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Rito Group Corp. - Quarter Report: 2018 March (Form 10-Q)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

 

For The Quarterly Period Ended March 31, 2018

 

or

 

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

 

For the transition period from ____________ to ____________

 

Commission File Number 000-55796

 

Rito Group Corp.

(Exact name of registrant issuer as specified in its charter)

 

Nevada   47-3588502
(State or other jurisdiction of
 incorporation or organization)
  (I.R.S. Employer
Identification No.)

 

Room 6C, 4/F, Block C, Hong Kong Industrial Centre,

489 Castle Peak Road, Lai Chi Kok, Hong Kong

(Address of principal executive offices, including zip code)

 

Registrant’s phone number, including area code (852) 2385-8598

 

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.

 

YES [X] NO [  ]

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section232.405 of this chapter) during the preceding twelve months (or 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” and “smaller reporting company” in Rule12b-2 of the Exchange Act. (Check one):

 

Large Accelerated Filer [  ] Accelerated Filer [  ] Non-accelerated Filer [  ] Smaller reporting company [X]

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule12b-2 of the Exchange Act). Yes [  ] No [X]

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class   Outstanding at May 10, 2018
Common Stock, $.0001 par value   55,528,284

 

 

 

 
 

 

TABLE OF CONTENTS

 

    Page
PART I FINANCIAL INFORMATION F-1
     
ITEM 1. FINANCIAL STATEMENTS: F-1
  Condensed Consolidated Balance Sheets as of March 31, 2018 (unaudited) and June 30, 2017 (audited) F-1
  Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended March 31, 2018 and 2017 (unaudited) F-2
  Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine Months Ended March 31, 2018 (audited) F-3
  Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2018 and 2017 (unaudited) F-4
  Notes to the Condensed Consolidated Financial Statements F-5 to F-13
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 3
ITEM 3. QUANTITATIVE AND QUALITATIVED IS CLOSURES ABOUT MARKET RISK 6
ITEM 4. CONTROLS AND PROCEDURES 6
     
PART II OTHER INFORMATION 7
     
ITEM 1 LEGAL PROCEEDINGS 7
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 7
ITEM 3 DEFAULTS UPON SENIOR SECURITIES 7
ITEM 4 MINE SAFETY DISCLOSURES 7
ITEM 5 OTHER INFORMATION 7
ITEM 6 EXHIBITS 7
  SIGNATURES 8

 

 2 
 

 

PART I — FINANCIAL INFORMATION

 

Item 1. Financial statements

 

RITO GROUP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2018 AND JUNE 30, 2017

(Currency expressed in United States Dollars (“US$”))

 

    As of  
    March 31, 2018     June 30, 2017  
    (Unaudited)     (Audited)  
ASSETS                
Current assets:                
Trade receivables     -       9,767  
Prepayments, deposits and other receivables     5,765       1,300  
Cash and cash equivalents     714,789       80,487  
                 
Total current assets     720,554       91,554  
                 
Non-current assets:                
Property, plant and equipment, net     179,764       -  
                 
TOTAL ASSETS   $ 900,318     $ 91,554  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities                
Accounts payable   $ 5,577     $ 9,109  
Other payables and accrued liabilities     465,959       59,898  
Short-term bank loans     7,022        
Convertible notes payable     -       26,910  
Total current liabilities     478,558       95,917  
                 
Non-current liabilities                
Long-term bank loans     34,154        
                 
TOTAL LIABILITIES   $ 512,712     $ 95,917  
                 
STOCKHOLDERS’ EQUITY                
Preferred stock, $0.0001 par value; 200,000,000 shares authorized; None issued and outstanding     -       -  
Common stock, $ 0.0001 par value; 600,000,000 shares authorized; 55,368,284 and 54,625,956 shares issued and outstanding as of March 31, 2018 and June 30, 2017, respectively     5,538       5,463  
Additional paid-in capital     2,607,274       1,629,267  
Accumulated other comprehensive income     21       29  
Accumulated deficit     (2,225,227 )     (1,639,122 )
                 
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)   $ 387,606     $ (4,363 )
                 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY   $ 900,318     $ 91,554  

 

See accompanying notes to the condensed consolidated financial statements.

