UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934 |
For
the fiscal year ended
Commission
File Number:
| (Exact Name of Registrant as Specified in Its Charter) |
(State or Other Jurisdiction of Incorporation or Organization) |
(IRS Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s
Telephone Number, Including Area Code: 1 (
(Former name, former address and telephone number, if changed since last report)
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| OTC Markets Group |
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par value $0.001
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ☐ Yes ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ☐ Yes ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. ☒
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 during the preceding 12 months (or for such shorter period
that the registrant was required to submit and post such files). ☒
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth 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. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s
most recently completed second fiscal quarter. $
There were shares of issuer’s Common Stock outstanding as of December 28, 2022.
TABLE OF CONTENTS
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION
This Annual Report on Form 10-K , the other reports, statements, and information that we have previously filed or that we may subsequently file with the Securities and Exchange Commission, or SEC, and public announcements that we have previously made or may subsequently make include, may include, incorporate by reference or may incorporate by reference certain statements that may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to enjoy the benefits of that act. Unless the context is otherwise, the forward-looking statements included or incorporated by reference in this Form 10-K and those reports, statements, information and announcements address activities, events or developments that Rayont Inc. (hereinafter referred to as “we,” “us,” “our,” “our Company” or “Rayont”) expects or anticipates, will or may occur in the future. Any statements in this document about expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties, which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document. All forward-looking statements concerning economic conditions, rates of growth, rates of income or values as may be included in this document are based on information available to us on the dates noted, and we assume no obligation to update any such forward-looking statements. It is important to note that our actual results may differ materially from those in such forward-looking statements due to fluctuations in interest rates, inflation, government regulations, economic conditions and competitive product and pricing pressures in the geographic and business areas in which we conduct operations, including our plans, objectives, expectations and intentions and other factors discussed elsewhere in this Report.
Certain risk factors could materially and adversely affect our business, financial conditions and results of operations and cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, and you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and we do not undertake any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. The risks and uncertainties we currently face are not the only ones we face. New factors emerge from time to time, and it is not possible for us to predict which will arise. There may be additional risks not presently known to us or that we currently believe are immaterial to our business. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, you may lose all or part of your investment.
The industry and market data contained in this report are based either on our management’s own estimates or, where indicated, independent industry publications, reports by governmental agencies or market research firms or other published independent sources and, in each case, are believed by our management to be reasonable estimates. However, industry and market data are subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market shares. We have not independently verified market and industry data from third-party sources. In addition, consumption patterns and customer preferences can and do change. As a result, you should be aware that market share, ranking and other similar data set forth herein, and estimates and beliefs based on such data, may not be verifiable or reliable.
PRESENTATION OF INFORMATION
Except as otherwise indicated by the context, references in this Report to “Rayont”, “RAYT”, “we”, “us”, “our” and the “Company” are to the combined business of Rayont Inc. and its consolidated subsidiaries.
The Company last year changed its fiscal year-end from a fiscal year ending on September 30 to a fiscal year ending on June 30. This Report includes our audited consolidated financial statements as at and for the twelve months ended June 30, 2022 and as at and for the twelve months ended June 30, 2021. These financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”). All financial information in this Report is presented in US dollars, unless otherwise indicated, and should be read in conjunction with our audited consolidated financial statements and the notes thereto included in this Report.
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PART I
ITEM 1. BUSINESS.
History and Overview
Rayont Inc., formerly known as Velt International Group Inc. was incorporated in Nevada on February 7, 2011 under the name A & C United Agriculture Developing Inc. Our current principal executive office is located at 228 Hamilton Avenue, 3rd Floor, Palo Alto, California 94301.
On February 7, 2011, Andy Liu and Charlie Huang, two founders, driven by the sense of mission and duty to provide safe, high-quality and affordable vegetable products in China for her current and future generations, formed the company in state of Nevada, USA at 2011.
On March 13, 2017, Yidan (Andy) Liu and Jun (Charlie) Huang, the principal stockholders of the Company (“Sellers”), entered into a Stock Purchase Agreement (the “Agreement”) with Chin Kha Foo, the assignee of Choa-Jung Lee, and his assigns (the “Buyers”), pursuant to which, among other things, Sellers agreed to sell to the Buyers, and the Buyers agreed to purchase from Sellers, a total of 24,000,000 shares of Common Stock of the Company of record and beneficially by Sellers (the “Purchased Shares”). The Purchased Shares represented approximately 64% of the Company’s issued and outstanding shares of Common Stock, resulting in a change of the control of the Company.
The Board of the Directors and shareholders approved the reverse split of the Company’s issued and outstanding common stock whereby each twenty shares of common stock was converted into one share of common stock. The stock split became effective with the Financial Industry Regulatory Authority (“FINRA”) on May 21, 2018.
On November 19, 2018, the Company’s principal shareholder, Mr. Chin Kha Foo (“Mr. Foo”), entered into a Stock Purchase Agreement (the “SPA”) to transfer 60% of the Company’s issued and outstanding shares to Rural Asset Management Services, Inc., a Malaysian Labuan company (“RAM”). On December 14, 2018, RAM became the principal shareholder of the Company and Mr. Ali Kasa was appointed to be the Company’s President, CEO, CFO, and Secretary of the Company due to the change in control of the Company. RAM is an equity investment company with portfolio of interest in biotechnology, healthcare, cancer treatment research and technology, ICT and Crypto Currency. RAM has invested in 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 (“THF”) and Rural, pursuant to which the Company acquired 100% of the issued and outstanding capital stock of THF in exchange for 4,000,000 shares of Company’s common stock, valued on January 22, 2019 at $1,000,000. THF is an Australian Cancer treatment and medical device company. Rural was the majority shareholder of THF. In March 2019, the acquisition of THF was completed and THF became a subsidiary of the Company. In addition, the acquisition was accounted for business combination under common control of Rural. This company was sold in September 3, 2022. THF has subsequently changed name to Rayont (Australia) Pty Ltd,
On September 7, 2019, FINRA approved name and trading symbol change. In addition to the name change the Company also commenced a significant change in corporate strategy and the future direction of the Company.
On September 30, 2020, pursuant to an Acquisition Agreement the Company acquired all of the issued and outstanding shares of Rayont International (Labuan) Inc (“RIL”), a Malaysian Offshore company as Exclusive Licensee of a Cancer Treatment technology for Sub-Sahara African Region. Under the agreement, Rayont acquired 100% of the outstanding shares of RIL in exchange for 25,714,286 shares of the Company’s common stock valued at $1.8 Million based on the closing share price on the OTC Markets on September 29, 2020.
Rayont International (Labuan) Inc is an on offshore company incorporated in Labuan, Malaysia which offers attractive 3% tax on profit. The company is a clinical-stage life sciences company that holds the exclusive license for registering and commercializing Photosoft technology for treatment of all cancers across Sub-Sahara African region. The technology has already been licensed in Australia, New Zealand, China and Malaysia. The human clinical trial efforts have started in Australia and China conducted by Hudson Medical Institute, Australian.
On August 26, 2020, the Company established Rayont Technologies Pty Ltd. (“Rayont Technologies”) through Rayont (Australia) Pty Ltd. Rayont Technologies is an Australian corporation and Internet of Things specialist providing services such as end-to-end employee engagement and experience platform for businesses in Australia and globally. Rayont Technologies engages in providing customized digital learning based on real-life and practical situations and e-learning program. This company was sold on January 31, 2022.
In order to cope with rapid growth 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 USD215,017.19 (AUD302,876.22) payable over 90 days upon Ms. Smith transferring the assets to Rayont Technologies Pty Ltd. This company 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 Hazard Analysis Critical Control Point (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. This company 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. 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 instalments after a $265,300 down payment. In the event an instalment 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 Australian 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 lieu of payment by Rayont Australia Pty Ltd of approximately $605,920 to TheAlikasa Pty Ltd as full and final payment for the acquisition of 100% of the issued and outstanding common stock of GGLG.
GGLG Properties Pty Ltd is a special purpose company to hold the property asset of Rayont (Australia) Pty Ltd. Until the 28 June 2021, GGLG Properties Pty Ltd owned the property located at 11 Aldinga Street, Brendale, 4500 QLD, Australia which is the facility where Prema Life Pty Ltd operates. With the sale of property, GGLG Properties Pty Ltd has no real assets and operations hence, it has to reinvent itself and select a business activity to focus on. 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 on December 31, 2020 incorporated Rayont Technologies (M) Sdn Bhd with a paid-up capital of $25 from Rayont Malaysia Sdn Bhd 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 two key employees and one director. 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 28,2022 is unconditional and it has been agreed to be paid on 31 January 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
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
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.
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Rayont Inc Corporate Structure
As of June 30, 2022, the company group structure consisted of the following companies:
Rayont Inc Group Products and Services
In line with our purpose “help people live healthy life”. We offer our patients and clients the following products and services:
Complementary and Alternative Medicine Contract Manufacturing
Natural Vitality Australia is an Australian boutique contract manufacturer of innovative health foods and nutraceuticals. Natural Vitality Australia has been manufacturing quality health products for over 13 years as well as producing its own brand, Wonder Foods for over 30 years.
We are an experienced, certified organic processor with a wide range of organic ingredients on offer. Natural Vitality Australia specializes in functional foods, green blends, sports nutrition, weight management/maintenance and health and wellness products.
Natural Vitality Australia offers a range of manufacturing options include powders, liquids, capsules, homeopathic, creams and ointments.
https://nva.com.au
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Prescription Only Complementary Alternative Medicine
Natura Prescriptum Medicina (NPM) is a brand of products that licensed naturopaths can prescribe to their patients. These products are manufactured at our own manufacturing facility and distributed via our distributors to pharmacies across Australia.
We have more than 2000 licensed naturopaths across Australia who carry our products and distribute it to their clients.
https://premalifeaustralia.com/product/weight-support-drops/
Complementary & Alternative Medicine E-Commerce
https://wonderfoods.com.au is an e-commerce platform that offers functional food, supplements, complementary and alternative medicine products for those who seek to improve their health naturally.
The site offers consumers a range of products made from natural organic sources of products and delivered to customers across Australia.
Telehealth Platform for Naturopaths
http://healthscript.io is a platform for complementary and alternative health on demand. The platform enables consumers to find, consult and obtain prescription from licensed naturopath’s online of from their phone.
The platform is an Australian platform for now with aspiration to become a global platform is available on website, android and IOS.
The prescriptions are digitally delivered to Premalife office and the delivered to patients with mail within 48 hours.
Health Education
https://totalvita.com.au is FREE health literacy and education website for consumers globally. The articles are written by professional medical, allied health, naturopaths and other professionals.
