This Annual Report contains "forward-looking statements" that describe
management's beliefs and expectations about the future. We have identified
forward-looking statements by using words such as "anticipate," "believe,"
"could," "estimate," "may," "expect," and "intend," or words of similar import.
Although we believe these expectations are reasonable, our operations involve a
number of risks and uncertainties and actual results may be materially different
than our expectations.
Our Management's Discussion and Analysis contains not only statements that are
historical facts, but also statements that are forward-looking. Forward-looking
statements are, by their very nature, uncertain and risky. These risks and
uncertainties include international, national, and local general economic and
market conditions; our ability to sustain, manage, or forecast growth; our
ability to successfully make and integrate acquisitions; new product development
and introduction; existing government regulations and changes in, or the failure
to comply with, government regulations; adverse publicity; competition; the loss
of significant customers or suppliers; fluctuations and difficulty in
forecasting operating results; change in business strategy or development plans;
business disruptions; the ability to attract and retain qualified personnel; the
ability to protect technology; the risk of foreign currency exchange rate; and
other risks that might be detailed from time to time in our filings with the
Securities and Exchange Commission.
The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and the related
notes, and other financial information included in this Form 10-K.
Overview
Rayont Inc. (formerly Velt International Group Inc., or "Rayont" or the
"Company") is a Nevada corporation formed on February 7, 2011. The Company's
common stock are currently traded on the Over the Counter Pink Sheet under the
symbol "RAYT".
11
On November 19, 2018, the Company's former principal shareholder, Mr. Chin Kha
Foo, entered into a stock purchase agreement to transfer 60% of the Company's
issued and outstanding shares to Rural Asset Management Services, Inc., a
Malaysian Labuan company ("Rural"). On December 14, 2018, Rural became the
principal shareholder of the Company and Mr. Ali Kasa was appointed to be the
Company's President, CEO, CFO, and Secretary due to the change in control of the
Company. Rural is an equity investment company with portfolio of interest in
biotechnology, healthcare, cancer treatment research and technology, ICT and
Crypto Currency. Rural has invested to companies located in Malaysia, Australia
and the USA.
On January 22, 2019, the Company entered into an acquisition agreement with THF
Holdings Pty Ltd., an Australian corporation and Rural, pursuant to which the
Company acquired 100% of the issued and outstanding capital stock of THF
Holdings Pty Ltd. in exchange for 4,000,000 shares of the Company's common
stock, valued on January 22, 2019 at $1,000,000. THF Holdings Pty Ltd. is an
Australian Cancer treatment and medical device company. Rural is the majority
shareholder of THF Holdings Pty Ltd. In March 2019, the acquisition of THF
Holdings Pty Ltd. was completed and THF Holdings Pty Ltd. became a subsidiary of
the Company. In addition, the acquisition was accounted for business combination
under common control of Rural. On August 25, 2020, the name THF Holdings Pty
Ltd. was changed to Rayont (Australia) Pty Ltd. ("Rayont Australia"). This
company was sold on September 1, 2022.
On January 24, 2019, the Company entered into an acquisition agreement with THF
International (Hong Kong) Ltd., a Hong Kong company ("THF Hong Kong") and the
shareholders of THF Hong Kong, pursuant to which the Company acquired 100% of
the issued and outstanding capital stock of THF Hong Kong in exchange for
8,000,000 shares of the Company's common stock, valued at $2,000,000 on January
24, 2019. On May 13, 2019, the Company executed an amendment to the acquisition
agreement, wherein the Company agreed to acquire only 85% of THF Hong Kong and
reduce the purchase price to 6,800,000 shares from 8,000,000 shares. On August
4, 2019, the Company and the THF Hong Kong agreed to terminate the acquisition.
On January 24, 2019, the Company entered into an acquisition agreement with
Natural Health Farm (Labuan) Inc. ("NHF") and the shareholders of NHF, pursuant
to which the Company acquired 100% of the issued and outstanding capital stock
of NHF in exchange for 40,000,000 shares of the Company's common stock, valued
at $10,000,000 on January 24, 2019. NHF is a Malaysian company concentrating on
clinical life sciences and holds an exclusive license for registering and
commercializing Photosoft technology for treatment of all cancers in the
Sub-Sahara African region. The technology has been licensed in Australia, New
Zealand, China, Malaysia and Sub-Sahara Africa. The human clinical trial efforts
have started in Australia and China conducted by Hudson Medical Institute,
Australia. On August 4, 2019, the Company and NHF agreed to terminate the
acquisition.
