NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE
1 - ORGANIZATION AND BUSINESS DESCRIPTION
Rayont
Inc. (formerly Velt International Group Inc., or “Rayont” or the “Company”) is a Nevada corporation formed on
February 7, 2011. Rayont uses scientific tools such as DNA, microbiome, iridology and other tests to diagnose and personalize the prescription
of natural complementary medicine products, services and treatments to our patients in the markets we operate.
Given
the acquisition of THF Holdings Pty Ltd and Rayont International (Labuan) Inc as well as the cancer treatment assets that the Company
has invested on, Rayont has been focusing on commercializing these investments. The commercialization of the current assets for cancer
treatment requires medical board approval for almost all of the countries subject to the license. Rayont has conducted the initial study
to identify the requirements for obtaining the approvals for using PDT to treat cancer across different jurisdictions in Sub-Saharan
Africa (“SSA”). The same PDT technology has been licensed in China, Australia and New Zealand. It is currently undergoing
medical trials in Australia and China. The recent announcements show positive results that the technology works. The Company believes
that it will take time before it can start commercializing these assets and start to generate revenues and operating profits. THF Holdings
Pty Ltd has subsequently changed name to Rayont (Australia) Pty Ltd,
On
August 26, 2020, the Company established Rayont Technologies Pty Ltd. (Rayont Technologies) through Rayont Australia. Rayont Technologies
is an Australian corporation and IOT providing services such as end-to-end employee engagement and experience platform for businesses
in Australia and globally.
Rayont
Technologies Pty Ltd entered an agreement on October 15, 2020 with Ms. Kayla Ranee Smith to purchase the assets of Workstar Tech (Aust)
Pty Ltd for AUD 302,876.22 payable over 90 days upon Ms Smith transfers the assets to Rayont Technologies Pty Ltd. Rayont Technologies
Pty Ltd was sold in January 31, 2022.
On
December 23, 2020, Rayont Australia Pty Ltd, a wholly-owned subsidiary of Rayont Inc. (the “Company”), acquired all of the
issued and outstanding capital stock of Prema Life Pty Ltd, an Australian company (“Prema Life”), from TheAlikasa (Australia)
Pty Ltd, Prema Life’s sole shareholder. The acquisition of Prema Life was completed, and Prema Life became a subsidiary of the
Company. Prema Life is a HACCP certified manufacturer and supplier of functional foods and supplements, and of practitioner only naturopathic
and homeopathic medicines. Prema Life produces an extensive range of products including proteins, green blends, sports nutrition, weight
management and maintenance, and health and wellness products. In addition, the acquisition was accounted for business combination under
common control. The method of accounting for such transfers, as well as the acquisition of businesses, was similar to the pooling of
interest’s method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each
combining entity are carried forward to the balance sheet of the combined entity. The amount by which the proceeds paid by the Company
differs from Prema Life’s historical carrying value of the acquired business is accounted for as a return of capital or contribution
of capital. In addition, transfers of net assets between entities under common control were accounted for as if the transfer occurred
from the date that the Company and the acquired business were both under the common control and had begun operations. Prema Life Pty
Ltd was sold on September 1, 2022.
On
December 23, 2020, pursuant to an Acquisition Agreement, Rayont Australia Pty Ltd, a wholly-owned subsidiary of Rayont Inc. (the “Company”),
acquired all of the issued and outstanding capital stock of GGLG Properties Pty LTD, an Australian company (“GGLG”), from
TheAlikasa (Australia) Pty Ltd, GGLG’s sole shareholder (the “Seller”). The Seller is an affiliate of the Company and
therefore the acquisition is being treated as a related party transaction. In addition, the acquisition was accounted for business combination
under common control. The method of accounting for such transfers, as well as the acquisition of businesses, was similar to the pooling
of interest’s method of accounting. Under this method, the carrying amount of net assets recognized in the balance sheets of each
combining entity are carried forward to the balance sheet of the combined entity. The amount by which the proceeds paid by the Company
differs from GGLG ‘s historical carrying value of the acquired business is accounted for as a return of capital or contribution
of capital. In addition, transfers of net assets between entities under common control were accounted for as if the transfer occurred
from the date that the Company and the acquired business were both under the common control and had begun operations. The purchase price
is $605,920, which is a 10% discount of the total amount of GGLG’s net tangible assets. The purchase price will be paid in six
installments after a $265,300 down payment. In the event an installment payment is not paid timely, the Seller has agreed to accept shares
of the Company valued at $0.87 per share. The price per share is based on a 20% discount of the average share price on the OTC Markets
over the last 30 trading days.
On
February 18, 2021 the Foreign Investment Review Board approved the capital stock transferring of GGLG Properties Pty Ltd to the Rayont
Australia Pty Ltd. On March 9, 2021, the parties agreed to amend the acquisition agreements for the GGLG Properties Pty Ltd and as per
Board Resolution, the Company issued 710,713 shares of its common stocks in leu of payment by Rayont Australia Pty Ltd of approximately
$605,920 (AUD 800,000) to TheAlikasa Pty Ltd as full and final payment for the acquisition of 100% of the issued and outstanding common
stock of GGLG. This company was sold on September 1, 2022.
On
December 29, 2020, the Company incorporated Rayont Malaysia Sdn Bhd with a paid-up capital of $25 and on December 31, 2020 was incorporated
Rayont Technologies (M) Sdn Bhd with a paid-up capital of $25 from Rayont Malaysia Sdn Bhd to carry out its business activities in Malaysia.