 

 F-1 
 

 

RITO GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2018 AND 2017

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

    Three months ended
March 31,
    Nine months ended
March 31,
 
    2018     2017     2018     2017  
REVENUE   $ 60,060     $ 47,943     $ 88,569     $ 62,258  
                                 
COST OF REVENUE     (29,841 )     (26,013 )     (50,768 )     (39,546 )
                                 
GROSS PROFIT     30,219       21,930       37,801       22,712  
                                 
OTHER INCOME     -       -       38       -  
                                 
OPERATING EXPENSES                                
General and administrative     (229,747 )     (147,165 )     (618,774 )     (578,481 )
                                 
LOSS FROM OPERATIONS     (199,528 )     (125,235 )     (580,935 )     (555,769 )
                                 
Interest expense     (1,808 )     (518 )     (5,170 )     (31,970 )
                                 
LOSS BEFORE INCOME TAX     (201,336 )     (125,753 )     (586,105 )     (587,739 )
                                 
Income tax expense     -       -       -       -  
                                 
NET LOSS   $ (201,336 )   $ (125,753 )   $ (586,105 )     (587,739 )
                                 
Other comprehensive loss:                                
Foreign currency translation loss     2       -       (8 )     -  
                                 
COMPREHENSIVE LOSS     (201,334 )     (125,753 )     (586,113 )     (587,739 )
                                 
Net loss per share - Basic and diluted     (0.00 )     (0.00 )     (0.01 )     (0.01 )
                                 
Weighted average number of common shares outstanding – Basic and diluted     55,142,928       54,569,734       54,869,375       52,430,765  

 

See accompanying notes to the condensed consolidated financial statements.

 

 F-2 
 

 

RITO GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

    COMMON STOCK     ADDITIONAL     ACCUMULATED              
    Number of shares     Amount     PAID-IN
CAPITAL
   

COMPREHENSIVE

INCOME

    ACCUMULATED DEFICIT    

TOTAL

EQUITY

 
Balance as of June 30, 2017 (audited)     54,625,956     $ 5,463     $ 1,629,267     $           29     $ (1,639,122 )   $ (4,363 )
                                                 
Shares issued upon conversion of convertible notes principal and accrued interest at $0.25 per share     27,082       3       6,768       -       -       6,771  
                                                 
Shares issued in IPO at $1.5 per share     10,000       1       14,999       -       -       15,000  
                                                 
Shares issued upon conversion of convertible notes principal and accrued interest at $0.25 per share     27,082       3       6,768       -       -       6,771  
                                                 
Shares issued in IPO at $1.5 per share     30,000       3       44,997       -       -       45,000  
                                                 
Shares issued upon conversion of convertible notes principal and accrued interest at $0.25 per share     54,164       5       13,535       -       -       13,540  
                                                 
Shares issued in private placement at $1.5 per share     217,000       22       325,478       -       -       325,500  
                                                 
Shares issued in private placement at $1.5 per share     377,000       38       565,462       -       -       565,500  
                                                 
Foreign currency translation adjustment     -       -       -       (8 )     -       (8 )
                                                 
Net loss     -     $ -     $ -             $ (586,105 )   $ (586,105 )
                                                 
Balance as of March 31, 2018 (unaudited)     55,368,284       5,538       2,607,274       21       (2,225,227 )     387,606  

 

See accompanying notes to the condensed consolidated financial statements.

 

 F-3 
 

 

RITO GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED MARCH 31, 2018 AND 2017

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

 

    Nine Months Ended
March 31,
 
    2018     2017  
CASH FLOWS FROM OPERATING ACTIVITIES:                
Net loss   $ (586,105 )   $ (587,739 )
Adjustments to reconcile net loss to net cash used in operating activities                
Depreciation     -       -  
Interest expenses     5,170       31,970  
Changes in operating assets and liabilities:                
Subscriptions receivable     -       30,000  
Accounts receivable     9,767       (11,750 )
Prepayments, deposits and other receivables     (4,465 )     -  
Accounts payable     (3,532 )     (5,044 )
Other payables and accrued liabilities     406,061       (4,539 )
Net cash used in operating activities     (173,104 )     (547,102 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES:                
Purchase of plant and equipment     (179,764 )     -  
Net cash used in investing activities     (179,764 )     -  
                 
CASH FLOWS FROM FINANCING ACTIVITIES:                
Proceeds from issuance of shares in private placement     951,000       258,900  
Interest paid for convertible notes     -       (3,420 )
Effect of exchange rate changes on conversion of convertible notes     -       (5,373 )
Drawdown of bank borrowings     45,032       -  
Repayment of bank borrowings     (3,856 )     -  
Bank loan interest     (4,998     -  
Advances from directors     -       -  
Advances from a related company     -       -  
Net cash provided by financing activities     987,178       250,107  
                 
Effect of exchange rate changes on cash and cash equivalents     (8 )     -  
                 
Net change in cash and cash equivalents     634,302       (296,995 )
Cash and cash equivalents, beginning of period     80,487       449,328  
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 714,789     $ 152,333  
                 
SUPPLEMENTAL CASH FLOWS INFORMATION                
Cash paid for income taxes   $ -     $ -  
Cash paid for interest paid   $ (4,998   $ 3,420  

 

See accompanying notes to the condensed consolidated financial statements.

