UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X]

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

For The Quarterly Period Ended ~~March~~September 3130, 2019

[ ]

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

For the transition period from ____________ to ____________

Commission File Number 000-55796

Rito Group Corp.

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

Nevada

47-3588502

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

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

489-491 Castle Peak Road, Lai Chi Kok, Hong Kong

(Address of principal executive offices, including zip code)

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES [X] NO [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section232.405 of this chapter) during the preceding twelve months (or shorter period that the registrant was required to submit and post such files).

YES [ ] NO [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule12b-2 of the Exchange Act. (Check one):

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

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

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

Class		Outstanding at ~~May~~November 1413, 2019
Common Stock, $.0001 par value		56,~~351~~446,489

TABLE OF CONTENTS

		Page
PART I	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS:
	Condensed Consolidated Balance Sheets as of March 31, 2019 (unaudited) and June 30, 2018 (audited)	F-1
	Condensed Consolidated Balance Sheets as of September 30, 2019 (unaudited) and June 30, 2019 (audited)	F-1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended March 31, 2019 and 2018 (unaudited)	F-2
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended September 30, 2019 and 2018 (unaudited)	F-2
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2019 and 2018 (unaudited)	F-3
	Condensed Consolidated Statements of Change in Shareholders’ Equity for the Three Months Ended September 30, 2019 (unaudited)	F-3
	Notes to the Condensed Consolidated Financial Statements	F-4 – F-15
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2019 and 2018 (unaudited)	F-4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3
	Notes to the Condensed Consolidated Financial Statements	F-5 – F-15
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	3-6
ITEM 3.	QUANTITATIVE AND QUALITATIVED IS CLOSURES ABOUT MARKET RISK	6
ITEM 4.	CONTROLS AND PROCEDURES	6
PART II	OTHER INFORMATION	7
ITEM 1	LEGAL PROCEEDINGS	7
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	7
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	7
ITEM 4	MINE SAFETY DISCLOSURES	7
ITEM 5	OTHER INFORMATION	7
ITEM 6	EXHIBITS	7
	SIGNATURES	8

PART I — FINANCIAL INFORMATION

Item 1. Financial statements

RITO GROUP CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF ~~March~~SEPTEMBER 3130, 2019 AND JUNE 30, ~~2018~~2019

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

	As of
	March 31, 2019			June 30, 2018
	September 30, 2019			June 30, 2019
	(Unaudited)			(Audited)
ASSETS
CURRENT ASSETS
Account receivables		97153,~~819~~756			23123,~~837~~289
Deposits paid, prepayments and other receivables		4323,~~977~~827			1731,~~446~~350
Inventories		19,080			19,080
Cash and cash equivalents	$	127,376		$	349,080
Cash and cash equivalents	$	422,398		$	1,066,636
Total current assets		304,959			503,719
Total current assets		583,274			1,126,999
NON-CURRENT ASSETS
Plant and equipment, net		~~200~~172,~~322~~028			~~222~~189,~~174~~650
TOTAL ASSETS	$	~~783~~476,~~596~~987		$	1693,~~349,173~~369
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Current portion of long-term bank loans		86,~~510~~723			78,~~394~~882
Accrued expenses and other payables		62104,~~857~~464			~~287~~111,~~866~~621
Due to directors		1027,~~390~~306			~~151~~10,~~488~~255
Total current liabilities		81,757			446,748
Due to related party		12,755			-
Total current liabilities		151,248			130,758
NON-CURRENT LIABILITIES
Long-term bank loans		2523,~~646~~017			3223,~~168~~284
TOTAL LIABILITIES		~~107~~174,~~403~~265			~~478~~154,~~916~~042
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, 56,206,489 and 55,848,284 shares issued and outstanding as of March 31, 2019 and June 30, 2018 respectively		5,621			5,585
Common stock, $0.0001 par value, 600,000,000 shares authorized, 56,446,489 and 55,848,284 shares issued and outstanding as of September 30, 2019 and June 30, 2018 respectively		5,645			5,645
Additional paid-in capital		4,~~028~~508,~~600~~577			34,~~327~~508,~~227~~577
Accumulated other comprehensive income /(loss)		11,930			(1,281	)
Accumulated other comprehensive loss		(2,550	)		(1,193	)
Accumulated deficit		(34,~~369~~208,~~958~~950	)		(23,~~461~~973,~~274~~702	)
TOTAL STOCKHOLDERS’ EQUITY		~~676~~302,~~193~~722			~~870~~539,~~257~~327
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	~~783~~476,~~596~~987		$	1693,~~349,173~~369

See accompanying notes to the condensed consolidated financial statements.

