from
Tugun Compounding Pty Ltd, in exchange for AUD
During the period from July 1, 2022 through March 31, 2023, the Company did not sell any shares of common stock.
Capital Stock Authorized
Common Stock
The Company is authorized to issue shares of common stock with a par value of $ per share. As of March 31, 2023 and June 30, 2022, the outstanding shares of common stock were and , respectively.
Preferred Stock
The Company is authorized to issue shares of Series A Preferred Stock with a par value of $ per share. There are t preferred shares issued and outstanding as of March 31, 2023 and June 30, 2022, respectively.
| F-20 |
NOTE 10 - RELATED PARTY TRANSACTIONS
The related parties of the Company with whom transactions are reported in the consolidated financial statements are as follows:
| Name | Relationship | |
| TheAlikasa (Australia) Pty Ltd | Common director / shareholder of the Company | |
| Health Script Pty Ltd | Entity under the same beneficial owner/ common directors | |
| Abrar Investments Pty Ltd | Common shareholder | |
| Tasman Accounting Pty Ltd | Entity under the same beneficial owner/ common directors | |
| Vantis Partners Pty Ltd | Entity under the same beneficial owner/ common directors |
Amount due from related parties
| March 31, 2023 | June 30, 2022 | |||||||
| TheAliKasa Australia Pty Ltd | $ | $ | ||||||
| Health Script Pty Ltd | ||||||||
| Total | $ | $ | ||||||
As
of March 31, 2023 and June 30, 2022, Prema Life Pty Ltd and Wonder Foods Pty Ltd had amount receivable of $ and $ from director
of the company. Prema Life Pty Ltd owed the director $
As
of March 31, 2023 and June 30, 2022, Rayont (Australia) Pty Ltd has loans receivable of $ and $
Amounts due to related parties
As of March 31, 2023 and June 30, 2022, the Company had amount due to related parties as follows:
| March 31, 2023 | June 30, 2022 | |||||||
| TheAliKasa Australia Pty Ltd | $ | $ | ||||||
| Abrar Investments Pty Ltd | ||||||||
| Tasman Accounting Pty Ltd | ||||||||
| Ventis Pty Ltd | ||||||||
| Accounting Business Solutions | ||||||||
| Health Script Pharmacy Pty Ltd | ||||||||
| Total | $ | $ | ||||||
| F-21 |
During the nine months ended March 31, 2023 the director has given a loan amount of $ some subsidiaries of the Rayont Group which are used to pay the acquisition of the assets, to support their operations, to pay the former shareholder of the acquired business from subsidiaries. Those loans are non-interest bearing, payable on demand and unsecured.
On May 4, 2022 the Ventis Partners Pty Ltd has given a loan amount of $ which is used to pay the properties that are acquired from Rayont Properties Pty Ltd. This loan is non-interest bearing and payable on demand. The subsidiary is sold on September 1, 2022 and this loan is not part of the balance sheet as of March 31, 2023.
On June 5, 2022 the Tasman Accounting Pty Ltd has given a loan amount of $ which is used to pay the operation expenses of No More Knots (Taringa) Pty Ltd. This loan is non-interest bearing and payable on demand.
The other amounts due to related parties were non-interest bearing and payable on demand. The amounts were used to support its operation, to acquire the properties.
NOTE 11 - COMMITMENTS AND CONTINGENCIES
The Company has commitment or contingency as of March 31, 2023.
NOTE 12 – OTHER INCOME
Other
income was $
This income for nine months ended March 31, 2022 was mainly due to gain on disposal of the subsidiaries Rayont Technologies Pty Ltd and Rayont Technologies (M) Sdn Bhd on January 31, 2022 and debt forgiven.
NOTE 13 – OTHER RECEIVABLES AS CURRENT ASSETS
As of March 31, 2023 and June 30, 2022, other receivables as current assets, consisted of the following:
| March 31, 2023 | June 30, 2022 | |||||||
| Sale of exclusive license for PhotosoftTM technology | $ | $ | ||||||
| R&D grant | ||||||||
| Prepayment of the Value Added Tax | ||||||||
| Retainer fee | ||||||||
| Deposits | ||||||||
| Shares issued as a prepayment | ||||||||
| $ | $ | |||||||
| F-22 |
As
of March 31, 2022, the Company had other receivables in the amount of $
As
of June 30, 2022, the Company had other receivables in the amount of $
NOTE 14 – OTHER ASSETS AS NON-CURRENT ASSETS
As of March 31, 2023 and June 30, 2022, other assets as non-current assets, consisted of the following:
| March 31, 2023 | June 30, 2022 | |||||||
| Available for Sale Security | $ | $ | ||||||
| Deposits | ||||||||
| $ | $ | |||||||
As
of March 31, 2023 the Company had other assets in the amount of $
| F-23 |
As
of June 30, 2022, the Company had other assets in the amount of $
NOTE 15 – OTHER RECEIVABLES AS NON-CURRENT ASSETS
As of March 31, 2023 and June 30, 2022, other receivables as non-current assets, consisted of the following:
| December 31, 2022 | June 30, 2022 | |||||||
| Sale of the equipment for the cancer treatment | $ | $ | ||||||
| Other | ||||||||
| $ | $ | |||||||
As
of March 31, 2023, the Company had other receivables in the amount of $
As
of June 30, 2022, the Company had other receivables in the amount of $
NOTE 16 – RIGHT-OF-USE ASSET AND OPERATING LEASE LIABILITIES
Operating leases are accounted for on the balance sheet within the right-of-use (“ROU”) assets and lease liabilities recognized in “Operating lease liabilities - current” and “Operating lease liabilities – non-current,” respectively.