Cosmetics
https://www.rosanaturals.com/about/ is a cosmetic range of products sold under the brand rosa naturals. The products are manufactured at our factory and distributed online and through pharmacies across Australia. We recently acquired biomimmic skin care brand adding to our cosmetics brand. https://www.biomimicskincare.com
Remedial Massage & Myotherapy
https://nomoreknots.com.au is the largest Australian remedial massage & myotherapy offering a wide range of service to patients of various ages such as remedial massage, myotherapy, pregnancy massage, physio, osteopathy, and beauty therapy. The services are offered currently at Greenslopes, Taringa, Newmarket, and Ipswich. We are adding Clayfield as our fifth branch with aspiration to become not just an Australia wide player but a global brand.
Compounding Pharmacy
https://www.tuguncompounding.com.au is a Queensland based custom made compounding pharmacy. A growing network of practitioners across Australia supply their patients’ prescriptions to Tugun Compounding Pharmacy where they are fulfilled and custom made. The company has capabilities to produce a wide range of products including active ingredients, aesthetics and dermatology.
Skin DNA Testing
https://www.skindna.com.au is a proprietary Skin DNA testing platform and largest skin DNA profiling tool in the world. The company has its main
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Marketing and Sales
In order to become competitive in the private equity space, the Company has taken steps to establish a number of digital marketing channels namely:
| 1) | Websites. This is an effective marketing and branding tool for customers, employees and investors as well as the public educations. The Company has completed its website and updates it regularly. The following are some important websites that the Company has: |
| Company | Website | |
| Rayont Inc | https://rayont.com | |
| Wonder Foods Pty Ltd | https://wonderfoods.com.au | |
| Health Script Pty Ltd | http://healthscript.io | |
| Prema Life Pty Ltd | https://totalvita.com.au | |
| Prema Life Pty Ltd | https://www.rosanaturals.com | |
| Prema Life Pty Ltd | https://premalifeaustralia.com | |
| Prema Life Pty Ltd | https://nva.com.au | |
| The Skin DNA Pty Ltd | https://www.skindna.com.au | |
| Health Script Pty Ltd | https://www.tuguncompounding.com.au | |
| No More Knots Pty Ltd | https://nomoreknots.com.au | |
| Biomimic Pty Ltd | https://www.biomimicskincare.com |
| 2) | Social media channels The Company has set up major social media channels such as Facebook, LinkedIn and Instagram for each brand. The Company has established YouTube channels for some of the brands. These social media channels are linked and integrated with the websites. | |
| 3) | Digital and traditional advertising. The marketing infrastructure enables the Company and its subsidiaries to conduct both digital and traditional advertising activities. |
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Intellectual Property
The Company through its subsidiaries has acquired current trademarks, classes, countries registered and developed a number of intellectual properties in form of trademarks. The table below provides the list of expiry date for each trademark.
| Owner | Number | Trade Mark (Words) | Classes | Narration | Renewal Date | |||||
| Prema Life | 395814 | Bio Research | 5 | All goods in this class, particularly pharmaceutical products | 22-August-2024 | |||||
| Prema Life | 1563375 | Radico Colour Me | 3 | Hair Colours | 18-June-2023 | |||||
| Prema Life | 1563600 | Oliveheart | 5 | Dietary Food Supplement for Human Consumption | 19-June-2023 | |||||
| Prema Life | 1676868 | Liten’up | 5 | Dietary food preparations for medical use (medical food); Dietary food supplements; Dietetic food supplements adapted for medical purposes; Dietetic foods adapted for medical purposes; Dietetic foods for medicinal purposes; Dietetic foodstuffs for medical purposes; Food supplements (dietary supplements); Food supplements for medical purposes | 24-February-2025 | |||||
| Prema Life | 1708072 | BlackAqua | 5 | Dietary supplemental drinks in nature of vitamin and mineral beverages, nutritionally fortified water; energy drinks (dietary supplements); mineral supplement for humans | 17-July-2025 | |||||
| Prema Life | 1712023 | Physio-eze | 5 | Pain relieving creams | 05-August-2025 | |||||
| Prema Life | 1721405 | Macaroo | 5 | Dietary supplements; Herbal dietary supplements | 14-September-2025 | |||||
| Prema Life | 1766361 | MarineGreen Plus | 5 | Dietary food supplements; Dietary nutritional supplements; Dietary supplements; Herbal dietary supplements; Plant extracts (dietary supplements); Supplements (trace element) for foodstuffs for human consumption | 22-April-2026 | |||||
| Prema Life | 1768773 | Figalax | 5 | Dietary fiber; Dietary fibre; Dietary food supplements; Dietary protein supplements; Dietary supplements; Energy drinks (dietary supplements) | 04-May-2026 | |||||
| Prema Life | 1836265 | NPM | 35 | Brand creation services | 05-April-2027 | |||||
| Prema Life | 1836266 | Bio Activ | 35 | Brand creation services | 05-April-2027 | |||||
| Prema Life | 1836267 | Sun Ray Health & Botanicals | 35 | Brand creation services | 05-April-2027 | |||||
| Prema Bros | 1837211 | Prema | 29 | Extra-virgin olive oil; Fish in olive oil; Olive oil; Olive oil dip; Olive oil for food | 7 Aril 2027 |
Complementary and Alternative Medicine Manufacturing Industry
Maintaining health and well-being has moved to the forefront of Australian’s minds as the COVID-19 epidemic has swept across the globe. This has led to a surge in consumer demand for health and wellbeing products in tandem with an increased awareness of naturopath remedies.
Technological advancement has lagged the industry average in the supplements sector, though projected growth and increased demand will force the industry to adapt and invest into technological and productive innovation.
Overall, success in the vitamin and supplement industry is characterized by three attributes: low revenue concentration, high Asian demand and economies of scale.
A well-positioned firm would optimally take advantage of these factors by expanding internationally and producing high volumes to minimize marginal costs and maximise profits before established players can collect a market share too large to appropriate.
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Vitamin & Supplement Manufacturing Industry
Source: https://www.grandviewresearch.com/industry-analysis/dietary-supplements-market
Vitamin and Supplement Manufacturing in Australia - Market Size 2007–2028
Source: https://www.ibisworld.com/au/market-size/vitamin-supplement-manufacturing
The Vitamin & Supplement Manufacturing industry has grown at a faster rate than the Consumer Goods & Services sector in Australia.
Vitamin & Supplement Market Segmentation
Major Players in Australia
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| No | Industry Players | Description | Market Share | |||
| 1 | Blackmore Ltd
|
Blackmores Ltd is Australia’s leading natural health company. Founded by Maurice Blackmore, the company is listed on ASX and operates in Australia and globally. Blackmore has developed high quality products and services that deliver a more natural approach to health, based on our expertise in vitamins, minerals, herbs and nutrients. |
5.9% | |||
| 2 | Nature`s Care Pty Ltd
|
Nature`s Care Pty Ltd was founded in Sydney in 1990. The company manufactures and distributes health supplements throughout Australia and globally. | 6.9% | |||
| 3 | Pharmacare Laboratories Pty Ltd
|
Pharmacare Laboratories Pty Ltd is an Australian based natural health company that manufactures and distributes products across Australia and globally. |
5.7% |
Key Global Markets Overview
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Government Regulations
Certain aspects of our business activities are regulated by different government regulations in different countries we operate. Given the nature of business operations of Rayont Inc and its subsidiaries, the laws and regulations application are:
| ● | The standards in the Australia New Zealand Food Standards Code are legislative instruments under the Legislation Act 2003. Most of products we manufacture and distribute are classifies as food in Australia and New Zealand. |
| ● | Therapeutic Goods Administration (TGA) is Australia’s government authority responsible for evaluating, assessing and monitoring products that are defined as therapeutic goods. It regulates medicines, medical devices and biologicals to help Australians stay healthy and safe. A significant portion of products we manufacture and distribute as classified as medicine and hence require medical doctor’s prescriptions to be sold to consumers. |
Employees
As of June 30, 2022, the Group of Rayont has 58 employees of which:
| Company | Number of Employees | |
| Prema Life Pty Ltd | 21 | |
| No More Knots Pty Ltd | 14 | |
| No More Knots Holdings Pty Ltd | 2 | |
| No More Knots (Taringa) Pty Ltd | 4 | |
| No More Knots (Newmarket) Pty Ltd | 5 | |
| Wonder Foods Retail Pty Ltd | 8 | |
| Rayont (Australia) Pty Ltd | 2 | |
| Rayont Inc | 2 | |
| Total | 58 |
All of whom performed operational, technical and administrative functions. No payroll will be paid to the employees from Rayont Inc before the Company generates net profits. We believe our future success will depend to a large extent on our continued ability to attract and retain highly skilled and qualified employees. We consider our employee relations to be good. None of these employees belong to labour unions.
ITEM 1A. RISK FACTORS.
Not Applicable to smaller reporting companies.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
Not Applicable to smaller reporting companies.
ITEM 2. PROPERTIES.
Our executive office address is located at 228 Hamilton Avenue, 3rd Floor, Palo Alto, California 94301. The lease for this facility is $2,100 yearly. The other subsidiaries of the group operate in properties owns from the group or by lease as explained below:
| ● | Prema Life Pty Ltd owns the property located at 32 French Avenue, Brendale QLD 4500, Australia. This property was bought in June 28, 2021. It consists of 2720m2 land and Building 1760m2. | |
| ● | Rayont (Australia) Pty Ltd owns the property located at 900 Sandgate Road, Clayfield QLD, 4011, Australia. This property was bought in September 23, 2021. It consists of 607m2 land and Building 445m2. | |
| ● | Rayont Properties Pty Ltd owns two properties. The first is located at 85 Juliette St, Greenslopes (lot 272) QLD 4120, Australia. This property was bought in May 4, 2022. It consists of 405m2 land and Building 280m2. The second is located at 44 Marquis Street, Greenslopes (lot 280) QLD 4120, Australia. This property was bought in May 4, 2022. It consists of 405m2 land and Building 115m2. | |
| ● | No More Knots (Newmarket) Pty Ltd is lessee for the property located at 285-287 Enoggera Road, Newmarket, Qld, 4051, Australia. The lease for this facility is $57,441 yearly. Term of lease is for five years. | |
| ● | No More Knots (Taringa) Pty Ltd is lessee for the property located at 215 Moggill Road, Taringa QLD 4068, Australia. The lease for this facility is $57,911yearly. Term of lease is for five years. | |
| ● | Wonder Foods Retail Pty Ltd is lessee for the property located at Unit 6, 3986-3988 Pacific Highway, Loganholme QLD 4129, Australia. The lease for this facility is $46,671 yearly. Term of lease is for five years. |
We believe that our facilities are suitable and adequate for their intended use.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not Applicable.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market for Common Equity
Our common stock is quoted on the OTC Market Pink Sheet (“OTC PINK”) under the symbol “RAYT”. The following table sets forth the high and low bid prices for our common stock for the two most recently completed fiscal years. Such prices are based on inter-dealer prices, without retail mark-up, markdown or commission, and may not necessarily represent actual transactions.