On February 5, 2021 Rayont Technologies (M) Pty Ltd entered into an Asset Purchase Agreement with Sage Interactive Sdn Bhd to purchase
its assets in consideration of the payment of USD 105,000.00. These assets include software for remote learning, customer contracts,
digital content and two key employees and one director. These assets will operate in Malaysia under Workstar trademark and operation
shall be integrated with Rayont Technologies Australia to drive efficiency and scale of digital assets operations. Rayont Technologies
(M) Sdn Bhd was sold in January 31, 2022.
On
April 1, 2022 under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty Ltd, acquired 100% of the
total outstanding shares and units of No More Knots Pty Ltd, No More Knots (Taringa) Pty Ltd and No More Knots (Newmarket) Pty Ltd in
exchange for AUD3,000,000 (approximately USD 2,247,865) cash, payable in two tranches. The first trench of USD1,910,685 (AUD2,550,000)
is paid on May 4, 2022 and the second tranche of USD337,180 (AUD450,000) is payable before or on January 31, 2023 if three conditions
are met namely;
1.
Achievement of EBIDTA of USD500,000 (AUD700,000) by June 30, 2022.
2.
Former owner remain and transition the business until December 31, 2022.
3.
Complete the opening of new branch by December 31,2022.
As
of June 30, 2022 the business failed to meet the first condition so the amount of the USD110,000 (AUD150,000) has been deducted from
the purchase price. The remaining conditions have been met by the vendor and as of December 29,2022 is unconditional and it has been
agreed to be paid on 31 January 2023.
No
More Knots is home to over 45 tertiary qualified therapists who specialise in Remedial Massage and Myotherapy
As
of this filing date, the Company has not completed and file its Form 8K as required by the SEC rules and regulations. The Company is
in the process of completing all necessary documentation for the Form 8K filling in due time.
On
May 14, 2022 Wonderfoods Retail Pty Ltd, a wholly owned subsidiary of Rayont (Australia) Pty Ltd, entered into an agreement with Jovestone
Pty Ltd to purchase the business of Go Vita at Capalaba in consideration for USD6,918 (AUD10,000) and existing stock value at USD64,337
(AUD93,000) payable in three instalments. The total payment for the purchase of the business completed on August 17, 2022.
On
June 29, 2022 Rayont (Australia) Pty Ltd (“Asset Seller”), Rayont International (L) Limited (“License Seller”)
and Nova Medical Group Pty Ltd (“Buyer”) signed the Asset Sale Agreement for sale of Next Generation Photo Dynamic Therapy
(NGPDT) License for Sub-Sahara Africa and its equipment for a consideration of USD3,500,000 where the consideration is split as follows:
●
License for Sub-Sahara Africa – USD 2,500,000
●
Equipment – USD 1,000,000
On
July 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary No More Knots (Ipswich) Pty Ltd, acquired the business
of the Ipswich Massage from
buyer OneDose Pty Ltd, in exchange for AUD825,000 (approximately USD600,000). Rayont will pay the purchase price in four instalments.
As of today, it is remaining the last instalment that is due on July 5, 2023 in the amount of AUD51,000 (USD).
On
August 22, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Rayont Australia Pty Ltd, acquired 100% of the
total outstanding shares and units of The SkinDNA Company Pty Ltd, in exchange for AUD750,000 (approximately USD500,000). Rayont paid
by issuing 1,524,044 of its shares to the shareholder of record of The Skin DNA Company Pty Ltd. The
Corporation’s common stock was valued at USD0.34 per share on the OTC Markets on August 22, 2022.
On
November 25, 2022, the Company received a termination request from the former shareholders of The SkinDNA Company Pty Ltd. Both parties
are discussing ways how to resolve the concerns each party has through informal mediation.
On
September 1, 2022, Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty
Ltd incorporated Biomimic Pty Ltd for the amount of $70.
On
September 1, 2022, Rayont Inc., through its wholly owned subsidiary No More Knots Holdings Pty
Ltd incorporated Health Script Pty Ltd for the amount of $70.
On
September 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired the assets from
Tugun Compounding Pty Ltd, in exchange for AUD665,000 (approximately USD450,870). The sum of USD265,520 (AUD390,000) is made as “the
Cash Payment” and USD 185,350 (AUD275,000) is paid by issuing 545,147 shares at $0.34 per share of Rayont Inc to the shareholder
of record of Tugun Compounding Pty Ltd.
On
September 1, 2022, under the agreement Rayont Inc., sold 100% of the total outstanding shares and units of Rayont (Australia) Pty Ltd,
Prema Life Pty Ltd and Rayont Properties Pty Ltd ATF
Rayont Property Trust, in exchange for AUD4,944,225 (approximately USD3,352,185) to the buyer Exit
Properties Pty Ltd.
On
September 3, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired intangible and
tangible assets from Prema Life Pty Ltd, in exchange for AUD1,050,000 (approximately USD718,725).
About
Rayont Inc
Rayont
Inc is a Nevada USA company. Rayont operates in the personalized natural healthcare sector in USA and Australia.
Rayont
uses scientific tools such as DNA, microbiome, iridology and other tests to personalize diagnoses, prescription and treatments of natural
complementary and alternative medicine products, services and treatments to our patients in the markets we operate.