Lease assets and liabilities are recognized at the lease commencement date. Lease liabilities are measured at the present value of the lease payments not yet paid. To determine the present value of lease payments not yet paid, the Company estimates borrowing rates corresponding to the maturities of the leases based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. ROU assets measured based on the lease liability and no initial direct costs, prepaid or deferred rent, and lease incentives.
The Company recognizes expense for these leases on a straight-line basis over the lease term and also considered annual incremental charges.
Lease related costs recognized in the statements of operations for the nine months ended March 31, 2023
| Lease 1 | Lease 2 | Lease 3 | Lease 4 | |||||||||||||
| Operating lease expenses | $ | |||||||||||||||
Supplemental balance sheet information related to leases is as follows:
| Operating Leases | March 31, 2023 | |||||||||||||||
| Lease 1 | Lease 2 | Lease 3 | Lease 4 | |||||||||||||
| Right-of-use assets | $ | |||||||||||||||
| Lease liabilities - current | ||||||||||||||||
| Lease liabilities - non-current | ||||||||||||||||
| Total lease liabilities | $ | |||||||||||||||
| F-24 |
| March 31, 2023 | ||||
| Weighted Average Remaining Lease Terms | ||||
| Lease 1 | ||||
| Lease 2 | ||||
| Lease 3 | ||||
| Lease 4 | ||||
| Discount Rate | ||||
| Lease 1 | % | |||
| Lease 2 | % | |||
| Lease 3 | % | |||
| Lease 4 | % | |||
| Operating Leases | Lease 1 | Lease 2 | Lease 3 | Lease 4 | ||||||||||||
| 2023 | $ | |||||||||||||||
| 2024 | ||||||||||||||||
| 2025 | ||||||||||||||||
| 2026 | ||||||||||||||||
| 2027 | ||||||||||||||||
| Thereafter | ||||||||||||||||
| Total lease payments | ||||||||||||||||
| Less: imputed interest | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Present value of lease liabilities | $ | |||||||||||||||
NOTE 17 – GOODWILL
Goodwill is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Under the guidance of ASC 350, goodwill is not amortized, rather it is tested for impairment annually, and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicate the carrying amount may be impaired. An impairment loss generally would be recognized when the carrying amount of the reporting unit’s net assets exceeds the estimated fair value of the reporting unit and would be measured as the excess carrying value of goodwill over the derived fair value of goodwill.
The Company’s policy is to perform an annual impairment testing for its reporting units of each fiscal year. For the nine months ended March 31, 2023, the Company determined there were no indicators of impairment of goodwill.
On
April 1, 2022 under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty Ltd, acquired
1.
Achievement of EBIDTA of USD
2. Former owner remain and transition the business until December 31, 2022.
3. Complete the opening of new branch by December 31,2022.
As
of June 30, 2022 the business failed to meet the first condition so the amount of the USD
No More Knots is home to over 45 tertiary qualified therapists who specialise in Remedial Massage and Myotherapy
On
July 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots (Ipswich) Pty Ltd, acquired the business
of the Ipswich Massage from
buyer OneDose Pty Ltd, in exchange for AUD
| F-25 |
The Company accounted for the transaction as a business combination in accordance ASC 805 “Business Combinations”. The Company is in the process of performing an allocation of the purchase price paid for the assets acquired and the liabilities assumed. The fair values of the assets acquired, as set forth below, are considered provisional and subject to adjustment as additional information is obtained through the purchase price measurement period (a period of up to one year from the closing date). The provisional allocation of the purchase price is based on management’s preliminary estimates. The management completed its analysis to finalize the purchase price allocation.
No More Knots Pty Ltd
| Purchase consideration | $ | |||
| Fair value of the net assets acquired and liabilities assumed | $ | |||
| Goodwill | $ |
No More Knots (Ipswich) Pty Ltd
| Purchase consideration | $ | |||
| Fair value of the net assets acquired and liabilities assumed | $ | |||
| Goodwill | $ |
NOTE 18 - SEGMENT REPORTING
ASC 280, “Segment Reporting” establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organization structure as well as information about services categories, business segments and major customers in financial statements. The Company has reportable segment based on business unit, nutritional supplements and myotherapy; software and content business and reportable segment based on country, Australia and Malaysia.
