Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2016 | Feb. 13, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | Rito Group Corp. | |
Entity Central Index Key | 1,646,576 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 54,565,956 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Current assets: | ||
Subscriptions receivable | $ 30,000 | |
Prepayments, deposits and other receivables | 15,951 | 13,750 |
Cash and cash equivalents | 184,984 | 449,328 |
TOTAL ASSETS | 200,935 | 493,078 |
Current liabilities | ||
Accounts payable | 5,044 | |
Other payables and accrued liabilities | 42,208 | 43,881 |
Total current liabilities | 42,208 | 48,925 |
Non-current liabilities | ||
Convertible notes payable | 25,776 | 937,126 |
TOTAL LIABILITIES | 67,984 | 986,051 |
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; 54,555,956 and 50,712,880 shares issued and outstanding as of December 31, 2016 and June 30, 2016, respectively | 5,456 | 5,071 |
Additional paid-in capital | 1,524,274 | 436,749 |
Accumulated other comprehensive income | 19 | 19 |
Accumulated deficit | (1,396,798) | (934,812) |
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) | 132,951 | (492,973) |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 200,935 | $ 493,078 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 54,555,956 | 50,712,880 |
Common stock, shares outstanding | 54,555,956 | 50,712,880 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
REVENUE | ||||
Related party | $ 788 | |||
Non-related party | 277 | 14,315 | 5,090 | |
REVENUE, TOTAL | 277 | 14,315 | 5,878 | |
COST OF REVENUE | (13,533) | (2,491) | ||
GROSS PROFIT | 277 | 782 | 3,387 | |
OPERATING EXPENSES | ||||
General and administrative | (183,848) | (185,467) | (431,316) | (355,757) |
LOSS FROM OPERATIONS | (183,848) | (185,190) | (430,534) | (352,370) |
Interest expense | (12,650) | (11,788) | (31,452) | (15,599) |
LOSS BEFORE INCOME TAX | (196,498) | (196,978) | (461,986) | (367,969) |
Income tax expense | ||||
NET LOSS | $ (196,498) | $ (196,978) | $ (461,986) | $ (367,969) |
Net loss per share - Basic and diluted | $ 0 | $ 0 | $ (0.01) | $ (0.01) |
Weighted average number of common shares outstanding - Basic and diluted | 52,026,728 | 50,520,000 | 51,384,529 | 50,520,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - 6 months ended Dec. 31, 2016 - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Jun. 30, 2016 | $ 5,071 | $ 436,749 | $ 19 | $ (934,812) | $ (492,973) |
Balance, shares at Jun. 30, 2016 | 50,712,880 | ||||
Shares issued in IPO at $1.5 per share | $ 5 | $ 63,895 | $ 63,900 | ||
Shares issued in IPO at $1.5 per share, shares | 42,600 | ||||
Shares issued upon conversion of convertible notes principal and accrued interest at $0.25 per share | 373 | 931,972 | 932,345 | ||
Shares issued upon conversion of convertible notes principal and accrued interest at $0.25 per share, shares | $ 3,729,380 | ||||
Shares issued upon conversion of convertible notes principal and accrued interest at $0.15 per share | $ 1 | $ 1,664 | $ 1,665 | ||
Shares issued upon conversion of convertible notes principal and accrued interest at $0.15 per share, shares | 11,096 | ||||
Shares issued in private placement at $1.5 per share | $ 6 | 89,994 | 90,000 | ||
Shares issued in private placement at $1.5 per share, shares | 60,000 | ||||
Net loss | (461,986) | (461,986) | |||
Balance at Dec. 31, 2016 | $ 5,456 | $ 1,524,274 | $ 19 | $ (1,396,798) | $ 132,951 |
Balance, shares at Dec. 31, 2016 | 54,555,956 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Parenthetical) | Dec. 31, 2016$ / shares |
Statement of Stockholders' Equity [Abstract] | |
Shares issued in IPO, price per share | $ 1.5 |
Debt conversion price per share | 0.25 |
Debt conversion price per share one | 0.15 |
Shares issued in private placement, price per share | $ 1.5 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (461,986) | $ (367,969) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation | 3,025 | |
Interest expenses | 31,452 | 15,599 |
Changes in operating assets and liabilities: | ||
Subscriptions receivable | 30,000 | |
Accounts receivable | 11,548 | (6,416) |
Prepayments, deposits and other receivables | (13,749) | (9,724) |
Accounts payable | (5,044) | 4,660 |
Other payables and accrued liabilities | (1,673) | (3,496) |
Net cash used in operating activities | (409,452) | (364,657) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of tangible assets | (13,793) | |