As
of September 30, 2022, the company group structure consisted of the following companies:
NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis
of Presentation
The
unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted
in the United States of America (“GAAP”) for interim financial information and the rules of the Securities and Exchange Commission,
and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s most recent
Annual Financial Statements filed with the SEC on Form 10-K for the year ended June 30, 2022. In the opinion of management, all adjustments,
consisting of normal recurring adjustments, necessary for a fair presentation of financial position and the results of operations for
the interim period presented have been reflected herein. The results of operations for the interim period are not necessarily indicative
of the results to be expected for the full year. Notes to the unaudited interim financial statements which would substantially duplicate
the disclosures contained in the audited financial statements for the most recent fiscal period, as reported in the Form 10-K for the
year ended June 30, 2022, have been omitted.
Use
of Estimates
The
preparation of our consolidated financial statements and accompanying notes in conformity with GAAP requires us to make certain estimates
and assumptions. Actual results could differ from those estimates.
Going
Concern
The
Company had an operating loss of $249,287 for the three months ended September 30, 2022. The accumulated deficit of the Company is $3,133,435
as of September 30, 2022. 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 did not generate enough revenues to cover its operating expense during the quarter ended September 30, 2022. The Company plans
to continue obtaining funding from the majority shareholder and the President of the Company to support the Company’s normal business
operating. There is no assurance, however, that the Company will be successful in raising the needed capital and, if funding is available,
that it will be available on terms acceptable to the Company.
The
consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets,
or the amounts and classification of liabilities that might be necessary in the event that the Company cannot continue as a going concern.
Concentration
of Risk
The
Company maintains its cash in bank accounts which, at times, may exceed the federally insured limits. The Company has not experienced
any losses in such accounts and believes it is not exposed to any significant credit risk on cash in bank.
There
is no customer who accounted for 10% or more of the Company’s sales and there is no customer that accounted for more than 10% of
accounts receivable for the three months ended September 30, 2022 and 2021, respectively. For more information, please read note no.8.
There
is no supplier who accounted for 10% or more of the Company’s cost of sales for the three months ended September 30, 2022 and 2021,
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 September
30, 2022 and June 30, 2022, the Company’s notes payable has stated borrowing rates that are consistent with those currently available
to the Company and, accordingly, the Company believes the carrying value of these debt instruments approximates their fair value.
Fair
value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy which prioritizes the inputs
used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets
or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). These tiers include:
| |
● |
Level
1, defined as observable inputs such as quoted prices for identical instruments in active markets; |
| |
● |
Level
2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted
prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active;
and |
| |
● |
Level
3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions,
such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Cash
and Cash Equivalents
The
Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
As of September 30, 2022 and June 30, 2022, the Company had cash in bank of $28,921 and $185,782, 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 September 30, 2022 and June 30, 2022.
Inventories
Inventories
consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the
weighted average method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving
merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment.
The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Condensed
Statements of Operations and Comprehensive Income.
Intangible
assets
Intangible
assets for purchased are recognized and measured at cost upon acquisition and consist of the Company’s exclusive license with various
useful life.
As
of September 30, 2022 and June 30, 2022, the Company had intangible assets of $307,416 and $0. respectively associated with Rayont International’s
exclusive license for registering and commercializing PhotosoftTM technology for treatment of all cancers across Sub-Sahara
African region. The technology has been licensed in Australia, New Zealand, China, Malaysia and Sub-Sahara Africa which is sold on June
29, 2022. The other intangible assets are associated with trademark, website, software that Rayont Technologies Pty Ltd entered into
an agreement on October 15, 2020 to purchase the assets of Workstar Tech (Aust) Pty Ltd. This company was sold on January 31, 2022. Intangible
assets are not part of the balance sheets as of June 30, 2022 and September 30, 2022.
In
addition, on February 5, 2021 Rayont Technologies (M) Sdn Bhd entered into an Asset Purchase Agreement with Sage Interactive Sdn Bhd
to purchase intangible assets include software for remote learning, customer contracts and digital content. As of June 30, 2021, the
carrying amount of this asset is $100,625. This company was sold on January 31, 2022 and its intangible assets are not part of the balance
sheets as of June 30, 2022 and September 30, 2022.
For
other intangible assets, company determined the useful life of the asset as 10 years and it’s amortized based on the useful life.
On
September 3, 2022, the Company’s subsidiary, Health Script Pty Ltd, acquired the assets of
Prema Life Pty Ltd, in exchange for AUD1,050,000 (approximately USD718,725).
These
assets include intangible and tangible assets. Intangible assets are customer and formulation database in the amount of USD148,092, trademark,
website in the amount of USD162,448 and inventory in the amount of USD408,185 as of September 30, 2022.
Amortization
is computed using the straight-line method over the 10-year estimated useful lives of the customer and formulation database, trademark
and 5-year estimated useful lives of the website.
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, 2022, and determined there was no impairment of indefinite
lived intangibles.
Property
and equipment
Property
and equipment are carried at cost and, less accumulated depreciation. The cost of repairs and maintenance is expensed as incurred; major
replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed
from the accounts, and any resulting gains or losses are included in income in the year of disposal. The Company examines the possibility
of decreases in the value of property and equipment when events or changes in circumstances reflect the fact that their recorded value
may not be recoverable.
The
Company’s property and equipment mainly consists of computer and laser equipment. Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, which range from 4-40 years.
Impairment
of Long-lived Assets
The
Company reviews long-lived assets when changes in circumstances or event could impact the recoverability of the carrying value of the
assets. Recoverability of long-lived assets is determined by comparing the estimated undiscounted cash flows related to the long-lived
assets to their carrying value. Impairment is determined by comparing the present value of future undiscounted cash flows, or some other
fair value measure, to the carrying value of the asset. For the three months ended September 30, 2022 and September 30, 2021, no impairment
of long-lived assets was indicated, and no impairment loss was recorded.