| Fiscal 2019 | Low | High | ||||||
| First Quarter | $ | 0.29 | $ | 0.34 | ||||
| Second Quarter | $ | 0.23 | $ | 0.75 | ||||
| Third Quarter | $ | 0.20 | $ | 0.51 | ||||
| Fourth Quarter | $ | 0.33 | $ | 0.50 | ||||
| Fiscal 2020 | Low | High | ||||||
| First Quarter | $ | 0.09 | $ | 0.50 | ||||
| Second Quarter | $ | 0.09 | $ | 0.51 | ||||
| Third Quarter | $ | 0.05 | $ | 0.50 | ||||
| Fourth Quarter | $ | 0.07 | $ | 0.07 | ||||
| Fiscal 2021 | Low | High | ||||||
| First Quarter | $ | 0.07 | $ | 1.45 | ||||
| Second Quarter | $ | 1.13 | $ | 2.65 | ||||
| Third Quarter | $ | 1.50 | $ | 3.02 | ||||
| Fiscal 2022 | Low | High | ||||||
| First Quarter | $ | 0.24 | $ | 2.98 | ||||
| Second Quarter | $ | 2.5 | $ | 2.74 | ||||
| Third Quarter | $ | 0.44 | $ | 2.5 | ||||
| Fourth Quarter | $ | 0.8 | $ | 1.95 | ||||
Penny Stock Considerations
The trading of our common stock is deemed to be “penny stock” as that term is generally defined in the Securities Exchange Act of 1934 to mean equity securities with a price of less than $5.00. Our shares thus are subject to rules that impose sales practice and disclosure requirements on broker-dealers who engage in certain transactions involving a penny stock.
Under the penny stock regulations, a broker-dealer selling a penny stock to anyone other than an established customer or accredited investor must make a special suitability determination regarding the purchaser and must receive the purchaser’s written consent to the transaction prior to the sale, unless the broker-dealer is otherwise exempt. Generally, an individual with a net worth in excess of $1,000,000 or annual income exceeding $100,000 individually or $300,000 together with his or her spouse is considered an accredited investor. In addition, under the penny stock regulations the broker-dealer is required to:
| ● | Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt; | |
| ● | Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities; | |
| ● | Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and | |
| ● | Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account. |
Because of these regulations, broker-dealers may encounter difficulties in their attempt to buy or sell shares of our common stock, which may affect the ability of selling stockholders or other holders to sell their shares in the secondary market and have the effect of reducing the level of trading activity in the secondary market. These additional sales practice and disclosure requirements could impede the sale of our common stock in the market place. In addition, the liquidity for our common stock may be decreased, with a corresponding decrease in the price of our common stock. Our shares are likely to be subject to such penny stock rules for the foreseeable future.
Common Stock Currently Outstanding
As of December 28, 2022, 50,163,797 shares were issued and outstanding.
Holders
As of the date of this Report, we had approximately 587 stockholders of record of our common stock.
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Dividends
We have not declared any cash dividends on our common stock since our inception and do not anticipate paying any dividends in the foreseeable future. We plan to retain future earnings, if any, for use in our business. Any decisions as to future payments of dividends will depend on our earnings and financial position and such other facts, as the Board of Directors deems relevant.
Reports to Stockholders
We are currently subject to the information and reporting requirements of the Securities Exchange Act of 1934 and will continue to file periodic reports, and other information with the SEC. We intend to send annual reports to our stockholders containing audited financial statements.
Transfer Agent
Pacific Stock Transfer Company located at 6725 Via Austi Pkwy., Suite 300, Las Vegas, NV 89119 is the transfer agent for our common stock.
Recent Sales of Unregistered Securities
During July 1, 2021 to June 30, 2022, the Company sold 49,114 shares of common stock to 2 independent investors pursuant to a private placement; 16,614 shares at $2.21; 32,500 shares at $2.20 for a total amount of $108,217.
The Company relied upon Section 4(2) and Regulation S of the Securities Act of 1933, as amended, for the sale of these securities. No commissions were paid regarding the share issuance and the shares were issued in a book entry form with a Rule 144 restrictive legend.
Issuer Purchases of Equity Securities
None
Additional Information
Copies of our annual reports on Form 10−K, quarterly reports on Form 10−Q, current reports on Form 8−K, and any amendments to those reports, are available free of charge on the Internet at www.sec.gov. All statements made in any of our filings, including all forward-looking statements, are made as of the date of the document, in which the statement is included, and we do not assume or undertake any obligation to update any of those statements or documents unless we are required to do so by law. The reports are also available on our corporate website at https://www.rayont.com. Upon written or oral request, we will provide to each person, including any beneficial owner, a copy of any or all of such reports, at no cost.
ITEM 6. SELECTED FINANCIAL DATA.
Not Applicable to smaller reporting companies.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
This Annual Report contains “forward-looking statements” that describe management’s beliefs and expectations about the future. We have identified forward-looking statements by using words such as “anticipate,” “believe,” “could,” “estimate,” “may,” “expect,” and “intend,” or words of similar import. Although we believe these expectations are reasonable, our operations involve a number of risks and uncertainties and actual results may be materially different than our expectations.
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.
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-K.
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 28,2022 is unconditional and it has been agreed to be paid on 31 January 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.
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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
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
For the twelve months ended June 30, 2022 and 2021
Revenue
There were $2,839,357 and $2,969,599 revenue generated for the twelve months ended June 30, 2022 and 2021, respectively. The revenues were attributable to revenues generated from digital learning solutions provided by Rayont Technologies in Australia, and the revenues generated from Prema Life, No More Knots, No More Knots (Taringa), No More Knots (Newmarket) and Wonder Foods in Australia. The Company continues looking for other opportunities which could potentially increase the profits of the Company.
Cost of Goods Sold
There were $1,456,733 and $1,221,026 cost of goods sold for the twelve months ended June 30, 2022 and 2021, respectively. The increase was attributable to costs incurred by Prema Life in Australia.
Operating Expense
Our operating expenses consist of selling, general and administrative expenses, depreciation and amortization expense.
For the twelve months ended June 30, 2022 and 2021, there were a total of $2,868,918 and $2,410,075 operating expenses, respectively. The increase was primarily due to the salary expenses incurred for the operating subsidiary, Rayont Technologies, the operating expenses generated from Prema Life as for the twelve months ended June 30, 2022, as well as the increase in the depreciation and amortization expense due to the existing and new intangible and tangible assets acquired. The Company recorded the amortization expense for intangible asset “Exclusive license for registering and commercializing PhotosoftTM technology” that was the biggest intangible asset of the Company.
Other Income
Other income was $2,370,877 and $953,709 for the twelve months ended June 30, 2022 and 2021, respectively. The increase was attributable to sale of the equipment for the cancer treatment in the amount of $385,361; to sale of the Next Generation Photo Dynamic Therapy (NGPDT) License for Sub-Sahara Africa in the amount of $ 1,071,430.59. Whilst, USD353,194 arose due to tax incentive/grant obtained in relation to approved research and development activities carried out. Other income is generated from the sale of the subsidiary Rayont Technologies Australia in the amount of $668,174 and $39,975 from the sale of Rayont Technologies in Malaysia. In addition, debt forgiven in the amount of $167,124. The amount of $314,382 is deducted from Other income as a result of the sale of two subsidiaries Rayont Technologies Malaysia and Rayont Technologies Australia in the consolidation of the financial statements of the group.
The amount of USD 298,418 was attributable to differences between seller and purchase price of the property that GGLG Properties Pty Ltd sold on June 29, 2021. 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 USD476,594.32 (AUD632,393) for purchase consideration of USD228,258.35 (AUD302,876). The income from this transaction is $244,376. Whilst, USD185,539 arose due to tax incentive/grant obtained in relation to approved research and development activities carried out. The amount of $225,376 was mainly due to tax incentive/grant obtained in relation to approved research and development activities carried out, due to ATO COVID19 Job Seeker, Cash Flow Boost incentives from Australian Government.
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Net Income (Loss)
We had a net income of $244,858 and of $ 383,884 for the twelve months ended June 30, 2022 and June 30, 2021 respectively based on the factors discussed above.
Liquidity and Capital Resources
As of June 30, 2022 and As of June 30, 2021, the Company had working capital deficit of $83,884 and $1,456,964, respectively.
The deficit is attributable to loans due to a related party of $ 128,677 and $387,238, accounts payable of $384,355 and $99,615, accrued liabilities of $470,689 and $472,021, loan payable of $2,481,440 and $2,051,554, other payables of $278,800 and $209,712 and finance lease of $10,983 and $8,188, operating lease liabilities of $ 112,333 and $0 at June 30, 2022 and June 30, 2021, respectively.
As of June 30, 2022 and June 30, 2021, the Company had $3,783,393 and $1,771,364 in current assets, respectively.
As of June 30, 2022 and June 30, 2021, we had a cash and equivalents balance of $185,782 and $243,610, respectively. The Company’s operations are primarily funded by the revenue, other income, proceeds received from the sale of common stock in private placements and loans received during those periods.
Cash Flows from Operating Activities
Net cash used in operating activities was $169,145 for the twelve months ended June 30, 2022 compared with net cash used in operating activities of $187,493 for the twelve months ended June 30, 2021. During the twelve months ended June 30, 2022, the net cash used in operating activities was attributed to net income of $244,858, offset by depreciation and amortization expense of $485,830, non-cash portion of share based compensation for service of $61,500, gain on sale of assets of $1,456,792, gain on sale of investment of $310,277, debt waiver in the amount of $167,124 an decrease in accounts receivable of $335,759, an increase in inventory of $53,913, an increase in accounts payable of $307,322, an increase in accrued liabilities of $28,968, an increase in prepaid expense of $61,619, an decrease in other receivables of $160,024, an decrease in other assets of $14,639 and an increase in other payable of $241,680.
During the twelve months ended June 30, 2021, the net cash used in operating activities was attributed to net loss of $383,884, offset by depreciation and amortization expense of $454,508, gain on sale of assets of $244,376 an increase in accounts receivable of $343,432, an increase in inventory of $152,984, an decrease in accounts payable of $9,454, an increase in accrued liabilities of $129,701, an increase in prepaid expense of $23,719, an decrease in advance to officer of $2,219, an increase in other assets of $46,788, a increase in other receivables of $322,358, an decrease in other payable of $14,694.
Cash Flows from Investing Activities
Net cash used in investing activities was $5,229,238 for the twelve months ended June 30, 2022 compared with net cash used in investing activities of $1,845,552 for the twelve months ended June 30, 2021.