On August 26, 2020, the Company established Rayont Technologies Pty Ltd. (Rayont
Technologies) through Rayont Australia. Rayont Technologies is an Australian
corporation and is engaged primarily in digital learning solutions to support
the development of people skills that drive business growth. This company was
sold on January 31, 2022.
On September 30, 2020, the Company acquired all of the issued and outstanding
capital stock of Rayont International (L) Limited (Rayont International), a
Malaysian company. The purchase price paid by the Company was 25,714,286 shares
of its common stock valued at $1,800,000 or $0.07 per share, which was the
closing price of the Company's common stock on the OTC Markets on September 29,
2020. Rayont International is a clinical-stage life sciences company that holds
the exclusive license for registering and commercializing PhotosoftTM technology
for treatment of all cancers across Sub-Sahara African region. The technology
has been licensed in Australia, New Zealand, China, Malaysia and Sub-Sahara
Africa. The exclusive license for License for Sub-Sahara Africa was sold on June
29, 2022 for the amount of USD 2,500,000 to the Nova Medical Group Pty Ltd.
On October 15, 2020, Rayont Technologies Pty Ltd entered into an agreement with
Ms. Kayla Ranee Smith to purchase the assets of Workstar Tech (Aust) Pty Ltd for
AUD 302,876.22 payable over 90 days upon Ms Smith transfers the assets to Rayont
Technologies Pty Ltd. The assets that Rayont Technologies acquired under the
agreement includes trademark, website, software, office assets. Rayont
Technologies Pty Ltd was sold on January 31, 2022.
12
On December 23, 2020, Rayont Australia Pty Ltd, a wholly-owned subsidiary of
Rayont Inc. (the "Company"), acquired all of the issued and outstanding capital
stock of Prema Life Pty Ltd, an Australian company ("Prema Life"), from
TheAlikasa (Australia) Pty Ltd, Prema Life's sole shareholder. The acquisition
of Prema Life was completed, and Prema Life became a subsidiary of the Company.
Prema Life is a HACCP certified manufacturer and supplier of functional foods
and supplements, and of practitioner only naturopathic and homeopathic
medicines. Prema Life produces an extensive range of products including
proteins, green blends, sports nutrition, weight management and maintenance, and
health and wellness products. In addition, the acquisition was accounted for
business combination under common control. The method of accounting for such
transfers, as well as the acquisition of businesses, was similar to the pooling
of interest's method of accounting. Under this method, the carrying amount of
net assets recognized in the balance sheets of each combining entity are carried
forward to the balance sheet of the combined entity. The amount by which the
proceeds paid by the Company differs from Prema Life's historical carrying value
of the acquired business is accounted for as a return of capital or contribution
of capital. In addition, transfers of net assets between entities under common
control were accounted for as if the transfer occurred from the date that the
Company and the acquired business were both under the common control and had
begun operations. Prema Life Pty Ltd was sold on September 1, 2022.
On December 23, 2020, pursuant to an Acquisition Agreement, Rayont Australia Pty
Ltd, a wholly-owned subsidiary of Rayont Inc. (the "Company"), acquired all of
the issued and outstanding capital stock of GGLG Properties Pty LTD, an
Australian company ("GGLG"), from TheAlikasa (Australia) Pty Ltd, GGLG's sole
shareholder (the "Seller"). The Seller is an affiliate of the Company and
therefore the acquisition is being treated as a related party transaction. In
addition, the acquisition was accounted for business combination under common
control. The method of accounting for such transfers, as well as the acquisition
of businesses, was similar to the pooling of interest's method of accounting.
Under this method, the carrying amount of net assets recognized in the balance
sheets of each combining entity are carried forward to the balance sheet of the
combined entity. The amount by which the proceeds paid by the Company differs
from GGLG 's historical carrying value of the acquired business is accounted for
as a return of capital or contribution of capital. In addition, transfers of net
assets between entities under common control were accounted for as if the
transfer occurred from the date that the Company and the acquired business were
both under the common control and had begun operations. The purchase price is
$605,920, which is a 10% discount of the total amount of GGLG's net tangible
assets. The purchase price will be paid in six installments after a $265,300
down payment. In the event an installment payment is not paid timely, the Seller
has agreed to accept shares of the Company valued at $0.87 per share. The price
per share is based on a 20% discount of the average share price on the OTC
Markets over the last 30 trading days.
On February 18, 2021 the Foreign Investment Review Board approved the capital
stock transferring of GGLG Properties Pty Ltd to the Rayont Australia Pty Ltd.