In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker has been identified as the Chief Executive Officer and President, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similar customer base and similarities in economic characteristics; nature of products and services; and procurement, manufacturing and distribution processes.
| For the Year Ended and As of | ||||||||||||
| March 31, 2023 | ||||||||||||
| By Business Unit | Nutritional Supplements and Myotherapy | Other Segment | Total | |||||||||
| Revenue | $ | $ | ||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Total assets | $ | $ | ||||||||||
| Capital Expenditure | ||||||||||||
| Property and equipment | $ | |||||||||||
| Intangible assets | $ | |||||||||||
| For the Year Ended and As of | ||||||||||||
| June 30, 2022 | ||||||||||||
| By Business Unit | Nutritional Supplements and Myotherapy | Other Segment | Total | |||||||||
| Revenue | $ | $ | ||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||
| Total assets | $ | $ | ||||||||||
| Capital Expenditure | ||||||||||||
| Property and equipment | $ | |||||||||||
| Intangible assets | $ | |||||||||||
| F-26 |
For the Year Ended and As of March 31, 2023 | ||||||||||||||||
| By Country | Malaysia | Australia | Other Segment | Total | ||||||||||||
| Revenue | $ | $ | $ | |||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | $ | $ | $ | |||||||||||||
| Capital Expenditure | ||||||||||||||||
| Property and equipment | $ | $ | ||||||||||||||
| Intangible assets | $ | $ | ||||||||||||||
| For the Year Ended and As of | ||||||||||||||||
| June 30, 2022 | ||||||||||||||||
| By Country | Malaysia | Australia | Other Segment | Total | ||||||||||||
| Revenue | $ | $ | $ | |||||||||||||
| Cost of revenue | ( | ) | ( | ) | ||||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | $ | $ | $ | |||||||||||||
| Capital Expenditure | ||||||||||||||||
| Property and equipment | $ | $ | ||||||||||||||
| Intangible assets | $ | $ | ||||||||||||||
NOTE 19 - SIGNIFICANT EVENT
On
July 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots (Ipswich) Pty Ltd, acquired the business
of the Ipswich Massage from
buyer OneDose Pty Ltd, in exchange for AUD
The Company assesses this business acquisition and accounts for this transaction under ASC805 “Business Combination”. The fair value of the business acquired is considered provisional and subject to adjustment as additional information may obtain through the measurement period.
On
August 22, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Rayont Australia Pty Ltd, acquired
On November 25, 2022, the Company received a termination request from the former shareholders of The SkinDNA Company Pty Ltd. Both parties are discussing ways how to resolve the concerns each party has through informal mediation.
| F-27 |
On
September 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired the assets from
Tugun Compounding Pty Ltd, in exchange for AUD
The Company is in the midst of assessing this acquisition whether should be accounted for as an acquisition of business or a group of assets under ASC805 “Business Combination”.
On
September 1, 2022, under the agreement Rayont Inc., sold
On
September 3, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired intangible and
tangible assets from Prema Life Pty Ltd, in exchange for AUD
The Company is in the midst of assessing this acquisition whether should be accounted for as an acquisition of business or a group of assets under ASC805 “Business Combination”.
As of the date of this filing the Company has not completed and filed Form 8K for No More Knots Holdings Pty Ltd.’s acquisition as required by the SEC rules and regulations. The Company is in the process of completing all necessary documentation for the Form 8K filling. The Staff of the SEC has requested a time line for filing of Form 8-K/A and the Company has committed to file it on or before July 5, 2023.
The auditor’s review for current version of the Form 10Q has not been completed due to the fact that the valuation report for the acquisition of the business of Ipswich Massage, Prema Life and Tugun Compounding Pharmacy by an independent expert that not been completed. The company is in process of procuring these reports. Thus, as of the date of this filing, the Company’s Form 10Q is incomplete because auditor’s review was not performed and/or completed. Once the auditor’s review is ready, the Company will file an amendment to its Form 10-Q, reflecting that fact.
On March 28, 2022, Commonwealth Bank of Australia, the lender to subsidiaries of Rayont Inc, notified Rayont Holdings Pty Ltd (formerly known as No More Knots Holdings) and its subsidiaries that it has exercised its rights to enforce the security agreements as a result of defaults by appointing Michael McCann and Cameron Crichton of Grant Thornton as receivers and managers to following subsidiaries with immediate effect:
| (a) | Rayont Holdings Pty Ltd (formerly No More Knots Holdings Pty Ltd) (ACN 656 670 736); |
| (b) | No More Knots (Taringa) Pty (ACN 146 411 869); |
| (c) | No More Knots (Clayfield) Pty Ltd (ACN 656 672 203); |
| (d) | No More Knots Pty Ltd (ACN 100 811 381); and |
| (e) | No More Knots (Newmarket) Pty Ltd (ACN 158 638 889) |
NOTE 20 - SUBSEQUENT EVENTS
On
May 1, 2023, pursuant to a Sale and Purchase Agreement (the “Agreement”), Rayont Inc, the Registrant, (hereinafter referred
to as the “Seller”) sold its Australian subsidiaries to a related party, Ali Kasa (the “Buyer”), for total consideration
of USD
The
sale price for all companies in the amount of USD3,
In return, the parties have agreed between the parties that Ali Kasa shall pay the loan that the subsidiary Rayont Holdings owes to Rayont Inc in the amount of
USD
The
parties have also agreed that Ali Kasa shall pay all the liabilities of Rayont Inc Australian subsidiaries in Australia to third
parties. As of May 1, 2023, these liabilities amounted to approximately USD
While this is a related party transaction, from an accounting basis it will be treated as arm’s length as this transaction is subject to an independent third-party evaluation report and the price may therefore change upward but not downwards based on the evaluation report.