Revenue
Recognition
Revenue
is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we
expect to be entitled to in exchange for those products and services. We enter into contracts that include products and services, which
are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances
for returns and any taxes collected from customers.
The
Company’s contracts with customers may include multiple performance obligations. Revenue relating to agreements that provide more
than one performance obligation is recognized based upon the relative fair value to the customer of each performance obligation as each
obligation is earned. The Company derives its revenues the follows:
Sale
of Services: Remedial Massage & Myotherapy
Revenue
from remedial massage & myotherapy is recognized when the entity has provided the services to the clients which typically occurs
when the service is completed.
Sale
of Goods - Medicinal Supplements:
Revenue
from these sales is recognized when the entity has delivered the products to locations specified by its customers and the customers have
accepted the products in accordance with the sales contract.
Products
are sold to certain customers with volume discount and these customers also have the right to return within a reasonable time frame.
Revenue from these sales is recorded based on the contracted price less the estimated volume discount and returns at the time of sale.
Earnings
/ (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 September 30, 2022 and September 30, 2021.
Translation
of Foreign Currency
Transactions
denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing
at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated
into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded
in the statement of operations.
The
functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been
expressed in US$. In addition, the Company’s Australian subsidiaries maintain their books and record in a local currency, Australian
Dollars (“AUD”), which is functional currency as being the primary currency of the economic environment in which the entity
operates. The Company’s Malaysian subsidiaries maintain their books and record in US$.
In
general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into
US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance
sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation
of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income.
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:
SCHEDULE
OF EXCHANGES RATE
| | |
Average Rate for the three months ended September 30, | |
| | |
2022 | | |
2021 | |
| Australian dollar (AUD) | |
| AUD | | |
| 1.4643 | | |
| AUD | | |
| 1.3619 | |
| | |
Exchange Rate at | |
| | |
September 30, 2022 | | |
June 30, 2022 | |
| Australian dollar (AUD) | |
| AUD | | |
| 1.5535 | | |
| AUD | | |
| 1.4482 | |
Recent
Accounting Pronouncements
Management
believes none of the recently issued accounting pronouncements will have a material impact on the consolidated financial statements.
NOTE
3 – INVENTORIES
As
of September 30, 2022 and June 30, 2022, inventories were composed of the following:
SCHEDULE
OF INVENTORIES
| | |
September 30, 2022 | | |
June 30, 2022 | |
| Raw materials | |
$ | 187,101 | | |
$ | 187,140 | |
| Working in progress | |
$ | 81,122 | | |
| 82,446 | |
| Finished goods | |
$ | 207,179 | | |
| 242,467 | |
| Total inventories | |
$ | 475,402 | | |
$ | 512,053 | |
NOTE
4 – PROPERTY AND EQUIPMENT, NET
As
of September 30, 2022 and June 30, 2022, property and equipment consisted of the following:
SCHEDULE
OF PROPERTY AND EQUIPMENT, NET
| | |
September 30, 2022 | | |
June 30, 2022 | |
| Land | |
$ | - | | |
$ | 2,982,738 | |
| Building | |
| - | | |
| 2,673,276 | |
| Leasehold improvements | |
| 235,564 | | |
| 758,066 | |
| Different equipment | |
| 428,066 | | |
| - | |
| Vehicle | |
| - | | |
| 27,445 | |
| Computer equipment | |
| 7,378 | | |
| 7,378 | |
| Total | |
| 671,008 | | |
| 6,448,902 | |
| Less: accumulated depreciation | |
| (158,598 | ) | |
| (207,853 | ) |
| Total property and equipment, net | |
$ | 512,409 | | |
$ | 6,241,049 | |
On
June 30, 2018, the Company purchased computers in the amount of $7,378.
On
January 22, 2019, the Company’s subsidiary, Rayont (Australia) Pty. Ltd, purchased the cancer treatment equipment for USD 1,239,008
(AUD1,736,966).
On
June 26, 2020, the Company’s subsidiary, GGLG Properties Pty Ltd, purchased a property located at 11 Aldinga Street Brendale QLD
4500, Australia for USD472,135 (AUD686,814). GGLG Properties Pty Ltd disposed this property on June 29, 2021 for USD693,403.
On
May 4, 2022, Rayont Properties Pty Ltd (formerly known as GGLG Properties Pty Ltd) acquired two properties. First property is located
at 85 Juliette St, Greenslopes (lot 272) QLD 4120 Australia and has a surface land of 405m2 and surface of building of 280m2.
Its purchase price is USD1,643,327 (AUD2,300,000), excluding GST. The stamp duty of this property in the amount of USD90,198 (AUD130,625)
it is capitalized too. It is used for operations of No More Knots Pty Ltd. Rayont Properties Pty Ltd is sold on September 1, 2022 and
this property is not part of the balance sheet as of September 30, 2022.
Second
property is located at 44 Marquis Street, Greenslopes QLD 4120 Australia and has a surface land of 405m2 and surface of building
of 115m2. Its purchase price is USD600,746 (AUD870,000), excluding GST. The stamp duty of this property in the amount of USD22,217 (AUD32,175)
it is capitalized too. This property is rented to third parties and parking is used for No More Knots Pty Ltd. Rayont Properties Pty
Ltd is sold on September 1, 2022 and this property is not part of the balance sheet as of September 30, 2022.
