RAYONT INC. - Quarter Report: 2021 March (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to _________

SEC File No. 000-56020

Issuer’s telephone number: 1 (855) 801-9792

(Former name, former address and telephone number, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [  ] No [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]

Securities registered pursuant to Section 12(b) of the Act: None

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of May 17, 2021, there were 47,465,728 shares issued and outstanding of the registrant’s common stock.

TABLE OF CONTENTS

RAYONT INC. AND SUBSIDIARY

Unaudited Consolidated Financial Statements

For the three AND SIX months ended MARCH 31, 2021 and 2020

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

RAYONT INC. AND Subsidiaries

CONSOLIDATED BALANCE SHEETS

 (UNAUDITED)

The accompanying notes are an integral part of these consolidated financial statements.

RAYONT INC. AND S Subsidiaries

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

RAYONT INC. AND Subsidiaries

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

RAYONT INC. AND Subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

The accompanying notes are an integral part of these consolidated financial statements.

RAYONT INC. AND Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED) 

NOTE 1 - ORGANIZATION AND BUSINESS DESCRIPTION

Rayont Inc. (the “Company” or “Rayont”) is a Nevada corporation formed on February 7, 2011. Rayont Inc. is a private equity company in areas of biotechnology and internet of things (IOT).

Given the acquisition of Rayont Australia Pty Ltd (formerly known as “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.

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 engages in providing customized digital learning based on real-life and practical situations and e-learning programs.

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.

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.

On December 29, 2020, the Company incorporated Rayont Malaysia Sdn Bhd with a paid-up capital of $ 100 and on December 31, 2020 was incorporated Rayont Technologies (M) Sdn Bhd with a paid-up capital of $100 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.

The World Health Organization designated COVID-19 as a global pandemic. To date, the Company has experienced some adverse impacts; however, the impacts of COVID-19 on our operating results for the six months ended March 31, 2021 and the year ended September 30, 2020 was limited due to the nature of our business. The extent of the COVID-19 impact to the Company will depend on numerous factors and developments related to COVID-19. Consequently, any potential impacts of COVID-19 remain highly uncertain and cannot be predicted with confidence.

The corporate structure as of March 31, 2021 is as follows:

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules of the Securities and Exchange Commission, and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent Annual Financial Statements filed with the SEC on Form 10-K for the year ended September 30, 2020. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative of the results to be expected for the full year. Notes to the unaudited interim financial statements which would substantially duplicate the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K for the year ended September 30, 2020, have been omitted.

Use of Estimates

The preparation of our consolidated financial statements and accompanying notes in conformity with GAAP requires us to make certain estimates and assumptions. Actual results could differ from those estimates.

Going Concern

The Company had a net income of $271,051 for the six months ended March 31, 2021. The accumulated loss of the Company is $3,687,776 as of March 31, 2021. The Company demonstrates adverse conditions that raise substantial the Company’s ability to continue as a going concern. These adverse conditions are recurring operating losses, accumulated deficit and other adverse key financial ratios.

The Company plans to continue obtaining funding from public or private offering, 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 sales and accounts receivable for the six months ended March 31, 2021 and 2020, respectively, which is explained in Note 10.

There is no supplier who accounted for 10% or more of the Company’s cost of sales for the six months ended March 31, 2021 and 2020, respectively.

Fair Value of Financial Instruments

The Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities are carried at cost, which approximates their fair value, due to the relatively short maturity of these instruments. As of March 31, 2021 and September 30, 2020, the Company’s notes payable has stated borrowing rates that are consistent with those currently available to the Company and, accordingly, the Company believes the carrying value of these debt instruments approximates their fair value.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. As of March 31, 2021 and September 30, 2020, the Company had cash in bank of $79,412 and $196,174, respectively.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable recorded by the Company are customer obligations due under normal trade terms. The Company reviews its accounts receivable regularly to determine if a bad debt allowance is necessary. Management reviews the composition of accounts receivable and analyses the age of receivables outstanding, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the necessity of making such allowance. Uncollectible account balances are written off when management determines the probability of collection is remote. The allowance for doubtful accounts was nil as of March 31, 2021 and September 30, 2020.

Inventories

Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the weighted average method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed Statements of Operations and Comprehensive Income.