Net cash used in investing activities | (13,793) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of shares in IPO | 153,900 | |
Interest paid for convertible notes | (3,420) | |
Effect of exchange rate changes on conversion of convertible notes | (5,372) | |
Proceeds from convertible notes payable | 605,345 | |
Advances from directors | 14,042 | |
Advances from a related company | 4,722 | |
Net cash provided by financing activities | 145,108 | 624,109 |
Effect of exchange rate changes on cash and cash equivalents | 1 | |
Net change in cash and cash equivalents | (264,344) | 245,660 |
Cash and cash equivalents, beginning of period | 449,328 | 70,778 |
CASH AND CASH EQUIVALENTS, END OF PERIOD | 184,984 | 316,438 |
SUPPLEMENTAL CASH FLOWS INFORMATION | ||
Cash paid for income taxes | ||
Cash paid for interest paid | $ 3,420 |
Basis of Preparation
Basis of Preparation | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Preparation | 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, 2016 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 six months ended December 31, 2016 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, 2017 or 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, 2016. |
Organization and Business Backg
Organization and Business Background | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business Background | 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 1. Sino Union International Limited (“Sino Union”) Anguilla January 3, 2014 84,500 shares of ordinary share of US$1 each Investment holding 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 Rito Group Corp. and its subsidiaries are hereinafter referred to as the “Company”. |
Going Concern Uncertainties
Going Concern Uncertainties | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern Uncertainties | 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 December 31, 2016, the Company suffered an accumulated deficit of $1,396,798 and continuously incurred a net operating loss of $461,986 for the six months ended December 31, 2016. 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. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 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 Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. ● 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. ● Subscriptions receivable There was no subscriptions receivable as of December 31, 2016. ● Revenue recognition In accordance with the Accounting Standard Codification (“ASC”) Topic 605 “Revenue Recognition” 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 transfer 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 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 six months ended December 31, 2016. 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. ● Net loss per share The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings per share” ● 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$, in accordance with ASC Topic 830-30, “Translation of Financial Statement” Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: As of and for the six months ended December 31, 2016 2015 Period-end / average HK$ : US$1 exchange rate 7.75 7.75 ● 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, prepayments, 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” Level 1 Level 2 Level 3 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. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 5 - SHAREHOLDERS’ EQUITY In July and August 2016, the Company entered into a number of Subscription Agreement with various investors relating to an initial public offering of a total of 42,600 shares of common stocks at a subscription price of $1.5 per share, for an aggregate gross proceeds of $63,900. On December 1, 2016, the Company entered into a number of Subscription Agreements with various investors relating to the private placement of a total of 60,000 shares of common stocks at a subscription price of $1.5 per share, for an aggregate gross proceeds of $90,000. On December 1, 2016, the Company issued an aggregate of 3,740,476 shares of its common stock to various investors in conversion of outstanding convertible notes payable in aggregated principal and accrued interest of $863,248 and $76,133, respectively. The conversion price is ranged from $0.15 to $0.25 per share. As of December 31, 2016 and June 30, 2016, the Company has a total of 54,555,956 and 50,712,880 shares, respectively of its common stock issued and outstanding. There are no shares of preferred stock issued and outstanding. |