 

 F-4 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 1 - BASIS OF PREPARATION

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission that permit reduced disclosure for interim periods. Therefore, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

 

In the opinion of management, the consolidated balance sheet as of June 30, 2017 which has been derived from audited financial statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered necessary to state fairly the results for the periods presented. The results for the nine months ended March 31, 2018 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2018 for any future period.

 

These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Management’s Discussion and the audited financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended June 30, 2017.

 

NOTE 2 - ORGANIZATION AND BUSINESS BACKGROUND

 

Rito Group Corp. (the “Company”) was incorporated on March 24, 2015 under the laws of the state of Nevada.

 

The Company, through its subsidiaries, mainly engages in trading of retail goods such as cookware, jewelry and watches, and numerous other products.

 

Details of the Company’s subsidiaries:

 

  Company name   Place/date of incorporation   Particulars of issued capital   Principal activities   Percentage hold
                   
1. Sino Union International Limited (“Sino Union”)  

Anguilla

January 3, 2014

  84,500 shares of ordinary share of US$1 each   Investment holding   100%
                   
2. Rito International Enterprise Company Limited (“Rito International”)  

Hong Kong

August 12, 2014

  630,001 shares of ordinary share of HK$1 each   Trading of retail goods   100%
                   
3. 深圳市汇图贸易有限公司  

Shenzhen, PRC

June 27, 2017

  500,000 shares of ordinary share of RMB 1 each   Trading of retail goods, business and agriculture technology consulting   100%

 

Rito Group Corp. and its subsidiaries are hereinafter referred to as the “Company”.

 

NOTE 3 - GOING CONCERN UNCERTAINTIES

 

The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

As of March 31, 2018, the Company suffered an accumulated deficit of $2,225,227 and continuously incurred a net operating loss of $586,105 for the nine months ended March 31, 2018. The continuation of the Company as a going concern through June 30, 2017 is dependent upon improving the profitability and the continuing financial support from its stockholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.

 

 F-5 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINEMONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

 

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

The accompanying unaudited condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying consolidated financial statements and notes.

 

Basis of presentation

 

The accompanying condensed consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

 

Basis of consolidation

 

The condensed consolidated financial statements include the accounts of Rito Group Corp. and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

 

Use of estimates

 

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheets and revenues and expenses during the periods reported. Actual results may differ from these estimates.

 

Cash and cash equivalents

 

The company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents.

 

Plant and equipment

 

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational:

 

Categories  Estimated useful life  Residual value 
Leasehold improvement  5 years  $179,764 

 

Expenditures for maintenance and repairs are expensed as incurred. The gain or loss on the disposal of plant and equipment is the difference between the net sales proceeds and the carrying amount of the relevant assets and is recognized in the statement of operations.

 

Accounts receivable

 

Accounts receivable are recorded at the invoiced amount and do not bear interest. Management reviews the adequacy of the allowance for doubtful accounts on an ongoing basis, using historical collection trends and aging of receivables. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

 

 F-6 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

Revenue recognition

 

In accordance with the Accounting Standard Codification (“ASC”) Topic 605 “Revenue Recognition”, the Company recognizes revenue when the following four criteria are met: (1) delivery has occurred or services rendered; (2) persuasive evidence of an arrangement exists; (3) selling price is fixed or determinable; and (4) collectability is reasonably assured.

 

Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes applicable to the revenue. Revenue from trading of retail goods is recognized when title and risk of loss are transferred and there are no continuing obligations to the customer. Title and the risks and rewards of ownership transferred to and accepted by the customer when the products are collected by the customer at the Company’s office. Revenue is recorded net of sales discounts, returns, allowances, and other adjustments that are based upon management’s best estimates and historical experience and are provided for in the same period as the related revenues are recorded. Based on limited operating history, management estimates that there were no sales return for the period reported.

 

The Company derives its revenue from sales of goods to individuals. Generally, the Company recognizes revenue when products are sold and accepted by the customers and there are no continuing obligations to the customer.