On March 9, 2021, the parties agreed to amend the acquisition agreements for the
GGLG Properties Pty Ltd and as per Board Resolution, the Company issued 710,713
shares of its common stocks in leu of payment by Rayont Australia Pty Ltd of
approximately $605,920 (AUD 800,000) to TheAlikasa Pty Ltd as full and final
payment for the acquisition of 100% of the issued and outstanding common stock
of GGLG. This company was sold on September 1, 2022.
On December 29, 2020, the Company incorporated Rayont Malaysia Sdn Bhd with a
paid-up capital of $25 and Rayont Malaysia Sdn Bhd incorporated on December 31,
2020 Rayont Technologies (M) Sdn Bhd with a paid-up capital of $25 respectively
to carry out its business activities in Malaysia. On February 5, 2021 Rayont
Technologies (M) Pty Ltd entered into an Asset Purchase Agreement with Sage
Interactive Sdn Bhd to purchase its assets in consideration of the payment of
USD 105,000.00. These assets include software for remote learning, customer
contracts, digital content and three key employees. These assets will operate in
Malaysia under Workstar trademark and operation shall be integrated with Rayont
Technologies Australia to drive efficiency and scale of digital assets
operations. Rayont Technologies (M) Sdn Bhd was sold on January 31, 2022.
On April 1, 2022 under the agreement Rayont Inc., through its wholly owned
subsidiary No More Knots Holdings Pty Ltd, acquired 100% of the total
outstanding shares and units of No More Knots Pty Ltd, No More Knots (Taringa)
Pty Ltd and No More Knots (Newmarket) Pty Ltd in exchange for AUD3,000,000
(approximately USD 2,247,865) cash, payable in two tranches. The first trench of
USD1,910,685 (AUD2,550,000) is paid on May 4, 2022 and the second tranche of
USD337,180 (AUD450,000) is payable before or on January 31, 2023 if three
conditions are met namely;
1. Achievement of EBIDTA of USD500,000 (AUD700,000) by June 30, 2022.
2. Former owner remain and transition the business until December 31, 2022.
3. Complete the opening of new branch by December 31,2022.
As of June 30,2022 the business failed to meet the first condition so the amount
of the USD110,000 (AUD150,000) has been deducted from the purchase price. The
remaining conditions have been met by the vendor and as of December 28,2022 is
unconditional and it has been agreed to be paid on 31 January 2023.
No More Knots is home to over 45 tertiary qualified therapists who specialise in
Remedial Massage and Myotherapy
As of this filing date, the Company has not completed and file its Form 8K as
required by the SEC rules and regulations. The Company is in the process of
completing all necessary documentation for the Form 8K filling in due time.
13
On May 14, 2022 Wonderfoods Retail Pty Ltd, a wholly owned subsidiary of Rayont
(Australia) Pty Ltd, entered into an agreement with Jovestone Pty Ltd to
purchase the business of Go Vita at Capalaba in consideration for USD6,918
(AUD10,000) and existing stock value at USD64,337 (AUD93,000) payable in three
instalments. The total payment for the purchase of the business completed on
August 17, 2022.
On June 29, 2022 Rayont (Australia) Pty Ltd ("Asset Seller"), Rayont
International (L) Limited ("License Seller") and Nova Medical Group Pty Ltd
("Buyer") signed the Asset Sale Agreement for sale of Next Generation Photo
Dynamic Therapy (NGPDT) License for Sub-Sahara Africa and its equipment for a
consideration of USD3,500,000 where the consideration is split as follows:
? License for Sub-Sahara Africa - USD 2,500,000
? Equipment - USD 1,000,000
About Rayont Inc
Rayont Inc is a Nevada USA company. Rayont operates in the personalized natural
healthcare sector in USA and Australia.
Rayont uses scientific tools such as DNA, microbiome, iridology and other tests
to personalize diagnoses, prescription and treatments of natural complementary
and alternative medicine products, services and treatments to our patients in
the markets we operate.
Results of Operations
For the twelve months ended June 30, 2022 and 2021
Revenue
There were $2,839,357 and $2,969,599 revenue generated for the twelve months
ended June 30, 2022 and 2021, respectively. The revenues were attributable to
revenues generated from digital learning solutions provided by Rayont
Technologies in Australia, and the revenues generated from Prema Life, No More
Knots, No More Knots (Taringa), No More Knots (Newmarket) and Wonder Foods in
Australia. The Company continues looking for other opportunities which could
potentially increase the profits of the Company.
Cost of Goods Sold
There were $1,456,733 and $1,221,026 cost of goods sold for the twelve months
ended June 30, 2022 and 2021, respectively. The increase was attributable to
costs incurred by Prema Life in Australia.