On
October 15, 2020, the Company entered into an agreement to purchase the assets of Workstar Tech (Aust) Pty Ltd, from an individual towards
purchase of fair value of USD476,594.32 (AUD632,393) for purchase consideration of USD228,258.35 (AUD302,876). The company considered
the gain on purchase of assets as an income in fiscal year ended June 30, 2021.
These
assets include intangible assets like trademark, website, software in the amount of USD465,666.59 (AUD617,893) and tangible assets like
office assets, computer contracts in the amount of USD10,927.73 (AUD14,500). This company was sold on January 31, 2022 and its assets
are not part of the BS as of June 30, 2022.
On
October 28, 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. Rayont Properties Pty Ltd is sold on
September 1, 2022 and this property is not part of the balance sheet as of September 30, 2022.
On
June 28, 2021, the Company’s subsidiary, Prema Life Pty Ltd, purchased a property which consist of 2720m2 land and 1760m2 building
located at 32 French Avenue, Brendale QLD 4500, Australia for a total amount of USD2,304,330 excluding GST. The land cost is $1,273,595
and the building cost is $1,030,735. The purchase price of this property is paid totally by mortgage loans.
In
addition, Prema Life has done leasehold improvements in the amount of $505,374 as of June 30, 2022. Prema Life Pty Ltd is sold on September
1, 2022 and those properties are not part of the balance sheet as of September 30, 2022.
On
September 23, 2021, the Company’s subsidiary, Rayont (Australia) Pty Ltd, purchased a new property located at 900 Sandgate Road,
Clayfield QLD, 4011, Australia for USD1,159,040 excluding GST. The purchase price of this property is paid by issuing shares of Rayont
Inc. In addition, the Company has received a loan to cover some fit-out expense and its interest is capitalized in the cost of this property.
The policy that the Company has used for the capitalization of the interest is ASC835. Interest is capitalized during the period under
which the asset is being prepared for its intended use. The purpose of this is to obtain a more accurate representation of the full costs
incurred in acquiring or constructing the asset. The interest capitalized should be added to the cost of the asset on the balance sheet
and, when the asset is used internally, amortized over the life of the asset. The amount of the interest capitalized is USD107,296 (AUD147,790).
In addition, it is capitalized even the stamp duty of the property in the amount of USD52,654 (AUD72,525). Rayont (Australia) Pty Ltd
is sold on September 1, 2022 and this property is not part of the balance sheet as of September 30, 2022.
No
More Knots (Taringa) Pty Ltd, the new company acquired on April 1, 2022, has done leasehold improvements in the amount of $232,796 as
of September 30, 2022.
No
More Knots (Clayfield) Pty Ltd, the company incorporated on January 19, 2022, has done leasehold improvements in the amount of $2,768
as of September 30, 2022.
On
September 1, 2022, the Company’s subsidiary, Health Script Pty Ltd, acquired the assets of
Tugun Compounding Pty Ltd, in exchange for AUD665,000 (approximately USD450,870).
These
assets include tangible assets like office assets, laboratories’ assets, storage room, in the amount of USD428,066 (AUD665,000)
as of September 30, 2022.
For
the three months ended September 30, 2022 and 2021, the depreciation expenses were $6,284 and $39,819, 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 USD476,594.32 (AUD632,393) for purchase consideration of USD228,258.35 (AUD302,876). The company considered
the gain on purchase of assets as an income in fiscal year ended June 30, 2021.
These
assets include intangible assets like trademark, website, software in the amount of USD465,666.59 (AUD617,893) and tangible assets like
office assets, computer contracts in the amount of USD10,927.73 (AUD14,500). This company was sold on January 31, 2022 and its assets
are not part of the balance sheets as of June 30, 2022 and September 30, 2022.
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 and digital
content. This company was sold on January 31, 2022 and its assets are not part of the balance sheets as of June 30, 2022 and September
30, 2022.
Amortization
is computed using the straight-line method over the 10-year estimated useful lives of the assets.
The
Company had evaluated the useful life of 10 years from 2018 for the intangible assets of $2,000,000, which is associated with Rayont
International’s exclusive license for registering and commercializing PhotosoftTM technology for treatment of all cancers
across Sub-Sahara African region. The technology has been licensed in Australia, New Zealand, China, Malaysia and Sub-Sahara Africa.
This license was sold on June 29, 2022 and is not part of the balance sheets as of June 30, 2022 and September 30, 2022.
On
September 3, 2022, the Company’s subsidiary, Health Script Pty Ltd, acquired the assets of
Prema Life Pty Ltd, in exchange for AUD1,050,000 (approximately USD718,725).
These
assets include intangible and tangible assets. Intangible assets are customer and formulation database in the amount of USD148,092, trademark,
website in the amount of USD162,448 and inventory in the amount of USD408,185 as of September 30, 2022.
Amortization
is computed using the straight-line method over the 10-year estimated useful lives of the customer and formulation database, trademark
and 5-year estimated useful lives of the website.
As
of September 30, 2022 and June 30, 2022, intangible assets, consisted of the following:
SCHEDULE
OF INTANGIBLE ASSETS
| | |
September 30, 2022 | | |
June 30, 2022 | |
| Customer and Formulation Database | |
$ | 148,092 | | |
$ | - | |
| Trademark, website, software | |
| 162,448 | | |
| - | |
| Total | |
| 310,540 | | |
| - | |
| Less: accumulated amortization | |
| (3,124 | ) | |
| - | |
| Total intangible assets, net | |
$ | 307,416 | | |
$ | - | |
For
the three months ended September 30, 2022 and 2021, the amortization expenses were $3,315 and $85,489, respectively.