 

Cost of revenues

 

Cost of revenue includes the purchase cost of retail goods for re-sale to the customers.

 

Income taxes

 

The provision of income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC Topic 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC Topic 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

The Company did not have any unrecognized tax positions or benefits and there was no effect on the financial conditions or results of operations for the nine months ended March 31, 2018. The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.

 

 F-7 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

Net loss per share

 

The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings per share”. Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive.

 

Foreign currencies translation

 

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 statements of operations.

 

The reporting currency of the Company and its subsidiary in Anguilla is United States Dollars (“US$”). The Company’s subsidiary in Hong Kong maintains its books and record in Hong Kong Dollars (“HK$”), 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 within the statement of stockholders’ equity.

 

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

 

    As of and for the
nine months ended
March 31,
 
    2018     2017  
Period-end / average HK$ : US$1 exchange rate     7.75       7.75  
Period-end / average CNY¥ : US$1 exchange rate     6.27       -  

 

Related parties

 

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

 

Fair value of financial instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, deposits and other receivables, accounts payable, other payables and accrued liabilities approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” (“ASC Topic 820-10”), with respect to financial assets and liabilities that are measured at fair value. ASC Topic 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

 F-8 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

  Level 1 : Observable inputs such as quoted prices in active markets;
   
  Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
   
  Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

 

Fair value estimates are made at a specific point in time based on relevant market information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

 

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and does not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

 

NOTE 5 - STOCKHOLDERS’ EQUITY

 

In August and September 2017, the Company issued an aggregated of 40,000 shares of its common stock at $1.50 per share for aggregate gross proceeds of $60,000.

 

In August and September 2017, the Company issued an aggregate of 108,328 shares of its common stock to various investors in conversion of outstanding convertible notes payable in aggregated principal and accrued interest of $25,000 and $2,082 respectively. The conversion price is $0.25 per share.

 

In November and December 2017, the Company issued an aggregated of 217,000 shares of its common stock at $1.50 per share for aggregate gross proceeds of $325,500.

 

From January to March 2018, the Company issued an aggregated of 377,000 shares of its common stock at $1.50 per share for aggregate gross proceeds of $565,500.

 

As of March 31, 2018, and June 30, 2017, the Company has a total of 55,368,284 and 54,625,956 shares, respectively of its common stock issued and outstanding. There are no shares of preferred stock issued and outstanding.

 

NOTE 6 - OTHER PAYABLES AND ACCRUED LIABILITIES

 

As of March 31, 2018, and June 30, 2017, the Company has other payables and accrued liabilities of $465,959 and $59,898. Other payables and accrued liabilities are comprised of accruals of $71,538, due to subsidiary director of $143,289, advance collection of $43,573 and due to Wisdom Union and ONC Lawyers of $207,549.

 

NOTE 7 – PROPERTY, PLANT AND EQUIPMENT

 

    As of  
    March 31, 2018     June 30, 2017  
          (audited)  
Leasehold improvement   $ 179,764     $ -  
                              
      179,764       -  
Less: Accumulated depreciation     -       -  
Total   $ 179,764     $ -  

 

Depreciation expense, classified as operating expenses, was $Nil and $Nil for the three months and nine months ended March 31, 2018, respectively, because the leasehold improvement is not yet completed and hence no depreciation.

 

NOTE 8 - BANK LOANS

 

    As of  
    March 31, 2018     June 30, 2017  
          (audited)  
Bank loan from financial institution in Hong Kong                
The Hongkong and Shanghai Banking Corporation Limited   $ 41,176     $   -  
                 
      41,176       -  
Less: Current portion     (7,022 )     -  
Long-term portion   $ 34,154     $ -  

 

In July 2017, the Company obtained a loan in the principal amount of HKD349,000 (approximately $45,032) from The Hongkong and Shanghai Banking Corporation Limited, a financial institution in Hongkong which bears interest at the base lending rate less 0.7% flat rate per month with 60 monthly installments of HKD8,260 (approximately $1,066) each and will mature in July 2022.