The Company has evaluated any other events occurring from March 31, 2023 through the date these financial statements were issued and determined there are no additional events requiring disclosure.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.
Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.
Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.
Overview
Rayont Inc. (formerly Velt International Group Inc., or “Rayont” or the “Company”) is a Nevada corporation formed on February 7, 2011. The Company’s common stock are currently traded on the Over the Counter Pink Sheet under the symbol “RAYT”.
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On November 19, 2018, the Company’s former principal shareholder, Mr. Chin Kha Foo, entered into a stock purchase agreement to transfer 60% of the Company’s issued and outstanding shares to Rural Asset Management Services, Inc., a Malaysian Labuan company (“Rural”). On December 14, 2018, Rural became the principal shareholder of the Company and Mr. Ali Kasa was appointed to be the Company’s President, CEO, CFO, and Secretary due to the change in control of the Company. Rural is an equity investment company with portfolio of interest in biotechnology, healthcare, cancer treatment research and technology, ICT and Crypto Currency. Rural has invested to companies located in Malaysia, Australia and the USA.
On January 22, 2019, the Company entered into an acquisition agreement with THF Holdings Pty Ltd., an Australian corporation and Rural, pursuant to which the Company acquired 100% of the issued and outstanding capital stock of THF Holdings Pty Ltd. in exchange for 4,000,000 shares of the Company’s common stock, valued on January 22, 2019 at $1,000,000. THF Holdings Pty Ltd. is an Australian Cancer treatment and medical device company. Rural is the majority shareholder of THF Holdings Pty Ltd. In March 2019, the acquisition of THF Holdings Pty Ltd. was completed and THF Holdings Pty Ltd. became a subsidiary of the Company. In addition, the acquisition was accounted for business combination under common control of Rural. On August 25, 2020, the name THF Holdings Pty Ltd. was changed to Rayont (Australia) Pty Ltd. (“Rayont Australia”). This company was sold on September 1, 2022.
On January 24, 2019, the Company entered into an acquisition agreement with THF International (Hong Kong) Ltd., a Hong Kong company (“THF Hong Kong”) and the shareholders of THF Hong Kong, pursuant to which the Company acquired 100% of the issued and outstanding capital stock of THF Hong Kong in exchange for 8,000,000 shares of the Company’s common stock, valued at $2,000,000 on January 24, 2019. On May 13, 2019, the Company executed an amendment to the acquisition agreement, wherein the Company agreed to acquire only 85% of THF Hong Kong and reduce the purchase price to 6,800,000 shares from 8,000,000 shares. On August 4, 2019, the Company and the THF Hong Kong agreed to terminate the acquisition.
On January 24, 2019, the Company entered into an acquisition agreement with Natural Health Farm (Labuan) Inc. (“NHF”) and the shareholders of NHF, pursuant to which the Company acquired 100% of the issued and outstanding capital stock of NHF in exchange for 40,000,000 shares of the Company’s common stock, valued at $10,000,000 on January 24, 2019. NHF is a Malaysian company concentrating on clinical life sciences and holds an exclusive license for registering and commercializing Photosoft technology for treatment of all cancers in the Sub-Sahara African region. The technology has been licensed in Australia, New Zealand, China, Malaysia and Sub-Sahara Africa. The human clinical trial efforts have started in Australia and China conducted by Hudson Medical Institute, Australia. On August 4, 2019, the Company and NHF agreed to terminate the acquisition.
On August 26, 2020, the Company established Rayont Technologies Pty Ltd. (Rayont Technologies) through Rayont Australia. Rayont Technologies is an Australian corporation and is engaged primarily in digital learning solutions to support the development of people skills that drive business growth. This company was sold on January 31, 2022.
On September 30, 2020, the Company acquired all of the issued and outstanding capital stock of Rayont International (L) Limited (Rayont International), a Malaysian company. The purchase price paid by the Company was 25,714,286 shares of its common stock valued at $1,800,000 or $0.07 per share, which was the closing price of the Company’s common stock on the OTC Markets on September 29, 2020. Rayont International is a clinical-stage life sciences company that holds the exclusive license for registering and commercializing PhotosoftTM technology for treatment of all cancers across Sub-Sahara African region. The technology has been licensed in Australia, New Zealand, China, Malaysia and Sub-Sahara Africa. The exclusive license for License for Sub-Sahara Africa was sold on June 29, 2022 for the amount of USD 2,500,000 to the Nova Medical Group Pty Ltd.
On October 15, 2020, Rayont Technologies Pty Ltd entered into an agreement with Ms. Kayla Ranee Smith to purchase the assets of Workstar Tech (Aust) Pty Ltd for AUD 302,876.22 payable over 90 days upon Ms Smith transfers the assets to Rayont Technologies Pty Ltd. The assets that Rayont Technologies acquired under the agreement includes trademark, website, software, office assets. Rayont Technologies Pty Ltd was sold on January 31, 2022.