During the twelve months ended June 30, 2022, the net cash used in investing activities was attributed to the purchases of intangible assets of $188,480, purchases of property and equipment of $3,191,324, acquisition of subsidiaries, net of cash and cash equivalents of $1,849,434.
During the twelve months ended June 30, 2021, the net cash used in investing activities was attributed to the purchases of property and equipment of $1,720,498, purchases of intangible assets of $126,136, cash from acquisition of $1,082.
Cash Flow from Financing Activities
We generated cash in financing activities during the twelve months ended June 30, 2022 and 2021 of $5,334,858 and $2,031,580, respectively, from issuance of common stock in the amount of $108,217 and $701,988 respectively, proceeds from loan payable in the amount of $5,519,604 and $1,562,712, respectively, repayment to related party in the amount of $292,963 and $233,120, respectively.
Non-Cash Investing and Financing Activities
During the twelve months ended June 30, 2022, issuance of common stock for services in the amount of the $61,500, Issuance of common stock for Business acquisitions in the amount of $ 618,320, Issuance of common stock for acquisition of a property in the amount of $1,159,040.
During the twelve months ended June 30, 2021, the related party debt in the amount of $ 2,016,363 was forgiven and recorded to additional paid in capital, issuance of common stock for business acquisitions in the amount of $1,800,000.
Equity and Capital Resources
We have created income for the year ended June 30, 2022 and had an accumulated deficit of $3,634,943 as of June 30, 2022. As of June 30, 2022, we had cash of $185,782 and a working capital deficit of $83,884, compared to cash of $243,610 and a working capital deficit of $1,456,964 as of June 30, 2021.
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We had material commitments for capital expenditures as of June 30, 2022. 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 Form 10-K, 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
Under SEC regulations, we are required to disclose off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, such as changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. An off-balance sheet arrangement means a transaction, agreement or contractual arrangement to which any entity that is not consolidated with us is a party, under which we have:
| ● | Any obligation under certain guarantee contracts, | |
| ● | Any retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets, | |
| ● | Any obligation under a contract that would be accounted for as a derivative instrument, except that it is both indexed to our stock and classified in shareholder equity in our statement of financial position, and | |
| ● | Any obligation arising out of a material variable interest held by us in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us, or engages in leasing, hedging or research and development services with us. |
We do not have any off-balance sheet arrangements that we are required to disclose pursuant to these regulations.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable to smaller reporting companies.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF JUNE 30, 2022 AND 2021
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of
Rayont Inc.
228 Hamilton Avenue
3rd Floor
Palo Alto, California 94301
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Rayont Inc. (the ‘Company’) as of June 30, 2022 and 2021, and the related consolidated statements of operations and comprehensive income/(loss), stockholders’ equity, and cash flows for each of two years in the year ended of June 30, 2022 and 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2022 and 2021, and the results of its operations and its cash flows for each of two years in the year ended June 30, 2022 and 2021, in conformity with accounting principles generally accepted in the United States of America.
Going Concern
The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s current liabilities exceeded its current assets by $83,884 and had an accumulated loss of $3,634,943. Furthermore, the Company incurred a negative cash flow from operating activities of $169,145 during the year. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
| F-2 |
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to those charged with governance that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Review of restriction imposed by bank covenants
The Company has a total loan payable of $7,293,415 and $2,233,833 as of June 30, 2022 and June 30, 2021, as disclosed in the consolidated financial statements, representing approximately 80% and 65% of the total group’s liabilities for respective financial year.
During the year, the subsidiaries of the group have obtained loans to re-finance its existing borrowings from private lenders and to finance the merger and acquisition of subsidiaries, the bank has imposed bank covenants and undertaking, including fulfillment of the financial ratio.
Our audit procedures in this area included the following, among others:
| a) | Obtained and reviewed the bank offer letters and understanding the conditions imposed by the bank; |
| b) | Examined the management’s assessment of the fulfilment of covenants imposed by the bank; |
| c) | Assessed the appropriateness of the management’s evaluation of the breaches of covenants; |
| d) | Evaluated the adequacy of the evidence obtained and the appropriateness of loans classification; |
| e) | Assessed the adequacy of the disclosure in the financial statements. |
Business combination | |
The Company has a goodwill of $1,866,708 and $nil as of June 30, 2022 and June 30, 2021, as disclosed in the consolidated financial statements, representing 13% and -% of the total group’s assets for respective financial year. The goodwill arises from the acquisition of subsidiaries during the financial year and the Company accounted these transactions as a business combination in accordance with the applicable standard. We identified this as the critical audit matter given to the magnitude and complexity of the goodwill recognition and measurement. | |
Our procedures in this area included the following, among others: |
| a) | Obtained understanding of terms and conditions of the acquisition as stipulated in the agreements; | |
| b) | Evaluated the appropriateness of the accounting treatment in relation to the business combination; | |
| c) | Evaluated the management’s assessment and the judgement made in relation to the goodwill impairment test; | |
| d) | Evaluated the adequacy of the evidence obtained and the appropriateness of the judgment made; | |
| e) | Assessed the adequacy of the disclosure in the financial statements. |
| /s/ JP CENTURION & PARTNERS PLT | |
| JP CENTURION & PARTNERS PLT | |
| We have served as the Company’s auditor since 2020. | |
| December 28, 2022 | |
| F-3 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| June 30, 2022 | June 30, 2021 | |||||||
| (Audited) | (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 June 30, 2022 and June 30, 2021, respectively | $ | $ | ||||||
| Preferred stock, $ par value; shares authorized; share issued and outstanding | ||||||||
| Additional paid-in capital | ||||||||
| Shares to be issued | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | ||||||
| F-4 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME / (LOSS)
(UNAUDITED)
| Restated | ||||||||
Year ended June 30, 2022 | Year ended June 30, 2021 | |||||||
| 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 | ||||||||
| Income before income taxes | ||||||||
| Income tax expense | ( | ) | ||||||
| Net income | $ | $ | ||||||
| Other comprehensive items | ||||||||
| Foreign currency translation loss | ( | ) | ( | ) | ||||
| Total other comprehensive loss | ( | ) | ( | ) | ||||
| Total comprehensive income | ||||||||
| Less: comprehensive income attributable to noncontrolling interest | ||||||||
| Total Comprehensive income attributable to shareholders of the Company | $ | $ | ||||||
| Weighted average shares, basic and diluted | ||||||||
| Net earnings per common share, basic and diluted | $ | $ | ||||||
| F-5 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Accumulated | ||||||||||||||||||||||||||||||||
| Additional | Stock | Stock | Other | |||||||||||||||||||||||||||||
| Common Stock | Paid-In | Subscriptions | To Be | Accumulated | Comprehensive | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Issued | Deficit | Income / (Loss) | Total | |||||||||||||||||||||||||
| For the twelve months ended June 30, 2021 | ||||||||||||||||||||||||||||||||
| Balance as of June 30, 2020 | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Common Stock issued for business acquisition of a subsidiary under common control | ||||||||||||||||||||||||||||||||
| Common Stock issued for cash | ||||||||||||||||||||||||||||||||
| Adjustments to additional paid in capital from acquisitions | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Debt forgiveness | - | |||||||||||||||||||||||||||||||
| Common Stock to be issued | - | |||||||||||||||||||||||||||||||
| Foreign currency translation loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net income for the twelve months ended June 30, 2021 | - | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2021 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| For the twelve months ended June 30, 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 services | ||||||||||||||||||||||||||||||||
| Common Stock issued for cash | ||||||||||||||||||||||||||||||||
| Adjustments to additional paid in capital from acquisitions | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Foreign currency translation loss | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Net income for the 12 months ended June 30, 2022 | - | |||||||||||||||||||||||||||||||
| Balance as of June 30, 2022 | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| F-6 |
RAYONT INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Restated | ||||||||
Year ended June 30, 2022 | Year ended June 30, 2021 | |||||||
| Operating Activities: | ||||||||
| Net income | $ | $ | ||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
| Non-cash portion of share based compensation for service | ||||||||
| Depreciation and amortization expense | ||||||||
| Gain on Disposal of Investments | ( | ) | ||||||
| Gain on sale of assets | ( | ) | ( | ) | ||||
| Debt waiver by payable | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ||||
| Accounts payable | ( | ) | ||||||
| Accrued liabilities | ||||||||
| Prepaid expense | ( | ) | ( | ) | ||||
| Advance to officer | ||||||||
| Other assets | ( | ) | ||||||
| Other receivables | ( | ) | ||||||
| Other payable | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| Investing Activities: | ||||||||
| Cash from acquisition | ||||||||
| 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: | ||||||||
| Repayment to 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 for acquisition of a property | $ | $ | ||||||
| Forgiveness of debt | $ | $ | ||||||
| F-7 |
RAYONT INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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.
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 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.
| F-8 |
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
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.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the financial statements of the Company and its subsidiary. All significant inter-company balances and transactions have been eliminated on consolidation.
| 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’s current liabilities
exceeded its current assets by $
The Company generated revenues to cover its operating expense during the year ended June 30, 2022. 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 one customer who accounted for 10% or more of the Company’s accounts receivable for the year ended June 30, 2022 and there is one customer who accounted for 10% or more of the Company’s accounts receivable for the year as of June 30, 2021.
There
is no supplier who accounted for
Fair Value of Financial Instruments
The carrying amounts of the Company’s current financial assets and liabilities approximated their fair values due to the short maturities. The fair value of noncurrent financial assets and liabilities are determined based on the value of the discounted cash flows. The Company believes no material difference exists between the fair value and carry amounts of the noncurrent financial assets and liabilities
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 June 30, 2022 and June 30, 2021, the Company had cash in bank of $
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 June 30, 2022 and June 30, 2021, 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
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 June 30, 2022, 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 years ended June 30, 2022 and June 30, 2021, no impairment of long-lived assets was indicated, and no impairment loss was recorded.
| F-10 |
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:
Digital Learning Solutions:
Revenue from digital learning solutions is recognized when control has transferred to the customer which typically occurs when the service is completed or the delivery of the license to the customer.
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.
| F-11 |
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 June 30, 2022 and 2021.
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 maintains its 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$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income.