 

 F-9 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 7 - INCOME TAXES

 

For the nine months ended March 31, 2018 and 2017, the local (United States) and foreign components of loss before income taxes were comprised of the following:

 

    For the nine months ended
March 31,
 
    2018     2017  
Tax jurisdictions from:                
– Local   $ (40,785 )   $ (67,723 )
– Foreign, representing                
Anguilla     (4,564 )     (24,547 )
Hong Kong     (540,112 )     (495,469 )
PRC     (644 )     -  
                 
Loss before income taxes     (586,105 )     (587,739 )

 

Provision for income taxes consisted of the following:

 

      For the nine months ended
March 31,
 
      2018       2017  
Current:                
– Local   $ -     $ -  
– Foreign (Hong Kong)     -       -  
– Foreign (PRC)     -       -  
                 
Deferred:                
– Local     -       -  
– Foreign (Hong Kong)     -       -  
– Foreign (PRC)     -       -  
    $ -     $ -  

 

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. The Company has subsidiaries that operate in various countries: United States, Anguilla, Hong Kong and People’s Republic of China that are subject to taxes in the jurisdictions in which they operate, as follows:

 

United States of America

 

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of March 31, 2018, the operations in the United States of America incurred $ 211,823 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2036, if unutilized. The Company has provided for a full valuation allowance of $44,482 against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

 F-10 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

Anguilla

 

Under the current laws of the Anguilla, Sino Union is registered as an international business company which is governed by the International Business Companies Act of Anguilla and there is no income tax charged in Anguilla.

 

Hong Kong

 

Rito International is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5% on its assessable income. For the nine months ended March 31, 2018, no provision for income tax is required due to operating loss incurred. As of March 31, 2018, Rito International incurred $1,894,575 of cumulative net operating losses which can be carried forward to offset future taxable income at no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $312,605 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

People’s Republic of China

 

深圳市汇图贸易有限公司 is operating in the People’s Republic of China (“PRC”) subject to the Corporate Income Tax governed by the Income Tax Law of the People’s Republic of China with a unified statutory income tax rate of 25%. For the nine months ended March 31, 2018, no provision for income tax is required due to operating loss incurred. As of March 31, 2018, 深圳市汇图贸易有限公司 incurred $644 of cumulative net operating losses which can be carried forward to offset future taxable income at no expiration. The Company has provided for a full valuation allowance against the deferred tax assets of $161 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

 

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of March 31, 2018 and June 30, 2017:

 

    As of  
    March 31, 2018     June 30, 2017  
          (audited)  
Deferred tax assets:                
Net operating loss carryforwards                
– United States of America   $ 44,482     $ 59,863  
– Hong Kong     312,605       223,487  
– PRC     161       -  
      357,248       283,350  
Less: valuation allowance     (357,248 )     (283,350 )
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 $357,248 as of March 31, 2018. During the nine months ended March 31, 2018, the valuation allowance increased by $73,898, primarily relating to net operating loss carryforwards from the various tax regime.

 

 F-11 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

NOTE 8 - RELATED PARTY TRANSACTIONS

 

   For the nine months ended
March 31,
 
   2018   2017 
Professional fee paid to:          
- Related party A  $11,601   $11,030 
- Related party B   13,200    33,803 
- Related party C   430    - 
           
Website design and maintenance fee paid to:          
- Related party D   588    843 
           
   $25,819   $45,676 

 

Related party A, B, C and D are the fellow subsidiaries of a corporate shareholder of the Company.

 

The related party transactions are generally transacted in an arm-length basis at the current market value in the normal course of business.

 

NOTE 9 - CONCENTRATIONS OF RISKS

 

(a) Major customers

 

For the three months ended March 31, 2018, the customers who accounted for 100% of the Company’s revenues and the accounts receivable balances at period-end are presented as follows:

 

    For the three months ended
March 31, 2018
    As of
March 31, 2018
 
    Revenues     Percentage of
revenues
    Accounts
receivable
 
Customer A   $ 40,111       67 %   $      -  
Customer B     19,949       33 %     -  
Total:   $ 60,060       100 %   $ -  

 

For the three months ended March 31, 2017, the customers who accounted for 10% or more of the Company’s revenues and the accounts receivable balances at period-end are presented as follows:

 

    For the three months ended
March 31, 2017
    As of
March 31, 2017
 
    Revenues     Percentage of
revenues
    Accounts
receivable
 
Customer A   $ 31,651       66 %   $ -  
Customer B     11,751       25 %     11,751  
Total:   $ 43,402       91 %   $ 11,751  

 

For the nine months ended March 31, 2018, the customers who accounted for 10% or more of the Company’s revenues and the accounts receivable balances at period-end are presented as follows:

 

    For the nine months ended
March 31, 2018
    As of
March 31, 2018
 
    Revenues     Percentage of
revenues
    Accounts
receivable
 
Customer A   $ 40,111       45 %   $        -  
Customer B     47,750       54 %     -  
Total:   $ 87,861       99 %   $ -  

 