Convertible Notes Payable
Convertible Notes Payable | 6 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | NOTE 6 - CONVERTIBLE NOTES PAYABLE During August 2015 to April 2016, the Company issued a number of convertible promissory notes (collectively the “Convertible Notes”) to investors in an aggregated principal of $888,410. The Convertible Notes bear interest at a rate of 8% per annum with a maturity of two years, due in 2017 and 2018. The principal and accrued interest are payable in a lump sum at the maturity. The notes are convertible into shares of the Company’s common stock at a conversion price ranged from $0.15 to $0.25 per share at the note holders’ sole and exclusive option. On December 1, 2016, various note holders converted $863,248 in principal and $76,133 in accrued interest into 3,740,476 shares of common stock. The conversion price is ranged from $0.15 to $0.25 per share. As of December 31, 2016, the outstanding convertible notes payable is $25,161 and $615 in principal and accrued interest, respectively. For the three months ended December 31, 2016 and 2015, the interest expense of $12,650 and $11,788, respectively are recognized in the condensed consolidated statements of operations. The Company paid interest of $2,379 to convertible notes holders during the three months ended December 31, 2016. For the six months ended December 31, 2016 and 2015, the interest expense of $31,452 and $15,599, respectively are recognized in the condensed consolidated statements of operations. The Company paid interest of $3,420 to convertible notes holders during the six months ended December 31, 2016. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7 - INCOME TAXES For the six months ended December 31, 2016 and 2015, the local (United States) and foreign components of loss before income taxes were comprised of the following: For the six months ended December 31, 2016 2015 Tax jurisdictions from: – Local $ (52,439 ) $ (18,335 ) – Foreign, representing Anguilla (21,899 ) (33,220 ) Hong Kong (387,648 ) (316,414 ) Loss before income taxes (461,986 ) (367,969 ) Provision for income taxes consisted of the following: For the six months ended December 31, 2016 2015 Current: – Local $ - $ - – Foreign (Hong Kong) - - Deferred: – Local - - – Foreign (Hong Kong) - - $ - $ - 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 and Hong Kong 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 December 31, 2016, the operations in the United States of America incurred $124,922 of cumulative net operating losses which can be carried forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2035, if unutilized. The Company has provided for a full valuation allowance of $43,722 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. 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 six months ended December 31, 2016, no provision for income tax is required due to operating loss incurred. As of December 31, 2016, Rito International incurred $1,161,866 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 $191,708 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 December 31, 2016 and June 30, 2016: As of December 31, 2016 June 30, 2016 (audited) Deferred tax assets: Net operating loss carryforwards – United States of America $ 43,722 $ 25,369 – Hong Kong 191,708 115,505 235,430 140,874 Less: valuation allowance (235,430 ) (140,874 ) 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 $235,430 as of December 31, 2016. During the six months ended December 31, 2016, the valuation allowance increased by $94,556, primarily relating to net operating loss carryforwards from the various tax regime. |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8 - RELATED PARTY TRANSACTIONS For the six months ended December 31, 2016 2015 Revenue generated from: - Related party A $ - $ 788 Professional fee paid to: - Related party B $ 7,547 $ 4,961 - Related party C 27,603 31,000 Website design and maintenance fee paid to: - Related party D 843 11,432 $ 35,993 $ 45,032 Related party A is the director of the holding company of a corporate shareholder of the Company. Related party 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. |
Concentrations of Risks