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On December 23, 2020, Rayont Australia Pty Ltd, a wholly-owned subsidiary of Rayont Inc. (the “Company”), acquired all of the issued and outstanding capital stock of Prema Life Pty Ltd, an Australian company (“Prema Life”), from TheAlikasa (Australia) Pty Ltd, Prema Life’s sole shareholder. The acquisition of Prema Life was completed, and Prema Life became a subsidiary of the Company. Prema Life is a HACCP certified manufacturer and supplier of functional foods and supplements, and of practitioner only naturopathic and homeopathic medicines. Prema Life produces an extensive range of products including proteins, green blends, sports nutrition, weight management and maintenance, and health and wellness products. In addition, the acquisition was accounted for business combination under common control. The method of accounting for such transfers, as well as the acquisition of businesses, was similar to the pooling of interest’s method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity. The amount by which the proceeds paid by the Company differs from Prema Life’s historical carrying value of the acquired business is accounted for as a return of capital or contribution of capital. In addition, transfers of net assets between entities under common control were accounted for as if the transfer occurred from the date that the Company and the acquired business were both under the common control and had begun operations. Prema Life Pty Ltd was sold on September 1, 2022.
On December 23, 2020, pursuant to an Acquisition Agreement, Rayont Australia Pty Ltd, a wholly-owned subsidiary of Rayont Inc. (the “Company”), acquired all of the issued and outstanding capital stock of GGLG Properties Pty LTD, an Australian company (“GGLG”), from TheAlikasa (Australia) Pty Ltd, GGLG’s sole shareholder (the “Seller”). The Seller is an affiliate of the Company and therefore the acquisition is being treated as a related party transaction. In addition, the acquisition was accounted for business combination under common control. The method of accounting for such transfers, as well as the acquisition of businesses, was similar to the pooling of interest’s method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each combining entity are carried forward to the balance sheet of the combined entity. The amount by which the proceeds paid by the Company differs from GGLG ‘s historical carrying value of the acquired business is accounted for as a return of capital or contribution of capital. In addition, transfers of net assets between entities under common control were accounted for as if the transfer occurred from the date that the Company and the acquired business were both under the common control and had begun operations. The purchase price is $605,920, which is a 10% discount of the total amount of GGLG’s net tangible assets. The purchase price will be paid in six installments after a $265,300 down payment. In the event an installment payment is not paid timely, the Seller has agreed to accept shares of the Company valued at $0.87 per share. The price per share is based on a 20% discount of the average share price on the OTC Markets over the last 30 trading days.
On February 18, 2021 the Foreign Investment Review Board approved the capital stock transferring of GGLG Properties Pty Ltd to the Rayont Australia Pty Ltd. On March 9, 2021, the parties agreed to amend the acquisition agreements for the GGLG Properties Pty Ltd and as per Board Resolution, the Company issued 710,713 shares of its common stocks in leu of payment by Rayont Australia Pty Ltd of approximately $605,920 (AUD 800,000) to TheAlikasa Pty Ltd as full and final payment for the acquisition of 100% of the issued and outstanding common stock of GGLG. This company was sold on September 1, 2022.
On December 29, 2020, the Company incorporated Rayont Malaysia Sdn Bhd with a paid-up capital of $25 and Rayont Malaysia Sdn Bhd incorporated on December 31, 2020 Rayont Technologies (M) Sdn Bhd with a paid-up capital of $25 respectively to carry out its business activities in Malaysia. On February 5, 2021 Rayont Technologies (M) Pty Ltd entered into an Asset Purchase Agreement with Sage Interactive Sdn Bhd to purchase its assets in consideration of the payment of USD 105,000.00. These assets include software for remote learning, customer contracts, digital content and three key employees. These assets will operate in Malaysia under Workstar trademark and operation shall be integrated with Rayont Technologies Australia to drive efficiency and scale of digital assets operations. Rayont Technologies (M) Sdn Bhd was sold on January 31, 2022.
On April 1, 2022 under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty Ltd, acquired 100% of the total outstanding shares and units of No More Knots Pty Ltd, No More Knots (Taringa) Pty Ltd and No More Knots (Newmarket) Pty Ltd in exchange for AUD3,000,000 (approximately USD 2,247,865) cash, payable in two tranches. The first trench of USD1,910,685 (AUD2,550,000) is paid on May 4, 2022 and the second tranche of USD337,180 (AUD450,000) is payable before or on January 31, 2023 if three conditions are met namely;
1. Achievement of EBIDTA of USD500,000 (AUD700,000) by June 30, 2022.
2. Former owner remain and transition the business until December 31, 2022.
3. Complete the opening of new branch by December 31,2022.
As of June 30, 2022 the business failed to meet the first condition so the amount of the USD110,000 (AUD150,000) has been deducted from the purchase price. The remaining conditions have been met by the vendor and as of December 29,2022 is unconditional and it has been agreed to be paid on 31 January 2023. The parties have agreed that final settlement payment will be made on July 31, 2023.
No More Knots is home to over 45 tertiary qualified therapists who specialise in Remedial Massage and Myotherapy
As of this filing date, the Company has not completed and file its Form 8K as required by the SEC rules and regulations. The Company is in the process of completing all necessary documentation for the Form 8K filling in due time. The Staff of the SEC has requested a time line for filing of Form 8-K/A and the Company has committed to file it on or before July 5, 2023.