For the nine months ended March 31, 2017, the customers who accounted for 10% or more of the Company’s revenues and the accounts receivable balances at period-end are presented as follows:

 

    For the nine months ended
March 31, 2017
    As of
March 31, 2017
 
    Revenues     Percentage of
revenues
    Accounts
receivable
 
Customer A   $ 31,651       51 %   $ -  
Customer B     26,066       42 %     11,751  
Total:   $ 57,717       93 %   $ 11,751  

 

 F-12 
 

 

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED MARCH 31, 2018

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

 

(b) Major vendors

 

For the three months ended March 31, 2018, the vendors who accounted for 10% or more of the Company’s cost of revenues and its accounts payable balance at period-end are presented as follows:

 

    For the three months ended
March 31, 2018
    As of
March 31, 2018
 
    Purchases     Percentage of
purchases
    Accounts
payable
 
Vendor A   $ 10,917       37 %   $ -  
Vendor B     14,169       47 %     5,098  
Total:   $ 25,086       84 %   $ 5,098  

 

For the three months ended March 31, 2017, the vendors who accounted for 100% of the Company’s cost of revenues and its accounts payable balance at period-end are presented as follows:

 

    For the three months ended
March 31, 2018
    As of
March 31, 2018
 
    Purchases     Percentage of
purchases
    Accounts
payable
 
Vendor A   $ 26,014       100 %   $        -  
                         
Total:   $ 26,014       100 %   $ -  

 

For the nine months ended March 31, 2018, the vendors who accounted for 10% or more of the Company’s cost of revenues and its accounts payable balance at period-end are presented as follows:

 

    For the nine months ended
March 31, 2018
    As of
March 31, 2018
 
    Purchases     Percentage of
purchases
    Accounts
payable
 
Vendor A   $ 31,505       62 %   $ -  
Vendor B     14,169       28 %     5,098  
Total:   $ 45,674       90 %   $ 5,098  

 

For the nine months ended March 31, 2017, the vendors who accounted for 10% or more of the Company’s cost of revenues and its accounts payable balance at period-end are presented as follows:

 

   For the nine months ended
March 31, 2017
   As of
March 31, 2017
 
   Purchases   Percentage of
purchases
   Accounts
payable
 
Vendor A  $26,014    66%  $- 
Vendor B   13,532    34%   - 
Total:  $39,546    100%  $- 

 

(c) Credit risk

 

Financial instruments that are potentially subject to credit risk consist principally of accounts receivable. The Company believes the concentration of credit risk in its accounts receivables is substantially mitigated by its ongoing credit evaluation process and relatively short collection terms. The Company does not generally require collateral from customers. The Company evaluates the need for an allowance for doubtful accounts based upon factors surrounding the credit risk of specific customers, historical trends and other information.

 

NOTE 10 - COMMITMENTS AND CONTINGENCIES

 

The Company leases an office premises in Hong Kong under a non-cancellable operating lease that expire on December 2018, with an aggregate fixed monthly rent of approximately $1,548.

 

The aggregate lease expense for the three months ended March 31, 2018 and 2017 were $4,644 and $4,645, respectively.

 

The aggregate lease expense for the nine months ended March 31, 2018 and 2017 were $13,932 and $12,387, respectively.

 

As of March 31, 2018, the Company has the aggregate future minimum rental payments due under a non-cancellable operating lease in the next two years, as follows:

 

Period ending March 31:        
2018   $ 13,937  
         
    $ 13,937  

 

NOTE 11 - SUBSEQUENT EVENTS

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2018 up through the date the Company presented this condensed consolidated financial statements.

 

On April 6, 2018, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 10,000 shares at a price of $1.50 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Shum Bun Chuen Banny (the “investor”), pursuant to the Subscription Agreements dated as of April 6, 2018 between the Company and the investor. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

 

On April 17, 2018, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 30,000 shares at a price of $1.50 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Lam Mei Yi Olive and Tsang Pui Ming (the “investors”), pursuant to the Subscription Agreements dated as of April 17, 2018 between the Company and the investors. Lam Mei Yi Olive purchased 20,000 shares, while Tsang Pui Ming purchased 10,000 shares. The net proceeds to the Company amounted to $45,000. The $45,000 in proceeds went directly to the Company as working capital.

 

On April 24, 2018, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 90,000 shares at a price of $1.50 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to three investors (the “investors”), pursuant to the Subscription Agreements dated as of April 24, 2018 between the Company and the investors. Lui Tin Shing & Tse Lai Nar Lana purchased 20,000 shares, Lui Man Hei purchased 20,000 shares and Wong Hei purchased 50,000. The net proceeds to the Company amounted to $135,000. The $135,000 in proceeds went directly to the Company as working capital.