Translation
of amounts from the local currency of the Company into US$
| As of and for the 12 months ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Year-end AUD : US$1 exchange rate | ||||||||
| 12 months average AUD : US$1 exchange rate | ||||||||
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 June 30, 2022 and June 30, 2021, inventories were composed of the following:
| June 30, 2022 | June 30, 2021 | |||||||
| Raw materials | $ | $ | ||||||
| Working in progress | ||||||||
| Finished goods | ||||||||
| Total inventories | $ | $ | ||||||
NOTE 4 – PROPERTY AND EQUIPMENT, NET
As of June 30, 2022 and June 30, 2021, property and equipment consisted of the following:
| June 30, 2022 | June 30, 2021 | |||||||
| Land | $ | $ | ||||||
| Building | ||||||||
| Leasehold improvements | ||||||||
| Laser equipment | ||||||||
| Vehicle | ||||||||
| Computer equipment | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
| F-12 |
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 $
During
the twelve months ended June 30, 2022 and 2021, the depreciation expenses were $
| F-13 |
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
As of June 30, 2022 and June 30, 2021, intangible assets, consisted of the following:
| June 30, 2022 | June 30, 2021 | |||||||
| Exclusive license for registering and commercializing PhotosoftTM technology | $ | $ | ||||||
| Trademark, website, software | ||||||||
| Total | ||||||||
| Less: accumulated amortization | ( | ) | ||||||
| Total intangible assets, net | $ | $ | ||||||
For
the twelve months ended June 30, 2022 and 2021, the amortization expenses were $
NOTE 6 – ACCOUNTS PAYABLE
Accounts payable are amounts billed to the Company by suppliers for goods and services in the ordinary course of business. All amounts have short-term repayment terms and vary by supplier.
As
of June 30, 2022 and June 30, 2021, the Company had outstanding balances of $
| F-14 |
NOTE 7 – LOAN PAYABLE
As of June 30, 2022 and June 30, 2021, loans payable, consisted of the following:
| Current loan payable: | June 30, 2022 | June 30, 2021 | ||||||
| Mortgage loan | $ | $ | ||||||
| COVID-19 loan | ||||||||
| Loan - Mazars (Quickfee) | ||||||||
| Note payable -1800 Diagonal | ||||||||
| Lydia Loh Holdings Loan | ||||||||
| Loan - Trevor Townsend | ||||||||
| HP Liability - Label Applicator | ||||||||
| Attvest Insurance Loan | ||||||||
| Loan - Biz Cap | ||||||||
| Loan Kelly Townsend | ||||||||
| Total current loan payable | $ | $ | ||||||
| Non-current loan payable: | ||||||||
| Mortgage loan | ||||||||
| Total non-current loan payable: | $ | $ | ||||||
| Total loan payable | $ | $ | ||||||
Mortgage loan
On
June 26, 2020, the Company’s subsidiary obtained a mortgage loan of $
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 $
| F-15 |
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
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
Restriction imposed by from Commonwealth Bank covenants
Commonwealth Bank has imposed financial covenants to the subsidiaries of the group for its mortgage loans obtained from the Bank, however, certain subsidiaries’ financial position and performance do not meet with these requirements for the year ended June 30, 2022. During the periodic review by the Bank for the period ended June 30, 2022, the Bank has agreed and satisfied with the undertaking by the Company’s Director and on the conditions met at overall consolidated results of the subsidiaries. Consequently, the Company has assessed and determined that financial covenants required were adhered with additional circumstances being addressed as at balance sheet date and therefore has no perform further adjustment or reclassification.
As
of June 30, 2022 and June 30, 2021 the Company had outstanding current balances of $
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
Interest
and outstanding principal, subject to adjustment, shall be paid in ten (10) payments each in the amount of $
| F-16 |
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
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
No
More Knots (Taringa) Pty Ltd has received on May 12, 2022 one 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
Prema
Life Pty Ltd has received on April 21, 2022 one private loan in the amount of USD
For
the 12 months ended June 30, 2022 and 2021 the interest expenses were $
| F-17 |
NOTE 8 – FINANCE LEASE PAYABLE
| Current finance lease: | June 30, 2022 | June 30, 2021 | ||||||
| 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 obtained a Finance Lease for vehicle in the amount of $
Finance lease activity is included in property and equipment, net.
| F-18 |
NOTE 9 – CONCENTRATION
(a) Major Customers
At
June 30, 2022 and June 30, 2021, one major customer represented approximately
(b) Major Suppliers
At June 30,
2022 and June 30, 2021 there was no supplier who accounted for
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 | |
| Rural Asset Management Services, Inc. (“Rural”) | One of major shareholder of Rayont Inc | |
| TheAlikasa (Australia) Pty Ltd | Common director / shareholder of the Company | |
| Blue Pacific Academy | Entity under the same beneficial owner/ common directors | |
| Health Script Pty Ltd | Entity under the same beneficial owner/ common directors | |
| Accounting Business Solutions 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
| June 30, 2022 | June 30, 2021 | |||||||
| TheAliKasa Australia Pty Ltd | $ | $ | ||||||
| Rural Asset Management Services | ||||||||
| Blue Pacific Academy | ||||||||
| Health Script Pty Ltd | ||||||||
| Total | $ | $ | ||||||
As
of March 31, 2022 and June 30, 2021, Rayont International (L) had loans receivable of $
As
of March 31, 2022 and June 30, 2021, Rayont International (L) Ltd had loans receivable of $
As
of June 17, 2022 and June 30, 2021, Rayont (Australia) Pty Ltd has loans receivable of $
As
of June 30, 2022 and June 30, 2021, Prema Life Pty Ltd and Wonder Foods Pty Ltd had amount receivable of $
| F-19 |
Amounts due to related parties
As of June 30, 2022 and June 30, 2021, the Company had amount due to related parties as follows:
| June 30, 2022 | June 30, 2021 | |||||||
| Accounting Business Solutions Pty Ltd | $ | $ | ||||||
| Abrar Investments Pty Ltd | ||||||||
| Director’s loan | ||||||||
| Tasman Accounting Pty Ltd | ||||||||
| Ventis Partners Pty Ltd | ||||||||
| Total | $ | $ | ||||||
On
August 1, 2021 the director has given a loan amount of $
On
May 4, 2022 the Ventis Partners Pty Ltd has given a loan amount of $
On
June 5, 2022 the Tasman Accounting Pty Ltd has given a loan amount of $
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 – STOCK-BASED COMPENSATION
The Company accounts for stock issued for services using the fair value method in accordance with ASC 718, Stock-Based Compensation, the measurement date of shares issued for services is the grant date.
On December 19, 2018, the Company issued shares of its common stock to a consultant for services rendered to the Company at $ per share.
On January 14, 2019, under the Company’s 2019 Equity Incentive Plan, the Company issued an aggregate of shares to a consultant for services rendered to the Company $per share.
On January 30, 2019, the Company issued shares of its common stock to a consultant for services rendered to the Company at $ per share.
On January 30, 2019, the Company issued shares of its common stock to a consultant for services rendered to the Company at $ per share.
On January 31, 2019, the Company issued shares of its common stock to a consultant for services rendered to the Company at $ per share.
On January 31, 2019, the Company issued shares of its common stock to a marketing staff for marketing services rendered to the Company at $ per share.
On February 11, 2019, the Board of Directors authorized the issuance of shares of the Company’s common stock to its prior President, for services rendered at $ per share.
| F-20 |
On April 8, 2019, the Company issued shares of its common stock to one consultant for services rendered to the Company at $ per share.
On April 26, 2019, the Company issued shares of its common stock to one consultant for services rendered to the Company at $per share.
On April 8, 2020, under the Company’s 2019 Equity Incentive Plan, the Company issued an aggregate of shares of its common stock to one former officer, the CEO of the Company and one consultant for services rendered to the Company at per shares.
The Company did not record the compensation cost for services for the twelve months ended June 30, 2021.
In addition, the Company accounts for stock issued for business acquisition using the fair value method. The measurement date of shares issued for acquisition is the grant date.
On September 30, 2020, the Company issued shares of its common stock to Taleo Holdings (L) Ltd for acquisition of Rayont International (L) Limited at $ per share based on the closing share price on the OTC Markets on September 29, 2020.
On July 17, 2021, the Company issued shares of its common stock to TheAliKasa (Australia) Pty Ltd for acquisition of business from Rayont (Australia) Pty Ltd. at $ per share based on the closing share price on the OTC Markets on July 17, 2021.
On September 23, 2021, the Company issued shares of its common stock to AMH Corporate Pty Ltd for acquisition of property from Rayont (Australia) Pty Ltd. at $ per share based on the closing share price on the OTC Markets on September 23, 2021.
On December 16, 2021, the Company issued shares of its common stock to Board of Directors for their services provided to Rayont group at $ per share based on the closing share price on the OTC Markets on December 16, 2021.
On March 31, 2022, the Company issued shares of its common stock to Board of Directors for their services provided to Rayont group at $ per share based on the closing share price on the OTC Markets on March 31, 2022.
On June 2, 2022, the Company issued shares of its common stock to Board of Directors for their services provided to Rayont group at $ per share based on the closing share price on the OTC Markets on June 2, 2022.
The Company relied upon Section 4(2) and Regulation D of the Securities Act of 1933, as amended, for the issuances of the securities listed above. No commissions were paid regarding the share issuance and the share certificates were issued with a Rule 144 restrictive legend.
| F-21 |
NOTE 12 - INCOME TAXES
The income before income taxes of the Company for the years ended June 30, 2022 and 2021 were comprised of the following:
| For the years ended June 30 | ||||||||
| 2022 | 2021 | |||||||
| Tax jurisdictions from: | ||||||||
| – Local | $ | ( | ) | $ | ( | ) | ||
| – Foreign, representing: | ||||||||
| Australia | ( | ) | ||||||
| Malaysia | ( | ) | ||||||
| Income before income taxes | $ | $ | ||||||
Provision for income taxes consisted of the following:
| For the years ended June 30 | ||||||||
| 2022 | 2021 | |||||||
| Current: | ||||||||
| – Local | $ | $ | ||||||
| – Foreign: | ||||||||
| Australia | ||||||||
| Malaysia | ||||||||
| Deferred: | ||||||||
| – Local | ( | ) | ( | ) | ||||
| – Foreign, representing: | ||||||||
| Australia | ( | ) | ||||||
| Malaysia | ( | ) | ||||||
| Changes in valuation allowance | ||||||||
| Income tax expense | $ | $ | ||||||
The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. During the periods presented, the Company has a number of subsidiaries that operates in different countries and is subject to tax in the jurisdictions in which its subsidiaries operate, as follows:
United States of America
The Tax Act reduces the U.S.
statutory corporate tax rate from
Malaysia
Rayont (Malaysia) Sdn Bhd
is subject to the Malaysia Corporate Tax Laws at a two tier corporate income tax rate based on amount of paid up capital. The 2022 tax
rate for company with paid-up capital of MYR
Rayont International (L)
is subject to the Labuan Corporate Tax Laws, that is 3% of audited net profits for trading activity and zero percent for non-trading activity,
conditional upon fulfilling the substance requirements under the Labuan Business Activity Tax Act, 1990. Failure of fulfilling the substance
requirements, Labuan entity will be taxed at
For the year ended June 30,
2022, Rayont (Malaysia) Sdn Bhd generated a profit of $
As of June 30, 2022, the
operations in Malaysia generated $
| F-22 |
Australia
The Australian Income Tax
had significant changes progressively since 30 June 2017. The rate was previously
The Base Rate entity company tax rate can take advantage of the lower tax rate, and must meet the following condition.