Concentrations of Risks | 6 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Concentrations of Risks | NOTE 9 - CONCENTRATIONS OF RISKS (a) Major customers For the three months ended December 31, 2016, there was no customer who accounted for the Company’s revenues. For the three months ended December 31, 2015, there was one customer who accounted for 100% of the Company’s revenues with no accounts receivable balance at period-end. For the six months ended December 31, 2016, there was one customer who accounted for 100% of the Company’s revenues with no accounts receivable balance at period-end. For the six months ended December 31, 2015, the customers who accounted for 10% or more of the Company’s revenues are presented as follows: For the six months ended December 31, 2015 As of December 31, 2015 Revenue Percentage of revenue Accounts receivable Customer A $ 1,290 22 % $ - Customer B 1,290 22 % - Customer C, related party 788 13 % - Total: $ 3,368 57 % $ - (b) Major vendors For the three months ended December 31, 2016 and 2015, there was no vendor who accounted for the Company’s cost of revenues. For the six months ended December 31, 2016, there was one vendor who accounted for 100% of the Company’s cost of revenues with no accounts payable balance at period-end. For the six months ended December 31, 2015, there was one vendor who accounted for 100% of the Company’s cost of revenues with accounts payable balance of $4,570 at period-end. (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. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 10 - COMMITMENTS AND CONTINGENCIES The Company leases an office premises in Hong Kong under a non-cancellable operating lease that expire on June 2018, with an aggregate fixed monthly rent of approximately $1,290. The aggregate lease expense for the three months ended December 31, 2016 and 2015 were $3,871 and $10,245, respectively. The aggregate lease expense for the six months ended December 31, 2016 and 2015 were $7,742 and $20,608, respectively. As of December 31, 2016, 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 December 31: 2017 $ 15,484 2018 7,742 $ 23,226 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 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 December 31, 2016 up through the date the Company presented this condensed consolidated financial statements. On January 23, 2017, the Company entered into a Subscription Agreement with a corporate investor in relating to a private placement of 10,000 shares of common stocks at a subscription price of $1.5 per share, for an aggregate gross proceeds of $15,000. The proceeds are used for the working capital of the Company. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | ● 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 | ● 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 | ● 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 | ● Cash and cash equivalents Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. |
Accounts receivable | ● 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. |
Subscription Receivables | ● Subscriptions receivable There was no subscriptions receivable as of December 31, 2016. |
Revenue Recognition | ● Revenue recognition In accordance with the Accounting Standard Codification (“ASC”) Topic 605 “Revenue Recognition” 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 transfer 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 Revenue | ● Cost of revenues Cost of revenue includes the purchase cost of retail goods for re-sale to the customers. |
Income Taxes | ● Income taxes The provision of income taxes is determined in accordance with the provisions of ASC Topic 740, “Income Taxes” 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 six months ended December 31, 2016. 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. |
Net Loss Per Share | ● Net loss per share The Company calculates net loss per share in accordance with ASC Topic 260 “Earnings per share” |
Foreign Currencies Translation | ● 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$, in accordance with ASC Topic 830-30, “Translation of Financial Statement” Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: As of and for the six months ended December 31, 2016 2015 Period-end / average HK$ : US$1 exchange rate 7.75 7.75 |
Related Parties | ● 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 | ● Fair value of financial instruments The carrying value of the Company’s financial instruments: cash and cash equivalents, accounts receivable, prepayments, 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” Level 1 Level 2 Level 3 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 | ● 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. |
Organization and Business Bac20