Operating Expense
Our operating expenses consist of selling, general and administrative expenses,
depreciation and amortization expense.
For the twelve months ended June 30, 2022 and 2021, there were a total of
$2,868,918 and $2,410,075 operating expenses, respectively. The increase was
primarily due to the salary expenses incurred for the operating subsidiary,
Rayont Technologies, the operating expenses generated from Prema Life as for the
twelve months ended June 30, 2022, as well as the increase in the depreciation
and amortization expense due to the existing and new intangible and tangible
assets acquired. The Company recorded the amortization expense for intangible
asset "Exclusive license for registering and commercializing PhotosoftTM
technology" that was the biggest intangible asset of the Company.
Other Income
Other income was $2,370,877 and $953,709 for the twelve months ended June 30,
2022 and 2021, respectively. The increase was attributable to sale of the
equipment for the cancer treatment in the amount of $385,361; to sale of the
Next Generation Photo Dynamic Therapy (NGPDT) License for Sub-Sahara Africa in
the amount of $ 1,071,430.59. Whilst, USD353,194 arose due to tax
incentive/grant obtained in relation to approved research and development
activities carried out. Other income is generated from the sale of the
subsidiary Rayont Technologies Australia in the amount of $668,174 and $39,975
from the sale of Rayont Technologies in Malaysia. In addition, debt forgiven in
the amount of $167,124. The amount of $314,382 is deducted from Other income as
a result of the sale of two subsidiaries Rayont Technologies Malaysia and Rayont
Technologies Australia in the consolidation of the financial statements of the
group.
The amount of USD 298,418 was attributable to differences between seller and
purchase price of the property that GGLG Properties Pty Ltd sold on June 29,
2021. On October 15, 2020, the Company entered into an agreement to purchase the
assets of Workstar Tech (Aust) Pty Ltd, from an individual towards purchase of
fair value of USD476,594.32 (AUD632,393) for purchase consideration of
USD228,258.35 (AUD302,876). The income from this transaction is $244,376.
Whilst, USD185,539 arose due to tax incentive/grant obtained in relation to
approved research and development activities carried out. The amount of $225,376
was mainly due to tax incentive/grant obtained in relation to approved research
and development activities carried out, due to ATO COVID19 Job Seeker, Cash Flow
Boost incentives from Australian Government.
14
Net Income (Loss)
We had a net income of $244,858 and of $ 383,884 for the twelve months ended
June 30, 2022 and June 30, 2021 respectively based on the factors discussed
above.
Liquidity and Capital Resources
As of June 30, 2022 and As of June 30, 2021, the Company had working capital
deficit of $83,884 and $1,456,964, respectively.
The deficit is attributable to loans due to a related party of $ 128,677 and
$387,238, accounts payable of $384,355 and $99,615, accrued liabilities of
$470,689 and $472,021, loan payable of $2,481,440 and $2,051,554, other payables
of $278,800 and $209,712 and finance lease of $10,983 and $8,188, operating
lease liabilities of $ 112,333 and $0 at June 30, 2022 and June 30, 2021,
respectively.
As of June 30, 2022 and June 30, 2021, the Company had $3,783,393 and $1,771,364
in current assets, respectively.
As of June 30, 2022 and June 30, 2021, we had a cash and equivalents balance of
$185,782 and $243,610, respectively. The Company's operations are primarily
funded by the revenue, other income, proceeds received from the sale of common
stock in private placements and loans received during those periods.
Cash Flows from Operating Activities
Net cash used in operating activities was $169,145 for the twelve months ended
June 30, 2022 compared with net cash used in operating activities of $187,493
for the twelve months ended June 30, 2021. During the twelve months ended June
30, 2022, the net cash used in operating activities was attributed to net income
of $244,858, offset by depreciation and amortization expense of $485,830,
non-cash portion of share based compensation for service of $61,500, gain on
sale of assets of $1,456,792, gain on sale of investment of $310,277, debt
waiver in the amount of $167,124 an decrease in accounts receivable of $335,759,
an increase in inventory of $53,913, an increase in accounts payable of
$307,322, an increase in accrued liabilities of $28,968, an increase in prepaid
expense of $61,619, an decrease in other receivables of $160,024, an decrease in
other assets of $14,639 and an increase in other payable of $241,680.