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On May 14, 2022 Wonderfoods Retail Pty Ltd, a wholly owned subsidiary of Rayont (Australia) Pty Ltd, entered into an agreement with Jovestone Pty Ltd to purchase the business of Go Vita at Capalaba in consideration for USD6,918 (AUD10,000) and existing stock value at USD64,337 (AUD93,000) payable in three instalments. The total payment for the purchase of the business completed on August 17, 2022.
On June 29, 2022 Rayont (Australia) Pty Ltd (“Asset Seller”), Rayont International (L) Limited (“License Seller”) and Nova Medical Group Pty Ltd (“Buyer”) signed the Asset Sale Agreement for sale of Next Generation Photo Dynamic Therapy (NGPDT) License for Sub-Sahara Africa and its equipment for a consideration of USD3,500,000 where the consideration is split as follows:
● License for Sub-Sahara Africa – USD 2,500,000
● Equipment – USD 1,000,000
On July 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots (Ipswich) Pty Ltd, acquired the business of the Ipswich Massage from buyer OneDose Pty Ltd, in exchange for AUD825,000 (approximately USD600,000). Rayont will pay the purchase price in four instalments. As of today, it is remaining the last instalment that is due on July 5, 2023 in the amount of AUD51,000 (USD).
The Company assesses this business acquisition and accounts for this transaction under ASC805 “Business Combination”. The fair value of the business acquired is considered provisional and subject to adjustment as additional information may obtain through the measurement period.
On August 22, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Rayont Australia Pty Ltd, acquired 100% of the total outstanding shares and units of The SkinDNA Company Pty Ltd, in exchange for AUD750,000 (approximately USD500,000). Rayont paid by issuing 1,524,044 of its shares to the shareholder of record of The Skin DNA Company Pty Ltd. The Corporation’s common stock was valued at USD0.34 per share on the OTC Markets on August 22, 2022.
On November 25, 2022, the Company received a termination request from the former shareholders of The SkinDNA Company Pty Ltd. Both parties are discussing ways how to resolve the concerns each party has through informal mediation.
On September 1, 2022, Rayont Inc., through its wholly owned subsidiary Rayont Holdings Pty Ltd (formerly known as No More Knots Holdings Pty Ltd) incorporated Biomimic Pty Ltd for the amount of $70.
On September 1, 2022, Rayont Inc., through its wholly owned subsidiary Rayont Holdings Pty Ltd (formerly known as No More Knots Holdings Pty Ltd) incorporated Health Script Pty Ltd for the amount of $70.
On September 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired the assets from Tugun Compounding Pty Ltd, in exchange for AUD665,000 (approximately USD450,870). The sum of USD265,520 (AUD390,000) is made as “the Cash Payment” and USD 185,350 (AUD275,000) is paid by issuing 545,147 shares at $0.34 per share of Rayont Inc to the shareholder of record of Tugun Compounding Pty Ltd.
The Company is in the midst of assessing this acquisition whether should be accounted for as an acquisition of business or a group of assets under ASC805 “Business Combination”.
On September 1, 2022, under the agreement Rayont Inc., sold 100% of the total outstanding shares and units of Rayont (Australia) Pty Ltd, Prema Life Pty Ltd and Rayont Properties Pty Ltd ATF Rayont Property Trust, in exchange for AUD4,944,225 (approximately USD3,352,185) to the buyer Exit Properties Pty Ltd.
On September 3, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired intangible and tangible assets from Prema Life Pty Ltd, in exchange for AUD1,050,000 (approximately USD718,725).
The Company is in the midst of assessing this acquisition whether should be accounted for as an acquisition of business or a group of assets under ASC805 “Business Combination”.
About Rayont Inc
Rayont Inc is a Nevada USA company. Rayont operates in the personalized natural healthcare sector in USA and Australia.
Rayont uses scientific tools such as DNA, microbiome, iridology and other tests to personalize diagnoses, prescription and treatments of natural complementary and alternative medicine products, services and treatments to our patients in the markets we operate.
Results of Operations
Comparison of the three months ended March 31, 2023 and 2022
Revenue
There were $980,415 and $464,698 revenue generated for the three months ended March 31, 2023 and 2022, respectively. The increase was attributable to revenues generated from new subsidiaries that are acquired like No More Knots Pty Ltd, No More Knots (Taringa) Pty Ltd, No More Knots (Newmarket) Pty Ltd and some other subsidiaries that are incorporated like Wonder Foods Retail Pty Ltd, No More Knots (Ipswich) Pty Ltd and Health Script Pty Ltd, that were not part of the Company during the quarter ended on March 31, 2022. The Company continues looking for other opportunities which could potentially increase the revenues and profits of the Company.
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Cost of Goods Sold
There were $265,562 and $309,440 cost of goods sold for the three months ended March 31, 2023 and 2022, respectively. The increase was attributable to the increased of revenues significantly for the quarter ended March 31, 2023.
Operating Expense
Our operating expenses consist of selling, general and administrative expenses, depreciation and amortization expense.
For the three months ended March 31, 2023 and 2022, there were a total of $1,004,529 and $435,153 operating expenses, respectively. The increase was primarily due to the increase in the revenues and increase of the staff for the Company.
Other Income
Other income was $4,953 and $514,320 for the three months ended March 31, 2023 and 2022, respectively.
Net Income / (Loss)
We had a net loss of $269,071 for the three months ended March 31, 2023, and a net income of $80,650 for the three months ended March 31, 2022 based on the factors discussed above.