Organization and Business Background (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Company's Subsidiaries | Details of the Company’s subsidiaries: Company name Place/date of incorporation Particulars of issued capital Principal activities 1. Sino Union International Limited (“Sino Union”) Anguilla January 3, 2014 84,500 shares of ordinary share of US$1 each Investment holding 2. Rito International Enterprise Company Limited (“Rito International”) Hong Kong August 12, 2014 630,001 shares of ordinary share of HK$1 each Trading of retail goods |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Exchange Rates Translation | Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods: As of and for the six months ended December 31, 2016 2015 Period-end / average HK$ : US$1 exchange rate 7.75 7.75 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Components of Loss before Income Taxes | For the six months ended December 31, 2016 and 2015, the local (United States) and foreign components of loss before income taxes were comprised of the following: For the six months ended December 31, 2016 2015 Tax jurisdictions from: – Local $ (52,439 ) $ (18,335 ) – Foreign, representing Anguilla (21,899 ) (33,220 ) Hong Kong (387,648 ) (316,414 ) Loss before income taxes (461,986 ) (367,969 ) |
Schedule of Provision for Income Taxes | Provision for income taxes consisted of the following: For the six months ended December 31, 2016 2015 Current: – Local $ - $ - – Foreign (Hong Kong) - - Deferred: – Local - - – Foreign (Hong Kong) - - $ - $ - |
Schedule of Deferred Tax Assets | The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of December 31, 2016 and June 30, 2016: As of December 31, 2016 June 30, 2016 (audited) Deferred tax assets: Net operating loss carryforwards – United States of America $ 43,722 $ 25,369 – Hong Kong 191,708 115,505 235,430 140,874 Less: valuation allowance (235,430 ) (140,874 ) Deferred tax assets $ - $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | For the six months ended December 31, 2016 2015 Revenue generated from: - Related party A $ - $ 788 Professional fee paid to: - Related party B $ 7,547 $ 4,961 - Related party C 27,603 31,000 Website design and maintenance fee paid to: - Related party D 843 11,432 $ 35,993 $ 45,032 |
Concentrations of Risks (Tables
Concentrations of Risks (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
Schedule of Major Customers with Revenue and Accounts Receivable | For the six months ended December 31, 2015, the customers who accounted for 10% or more of the Company’s revenues are presented as follows: For the six months ended December 31, 2015 As of December 31, 2015 Revenue Percentage of revenue Accounts receivable Customer A $ 1,290 22 % $ - Customer B 1,290 22 % - Customer C, related party 788 13 % - Total: $ 3,368 57 % $ - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | As of December 31, 2016, 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 December 31: 2017 $ 15,484 2018 7,742 $ 23,226 |
Organization and Business Bac26
Organization and Business Background - Summary of Company's Subsidiaries (Details) | 6 Months Ended |
Dec. 31, 2016 | |
Sino Union [Member] | |
Company name | Sino Union International Limited (Sino Union) |
Place/date of incorporation | Anguilla January 3, 2014 |
Particulars of issued capital | 84,500 shares of ordinary share of US$1 each |
Principal activities | Investment holding |
Rito International [Member] | |
Company name | Rito International Enterprise Company Limited (Rito International) |
Place/date of incorporation | Hong Kong August 12, 2014 |
Particulars of issued capital | 630,001 shares of ordinary share of HK$1 each |
Principal activities | Trading of retail goods |
Going Concern Uncertainties (De
Going Concern Uncertainties (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Accumulated deficit | $ 1,396,798 | $ 1,396,798 | $ 934,812 | ||
Net operating loss | $ 196,498 | $ 196,978 | $ 461,986 | $ 367,969 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Jun. 30, 2016 | |
Accounting Policies [Abstract] | ||
Subscription receivables | $ 30,000 | |
Percentage of recognized benefit likelihood of being realized upon ultimate settlement | greater than 50% |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Schedule of Exchange Rates Translation (Details) | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Period-end / average HK$ : US$1 exchange rate | 7.75 | 7.75 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Schedule of Exchange Rates Translation (Details) (Parenthetical) - USD ($) | 6 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Exchange rate | $ 1 | $ 1 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | Dec. 01, 2016 | Aug. 31, 2016 | Dec. 31, 2016 | Jun. 30, 2016 | Apr. 30, 2016 |