A company is a base rate entity for an income year if:
| ● | the company’s aggregated turnover for that income year is less than USD35M or (AUD50M) for that income year, and | |
| ● | it has 80% or less of their assessable income in that income year that is base rate entity passive income |
All the Australian companies have satisfied the requirements of the base rate entity and therefore the 25% tax rate is applicable.
For three subsidiaries companies
tax liabilities as per Australian Tax laws are in the amount of $
As of June 30, 2022, the
operations in the Australia incurred $
The following table sets forth the significant components of the aggregate net deferred tax assets of the Company as of June 30, 2022 and June 30, 2021:
| As of June 30 | ||||||||
| 2022 | 2021 | |||||||
| Gross Deferred tax assets: | ||||||||
| On Net operating loss carryforwards | $ | $ | ||||||
| – United States of America | ||||||||
| – Australia | ||||||||
| - | - | |||||||
| Less: valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax assets | $ | $ | ||||||
Management believes that
it is more likely than not that the deferred tax assets will not be fully realizable in the future. Accordingly, the Company provided
for a full valuation allowance against its deferred tax assets of $
NOTE 13 – OTHER INCOME
Other
income was $
The
amount of USD
| F-23 |
NOTE 14 – OTHER RECEIVABLES AS CURRENT ASSETS
As
of June 30, 2022, the Company had other receivables in the amount of $
As
of June 30, 2021, the Company had other receivables in the amount of $
NOTE 15 – OTHER ASSETS AS NON-CURRENT ASSETS
As
of June 30, 2022, the Company had other assets in the amount of $
NOTE 16 – OTHER RECEIVABLES AS NON-CURRENT ASSETS
As
of June 30, 2022, the Company had other receivables in the amount of $
NOTE 17 - RESTATEMENT OF PRIOR ISSUED FINANCIAL STATEMENTS
The Company changed last year its fiscal year-end from a fiscal year ending on September 30 to a fiscal year ending on June 30. Based on this change, prior issued financial statements ended June 30, 2021 includes our audited consolidated financial statements as at and for the nine months ended June 30, 2021 but the fiscal year ended June 30, 2022 is a full year so the management decided to do the consolidation for prior years for a period of twelve months as a comparative period for actual fiscal year ended June 30, 2022 by adopting ASC250-10 guidelines and prepared the restated financial statement for June 30, 2021, enclosed herewith. The Company has not amended its previously filed Annual Reports on Form 10-K or Quarterly Reports on Form 10-Q for the periods affected by the restatement and has adjusted the balances by revising the consolidated balance sheet for the year ended June 30, 2021, income statement for the twelve months ended June 30, 2021, cash flow statements for the twelve months ended June 30, 2021 included herein.
| F-24 |
The restatement for the consolidated balance sheet as of and for the year ended June 30, 2021, income statement for the twelve months ended June 30, 2021 and cash flow statement for the twelve months ended June 30, 2021:
RAYONT INC. AND SUBSIDIARIES RESTATED CONSOLIDATED BALANCE SHEETS
| June 30, 2021 | ||||||||||||
| As Previously Reported | Restatement Adjustments | As Restated | ||||||||||
| 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 | ||||||||||||
| Total Non-Current Assets | ||||||||||||
| TOTAL ASSETS | $ | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||
| Current Liabilities: | ||||||||||||
| Accounts payable | $ | $ | $ | |||||||||
| Accrued liabilities | ||||||||||||
| Due to related parties | ||||||||||||
| Loan payable | ||||||||||||
| Finance lease payable | ||||||||||||
| Other payables | ||||||||||||
| Total Current Liabilities | ||||||||||||
| Non-Current Liabilities: | ||||||||||||
| Finance lease payable | ||||||||||||
| 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 June 30, 2021 and September 30, 2020, respectively | $ | $ | $ | |||||||||
| Preferred stock, $ par value; shares authorized; share issued and outstanding | ||||||||||||
| Additional paid-in capital | ||||||||||||
| Shares to be issued | ||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ( | ) | ||||||
| TOTAL STOCKHOLDERS’ EQUITY | ||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ | $ | |||||||||
| F-25 |
RAYONT INC. AND SUBSIDIARIES RESTATED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| As Previously Reported | Restatement Adjustments | As Restated | ||||||||||
| For the nine months ended June 30, 2021 | For the twelve months ended June 30, 2021 | |||||||||||
| Revenue | $ | $ | $ | |||||||||
| Cost of Revenue | ( | ) | ( | ) | ( | ) | ||||||
| Gross profit | ||||||||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative expenses | ||||||||||||
| Depreciation and amortization expense | ||||||||||||
| Total Operating Expenses | ||||||||||||
| Operating Loss | ( | ) | ( | ) | ||||||||
| Other income/(expense): | ||||||||||||
| Interest income | ||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ||||||
| Other income, net | ||||||||||||
| Total other income | ||||||||||||
| Income before income taxes | ||||||||||||
| Income tax expense | ||||||||||||
| Net income | $ | $ | $ | |||||||||
| Other comprehensive items | ||||||||||||
| Foreign currency translation loss | ( | ) | ( | ) | ||||||||
| Total other comprehensive loss | ( | ) | ( | ) | ||||||||
| Total comprehensive loss | ( | ) | ||||||||||
| Less: comprehensive income attributable to noncontrolling interest | ||||||||||||
| Comprehensive loss / income attributable to shareholders of the Company | $ | ( | ) | $ | $ | |||||||
| Weighted average shares, basic and diluted | ( | ) | ||||||||||
| Net income per common share, basic and diluted | $ | $ | $ | |||||||||
| F-26 |
RAYONT INC. AND SUBSIDIARIES RESTATED CONSOLIDATED STATEMENTS OF CASH FLOWS
| As Previously Reported | Restatement Adjustments | As Restated | ||||||||||
| For the nine months ended June 30, 2021 | For the twelve months ended June 30, 2021 | |||||||||||
| Operating Activities: | ||||||||||||
| Net Income | $ | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | ||||||||||||
| Non-cash portion of share based compensation for service | ||||||||||||
| Depreciation and amortization expense | ||||||||||||
| Gain on sale of assets | ( | ) | ( | ) | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||||||
| Accounts receivable | ( | ) | ( | ) | ( | ) | ||||||
| Inventory | ( | ) | ( | ) | ( | ) | ||||||
| Accounts payable | ( | ) | ( | ) | ||||||||
| Accrued liabilities | ||||||||||||
| Prepaid expense | ( | ) | ( | ) | ||||||||
| Advance to officer | ( | ) | ||||||||||
| Other assets | ( | ) | ( | ) | ||||||||
| Other receivables | ( | ) | ( | ) | ||||||||
| Other payable | ( | ) | ( | ) | ||||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||||||
| Investing Activities: | ||||||||||||
| Cash from acquisition | ||||||||||||
| Purchases of intangible assets | ( | ) | ( | ) | ||||||||
| Proceeds from loan receivable | ( | ) | ||||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ||||||
| Financing Activities: | ||||||||||||
| Repayment to related party | ( | ) | ( | ) | ( | ) | ||||||
| Proceeds from loan payable | ( | ) | ||||||||||
| Issuance of common stock | ||||||||||||
| Net cash provided by financing activities | ( | ) | ||||||||||
| EFFECT OF EXCHANGE RATE ON CASH | ( | ) | ( | ) | ||||||||
| Net increase (decrease) in cash and cash equivalents | ( | ) | ||||||||||
| Cash and cash equivalents at beginning of the period | ||||||||||||
| Cash and cash equivalents at end of the year | $ | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURE: | ||||||||||||
| Interest paid | $ | $ | $ | |||||||||
| Income tax paid | $ | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURE FOR NONCASH INVESTING AND FINANCING ACITIVIES: | ||||||||||||
| Issuance of common stock for acquisitions | $ | $ | $ | |||||||||
| Forgiveness of debt | $ | $ | $ | |||||||||
| F-27 |
NOTE 18 – 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 year ended June 30, 2022
| Lease 1 | Lease 2 | Lease 3 | ||||||||||
| Operating lease expenses | $ | |||||||||||
Supplemental balance sheet information related to leases is as follows:
| Operating Leases | June 30, 2022 | |||||||||||
| Lease 1 | Lease 2 | Lease 3 | ||||||||||
| Right-of-use assets | $ | |||||||||||
| Lease liabilities - current | ||||||||||||
| Lease liabilities - non-current | ||||||||||||
| Total lease liabilities | $ | |||||||||||
| June 30, 2022 | |||
| Weighted Average Remaining Lease Terms | |||
| Lease 1 | |||
| Lease 2 | |||
| Lease 3 | |||
| Discount Rate | |||
| Lease 1 | % | ||
| Lease 2 | % | ||
| Lease 3 | % |
| F-28 |
| Operating Leases | Lease 1 | Lease 2 | Lease 3 | |||||||||
| 2023 | $ | |||||||||||
| 2024 | ||||||||||||
| 2025 | ||||||||||||
| 2026 | ||||||||||||
| 2027 | ||||||||||||
| Thereafter | ||||||||||||
| Total lease payments | ||||||||||||
| Less: imputed interest | ( | ) | ( | ) | ( | ) | ||||||
| Present value of lease liabilities | $ | |||||||||||
NOTE 19 - COMMITMENTS AND CONTINGENCIES
The Company has commitment or contingency as of June 30, 2022.
NOTE 20 – 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 years ended June 30, 2022, 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
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.
| Purchase consideration | $ | |||
| Fair value of the net assets acquired and liabilities assumed | $ | |||
| Goodwill | $ |
NOTE 21 - 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 | ||||||||||||||||
| June 30, 2022 | ||||||||||||||||
| By Business Unit | Software and Content | 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, 2021 | ||||||||||||||||
| By Business Unit | Software and Content | Nutritional Supplements | Other Segment | Total | ||||||||||||
| Revenue | $ | $ | $ | |||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income / loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | $ | $ | $ | |||||||||||||
| Capital Expenditure | ||||||||||||||||
| Property and equipment | $ | $ | ||||||||||||||
| Intangible assets | $ | $ | ||||||||||||||
| F-29 |
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 | $ | $ | ||||||||||||||
For the Year Ended and As of June 30, 2021 | ||||||||||||||||
| By Country | Malaysia | Australia | Other Segment | Total | ||||||||||||
| Revenue | $ | $ | $ | |||||||||||||
| Cost of revenue | ( | ) | ( | ) | ( | ) | ||||||||||
| General and administrative expenses | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Income / loss from operations | ( | ) | ( | ) | ( | ) | ||||||||||
| Total assets | $ | $ | $ | |||||||||||||
| Capital expenditure | ||||||||||||||||
| Property and equipment | $ | $ | ||||||||||||||
| Intangible assets | $ | $ | ||||||||||||||
NOTE 22 - SUBSEQUENT EVENTS
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 business
of Tugun Compounding Pty Ltd, in exchange for AUD
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 the business
of Prema Life Pty Ltd, in exchange for AUD
On October 5, 2022 three board directors of Rayont Inc , Mark Rudulph Van Wyk, Thea Dillon and Jason Adam Sunstein resigned from their position as Board of Directors of their own accord.