F-1

RITO GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019 AND 2018

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

(Unaudited)

	Three months ended March 31,						Nine months ended March 31,
	Three months ended September 30,
	2019			2018			~~2019~~			~~2018~~
REVENUE	$	~~113~~95,~~948~~709		$	6099,~~060~~575		$	~~319,136~~		$	~~88,569~~
COST OF REVENUE		(4960,~~909~~579	)		(29113,~~841~~217	)		~~(232,653~~	)		~~(50,768~~	)
GROSS PROFIT		64,039			30,219			86,483			37,801
GROSS PROFIT/(LOSS)		35,130			(13,642	)
OTHER INCOME		2~~,078~~			-3,151			~~5,542~~			38
OPERATING EXPENSES
General and administrative		(~~460~~269,~~768~~297	)		(~~229~~260,~~747~~175	)		~~(996,573~~	)		~~(618,774~~	)
LOSS FROM OPERATIONS		(~~394~~234,~~651~~165	)		(~~199~~270,~~528~~666	)		~~(904,548~~	)		~~(580,935~~	)
Interest expense		(1,~~275~~083	)		~~(1,808~~-	)		~~(4,136~~	)		~~(5,170~~	)
LOSS BEFORE INCOME TAX		(~~395~~235,~~926~~248	)		(~~201~~270,~~336~~666	)		~~(908,684~~	)		~~(586,105~~	)
Income tax expense		-			-			-			-
NET LOSS	$	(~~396~~235,~~926~~248	)	$	(~~201~~270,~~336~~666	)	$	~~(909,684~~	)		~~(586,105~~	)
Other comprehensive loss:
Foreign currency translation (loss)/gain		(20	)		2			13,211			(8	)
Foreign currency translation loss		(1,357	)		(80	)
COMPREHENSIVE LOSS		(~~395~~236,~~946~~605	)		(~~201~~270,~~334~~746	)		~~(895,473~~	)		~~(586,113~~	)
Net loss per share - Basic and diluted		~~(0.01~~-	)		(0.0001	)		~~(0.02~~	)		~~(0.01~~	)
Weighted average number of common shares outstanding – Basic and diluted		56,~~119~~446,~~461~~489			55,~~142~~310,~~928~~495			~~56,008,855~~			~~54,869,375~~

See accompanying notes to the condensed consolidated financial statements.

F-2

RITO GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Audited)

	COMMON STOCK				ADDITIONAL		ACCUMULATED						TOTAL
	Number of shares		Amount		PAID-IN CAPITAL		COMPREHENSIVE LOSS			ACCUMULATED DEFICIT			STOCKHOLDERS’ DEFICIT

Balance as of June 30, 2019		56,446,489	$	5,645	$	4,508,577	$	(1,193	)	$	(3,973,702	)	$	539,327
Net Loss		-		-		-		-			(235,248	)		(235,248	)
Other comprehensive loss		-		-		-		(1,357	)		-			(1,357	)
Balance as of September 30, 2019		56,446,489		5,645		4,508,577		(2,550	)		(4,208,950	)		302,722

See accompanying notes to condensed consolidated financial statements

F-3

RITO GROUP CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019 AND 2018

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

(Unaudited)