During the twelve months ended June 30, 2021, the net cash used in operating
activities was attributed to net loss of $383,884, offset by depreciation and
amortization expense of $454,508, gain on sale of assets of $244,376 an increase
in accounts receivable of $343,432, an increase in inventory of $152,984, an
decrease in accounts payable of $9,454, an increase in accrued liabilities of
$129,701, an increase in prepaid expense of $23,719, an decrease in advance to
officer of $2,219, an increase in other assets of $46,788, a increase in other
receivables of $322,358, an decrease in other payable of $14,694.
Cash Flows from Investing Activities
Net cash used in investing activities was $5,229,238 for the twelve months ended
June 30, 2022 compared with net cash used in investing activities of $1,845,552
for the twelve months ended June 30, 2021.
During the twelve months ended June 30, 2022, the net cash used in investing
activities was attributed to the purchases of intangible assets of $188,480,
purchases of property and equipment of $3,191,324, acquisition of subsidiaries,
net of cash and cash equivalents of $1,849,434.
During the twelve months ended June 30, 2021, the net cash used in investing
activities was attributed to the purchases of property and equipment of
$1,720,498, purchases of intangible assets of $126,136, cash from acquisition of
$1,082.
Cash Flow from Financing Activities
We generated cash in financing activities during the twelve months ended June
30, 2022 and 2021 of $5,334,858 and $2,031,580, respectively, from issuance of
common stock in the amount of $108,217 and $701,988 respectively, proceeds from
loan payable in the amount of $5,519,604 and $1,562,712, respectively, repayment
to related party in the amount of $292,963 and $233,120, respectively.
Non-Cash Investing and Financing Activities
During the twelve months ended June 30, 2022, issuance of common stock for
services in the amount of the $61,500, Issuance of common stock for Business
acquisitions in the amount of $ 618,320, Issuance of common stock for
acquisition of a property in the amount of $1,159,040.
During the twelve months ended June 30, 2021, the related party debt in the
amount of $ 2,016,363 was forgiven and recorded to additional paid in capital,
issuance of common stock for business acquisitions in the amount of $1,800,000.
Equity and Capital Resources
We have created income for the year ended June 30, 2022 and had an accumulated
deficit of $3,634,943 as of June 30, 2022. As of June 30, 2022, we had cash of
$185,782 and a working capital deficit of $83,884, compared to cash of $243,610
and a working capital deficit of $1,456,964 as of June 30, 2021.
15
We had material commitments for capital expenditures as of June 30, 2022. We
expect our expenses will continue to increase during the foreseeable future as a
result of increased operational expenses and the development of potential
business opportunities. However, we do not anticipate that the Company will
generate revenue sufficient to cover its planned operating expenses in the
foreseeable future, and we are dependent on the proceeds from future debt or
equity investments to sustain our operations and implement our business plan. If
we are unable to raise sufficient capital, we will be required to delay or
forego some portion of our business plan, which would have a material adversely
effect on our anticipated results from operations and financial condition. There
is no assurance that we will be able to obtain necessary amounts of additional
capital or that our estimates of our capital requirements will prove to be
accurate. As of the date of this Form 10-K, we did not have any commitments from
any source to provide such additional capital. Even if we are able to secure
outside financing, it may not be available in the amounts or the times when we
require. Furthermore, such financing would likely take the form of bank loans,
private placement of debt or equity securities or some combination of these. The
issuance of additional equity securities would dilute the stock ownership of
current investors while incurring loans, leases or debt would increase our
capital requirements and possible loss of valuable assets if such obligations
were not repaid in accordance with their terms.
Off-Balance Sheet Arrangements
Under SEC regulations, we are required to disclose off-balance sheet
arrangements that have or are reasonably likely to have a current or future
effect on our financial condition, such as changes in financial condition,
revenues or expenses, results of operations, liquidity, capital expenditures or
capital resources that are material to investors. An off-balance sheet
arrangement means a transaction, agreement or contractual arrangement to which
any entity that is not consolidated with us is a party, under which we have:
? Any obligation under certain guarantee contracts,
? Any retained or contingent interest in assets transferred to an unconsolidated
entity or similar arrangement that serves as credit, liquidity or market risk
support to that entity for such assets,
? Any obligation under a contract that would be accounted for as a derivative
instrument, except that it is both indexed to our stock and classified in
shareholder equity in our statement of financial position, and
? Any obligation arising out of a material variable interest held by us in an
unconsolidated entity that provides financing, liquidity, market risk or
credit risk support to us, or engages in leasing, hedging or research and
development services with us.
We do not have any off-balance sheet arrangements that we are required to
disclose pursuant to these regulations.
© Edgar Online, source Glimpses
RAYONT INC. 