 

On April 26, 2018, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 20,000 shares at a price of $1.50 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to tow investors (the “investors”), pursuant to the Subscription Agreements dated as of April 26, 2018 between the Company and the investors. Leung Mei Ha purchased 10,000 shares, while Leung Mee Yee Minnie purchased 10,000 shares. The net proceeds to the Company amounted to $30,000. The $30,000 in proceeds went directly to the Company as working capital.

 

On April 27, 2018, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 10,000 shares at a price of $1.50 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to an investor (the “investor”), pursuant to the Subscription Agreements dated as of April 27, 2018 between the Company and the investor. Choi Kam Tong purchased 10,000 shares. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

 

 F-13 
 

 

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

 

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended June 30, 2017 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

 

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations. “These statements are not guarantees of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form S-1 Amendment No.6, dated April 18, 2016, in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this transition report on Form10-Q. The following should also be read in conjunction with the unaudited Condensed Consolidated Financial Statements and notes thereto that appear elsewhere in this report.

 

Company Overview

 

Rito Group Corp. (the “Company” or “Rito”) was incorporated under the laws of the State of Nevada on March 24, 2015. Rito Group Corp is a company that operates through its wholly owned subsidiary, Sino Union International Limited, a Company organized under the laws of the British Colony, Anguilla. It should be noted that the wholly owned subsidiary, Sino Union International Ltd. owns 100% of Rito International Enterprise Company Limited, a Hong Kong Company. We have incorporated a new company namely 深圳市汇图贸易有限公司 in China, with 100% equity interest owned by Rito International Enterprise Company Limited.

 

At this time, we operate exclusively through our wholly owned subsidiary and share the same business plan of our subsidiary which is the sale of miscellaneous retail goods. To date the goods sold have been sold through the individual efforts of our management by selling to personal contacts, and the sales have consisted of stainless steel and crystal accessories from Steela + Steelo as well as cookware from Malox. Sino Union International Limited also shares the same business plan of Rito International Enterprise Company Limited.

 

The future business of Rito is the development of “Rito Online mall” which will provide a platform for merchants and customers to facilitate transactions and take advantage of the growth opportunity we have identified in Hong Kong’s E-Commerce Industry. The Rito Online Mall has not yet been developed and is not operational at this time.

 

Results of Operation

 

For the three months ended March 31, 2018 and 2017

 

Revenues

 

For the three months ended March 31, 2018 and 2017, the Company generated revenue in the amount of $60,060 and $47,943 respectively. Our gross profits for the three months ended March 31, 2018 and 2017 was $30,219 and $21,930 respectively. The gross profit margin for the three months ended March 31, 2018 and 2017 was 50% and 46% respectively. The increase in gross profits is due to increase in sales.

 

General and administrative expenses

 

For the three months ended March 31, 2018 and 2017, we have had general and administrative expenses in the amount of $229,747 and $147,165 respectively, an increase of $82,582 or 56%. These expenses are comprised of advertising and promotion expenses of $28,773, marketing expenses of $12,038 information technology development expenses of $19,466 and payroll expenses of $73,203 for the three months ended March 31, 2018.

 

 3 
 

 

Net loss

 

Our net loss for the three months ended March 31, 2018 and 2017 was $201,336 and $125,753 respectively. The net loss mainly derived from the general and administrative expenses incurred.

 

For the nine months ended March 31, 2018 and 2017

 

Revenues

 

For the nine months ended March 31, 2018 and 2017, the Company generated revenue in the amount of $88,569 and $62,258 respectively. Our gross profits for the nine months ended March 31, 2018 and 2017 was $37,801 and $22,712, respectively. The increase in revenue and gross profits is due to higher sales order from a customer. The gross profit margin for the nine months ended March 31, 2018 and 2017 was 43% and 36% respectively. We believe that in order to attract more customers in the future we must increase our marketing efforts and or develop new products.

 

General and administrative expenses

 

For the nine months ended March 31, 2018 and 2017, we have had general and administrative expenses in the amount of $618,774 and $578,481 respectively, an increase of $40,293 or 7%. The increase is mainly due to the business is still under development and expansion. These expenses are mainly comprised of information technology development expenses of $30,829, advertising and promotion expenses of $55,427, marketing expenses of $127,634, payroll expenses of $189,332 and entertainment expenses of $39,275 for the nine months ended March 31, 2018.