Share subscription price per share | $ 1.5 | ||||
Number of common stock issued during the period | $ 63,900 | ||||
Number of common stock shares issued for conversion of convertible notes payable principal and accrued interest | 932,345 | ||||
Debt conversion price per share | $ 0.25 | ||||
Common stock, shares issued | 54,555,956 | 50,712,880 | |||
Common stock, shares outstanding | 54,555,956 | 50,712,880 | |||
Preferred stock, shares issued | |||||
Preferred stock, shares outstanding | |||||
Investors [Member] | Convertible Notes Payable [Member] | |||||
Number of common stock shares issued for conversion of convertible notes payable principal and accrued interest | 3,740,476 | ||||
Number of common stock shares issued for conversion of convertible notes payable principal amount | $ 863,248 | ||||
Number of common stock shares issued for conversion of convertible notes payable accrued interest amount | $ 76,133 | ||||
Investors [Member] | Convertible Notes Payable [Member] | Minimum [Member] | |||||
Debt conversion price per share | $ 0.15 | $ 0.15 | |||
Investors [Member] | Convertible Notes Payable [Member] | Maximum [Member] | |||||
Debt conversion price per share | $ 0.25 | $ 0.25 | |||
Subscription Agreement [Member] | Investors [Member] | IPO [Member] | |||||
Number of common stock shares issued during the period | 42,600 | ||||
Share subscription price per share | $ 1.5 | ||||
Number of common stock issued during the period | $ 63,900 | ||||
Subscription Agreement [Member] | Investors [Member] | Private Placement [Member] | |||||
Number of common stock shares issued during the period | 60,000 | ||||
Share subscription price per share | $ 1.5 | ||||
Number of common stock issued during the period | $ 90,000 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Narrative) - USD ($) | Dec. 01, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Apr. 30, 2016 |
Convertible notes convertible into common stock conversion price | $ 0.25 | $ 0.25 | ||||
Number of common stock shares issued for conversion of convertible notes payable principal and accrued interest | 932,345 | |||||
Convertible notes payable | $ 25,161 | $ 25,161 | ||||
Accrued interest | 615 | 615 | ||||
Interest expense | 12,650 | $ 11,788 | 31,452 | $ 15,599 | ||
Interest paid for convertible notes | $ 2,379 | $ 3,420 | ||||
Convertible Notes Payable [Member] | Investors [Member] | ||||||
Convertible notes principal amount | $ 888,410 | |||||
Convertible notes interest rate | 8.00% | |||||
Convertible note term | 2 years | |||||
Convertible notes maturity date | due in 2017 and 2018 | |||||
Number of common stock shares issued for conversion of convertible notes payable principal and accrued interest | 3,740,476 | |||||
Number of common stock shares issued for conversion of convertible notes payable principal amount | $ 863,248 | |||||
Number of common stock shares issued for conversion of convertible notes payable accrued interest amount | $ 76,133 | |||||
Convertible Notes Payable [Member] | Investors [Member] | Minimum [Member] | ||||||
Convertible notes convertible into common stock conversion price | $ 0.15 | $ 0.15 | ||||
Convertible Notes Payable [Member] | Investors [Member] | Maximum [Member] | ||||||
Convertible notes convertible into common stock conversion price | $ 0.25 | $ 0.25 | ||||
Convertible Notes Payable [Member] | Note Holders [Member] | ||||||
Number of common stock shares issued for conversion of convertible notes payable principal and accrued interest | 3,740,476 | |||||
Number of common stock shares issued for conversion of convertible notes payable principal amount | $ 863,248 | |||||
Number of common stock shares issued for conversion of convertible notes payable accrued interest amount | $ 76,133 | |||||
Convertible Notes Payable [Member] | Note Holders [Member] | Minimum [Member] | ||||||
Convertible notes convertible into common stock conversion price | $ 0.15 | |||||
Convertible Notes Payable [Member] | Note Holders [Member] | Maximum [Member] | ||||||
Convertible notes convertible into common stock conversion price | $ 0.25 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets valuation allowance | $ 235,430 | |||
Provision for income tax | ||||
Change in valuation allowance | 94,556 | |||