NOTE
6 – LOANS PAYABLE
As
of September 30, 2022 and June 30, 2022, loans payable, consisted of the following:
SCHEDULE
OF LOAN PAYABLE
| Current loan payable: | |
September 30, 2022 | | |
June 30, 2022 | |
| Mortgage loan | |
$ | 110,345 | | |
| 450,405 | |
| Loan - Mazars (Quickfee) | |
| - | | |
| 45,032 | |
| Note payable -1800 Diagonal | |
| 120,625 | | |
| 172,200 | |
| Lydia Loh Holdings Loan | |
| - | | |
| 1,035,769 | |
| Loan - Trevor Townsend | |
| - | | |
| 414,307 | |
| HP Liability - Label Applicator | |
| - | | |
| 3,296 | |
| Attvest Insurance Loan | |
| 3,910 | | |
| 25,430 | |
| Loan - Biz Cap | |
| 257,317 | | |
| 306,804 | |
| Loan Kelly Townsend | |
| 26,287 | | |
| 28,198 | |
| Kova Brendale Pty Ltd | |
| 41,197 | | |
| - | |
| Kova Properties Pty Ltd | |
| 451 | | |
| - | |
| Kova Clayfield Pty Ltd | |
| 8,356 | | |
| - | |
| Total current loan payable | |
$ | 568,488 | | |
$ | 2,481,440 | |
| | |
| | | |
| | |
| Non-current loan payable: | |
| | | |
| | |
| Mortgage loan | |
| 271,284 | | |
| 4,811,975 | |
| Total non-current loan payable: | |
$ | 271,284 | | |
$ | 4,811,975 | |
| Total loan payable | |
$ | 839,772 | | |
$ | 7,293,415 | |
Mortgage
loan
On
June 28, 2021, the Company’s subsidiary purchased a property which consist of 2720m2 land and building 1760m2. Since the intention
was to settle the property prior to June 30, 2021as per the Sale & Purchase Contract, the liability of the loan had to be recognized,
even though the agreement date of the loans for this property is on August 6, 2021 and on September 1, 2021. This transaction is an adjusting
event for the balance sheet at June 30, 2021. The Company’s subsidiary obtained on August 6, 2021 a mortgage loan of $ 1,746,920
(AUD 2,380,000) from private lender COE Property Group Pty Ltd to assist the Company to buy the property of the business place. This
loan is divided in two tranches. The term of the loan is one year from the commencement date for the first tranche in the amount of $
1,490,020 (AUD 2,030,000), the interest rate is 9% per annum and for the second tranche in the amount of $ 256,900 (AUD 350,000), the
term of the loan is 4 months from the commencement date and the interest rate is 36% per annum. Monthly payments are compound just from
interest in the amount of $ 11,175 (AUD 15,225) for first tranche and interest in the amount of $ 7,707 (AUD 10,500) for the second tranche.
The loan is secured under the Company’s present and future property of any kind, including all personal property. The principal
amount will be paid in the end of the term, December 6, 2021 for second tranche and August 5, 2022 for first tranche. Both tranches are
paid on May 4, 2022.
The
Company’s subsidiary obtained on September 1, 2021 a mortgage loan of $ 257,915 (AUD 350,000) from private lender RDS Superannuation
Pty Ltd as Trustee for The Ron Bruce Motor Trimmers Pty Ltd to assist the Company to buy the property of the business place. The term
of the loan is two months from the commencement date, and the interest rate is 18% per annum. Monthly payments are compound just from
interest in the amount of $ 3,869 (AUD 5,250). The loan is secured under the Company’s present and future property of any kind,
including all personal property. The principal amount is paid in the end of the term, October 15, 2021.
On
May 4, 2022 some subsidiaries of the group in Australia received loans from Commonwealth Bank as described below:
Prema
Life Pty Ltd received a loan in the amount of USD2,500,750 (AUD3,500,000). The loan term is five years with a variable rate of 3.16%
per annum. This loan is received to refinance the 23 Frech property of Prema (to pay loans received earlier for this property like COE,
James Lee and QRIDA). This is a secured loan. Prema Life Pty Ltd is sold on September 1, 2022 and this loan is not part of the balance
sheet as of September 30, 2022.
Rayont
(Australia) Pty Ltd received a loan in the amount of USD250,075 (AUD350,000). The loan term is three years with a variable rate of 3.50%
per annum. This loan is received to extinguish private lenders secured over 900 Sandgate property. This is a secured loan. Rayont (Australia)
Pty Ltd is sold on September 1, 2022 and this loan is not part of the balance sheet as of September 30, 2022.
No
More Knots Holdings Pty Ltd received a loan in the amount of USD357,250 (AUD500,000). The loan term is three years with a variable rate
of 3.50% per annum. This loan is received to pay No More Knots Pty Ltd Acquisition’s Balance. This is a secured loan.
Wonder
Foods Retail Pty Ltd received a loan in the amount of USD107,175 (AUD150,000). The loan term is three years with a variable rate of 3.50%
per annum. This loan is received to fund the stock in Wonder Foods Retail. This is a secured loan.