Intangible assets

Intangible assets for purchased are recognized and measured at cost upon acquisition and consist of the Company’s exclusive license with an indefinite useful life. The Company has determined that there are currently no legal, regulatory, contractual, economic or other factors that limit the useful life of the license and accordingly treat the license as indefinite life intangible assets. The Company had indefinite-life intangible assets of $2,000,000, which is associated with Rayont International’s exclusive license for registering and commercializing Photosoft^TM 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.

For other intangible assets, company determined the useful life of the asset as 10 years and it’s amortized based on the useful life.

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 September 30, 2020, and determined there was no impairment of indefinite lived intangibles

As of March 31, 2021 and September 30, 2020, the Company had intangible assets of $2,552,001 and $2,000,000, respectively.

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 5-12 years.

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.

Maintenance Services:

The Company offers maintenance and function improvements services related to the mobile apps for customers. Maintenance service is considered distinct and is recognized rateably over the maintenance term.

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.

(Loss) Earnings Per Share

Basic earnings per share is computed by dividing net income (loss) attribute to stockholders of common stock by the weighted-average number of common shares outstanding for the period. Diluted net earnings per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding plus equivalent shares.

Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through convertible notes and preferred stock when the effect would be dilutive. The Company only issued common stock and does not have any potentially dilutive instrument as of March 31, 2021 and September 30, 2020.

Translation of Foreign Currency

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the Company’s Australian subsidiaries maintain their books and record in a local currency, Australian Dollars (“AUD”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

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$1 has been made at the following exchange rates for the respective years:

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

Inventories were composed of the following:

NOTE 4 – PROPERTY AND EQUIPMENT, NET

As of March 31, 2021 and September 30, 2020, property and equipment consisted of the following:

For the six months ended March 31, 2021 and 2020, the depreciation expenses were $65,809 and $57,028, respectively.

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 intangible assets for USD438,653, (AUD 617,893). These assets include trademark, website, software, office assets and computer contracts. Total purchase consideration for purchasing intangible and tangible asset is USD233,489 (AUD 302,876). The company considered the gain on purchase of assets as an income (Refer Note 14).

Amortization is computed using the straight-line method over the 10-year estimated useful lives of the assets.

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.

Amortization is computed using the straight-line method over the 10-year estimated useful lives of the assets.

As of March 31, 2021 and September 30, 2020, intangible assets, consisted of the following:

For the six months ended March 31, 2021 and 2020, the amortization expenses were $23,401 and $0, respectively.

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 March 31, 2021 and September 30, 2020, the Company had outstanding balances of $223,022 and $54,316 related to the accounts payable.

NOTE 7 – LOANS PAYABLE

Non-interest-bearing notes payable

In March 2020, the Company’s subsidiary entered into loan agreements with outside creditors for the purpose to support its operation. The Company repaid all the outstanding balance as of December 31, 2020 but during January – March 2021 entered into another loan agreement with outside creditors. The loans are unsecured, bear no interest and are due on September 30, 2021. As of March 31, 2021 and September 30, 2020, the Company had outstanding balances of $25,884 and $10,055 to the outside third party.

COVID-19 loan

On the 29^th of June 2020, the Company’s subsidiary obtained a COVID-19 loan of $ 171,729 (AUD 250,000) from Queensland Rural and Industry Development Authority (QRIDA) to assist the Company to meet its working capital expenses. The term of the loan is 10 years from the commencement date, and the interest rate is 0% for the first 12 months from the commencement date and then 2.5% from the remainder of the term. The Company’s subsidiary has an Interest Only Period beginning 12 months after the Commencement Date and ending 36 months from the Commencement Date. The loan is secured under the Company’s present and future property of any kind, including all personal property As of March 31, 2021 and September 30, 2020, the Company had outstanding balances of $190,325 and $178,533 related to the COVID-19 loan.

The increase in loan amount from $178,533 to $190,325 was attributable to the translation loss on foreign exchange as at March 31, 2021.

Mortgage loan

On the 26^th of June 2020, the Company’s subsidiary obtained a mortgage loan of $453,713 (AUD 660,000) from two private lenders Oliver Fleming Pty Ltd as Trustee and Oliver John Fleming to assist the Company to buy the land of the business place. The term of the loan is one year from the commencement date, and the interest rate is 10% per annum. Monthly payments are compound just from interest in the amount of $ 4,108 (AUD 5,500). The principal amount will be paid in the end of the term, 26 June 2021. The loan is secured under the Company’s present and future property of any kind, including all personal property. As of March 31, 2021 and September 30, 2020 the Company had outstanding balances of $502,458 and $471,327 related to the mortgage loan. The increase in loan amount from $471,327 to $502,458 was attributable to the translation loss on foreign exchange as at March 31, 2021

NOTE 8 – FINANCE LEASE

On the 28^th of October 2020, the Company’s subsidiary obtained a Finance Lease for vehicle in the amount of $34,167 (AUD 44,880) from Australian Alliance Automotive Finance Pty Limited to assist the Company to meet its operating activities. The term of the loan is 4 years from the commencement date, and the interest rate is 5.03% for the term. As of March 31, 2021, the Company had outstanding balances of $30,931 related to the Finance Lease.