	Nine Months Ended March 31,
	Three Months Ended September 30,
	2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(~~908~~235,~~684~~248	)	$	(~~586~~270,~~105~~666	)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation		7417,~~325~~622			-27,335
Interest expenses		21,~~861~~083			~~5,170~~-
Changes in operating assets and liabilities:
Accounts receivable		(2630,~~531~~467	)		9(31,~~767~~382	)
Prepayments, deposits and other receivables		~~(73~~7,~~982~~523	)		(41,~~465~~923	)
Accounts payable		-			(37,~~532~~476	)
Other payables and accrued liabilities		(~~225~~7,~~009~~157	)		~~406~~(8,~~061~~865	)
Net cash used in operating activities		(1246,~~157,020~~644	)		(~~173~~278,~~104~~025	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of plant and equipment		~~(52,473~~-	)		(~~179~~51,~~764~~182	)
Net cash used in investing activities		~~(52,473~~-	)		(~~179~~51,~~764~~182	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of shares in private placement		~~701,409~~-			~~951~~290,000
Drawdown of bank borrowings		-			45,032
Advances from related party		12,755			-
Repayment of bank borrowings		(~~141~~2,~~098~~426	)		(31,~~856~~709	)
Bank loan interest		(21,~~861~~083	)		~~(4,998~~-	)
Advances from directors		(517,~~406~~051	)		-(724	)
Net cash provided by financing activities		~~552~~26,~~044~~297			~~987~~287,~~178~~567
Effect of exchange rate changes on cash and cash equivalents		13(1,~~211~~357	)		(880	)
Net change in cash and cash equivalents		(~~644~~221,~~238~~704	)		~~634~~(41,~~302~~560	)
Cash and cash equivalents, beginning of period		1349,~~066,636~~080			801,~~487~~066,636
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	~~422~~127,~~398~~376		$	~~714~~1,~~789~~025,076
SUPPLEMENTAL CASH FLOWS INFORMATION
Cash paid for income taxes	$	-		$	-
Cash paid for interest paid	$	(21,~~861~~083	)	$	(41,~~998~~488	)

See accompanying notes to the condensed consolidated financial statements.

F-34

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

NOTE 1 - BASIS OF PREPARATION

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

In the opinion of management, the consolidated balance sheet as of ~~March~~September 3130, 2019 which has been derived from audited financial ~~statements~~ statements and these unaudited condensed consolidated financial statements reflect all normal and recurring adjustments considered ~~necessary~~ necessary to state fairly the results for the periods presented. The results for the ~~six~~three months ended ~~March~~September 3130, 2019 are not necessarily indicative of the results to be expected for the entire fiscal year ending June 30, ~~2019~~2020 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, ~~2018~~2019.

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, AgriGaia Farming Products, and numerous other products.

F-45

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

Details of the Company’s subsidiaries:

	Company name	Place/date of incorporation	Particulars of issued capital	Equity ownership	Principal activities

1.	Sino Union International Limited (“Sino Union”)	Anguilla January 3, 2014	84,500 shares of ordinary share of US$1 each	100%	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	100%	Trading of retail goods

3.	深圳市汇图贸易有限公司	Shenzhen, PRC June 27, 2018	500,000 shares of ordinary share of RMB 1 each	100%	Trading of retail goods, business and agriculture technology consulting

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

NOTE 3 - GOING CONCERN UNCERTAINTIES

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

As of ~~March~~September 3130, 2019, the Company suffered an accumulated deficit of $34,~~369~~208,~~958~~950 and continuously incurred a net operating loss of $~~908~~235,~~684~~248 for the ~~nine~~three months ended ~~March~~September 3130, 2019. The continuation of the Company as a going concern through ~~June~~ June 30, ~~2018~~2020 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. Furthermore, management plans to import healthy food and drinks produced by Taiwanese AgriGaia Biomimicry Farming System into Hong Kong and arrange the food and drinks to be sold in various outlets by our sole agent in Hong Kong.

F-56

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

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

NOTE 4 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

●	Basis of presentation

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

●	Basis of consolidation

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

●	Use of estimates

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

●	Cash and cash equivalents

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

●	Plant and equipment

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

Categories	Estimated useful life	Residual value
Leasehold improvement	Over the shorter of estimated useful life or term of lease	-
Equipment	3-10 years	-
Motor Vehicle	3-10 years	-

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

●	Accounts receivable

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

F-67

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

●	Revenue recognition

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

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

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

●	Cost of revenues

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

●	Income taxes

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

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

The Company did not have any unrecognized tax positions or benefits and there was no effect on the financial conditions or results of operations for the ~~nine~~three months ended ~~March~~September 3130, 2019. The Company conducts major businesses in Hong Kong and is subject to tax in this jurisdiction. As a result of its business activities, the Company will file tax returns that are subject to examination by the foreign tax authority.