Rayont
Properties Pty Ltd received two loans: The first loan is in the amount of USD2,207,091 (AUD3,089,000). The loan term is five years with
a variable rate of 3.50% per annum. This loan is received to buy two properties located at 85 Juliette St, Greenslopes (lot 272) QLD
4120 Australia and 44 Marquis Street, Greenslopes QLD 4120 Australia. The second loan is in the amount of USD57,875 (AUD81,000). The
loan term is three years with a variable rate of 3.50% per annum. This loan is received to buy two properties located at 85 Juliette
St, Greenslopes (lot 272) QLD 4120 Australia and 44 Marquis Street, Greenslopes QLD 4120 Australia. Those are secured loans. Rayont Properties
Pty Ltd is sold on September 1, 2022 and this loan is not part of the balance sheet as of September 30, 2022.
As
of September 30, 2022 and June 30, 2022 the Company had outstanding current balances of $110,345 and $450,405 and non-current balances
of $271,284 and $4,811,975, respectively related to the mortgage loan.
The
Company’s subsidiary obtained on October 15, 2021 a loan of $266,976 (AUD 360,000) from private lender James Lee to assist the
Company to pay another loan. The term of the loan was three months from the commencement date but it is extended with two more months,
and the interest rate is 48% per annum or 96% per annum if the payment will be default as per loan agreement. The loan is secured under
the Company’s present and future property of any kind, including all personal property. The principal amount and the interest should
be paid both on March 15, 2022. The Company’s subsidiary obtained on November 12, 2021 a loan of $547,319 (AUD747,500) from private
lender Aura Loan Management Pty Ltd to assist the Company to cover the fit-out expenses for the property purchased lately located at
900 Sandgate Road, Clayfield QLD, 4011 Australia in order to be ready for internal use of the subsidiary Rayont (Autsralia) Pty Ltd.
The term of the loan is 12 months from the commencement date, and the interest rate is 9.25% per annum. Monthly payments are compound
just from interest in the amount of $4,183 (AUD5,762). The loan is secured under the Company’s present and future property of any
kind, including all personal property. This loan is paid on May 4, 2022.
COVID-19
loan
On
June 29, 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.
This loan is paid on May 4, 2022. As of September 30, 2022 and June 30, 2022, the Company had outstanding balances of $0, respectively
related to the COVID-19 loan.
Rayont
inc, received on May 23, 2022 a note payable in the amount of 172,200 from 1800 Diagonal Lending LLC. This note has 12% interest rate
per annum and has original issue discount in the amount of $18,450.
Interest
and outstanding principal, subject to adjustment, shall be paid in ten (10) payments each in the amount of $19,286.40.
Rayont
(Australia) Pty Ltd has received on June 10, 2022 a private loan in the amount of USD423,240 (AUD600,000) from Trevor Townsend. The loan
term is one year and with a variable rate of 8% per annum. This loan is received to finance the acquisition of business of No More Knots
Pty Ltd. This is a secured loan. Rayont (Australia) Pty Ltd is sold on September 1, 2022 and this loan is not part of the balance sheet
as of September 30, 2022.
Rayont
(Australia) Pty Ltd has received on May 4, 2022 a private loan in the amount of USD1,071,750 (AUD1,500,000) from Lydia Loh Holdings Pty
Ltd. The repayment date was for 10 days but then the loan was agreed to be extended by another 160 days with an interest rate of 0.7%
per day. Purpose of this loan was to acquire No More Knots Pty Ltd, No More Knots Taringa and No More Knots Newmarket. This is a secured
loan. Rayont (Australia) Pty Ltd is sold on September 1, 2022 and this loan is not part of the balance sheet as of September 30, 2022.
It is transferred to the buyer of the Rayont Australia as of September 1, 2022.
Rayont
(Australia) Pty Ltd has received two small private loans on December 12, 2021 and April 4, 2022 in the amount of USD55,662 (AUD77,556)
and USD26,554 (AUD35,176), respectively from Quickfee. The loan term is one year. This loan is received to paid the invoices sent from
Mazzars for Rayont Australia. This is unsecured loan. Rayont (Australia) Pty Ltd is sold on September 1, 2022 and this loan is not part
of the balance sheet as of September 30, 2022.
No
More Knots Holdings Pty Ltd has received on May 4, 2022 a private loan in the amount of USD29,178 (AUD40,836.44) from Kelly Townsend.
The loan is non-interest bearing and payable on demand. This loan is received to finance operations of No More Knots Holdings Pty Ltd.
This is unsecured loan.
No
More Knots Pty Ltd has received on May 12, 2022 two private loans in the amount of USD95,928 (AUD140,000) and USD34,260 (AUD50,000) from
Bizcap AU Pty Ltd. The loan term is 26 weeks and 90 days, respectively with total interest amount of USD47,005 (AUD68,600) and USD16,787
(AUD24,500) for the period, respectively. This loan is received to finance operations of No More Knots Pty Ltd. This is unsecured loan.
Those loans are paid on August 24, 2022.
No
More Knots Pty Ltd received on August 24, 2022 another private loan in the amount of USD172,831 (AUD250,000) from Bizcap AU Pty Ltd.
The loan term is 28 weeks with total interest amount of USD77,774 (AUD112,500) for the period. This loan is received to finance operations
of No More Knots Pty Ltd. This is unsecured loan.
No
More Knots (Taringa) Pty Ltd has received on May 12, 2022 one private loan in the amount of USD37,686 (AUD55,000) from Bizcap AU Pty
Ltd. The loan term is 26 weeks with total interest amount of USD18,466 (AUD26,950) for the period. This loan is received to finance operations
of No More Knots Pty Ltd. This is unsecured loan. This loan is paid on August 24, 2022.