Finance lease activity is included in property and equipment, net; current finance lease liabilities are aggregated into current liabilities; and non-current finance lease obligations are aggregated in non-current liabilities in the Company's Condensed Consolidated Balance Sheets. Finance ROU asset is amortized on a straight-line basis over its estimated useful live.

The Company has finance lease for automobile. This lease has remaining lease terms of three years and seven months. As of March 31, 2021, and September 30, 2020, ROU and lease liabilities is $27,792 and $0, respectively.

NOTE 9 – OTHER PAYABLES

Other payable consists of $200,691 due towards assets purchase from Workstar Tech (Aust) Pty Ltd and $3,274 is due to Sage Interactive Sdn Bhd towards purchase of its intangible assets which is paid on May 10, 2021.

As of March 31, 2021 and September 30, 2020 other payable outstanding is $203,965 and $474, respectively.

NOTE 10 – CONCENTRATION

For the six months ended March 31, 2021, the Company had one major customer who represented 12.2% of total revenue. At March 31, 2021 and September 30, 2020, this major customer represented approximately 22.7% and 0% of total accounts receivable, respectively.

NOTE 11 – STOCKHOLDERS’ EQUITY

Capital Stock Issued

During October 1, 2020 to March 31, 2021, the Company sold 7,883,197 shares of common stock to 154 independent investors pursuant to a private placement. 560,000 shares at $0.05; 7,195,347 shares at $0.07; 67,705 shares at $0.71; 19,231 shares at $1.04; 29,656 shares at $1.19; 5,564 shares at $1.42; 3,654 shares at $1.56; 755 shares at $1.59 and 1,285 shares at $1.79 for some private placements for a total amount of $652,137. The subscribers had paid $579,363 to the Company, and the remaining balances of $72,774 were recorded in stock subscriptions receivable.

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 share certificates were issued with a Rule 144 restrictive legend.

On March 9, 2021, the Company issued 710,713 shares of common stock to the The AliKasa Pty Ltd for the purchase of the GGLG, the Corporation’s wholly owned subsidiary, totaling $618,320.

Capital Stock Authorized

Common Stock

The Company is authorized to issue 500,000,000 shares of common stock with a par value of $0.001 per share. As of March 31, 2021 and September 30, 2020, the outstanding shares of common stock were 47,465,728 and 38,871,818, respectively.

Preferred Stock

The Company is authorized to issue 20,000,000 shares of Series A Preferred Stock with a par value of $0.001 per share. There are not preferred shares issued and outstanding as of March 31, 2021 and September 30, 2020, respectively.

NOTE 12 - RELATED PARTY TRANSACTIONS

The related parties of the Company with whom transactions are reported in the consolidated financial statements are as follows:

Amount due from related parties

The Company’s subsidiary Prema Life agreed to grant a loan to Anvia (Australia) Pty Ltd for the amount of $173,679. 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 $173,679 as of September 30, 2020. The Company had received the repayment in full from Anvia (Australia) Pty Ltd on December 23, 2020.

On August 20, 2019, the Company agreed to grant a loan to Anvia for the amount of $93,000. The loan bears an interest rate at 8% and matures on August 18, 2020. Due to the short maturity of the loan, the Company had a current loans receivable of $93,000 as of September 30, 2020. The Company had received the repayment in full from Anvia on December 30, 2020.

As of March 31, 2021 and September 30, 2020, Rayont International (L) had loans receivable of $11,881 and $91,823 from Rural. 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, 2021 and September 30, 2020, Prema Life had loans receivable of $13,569 and $nil from Fami Global. The loans receivable was non-interest bearing and due upon request.

As of March 31, 2021 and September 30, 2020, Rayont International had loans receivable of $3,000 and $nil from Blue Pacific Academy. The loans receivable was non-interest bearing and due upon request.