Comparison of the nine months ended March 31, 2023 and 2022
Revenue
There were $3,768,517 and $1,826,585 revenue generated for the nine months ended March 31, 2023 and 2022, respectively. The increase was attributable to revenues generated from new subsidiaries that are acquired like No More Knots Pty Ltd, No More Knots (Taringa) Pty Ltd, No More Knots (Newmarket) Pty Ltd and some other subsidiaries that are incorporated like Wonder Foods Retail Pty Ltd, No More Knots (Ipswich) Pty Ltd and Health Script Pty Ltd, that were not part of the Company during the nine months ended on March 31, 2022. The Company continues looking for other opportunities which could potentially increase the revenues and profits of the Company.
Cost of Goods Sold
There were $1,367,481 and $999,906 cost of goods sold for the nine months ended March 31, 2023 and 2022, respectively. The increase was attributable to the increased of revenues significantly for the nine months ended March 31, 2023.
Operating Expense
Our operating expenses consist of selling, general and administrative expenses, depreciation and amortization expense.
For the nine months ended March 31, 2023 and 2022, there were a total of $3,195,303 and $1,573,045 operating expenses, respectively. The increase was primarily due to the increase in the revenues and increase of the staff for the Company.
Other Income
Other income was $856,797 and $514,320 for the nine months ended March 31, 2023 and 2022, respectively. This income for nine months ended March 31, 2023 was mainly due to gain on disposal of the subsidiaries Rayont (Australia) Pty Ltd, Prema Life Pty Ltd and Rayont Properties Pty Ltd on September 1, 2022 in the amount of $474,026; the amount of $92,519 from debt waiver by payable in two subsidiaries of the Company; The amount of $290,252 that is generated as a result of the sale of three subsidiaries Rayont (Australia) Pty Ltd, Prema Life Pty Ltd and Rayont Properties Pty Ltd on September 1, 2022 in the consolidation of the financial statements of the group.
This income for nine months ended March 31, 2022 was mainly due to gain on disposal of the subsidiaries Rayont Technologies Pty Ltd and Rayont Technologies (M) Sdn Bhd on January 31, 2022 and debt forgiven.
Net Income / (Loss)
We had a net loss of $69,173 for the nine months ended March 31, 2023, and a net loss of $534,540 for the nine months ended March 31, 2022 based on the factors discussed above.
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Liquidity and Capital Resources
As of March 31, 2023 and June 30, 2022, the Company had working capital of $978,107 and working capital deficit of $83,884, respectively. The deficit is attributable to loans due to a related party of $128,677, accounts payable of $384,355, accrued liabilities of $470,689, loan payable of $2,481,440, other payables of $278,800 and finance lease of $10,983, operating lease liabilities of $112,333 at June 30, 2022.
As of March 31, 2023 and June 30, 2022, the Company had $4,047,507 and $3,783,393 in current assets, respectively.
As of March 31, 2023 and June 30, 2020, we had a cash and equivalents balance of $43,839 and $185,782, respectively. The Company’s operations are primarily funded by the revenue, other income, proceeds received from loan payable and financial support from major shareholders.
Cash Flows from Operating Activities
Net cash provided by operating activities was $474,867 for the nine months ended March 31, 2023 compared with net cash used by operating activities of $272,736 for the nine months ended March 31, 202.
During the nine months ended March 31, 2023, the net cash provided by operating activities was attributed to net loss of $69,173, offset by depreciation and amortization expense of $56,748, gain on disposal of investments of $70,392 and Debt waiver by payable of $92,519; an increase in accounts receivable of $398,054, an decrease in inventory of $87,553, an increase in accounts payable of $108,751, an increase in accrued liabilities of $808,365, an decrease in prepaid expense of $10,413, an increase in other assets of $2,399, an increase in other payable of $36,565 and an increase in other receivables of $991.
During the nine months ended March 31, 2022, the net cash used by operating activities was attributed to net loss of $534,540, offset by depreciation and amortization expense of $349,921, share issued for compensation for service of $52,500; gain on disposal of investments of $312,143 and Debt waiver by payable of $118,450 an decrease in accounts receivable of $266,761, an decrease in inventory of $75,409, an increase in accounts payable of $189,939, a decrease in accrued liabilities of $165,884, an increase in prepaid expense of $28,640, an increase in other assets of $41,148 an decrease in other receivables of $338,533, an increase in other payable of $200,478.
Cash Flows from Investing Activities
Net cash used in investing activities was $843,721 for the nine months ended March 31, 2023 compared with net cash used in investing activities of $874,770 for the nine months ended March 31, 2022.
During the nine months ended March 31, 2023, the net cash used in investing activities was attributed to the purchases of property and equipment of $262,945, payment in the amount of $353,113 for purchased of the intangible assets from Health Script Pty Ltd and payment in the amount of $227,663 for the acquisition of subsidiaries from No More Holdings Pty Ltd.
During the nine months ended March 31, 2022, the net cash used in investing activities was attributed to the purchases of property and equipment of $685,259, payment in the amount of $189,511 for purchased of the intangible assets from Rayont Technologies Pty Ltd.