No
More Knots (Taringa) Pty Ltd received on August 24, 2022 another private loan in the amount of USD57,034 (AUD82,500) from Bizcap AU Pty
Ltd. The loan term is 28 weeks with total interest amount of USD25,665 (AUD37,125) for the period. This loan is received to finance operations
of No More Knots (Taringa) Pty Ltd. This is unsecured loan.
No
More Knots (Newmarket) Pty Ltd has received on May 12, 2022 one private loan in the amount of USD37,686 (AUD55,000) from Bizcap AU Pty
Ltd. The loan term is 26 weeks with total interest amount of USD18,466 (AUD26,950) for the period. This loan is received to finance operations
of No More Knots Pty Ltd. This is unsecured loan. This loan is paid on August 24, 2022.
No
More Knots (Newmarket) Pty Ltd received on August 24, 2022 another private loan in the amount of USD57,034 (AUD82,500) from Bizcap AU
Pty Ltd. The loan term is 28 weeks with total interest amount of USD25,665 (AUD37,125) for the period. This loan is received to finance
operations of No More Knots (Newmarket) Pty Ltd. This is unsecured loan.
No
More Knots (Ipswich) Pty Ltd has received on August 24, 2022 one private loan in the amount of USD58,763 (AUD85,000) from Bizcap AU Pty
Ltd. The loan term is 24 weeks with total interest amount of USD26,443 (AUD38,250) for the period. This loan is received to finance operations
of No More Knots (Ipswich) Pty Ltd. This is unsecured loan.
Prema
Life Pty Ltd has received on April 21, 2022 one private loan in the amount of USD184,400 (AUD250,000) from Bizcap AU Pty Ltd. The loan
term is 140 days with total interest amount of USD90,356 (AUD122,500) for the period. This loan is received to finance operations of
No More Knots Pty Ltd. This is unsecured loan. Prema Life Pty Ltd is sold on September 1, 2022 and this loan is not part of the balance
sheet as of September 30, 2022.
The
Company has received during quarter ended September 30, 2022 from Kova Brendale Pty Ltd, Kova Properties Pty Ltd and Kova Clayfield Pty
Ltd the amounts of $41,197, $451 and $8,356, respectively. Those loans are non-interest bearing and payable on demand. Those loans are
received to finance operations of the Company. Those are unsecured loan.
For
three months ended September 30, 2022 and 2021 the interest expenses were $187,382 and $47,291, respectively.
NOTE
7 – FINANCE LEASE PAYABLE
SCHEDULE
OF FINANCE LEASE
| Current finance lease: | |
September 30, 2022 | | |
June 30, 2022 | |
| Finance lease for vehicle | |
$ | - | | |
$ | 10,983 | |
| Total current finance lease | |
$ | - | | |
$ | 10,983 | |
| | |
| | | |
| | |
| Non-current finance lease: | |
| | | |
| | |
| Finance lease for vehicle | |
| - | | |
| 7,812 | |
| Total non-current finance lease: | |
$ | - | | |
$ | 7,812 | |
| Total finance lease | |
$ | - | | |
$ | 18,795 | |
On
the 28th of October 2020, the Company’s subsidiary ( Rayont Properties Pty Ltd ) 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. Rayont Properties
Pty Ltd is sold on September 1, 2022 and this Finance Lease is not part of the balance sheet as of September 30, 2022. As of September
30, 2022 and June 30, 2022, the Company had outstanding balances of $0 and $18,795, respectively related to the Finance Lease.
Finance
lease activity is included in property and equipment, net.
NOTE
8 – CONCENTRATION
(a)
Major Customers
At
September 30, 2022 there was no customer who accounted for 10% or more of total accounts receivable and at June 30, 2022, one major customer
represented approximately 26% of total accounts receivable.
(b)
Major Suppliers
At
September 30, 2022 and June 30, 2022 there was no supplier who accounted for 10% or more of the Company’s purchases nor with significant
outstanding payables.
NOTE
9 – STOCKHOLDERS’ EQUITY
Capital
Stock Issued
During
the three months ended September 30, 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 on July 17, 2021.
On
September 23, 2021 the Company issued 515,771 shares of common stock to the AMH Corporate Pty Ltd for the purchase of a property and
building located at 900 Sandgate Road, Clayfield QLD, 4011 Australia from Rayont (Australia) Pty Ltd, the Corporation’s wholly
owned subsidiary, totaling $1,159,040.
During
the three months ended September 30, 202, the Company issued 1,524,044 of its shares to the shareholder
of record of The Skin DNA Company Pty Ltd. for the acquisition 100% of the total outstanding shares and units of The SkinDNA Company
Pty Ltd, totaling $518,175 on August 22, 2022. The Company received a termination request from the former shareholders of The
SkinDNA Company Pty Ltd. Both parties are discussing ways how to resolve the concerns each party has through informal mediation.
On
September 1, 2022, under the agreement Rayont Inc., through its wholly owned subsidiary Health Script Pty Ltd, acquired the assets from
Tugun Compounding Pty Ltd, in exchange for AUD665,000 (approximately USD450,870). The sum of USD265,520 (AUD390,000) is made as “the
Cash Payment” and USD 185,350 (AUD275,000) is paid by issuing 545,147 shares at $0.34 per share of Rayont Inc to the shareholder
of record of Tugun Compounding Pty Ltd.
During
the period from July 2022 through September 2022, the Company did not sell any shares of common stock.
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 September 30, 2022 and
June 30, 2022, the outstanding shares of common stock were 50,163,797 and 48,094,606, 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 September 30, 2022 and June 30, 2022, respectively.