F-78

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

●	Net loss per share

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

●	Foreign currencies translation

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

The reporting currency of the Company and its subsidiary in Anguilla is United States Dollars (“US$”). The Company’s subsidiary in Hong Kong maintains its books and record in Hong Kong Dollars (“HK$”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

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

	As of and for the nine months ended March 31,
	As of and for the three months ended September 30,
	2019		2018
Period-end / average HK$ : US$1 exchange rate		7.758364		7.757500
Period-end / average CNY¥: US$1 exchange rate		67.741161		6.278700

●	Related parties

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

●	Fair value of financial instruments

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

F-89

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

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

	Level 1 : Observable inputs such as quoted prices in active markets;

	Level 2 : Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

	Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions

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

●	Recent accounting pronouncements

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

NOTE 5 - SHAREHOLDERS’ EQUITY

~~From~~As ~~July~~of to September ~~2018~~30, 2019, the Company ~~issued~~has ~~30,000~~a ~~shares~~total of ~~its common stock at $1.50 per share for gross proceeds of $45~~56,~~000 and 122~~446,~~500~~489 shares of its common stock atissued $2and outstanding.00 ~~per~~There ~~share~~are ~~for~~no ~~aggregate~~shares ~~gross~~of ~~proceeds~~preferred ofstock ~~$245,000~~issued and outstanding.

In November and December 2018, the Company issued an aggregated of 45,000 shares of its common stock at $2.00 per share for aggregate gross proceeds of $90,000.

From January to March 2019, the Company issued an aggregated of 160,705 shares of its common stock at $2.00 per share for aggregate gross proceeds of $321,410.

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT

	As of
	March 31, 2019			June 30, 2018
	September 30, 2019			June 30, 2019
	(unaudited)			(audited)
Leasehold improvement	$	236,630		$	~~207~~236,~~062~~630
Equipment		2232,~~169~~570			1732,~~329~~570
Motor vehicle		18,065			-18,065
		276,864			224,391
		287,265			287,265
Less: Accumulated depreciation		(76115,~~542~~237	)		(297,~~217~~615	)
Total	$	~~200~~172,~~322~~028		$	~~222~~189,~~174~~650

Depreciation expense, classified as operating expenses, was $2217,~~258~~622 and $~~Nil~~27,335 for the three months ended ~~March~~September 3130, 2019 and ~~March 31,~~ 2018, respectively.

Depreciation expense, classified as operating expenses, was $74,325 and $2,217 for the nine months ended March 31, 2019 and March 31, 2018, respectively.

NOTE 7 - LONG-TERM BANK LOANS

	As of
	March 31, 2019			June 30, 2018
	September 30, 2019			June 30, 2019
	(unaudited)			(audited)
Bank loan from financial institution in Hong Kong:
The Hongkong and Shanghai Banking Corporation Limited	$	3429,~~156~~740		$	3932,~~562~~166
		34,156			39,562
		29,740			32,166
Less: Current portion		(86,~~510~~723	)		(78,~~394~~882	)
Long-term portion	$	2523,~~646~~017		$	3223,~~168~~284

In July ~~2018~~2017, the Company obtained a loan in the principal amount of HKD349,000 (approximately $45,032) from The Hongkong and Shanghai Banking Corporation Limited, a financial institution in Hongkong which bears interest at the base lending rate less 0.7% flat rate per month with 60 monthly installments of HKD8,260 (approximately $1,066) each and will mature in July 2022.

F-910

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

NOTE 8 - INCOME TAXES

For the ~~nine~~three months ended ~~March~~September 3130, 2019 and 2018, the local (United States) and foreign components of loss before income taxes ~~were~~ were comprised of the following:

	For the nine months ended March 31,
	For the three months ended September 30,
	2019			2018
Tax jurisdictions from:
– Local	$	(3716,~~500~~460	)	$	(407,~~785~~655	)
– Foreign, representing
Anguilla		(21,~~055~~825	)		(41,~~564~~122	)
Hong Kong		(~~867~~216,~~634~~539	)		(~~540~~261,~~112~~451	)
PRC		(~~1,495~~424	)		(~~644~~438	)
Loss before income taxes		(~~909~~235,~~684~~248	)		(~~586~~270,~~105~~666	)

Provision for income taxes consisted of the following:

		For the nine months ended March 31,
		For the three months ended September 30,
		2019		2018
Current:
– Local	$	-	$	-
– Foreign (Hong Kong)		-		-
– Foreign (PRC)		-		-
Deferred:
– Local		-		-
– Foreign (Hong Kong)		-		-
– Foreign (PRC)		-		-
	$	-	$	-

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rates. The Company has subsidiaries that operate in various countries: United States, Anguilla, Hong Kong and People’s Republic of China that are subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

The Company is registered in the State of Nevada and is subject to the tax laws of the United States of America. As of ~~March~~September 3130, 2019, the operations in the United States of America incurred $~~286~~339,~~723~~534 of cumulative net operating losses which can be carried ~~forward~~ forward to offset future taxable income. The net operating loss carryforwards begin to expire in 2037, if unutilized. The Company ~~has~~ has provided for a full valuation allowance of $6071,~~211~~302 against the deferred tax assets on the expected future tax benefits from ~~the~~ the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

F-1011

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

Anguilla

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

Hong Kong

Rito International is subject to Hong Kong Profits Tax, which is charged at the statutory income tax rate of 16.5% on its assessable income. For the ~~nine~~three months ended ~~March~~September 3130, 2019, no provision for income tax is required due to operating loss incurred. As of ~~March~~ 31September 30, 2019, Rito International incurred $23,~~959~~740,~~398~~242 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 $~~488~~617,~~301~~140 on the expected future tax benefits from the net operating loss carryforwards as the management ~~believes~~ believes it is more likely than not that these assets will not be realized in the future.

People’s Republic of China

深圳市汇图贸易有限公司 is operating in the People’s Republic of China (“PRC”) subject to the Corporate Income Tax governed by the Income Tax Law of the People’s Republic of China with a unified statutory income tax rate of 25%. For the ~~nine~~three months ended ~~March~~September 3130, 2019, no provision for income tax is required due to operating loss incurred. As of ~~March~~September 3130, 2019, 深圳市汇图贸易有限公司 incurred $23,~~619~~466 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 $~~655~~867 on the expected future tax benefits from the net operating loss carryforwards as the management believes it is more likely than not that these assets will not be realized in the future.

The following table sets forth the significant components of the aggregate deferred tax assets of the Company as of ~~March~~September 3130, ~~2019~~ 2019 and June 30, ~~2018~~2019:

	As of
	March 31, 2019			June 30, 2018
	September 30, 2019			June 30, 2019
	(unaudited)			(audited)
Deferred tax assets:
Net operating loss carryforwards
– United States of America	$	6071,~~211~~302		$	5267,~~337~~845
– Hong Kong		~~488~~617,~~301~~140			~~345~~581,~~141~~411
– PRC		~~655~~867			~~281~~761
Less: valuation allowance		~~549~~689,~~167~~309			~~397~~650,~~759~~017
Deferred tax assets	$	(~~549~~689,~~167~~309	)	$	(~~397~~650,~~759~~017	)
		-			-

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 $~~549~~689,~~146~~309 as of ~~March~~September 3130, 2019. During ~~the~~ ~~nine~~the three months ended ~~March~~September 3130, 2019, the valuation allowance increased by $~~151~~39,~~387~~292, primarily relating to net operating loss ~~carryforwards~~ carryforwards from the various tax regime.

F-1112

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

NOTE 9 - RELATED PARTY TRANSACTIONS

	For the nine months ended March 31,
	For the three months ended September 30,
	2019			2018
Professional fee paid to:
- Related party A	$	114,~~562~~216		$	111,~~601~~352
- Related party B		~~17,103~~5.850			134,~~200~~603
- Related party C		~~287~~780			~~430~~147
Website design and maintenance fee paid to:
- Related party D		~~441~~149			~~588~~72
	$	29,393		$	25,819
Advance from holding company
- Related party E		(12,755	)		-
	$	(1,760	)	$	6,174

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

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

NOTE 10 - CONCENTRATIONS OF RISKS

(a) Major customers

For the three months ended ~~March~~September 3130, 2019, the customers who accounted for 10% of the Company’s revenues and the accounts ~~receivable~~ receivable balances at period-end are presented as follows:

	For the three months ended March 31, 2019					As of March 31, 2019
	For the three months ended September 30, 2019					As of September 30, 2019
	Revenues		Percentage of revenues			Accounts receivable
Customer A	$	1795,~~174~~709		15100	%	$	97127,~~819~~612
Customer B		96,774		85	%		-
Total:	$	95,709		100	%	$	127,612
Total:	$	113,948		100	%	$	97,819