Amounts due to related parties

As of March 31, 2021 and September 30, 2020, the Company had amount due to related parties as follows:

During December 2020, the company acquired Prema Life and GGLG and since it’s a common control situation effect of acquisition was given from September 30, 2019 financial statement. Due to that related party is more of $1,011,873 during September 30, 2020, when compared with March 31, 2021 as the acquisition price is paid during the December 2020 - March, 2021.

On December 28, 2020, Taleo Holdings (L) Ltd, the only shareholder of Rayont International (L) Ltd, forgave the $2,000,000, owed to it by the Rayont International (L) Ltd and the amount is recorded as additional paid-in capital.

On December 31, 2021, the former director of the Rayont International (L) Ltd, forgave the $16,364, owed to him by the Company and the resulting gain is recorded as additional paid-in capital.

Amounts due to related parties were non-interest bearing and payable on demand. The amounts were used to support its operation, to acquire the exclusive license for registering and commercializing Photosoft^TM technology and to buy two business considered as related party transactions. The most part of the related party loan as of September 30, 2020 are paid but the related party loans as of March 31, 2021 will be paid during the 2021.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

The Company has no commitment or contingency as of March 31, 2021.

NOTE 14 – OTHER INCOME

Other income generated for the six months ended March 31, 2021 was attributable to differences between purchase consideration of assets from Workstar Tech (Aust) Pty Ltd and its as-is basis value amounted to USD $246,143. Whilst, USD $186,880 arose due to tax incentive/grant obtained in relation to approved research and development activities carried out. Other incentives amount from Australian Government are USD 40,337 and USD $9,337 in relation to ATO COVID19 Job Seeker and Cash Flow Boost. In addition, USD 128,346 arose due to the fact that the Company has requested the forgiveness of some liabilities and penalties that are approved from Australian Tax office.

NOTE 15 - RESTATEMENT OF PRIOR ISSUED FINANCIAL STATEMENTS

The company acquired GGLG Properties Pty Ltd during December 2020 and didn’t included it in the consolidated figures of December 31, 2020 as the company was waiting for the approval from Australian government authorities. Since the acquisition is of common control transaction as per ASC805-50, the management decided to do the consolidation for prior years by adopting ASC250-10 guidelines and prepared the restated financial statement for September 30, 2020, 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 as of and for the year ended September 30, 2020, income statement for the three and six months ended March 30, 2020, cash flow statements for the six months ended March 30, 2020 included herein.

The restatement for the consolidated balance sheet as of and for the year ended September 30, 2020, income statement for the three months and six months ended March 31, 2020 and cash flow statement for the six months ended March 31, 2020:

RAYONT INC. AND SUBSIDIARIES RESTATED CONSOLIDATED BALANCE SHEETS

RAYONT INC. AND SUBSIDIARIES RESTATED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

RAYONT INC. AND SUBSIDIARIES RESTATED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTE 16 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date these consolidated financial statements were issued and determined that there were no subsequent events or transactions that require recognition or disclosures in the consolidated financial statements.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-Q.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

Rayont Inc. (“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”.

On January 22, 2019, the Company entered into an acquisition agreement with Rayont Australia Pty Ltd (formerly known as “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”).

On August 26, 2020, the Company established Rayont Technologies Pty Ltd. (Rayont Technologies) through Rayout 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.

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 Photosoft^TM 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.

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 and customer contracts.

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.

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 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.

On December 29, 2020, the Company incorporated Rayont Malaysia Sdn Bhd with a paid-up capital of $ 100 and Rayont Malaysia Sdn Bhd incorporated on December 31, 2020 Rayont Technologies (M) Sdn Bhd with a paid-up capital of $100 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.

The World Health Organization designated COVID-19 as a global pandemic. To date, the Company has experienced some adverse impacts; however, the impacts of COVID-19 on our operating results for the six months ended March 31, 2021 and the year ended September 30, 2020 was limited due to the nature of our business. The extent of the COVID-19 impact to the Company will depend on numerous factors and developments related to COVID-19. Consequently, any potential impacts of COVID-19 remain highly uncertain and cannot be predicted with confidence.

Results of Operations

Comparison of the three months ended March 31, 2021 and 2020

Revenue

There were $951,538 and $442,435 revenue generated for the three months ended March 31, 2021 and 2020, respectively. The increase was attributable to revenues generated from digital learning solutions provided by Rayont Technologies in Australia, Malaysia, and the revenues generated from Prema Life. The Company continues looking for other opportunities which could potentially increase the profits of the Company.