The Company relied upon Section 4(2) and Regulation S of the Securities Act of 1933, as amended, for the sale of these securities. No commissions were paid regarding the share issuance and they were issued in book entry form with a Rule 144 restrictive legend.
| F-30 |
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None
ITEM 9A. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed with an objective of ensuring that information required to be disclosed in our periodic reports filed with the Securities and Exchange Commission, such as this Annual Report on Form 10-K, is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission. Disclosure controls are also designed with an objective of ensuring that such information is accumulated and communicated to our management, including our chief executive officer, in order to allow timely consideration regarding required disclosures.
The evaluation of our disclosure controls by our principal executive officer included a review of the controls’ objectives and design, the operation of the controls, and the effect of the controls on the information presented in this Annual Report. Our management, including our Chief Executive Officer, does not expect that disclosure controls can or will prevent or detect all errors and all fraud, if any. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Also, projections of any evaluation of the disclosure controls and procedures to future periods are subject to the risk that the disclosure controls and procedures may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that there were significant deficiency in our internal controls over Financial reporting as of June 30, 2022 and they were therefore not as effective as they could be to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The significant deficiency in our controls and procedure were lack of formal documents such as invoices and lack of evidence for proper approval and review of disbursements. Management does not believe that any of these significant deficiency materially affected the results and accuracy of its financial statements. However, in view of this discovery of such weaknesses, management has begun a review to improve them.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the (i) effectiveness and efficiency of operations, (ii) reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and (iii) compliance with applicable laws and regulations. Our internal controls framework is based on the criteria set forth in the Internal Control - Integrated Framework that was issued in 2013 by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Management’s assessment of the effectiveness of the small business issuer’s internal control over financial reporting is as of the year ended June 30, 2022. We believe that internal controls over financial reporting as set forth above shows some weaknesses and are not effective. We have identified certain weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.
This annual report does not include an attestation report of the company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit the Company to provide only management’s report in this annual report.
Subsequent to the end of the period covered by this report, and in light of the weakness described above, management is in the process of designing and implementing improvements in its internal control over financial reporting and we currently plan tom hire an independent third party consultant to assist in identifying and determining the appropriate accounting procedures and controls to implement.
ITEM 9B. OTHER INFORMATION.
None
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PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.
The following table contains the name, age of our Directors and executive officers as of June 30, 2022.
| Name | Age | Position Held | Held Office Since | |||
| Marshini Thulkanam | 45 | Chief Financial Officer and Director | 2020 | |||
| Dhurata Toli | 45 | Secretary | 2021 | |||
| Mark Rudulph Van Wyk | 55 | Independent Director | 2022 | |||
| Thea Dillon | 45 | Independent Director | 2022 | |||
| Jason Adam Sunstein | 51 | Independent Director | 2022 |
The directors will serve until the next annual meeting of stockholders of the Company and until such director’s successor is elected and qualified or until such director’s earlier death, resignation or removal. The following is information concerning the business background of Ms. Thulkanam.
Ms. Thulkanam has over 20 years in public practice, as well as the commercial environment. She provides accounting, CFO on demand and tax solutions to her variety of clients from diverse industries, including hospitability, retail, health, professional services, property developments, and medical centres and construction companies. Ms. Thulkanam graduated from Massey University, New Zealand and has worked in both New Zealand and Australian Chartered Accounting Firms. She is a member of the Chartered Accountants Australian and New Zealand and a Registered Tax Agent. Her focus is family businesses from start up to complex entities and takes great pride in assisting her clients navigate through Australia’s complex tax systems to provide great outcomes. Ms. Thulkanam is the founder and Managing Director of Accounting Biz Solutions Pty Ltd, an accounting and bookkeeping practice in Queensland, Australia. She is the CFO on demand for a number of private funds such as Future Asset Management International Ltd and Zenio Capital Ltd.
Ms. Toli has extensive experience in both government and private sector for over 21 years in financial analyses, accounting, financial controls, reporting and taxation, financial, market risk profiling, trainings. Ms. Toli started her career with NOA in management and risk analysis before managing a branch of BKT Bank. Thereafter, she worked with the Municipality of Tirana as Director of Operations and then with Abkons company on the Trans Adriatic Pipeline as a Financial Consultant. In 2017, Ms. Toli became the Financial Controller and Secretary of a USA public corporation with subsidiaries in Australia and Malaysia, overseeing all aspects of the Company’s accounting functions including planning, executing, controlling, reporting all financial matters and as an active member of the M&A team. In addition, she was the Board Secretary for Corporation. Ms. Toli earned her Master of Science degree in banking from the University of New York Tirana in collaboration with the Institute Universitaire Kurt Bosch in Switzerland and Master’s Degree in Finance and Accounting from Tirana University. She also holds an Approved Accounting Certificate, Real Estate Appraiser and “Six Sigma Quality Improvement Project” for “Loan Assessment and Approval Process Mapping “delivered by IMPACT W.L.L.
Ms. Dillon has extensive experience within the Remedial Massage & Myotherapy profession having successfully founded and operated a number of South East Qld based businesses in the industry over the past 15 years. She is passionate about enriching lives and enhancing health & wellbeing, and enjoys passing her wealth of knowledge & expertise to others so that they may thrive personally and professionally.
Thea holds a Diploma of Remedial Massage, Adv Diploma of Myotherapy, an Honors Degree in Exercise Science & a Certificate IV in Training & Assessment, and is an accomplished High Performance Sport Therapist, having worked with the Australian Olympic Team on multiple occasions. She was a founding partner of Gold Coast Physio & Sports Health in 2008 and remained an Owner through to 2013 before continuing as a Principal Remedial Massage Therapist through to 2016. She has been the Owner and Principal Therapist of No More Niggles since November 2016 where she provides exceptional remedial and sports massage services.
From December 2018 through January 2021, Thea was a Trainer at Massage Schools of QLD, designing and delivering remedial massage & myotherapy training content at post graduate level. From 2019 through 2021, Thea was in the Lead Soft Tissue Therapy role for the Australian Olympic Team in Tokyo. She was also a Practice Manager at No More Knots throughout 2020 and continues to deliver professional development and mentoring sessions across the No More Knots Team.
Mr. Sunstein was one of the founders and since October 2013, has been the CFO and a director of International Land Alliance, Inc., a publicly traded company, engaged in residential land development with target properties located primarily in the Baja California Northern region of Mexico. Mr. Sunstein brings finance, mergers and acquisitions and general management experience. Since 1989, he has participated in a broad variety of both domestic and international structured investments and financings, ranging from debt and preferred stock to equity and developmental capital across a wide variety of infrastructure and corporate financings. He has been involved in numerous start-ups, turnarounds and public companies. Mr. Sunstein serves as on the Board of Directors of several public and private companies. In December 2014 Mr. Sunstein filed for Chapter 7 bankruptcy, and it was discharged May 2015. He attended San Diego State University where he majored in Finance and has held NASD Series 7 (General Securities Representative) and Series 63 licenses.
Mr. Van Wyk is a seasoned business leader and strategist with a diverse 37 year global career across several industry sectors including health and aged care services, community services, environmental, financial and professional services, engineering, infrastructure, mining/resources, construction, manufacturing, building services and agriculture. He holds qualifications from the University of Pretoria (South Africa), Graduate School of Business at the University of Cape Town (South Africa) and De Montfort University in Leicester (United Kingdom). Mark is a Member of the Australian Institute of Company Directors, Fellow of the International Institute of Directors and Managers, a Member of the CEO Institute, a Member of the Advisory Board Centre and is also a Certified CEO and an advisory board Certified Chair™. He has held senior positions and executive roles in several listed Australian companies. Entrepreneur and founder of eleven SMEs. Board Experience having served as Advisory Board Member, Chairperson, Executive Director, Non-Executive Director, Alternate Director, Company Secretary and Committee Member. His most recent experience includes being a Non-Executive Director of Smiles Inclusive Limited, an Australian dental services provider since July 2021 and Chairman and Executive Director of Paying.Green Holdings, a global profit-for-purpose organisation focused on delivering sustainable environmental solutions to businesses since 2020. Prior to this Mark was Chairman and Executive Director of Medicrew Holdings, an integrated primary health care services provider with a number of medical centres across South East Queensland from July 2015 to June 2021.
| 18 |
ITEM 11. EXECUTIVE COMPENSATION.
Executive Compensation
The following table sets forth the compensation paid to each of our principal executive officers (the “Named Executive Officers”) during the last three completed fiscal years:
SUMMARY COMPENSATION TABLE
Management Compensation
Name and Fiscal Years Ended June 30, 2022, 2021 and 2020 | Fees earned or paid in cash ($) | Stock awards ($) | Option awards ($) | Non-equity incentive plan compensation ($) | Nonqualified deferred compensation earnings ($) | All other compensation ($) | Total ($) | |||||||||||||||||||||
| Marshini
Alyia Moodley (1) FY 2022 | - | - | - | - | - | - | ||||||||||||||||||||||
| FY 2021 | - | - | - | - | - | - | ||||||||||||||||||||||
| FY 2020 | 8,000 | - | - | - | 8,000 | |||||||||||||||||||||||
| Aleem Sheikh(2) | - | - | - | - | - | - | ||||||||||||||||||||||
| Dhurata
Toli (3) FY 2022 | - | - | - | - | - | 60,000 | 60,000 | |||||||||||||||||||||
| FY 2021 | - | - | - | - | - | 14,000 | 14,000 | |||||||||||||||||||||
| Reyad Fezzani (4) FY 2022 | - | 40,000 | - | - | - | - | 40,000 | |||||||||||||||||||||
| Leilani Latimer (5) FY 2022 | - | 12,500 | - | - | - | - | 12,500 | |||||||||||||||||||||
| Mark Rudulph Van Wyk (6) FY FY 2022 | - | 2,000 | - | - | - | - | 2,000 | |||||||||||||||||||||
| Thea Dillon (7) FY 2022 | - | 2,000 | - | - | - | - | 2,000 | |||||||||||||||||||||
| Jason Adam Sunstein(8) FY 2022 | - | 5,000 | - | - | - | - | 5,000 | |||||||||||||||||||||
| Greg Jackson FY 2019 (9) | - | 4,000 | - | - | - | - | 4,000 | |||||||||||||||||||||
| Chin Kha Foo (10) FY 2019 | - | - | - | - | - | - | - | |||||||||||||||||||||
| (1) | Ms. Thulkanam resigned as CEO, President and Secretary on March 25, 2021 and was appointed as President, CEO and Director on February 28, 2022. |
| (2) | Mr. Sheikh was appointed as President, CEO and Director on March 25, 2021 and resigned on February 28, 2022 |
| (3) | Ms. Toli was appointed as Secretary on March 25, 2021 |
| (4) | Mr. Fezzani was appointed as Director on March 12, 2021 and resigned on April 19, 2022 |
| (5) | Ms. Latimer was appointed as Director on April 22, 2021 and resigned on April 20, 2022 |
| (6) | Mr. Van Wyk was appointed as Director on April 21, 2022 and resigned on October 5, 2022 |
| (7) | Ms. Dillon was appointed as Director on April 21, 2022 and resigned on October 5, 2022 |
| (8) | Mr. Sunstein was appointed as Director on April 21, 2022 and resigned on October 5, 2022. |
| (9) | Mr. Jackson was appointed a Director, CEO, President, CFO and Secretary on August 9, 2019 and resigned on March 31, 2020 |
| (10) | Mr. Foo was appointed a Director and President/CEO/CFO on July 2, 2017 and resigned on August 9, 2019 |
Compensation of Directors
Each Director that is not an officer is reimbursed the reasonable out-of-pocket expenses in connection with their travel to attend meetings of the Board of Directors. No payments were made to our current directors for the fiscal years ended 2022, 2021 and 2020.