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Cash Flow from Financing Activities
Net cash used in financing activities during nine months ended March 31, 2023 and 2022 of $227,252 and $454,881, respectively; proceeds from loan payable in the amount of $24,993 and $765,362, respectively; proceeds / repayment to related party in the amount of $202,259 and $418,697, respectively; issuance of common stock in the amount of Nil$ and $108,216, respectively.
Non-Cash Investing and Financing Activities
During the nine months ended March 31, 2023, issuance of common stock for business acquisitions in the amount of $518,175 and issuance of common stock for acquisition of equipment in the amount of $185,350.
During the nine months ended March 31, 2022, the issuance of common stock for business acquisitions in the amount of $618,320 and issuance of common stock for acquisition of a property in the amount of $1,159,040; issuance of common stock in the amount of $52,500 for compensation of the services.
Equity and Capital Resources
We had a net loss for the nine months ended March 31, 2023 and had an accumulated deficit of $3,704,116 as of March 31, 2023. As of March 31, 2023, we had cash of $43,839, compared to cash of $185,782 as of June 30, 2022.
We had material commitments for capital expenditures as of March 31, 2023 which are the purchased of new assets and business for USD1,635,017 from Health Script Pty Ltd, No More Knots (Ipswich) Pty Ltd. We expect our expenses will continue to increase during the foreseeable future as a result of increased operational expenses and the development of potential business opportunities. However, we do not anticipate that the Company will generate revenue sufficient to cover its planned operating expenses in the foreseeable future, and we are dependent on the proceeds from future debt or equity investments to sustain our operations and implement our business plan. If we are unable to raise sufficient capital, we will be required to delay or forego some portion of our business plan, which would have a material adversely effect on our anticipated results from operations and financial condition. There is no assurance that we will be able to obtain necessary amounts of additional capital or that our estimates of our capital requirements will prove to be accurate. As of the date of this Report, we did not have any commitments from any source to provide such additional capital. Even if we are able to secure outside financing, it may not be available in the amounts or the times when we require. Furthermore, such financing would likely take the form of bank loans, private placement of debt or equity securities or some combination of these. The issuance of additional equity securities would dilute the stock ownership of current investors while incurring loans, leases or debt would increase our capital requirements and possible loss of valuable assets if such obligations were not repaid in accordance with their terms.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations.
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Item 3. Quantitative and Qualitative Disclosure about Market Risk
Not applicable.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms. The Company’s controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its principal executive and principal financial officer to allow timely decisions regarding required disclosure.
We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at December 31, 2021 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer/Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer/Chief Financial Officer concluded that, at March 31, 2023, our disclosure controls and procedures were not effective.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s internal control over financial reporting that occurred during the Company’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors
Not applicable to smaller reporting companies.
Item 2. Unregistered Sales of Equity Securities and Use of Proceed.
None
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosure.
Not applicable.
Item 5. Other Information.
On September 1, 2022, under the agreement Rayont Inc., sold 100% of the total outstanding shares and units of Rayont (Australia) Pty Ltd, Prema Life Pty Ltd and Rayont Properties Pty Ltd ATF Rayont Property Trust, in exchange for AUD4,944,225 (approximately USD3,352,185) to the buyer Exit Properties Pty Ltd.
On September 3, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired intangible and tangible assets from Prema Life Pty Ltd, in exchange for AUD1,050,000 (approximately USD718,725). The Company accounted for the transaction as a business combination in accordance ASC 805 “Business Combinations”. The Company is in the process of performing an allocation of the purchase price paid for the assets acquired and the liabilities assumed. The fair values of the assets acquired, as set forth below, are considered provisional and subject to adjustment as additional information is obtained through the purchase price measurement period (a period of up to one year from the closing date). The provisional allocation of the purchase price is based on management’s preliminary estimates.
As of the date of this filing the Company has not completed and file its Form 8K for No More Knots Holdings Pty Ltd.’s acquisition as required by the SEC rules and regulations. The Company is in the process of completing all necessary documentation for the Form 8K filling in due time. The Staff of the SEC has requested a time line for filing of Form 8-K/A and the Company has committed to file it on or before July 5, 2023.
The auditor’s review for current version of the Form 10Q has not been completed due to the fact that the valuation report for the acquisition of the business of Ipswich Massage, Prema Life and Tugun Compounding Pharmacy by an independent expert that not been completed. The company is in process of procuring these reports. Thus, as of the date of this filing, the Company’s Form 10Q is incomplete because auditor’s review was not performed and/or completed. Once the auditor’s review is ready, the Company will file an amendment to its Form 10-Q, reflecting that fact.
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Item 6. Exhibits.
(a) Exhibits.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RAYONT INC. | ||
| By: | /s/ Marshini Aliya Moodley | |
| Marshini Aliya Moodley, President | ||
President (Principal Executive Officer), Chief Executive Officer | ||
In accordance with the requirements of the Securities and Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities indicated and, on the dates, stated.
| /s/ Marshini Aliya Moodley | Dated: May 15, 2023 |
| Marshini Aliya Moodley | |
| President (Principal Executive Officer), Chief Executive Officer | |
| /s/ Marshini Aliya Moodley | Dated: May 15, 2023 |
| Marshini Aliya Moodley | |
| Principal Financial Officer and Director |
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