Rito International [Member] | ||||
Net operating losses | 1,161,866 | 1,161,866 | ||
United States of America [Member] | ||||
Net operating losses | $ 124,922 | $ 124,922 | ||
Net operating loss carryforwards expiration year | 2,035 | |||
Deferred tax assets valuation allowance | $ 43,722 | |||
Hong Kong [Member] | ||||
Deferred tax assets valuation allowance | $ 191,708 | |||
Statutory income tax rate | 16.50% |
Income Taxes - Components of Lo
Income Taxes - Components of Loss before Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Loss before income taxes | $ (196,498) | $ (196,978) | $ (461,986) | $ (367,969) |
Hong Kong [Member] | ||||
Loss before income taxes | (387,648) | |||
Local [Member] | ||||
Loss before income taxes | (52,439) | (18,335) | ||
Anguilla [Member] | ||||
Loss before income taxes | $ (21,899) | (33,220) | ||
Hong Kong [Member] | ||||
Loss before income taxes | $ (316,414) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Provision for income taxes Current - Local | ||||
Provision for income taxes Current - Foreign (Hong Kong) | ||||
Provision for income taxes Deferred - Local | ||||
Provision for income taxes Deferred - Foreign (Hong Kong) | ||||
Income tax expense |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2016 | Jun. 30, 2016 |
Deferred tax assets, Net operating loss carryforwards | $ 235,430 | $ 140,874 |
Less: valuation allowance | (235,430) | (140,874) |
Deferred tax assets | ||
United States of America [Member] | ||
Deferred tax assets, Net operating loss carryforwards | 43,722 | 25,369 |
Hong Kong [Member] | ||
Deferred tax assets, Net operating loss carryforwards | $ 191,708 | $ 115,505 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue generated | $ 788 | |||
Related party transaction, Total | $ 35,993 | $ 45,032 | 35,993 | 45,032 |
Related Company A [Member] | ||||
Revenue generated | 788 | |||
Related Company B [Member] | ||||
Professional fee paid | 7,547 | 4,961 | ||
Related Company C [Member] | ||||
Professional fee paid | 27,603 | 31,000 | ||
Related Company D [Member] | ||||
Website design and maintenance fee paid | $ 843 | $ 11,432 |
Concentrations of Risks (Detail
Concentrations of Risks (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | |
Revenues | $ 277 | $ 14,315 | $ 5,878 | ||
Cost of revenues | 13,533 | $ 2,491 | |||
Accounts payable | $ 5,044 | ||||
Revenue [Member] | Customer [Member] | |||||
Revenues | |||||
Concentration risk percentage | 10.00% | ||||
Revenue [Member] | One Customer [Member] | |||||
Concentration risk percentage | 100.00% | 100.00% | |||
Revenue [Member] | Vendor [Member] | |||||
Cost of revenues | |||||
Revenue [Member] | One Vendor [Member] | |||||
Concentration risk percentage | 100.00% | 100.00% | |||
Accounts payable | 4,570 | $ 4,570 | |||
Accounts Receivable [Member] | One Customer [Member] | |||||
Accounts receivable |
Concentrations of Risks - Sched
Concentrations of Risks - Schedule of Major Customers with Revenue and Accounts Receivable (Details) | 6 Months Ended |
Dec. 31, 2015USD ($) | |
Customer A [Member] | |
Trade accounts receivable | |
Customer A [Member] | Revenue [Member] | |
Revenues | $ 1,290 |
Percentage of revenues | 22.00% |
Customer B [Member] | |
Trade accounts receivable | |
Customer B [Member] | Revenue [Member] | |
Revenues | $ 1,290 |
Percentage of revenues | 22.00% |
Customer C [Member] | |
Trade accounts receivable | |
Customer C [Member] | Revenue [Member] | |
Revenues | $ 788 |
Percentage of revenues | 13.00% |
Revenue [Member] | |
Revenues | $ 3,368 |
Percentage of revenues | 57.00% |
Accounts Receivable [Member] | |
Trade accounts receivable |
Commitments and Contingencies40
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Lease expense | $ 3,871 | $ 10,245 | $ 7,742 | $ 20,608 |
Hong Kong [Member] | ||||
Operating lease expiration date | Jun. 30, 2018 | |||
Rent expense | $ 1,290 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) | Dec. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,017 | $ 15,484 |
2,018 | 7,742 |
Total | $ 23,226 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Jan. 23, 2017 | Dec. 31, 2016 |
Share subscription price per share | $ 1.5 | |
Number of common stock issued during the period | $ 63,900 | |
Subsequent Event [Member] | Subscription Agreement [Member] | Corporate Investors [Member] | IPO [Member] | ||
Number of common stock shares issued during the period | 10,000 | |
Share subscription price per share | $ 1.5 | |
Number of common stock issued during the period | $ 15,000 |