| 19 |
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information as of the Record Date with respect to the beneficial ownership of Common Stock by (i) each person known by us to be the beneficial owner of more than 5% of our outstanding Common Stock after the Closing Date (ii) our current directors, (iii) each person who will become a director on or after the tenth day following our mailing of this Information Statement, (iv) each of newly named executive officers and (v) all of our newly named executive officers and directors as a group.
Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated by footnote and subject to community property laws, where applicable, to our knowledge the persons named in the table below have sole voting and investment power with respect to all shares of Common Stock that are shown as beneficially owned by them. In computing the number of shares of Common Stock owned by a person and the percentage ownership of that person, any such shares subject to options and warrants held by that person that are exercisable as of the Record Date or that will become exercisable within 60 days thereafter are deemed outstanding for purposes of that person’s percentage ownership but not deemed outstanding for purposes of computing the percentage ownership of any other person. The percent of class is based on 50,163,797 shares of common stock issued and outstanding as of June 30, 2022. Unless otherwise indicated, the mailing address of each officer and director is c/o Rayont Inc., 228 Hamilton Avenue, 3rd Floor, Palo Alto, California 94301
| Officers and Directors | Shares of Common stock | Percentage | ||||||
| Marshini Alyia Moodley | 550,000 | 1.096 | % | |||||
| Mark Rudulph Van Wyk | 2,500 | 0.005 | % | |||||
| Dhurata Toli | 200,000 | 0.399 | % | |||||
| Thea Dillon | 2,500 | 0.005 | % | |||||
| Jason Adam Sunstein | 6,250 | 0.012 | % | |||||
| All Officers and Directors as a Group (5) | 761,250 | 1.517 | % | |||||
| More than 5% Beneficial Owners: | ||||||||
| Rural Asset Management Services, Inc. (1) | 4,232,000 | 8.436 | % | |||||
| Taleo Holdings (L) LTD (2) | 20,803,079 | 41.470 | % | |||||
| (1) | The principal owner of Rural Asset Management Services, Inc is Si Jing Yi and its address is Kensington Gardens, No. U1317 Lot 7616, Jalan Jumider, Federal Territory, Malaysia. | |
| (2) | The principal owner of Taleo Holdings (L) LTD is Ali Kasa and its address is 3 Spica Drive, Tanah Merah, 4128 QLD, Australia. |
Legal Proceedings
The Company is not aware of any legal proceedings in which any director, officer, or any owner of record or beneficial owner of more than 5% of any class of voting securities of the Company, or any affiliate of any such director, officer, affiliate of the Company, or security holder, or any person who will become a director upon completion of the transactions contemplated by the Agreement is a party, or any information that any such person is adverse to the Company or has a material interest adverse to the Company.
CORPORATE GOVERNANCE
The Board of Directors
As set forth in our Articles of Incorporation and Bylaws, all directors of the Company hold office until the next annual meeting of stockholders or until their successors have been duly elected and qualified. Other than as disclosed in this Information Statement, to the knowledge of the Company, are no agreements with respect to the election of directors. The Company’s executive officers serve at the discretion of the Board.
Code of Ethics
We have not adopted a written Code of Ethics at this time that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our Board of Directors are reviewing the necessity of adopting such a document given we are still in the start-up exploration stage and have limited employees, officers and directors.
Nominating Committee
We do not have a Nominating Committee. Since our formation we have relied upon the personal relationships of our President to attract individuals to our Board of Directors.
| 20 |
We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative size and lack of directors’ and officers’ insurance coverage, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees.
Compensation Committee
We do not have a Compensation Committee. Our entire Board of Directors review and recommend the salaries, and benefits of all employees, consultants, directors and other individuals compensated by us.
Audit Committee
We do not have a standing Audit Committee. The functions of the Audit Committee are currently assumed by our Board of Directors.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
The related parties of the Company with whom transactions are reported in the consolidated financial statements are as follows:
| Name | Relationship | |
| Rural Asset Management Services, Inc. (“Rural”) | One of major shareholder of Rayont Inc | |
| TheAlikasa (Australia) Pty Ltd | Common director / shareholder of the Company | |
| Blue Pacific Academy | Entity under the same beneficial owner/ common directors | |
| Health Script Pty Ltd | Entity under the same beneficial owner/ common directors | |
| Accounting Business Solutions 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
| June 30, 2022 | June 30, 2021 | |||||||
| TheAliKasa Australia Pty Ltd | $ | 20,097 | $ | - | ||||
| Rural Asset Management Services | - | 11,881 | ||||||
| Blue Pacific Academy | - | 4,000 | ||||||
| Health Script Pty Ltd | 45,919 | - | ||||||
| Total | $ | 66,016 | $ | 15,881 | ||||
As of March 31, 2022 and June 30, 2021, Rayont International (L) had loans receivable of $11,881 from Rural Asset Management Services. On June 30, 2020, the company agreed to grant a loan to the Rural for the amount of $91,823. The loan bears no interest rate and receivable on demands. Due to the short maturity of the loan, the Company had a current loans receivable of $91,823 as of September 30, 2020. The Company made a three-party agreement on December 31, 2020 between its subsidiary Rayont International (L), Rayont Inc and Rural in order to eliminate the loans from /to Rural and there is no need for money to move around. The remaining balance of $11,881 will be received on demands.
As of March 31, 2022 and June 30, 2021, Rayont International (L) Ltd had loans receivable of $4,000 from Blue Pacific Academy. The loans receivable was non-interest bearing and due upon request. this loan is paid back on June 30, 2022.
As of June 17, 2022 and June 30, 2021, Rayont (Australia) Pty Ltd has loans receivable of $45,919 and $nil from Health Script Pty Ltd. This is a prepayment for acquisition of the Tugan business that is completed in September 1, 2022. The loans receivable was non-interest bearing and due upon request and it is.
As of June 30, 2022 and June 30, 2021, Prema Life Pty Ltd and Wonder Foods Pty Ltd had amount receivable of $20,097 and $nil from director of the company. Prema Life Pty Ltd owed the director $386,105 as of June 30, 2021. In repaying this amount Prema Life Pty Ltd as of June 30, 2022 had paid $20,097 more than it was supposed to pay. This was not meant to be a loan but rather an oversight of the accounts. The oversight indicates a deficiency of internal control over financial reporting under the current operations. The Management has taken immediate remedial action rectifying the overpayment. As at 30 September 2022, the Director loan is not overdrawn. Prema Life Pty Ltd was sold on September 1, 2022 to unrelated party and this loan has been reconciled as part of that transaction.
| 21 |
Amounts due to related parties
As of June 30, 2022 and June 30, 2021, the Company had amount due to related parties as follows:
| June 30, 2022 | June 30, 2021 | |||||||
| Accounting Business Solutions Pty Ltd | $ | - | $ | 1,133 | ||||
| Abrar Investments Pty Ltd | 62 | - | ||||||
| Director’s loan | - | 386,105 | ||||||
| Tasman Accounting Pty Ltd | 3,453 | |||||||
| Ventis Partners Pty Ltd | 125,162 | |||||||
| Total | $ | 128,677 | $ | 387,238 | ||||
On August 1, 2021 the director has given a loan amount of $386,105 which is used to pay the property that is bought from Prema Life Pty Ltd. This loan has 3% interest per annum and it is fully settled as of December 31, 2021.
On May 4, 2022 the Ventis Partners Pty Ltd has given a loan amount of $125,162 which is used to pay the properties that is bought from Rayont Properties Pty Ltd. This loan is non-interest bearing and payable on demand.
On June 5, 2022 the Tasman Accounting Pty Ltd has given a loan amount of $3,453 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.
Director Independence
Our board of directors has determined that we have two board members that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.
| 22 |
Our Common Stock is traded on the OTC Pink Limited under the symbol “RAYT”. The OTC Bulletin Board electronic trading platform does not maintain any standards regarding the “independence” of the directors for our Board and we do not believe we are subject to the requirements of any national securities exchange or an inter-dealer quotation system with respect to the need to have any and/or a majority of our directors be independent.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
JP Centurion & Partners Plt is our current independent auditor for the fiscal year ended on June 30, 2022 and June 30, 2021.
The following table shows the fees paid or accrued by us for the audit and other services provided by, Total Asia Associates Plt and JP Centurion & Partners Plt, our auditors for the 12 months ended June 30, 2022 and June 30, 2021, respectively.
| 2022 | 2021 | |||||||
| Audit Fees (i) | $ | 16,050 | $ | 55,227 | ||||
| Audit-Related Fees (ii) | - | - | ||||||
| Tax Fees (iii) | - | - | ||||||
| All Other Fees (iv) | - | - | ||||||
| Total | $ | 16,050 | $ | 55,227 | ||||
As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees;” (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
The following documents are exhibits to this report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| RAYONT INC. | ||
| Date: December 29, 2022 | By: | /s/ Marshini Aliya Moodley |
| Marshini Aliya Moodley | ||
| President and Chief Executive Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the dates indicated.
| Signature | Title | Date | ||
| /s/ Marshini Aliya Moodley | Principal Executive Officer & Director | |||
| Marshini Aliya Moodley | December 29, 2022 | |||
| /s/ Marshini Aliya Moodley, | Principal Accounting Officer & Director | |||
| Marshini Aliya Moodley | December 29, 2022 |
| 24 |
EXHIBIT INDEX
| 25 |