 

Net loss

 

Our net loss for the nine months ended March 31, 2018 and 2017 was $586,105 and $587,739 respectively. The net loss mainly derived from the general and administrative expenses incurred.

 

Liquidity and Capital Resources

 

Cash Used in Operating Activities

 

Net cash used in operating activities was $173,104 for the nine months ended March 31, 2018 as compared to net cash used in operating activities of $547,102 for the nine months ended March 31, 2017. The cash used in operating activities was a result of our net loss attributable to payroll expenses, marketing expenses and advertising and promotion.

 

Cash Used in Investing Activities

 

Net cash used in investing activities was $179,764 and $0 for the nine months ended March 31, 2018 and 2017, respectively. The cash used in investing activities for the nine months ended March 31, 2018 was resulted from the purchase of plant and equipment.

 

Cash Provided by Financing Activities

 

Net cash provided by financing activities were $987,178 and $250,107 for the nine months ended March 31, 2018 and 2017 respectively. The cash provided by financing activities was contributed from the aggregate proceeds of $951,000 from the issuance of shares in initial public offering and private placement during the nine months ended March 31, 2018 and draw down of bank borrowings of $45,032.

 

 4 
 

 

There were no advances from directors and related company as of March 31, 2018 and June 30, 2017.

 

In regards to all of the above transactions we claim an exemption from registration afforded by Section 4(a)(2) and/or Regulation S of the Securities Act of 1933, as amended (“Regulation S”) for the above sales of the stock since the sales of the stock were made to non-U.S. persons (as defined under Rule 902 section (k)(2)(i) of Regulation S), pursuant to offshore transactions, and no directed selling efforts were made in the United States by the issuer, a distributor, any of their respective affiliates, or any person acting on behalf of any of the foregoing.

 

Going Concern

 

As of March 31, 2018, the Company suffered an accumulated deficit of $2,225,227 and incurred a continuous net operating loss of $586,105 for the nine months ended March 31, 2018. These matters raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements included elsewhere in this report have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

Off-balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of March 31, 2018.

 

Related party transactions

 

   For the nine months ended
March 31,
 
   2018   2017 
Professional fee paid to:          
- Related party A  $11,601   $11,030 
- Related party B   13,200    33,803 
- Related party C   430    - 
           
Website design and maintenance fee paid to:          
- Related party D   588    843 
           
   $25,819   $45,676 

 

Related party A, B, C and D are the fellow subsidiaries of a corporate shareholder of the Company.

 

The related party transactions are generally transacted in an arm-length basis at the current market value in the normal course of business.

 

 5 
 

 

Contractual Obligations

 

As of March 31, 2018, the Company has no contractual obligations involved.

 

Item 3 Quantitative and Qualitative Disclosures About Market Risk

 

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item.

 

Item 4 Controls and Procedures

 

Evaluation of Disclosure Controls and Procedures:

 

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of March 31, 2018. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2018, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

 

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of March 31, 2018, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

 

Changes in Internal Control Over Financial Reporting:

 

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 6 
 

 

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

 

We know of no materials, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

Incorporated by reference to the Company’s Form 8-K, filed with the Securities and Exchange Commission on January 19, 2017 and January 25, 2017.

 

Item 3. Defaults Upon Senior Securities

 

None.

 

Item 4. Mine Safety Disclosures

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

ITEM 6. Exhibits

 

31.1   Rule 13(a)-14(a) / 15(d)-14(a) Certification of principal executive office
     
31.2   Rule 13(a)-14(a) / 15(d)-14(a) Certification of principal financial officer
     
32.1   Section 1350 Certification of principal executive officer
     
32.2   Section 1350 Certification of principal financial officer

 

 7 
 

 

SIGNATURES

 

Pursuant to the requirements 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.

 

  RITO GROUP CORP.
  (Name of Registrant)
     
Date: May 14, 2018    
     
  By: /s/ Choi Tak Yin Addy
  Title: Chief Executive Officer, President, Director (Principal Executive Officer)
     
Date: May 14, 2018    
     
  By: /s/ Choy Wing Fai
  Title: Chief Financial Officer, Chief Accounting Officer, Treasurer and Director
    (Principal Financial Officer and Principal Accounting Officer)
     
Date: May 14, 2018    
     
  By: /s/ Or Ka Ming
  Title: Chief Operating Officer, Secretary, Director
     
Date: May 14, 2018    
     
  By: /s/ Kao Pun Yiu Philip
  Title: Chief Technical Officer, Director

 

 8