For the three months ended ~~March~~September 3130, 2018, the customers who accounted for 10% of the Company’s revenues and the accounts ~~receivable~~ receivable balances at period-end are presented as follows:

	For the three months ended March 31, 2018					As of March 31, 2018
	For the three months ended September 30, 2018					As of September 30, 2018
	Revenues		Percentage of revenues			Accounts receivable
Customer A	$	4080,~~111~~156		6780.5	%	$	-55,219
Customer B		19,~~949~~419		3319.5	%		-
Total:	$	6099,~~060~~575		100	%	$	-55,219

~~For the nine months ended March 31, 2019, the customers who accounted for 10% or more of the Company’s revenues and the accounts receivable balances at period~~F-~~end are presented as follows:~~13

	For the nine months ended March 31, 2019					As of March 31, 2019
	Revenues		Percentage of revenues			Accounts receivable
Customer A	$	99,330		30	%	$	97,819
Customer B		221,806		70	%		-
Total:	$	319,136		100	%	$	97,819

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

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

F-12

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

(b) Major vendors

For the three months ended ~~March~~September 3130, 2019, the vendors who accounted for 10% or more of the Company’s cost of revenues and ~~its~~ its accounts payable balance at period-end are presented as follows:

	For the three months ended March 31, 2019					As of March 31, 2019
	For the three months ended September 30, 2019					As of September 30, 2019
	Purchases		Percentage of purchases			Accounts payable
Vendor A	$	1360,~~305~~579		27100	%	$	-
Vendor B		36,604		73	%		-
Total:	$	60,579		100	%	$	-
Total:	$	49,909		100	%		-

For the three months ended ~~March~~September 3130, 2018, the vendors who accounted for 10% or more of the Company’s cost of revenues and ~~its~~ its accounts payable balance at period-end are presented as follows:

	For the three months ended March 31, 2018					As of March 31, 2018
	For the three months ended September 30, 2018					As of September 30, 2018
	Purchases		Percentage of purchases			Accounts payable
Vendor A	$	1054,~~917~~371		3748	%	$	-2,624
Vendor B		1411,~~169~~418		4710	%		54,~~098~~852
Total:	$	2565,~~086~~789		8458	%	$	57,~~098~~476

For the nine months ended March 31, 2019, the vendors who accounted for 10% or more of the Company’s cost of revenues and its accounts payable balance at period-end are presented as follows:

	For the nine months ended March 31, 2019					As of March 31, 2019
	Purchases		Percentage of purchases			Accounts payable
Vendor A	$	73,054		31	%	$	-
Vendor B		145,196		62	%		-
Total:	$	218,250		93	%	$	-

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

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

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.

F-1314

RITO GROUP CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE ~~NINE~~THREE MONTHS ENDED ~~MARCH~~SEPTEMBER 3130, 2019

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

(Unaudited)

NOTE 11 - COMMITMENTS AND CONTINGENCIES

The Company leases an office premises and a farm premises in Hong Kong under a non-cancellable operating lease that expire on ~~December~~July 2020, ~~2018~~with an aggregate fixed monthly rent of approximately $3,445 and $3,063, respectively; and a storage premises in Hong Kong under a non-cancellable operating lease that expire on December 2019, with an aggregate fixed monthly rent of approximately $~~1,548~~82.

The aggregate lease expense for the three months ended ~~March~~September 3130, 2019 and 2018 were $1019,~~451~~772 and $4,644, respectively.

~~The~~As ~~aggregate~~of ~~lease~~September ~~expense~~30, ~~for~~2019, the ~~nine~~Company ~~months~~has ~~ended~~the ~~March~~aggregate ~~31,~~future ~~2019~~minimum ~~and~~rental ~~2018~~payments ~~were~~due ~~$243,000~~under ~~and~~a ~~$13~~non-cancellable operating lease in the next one years,~~932,~~ ~~respectively.~~as follows:

As of March 31, 2019, 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 September 30:
2019	$	19,772
2020		44,503
	$	64,275

Period ending March 31:
2019	$	31,354
2020		10,451
	$	41,806

NOTE 12 - SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after ~~March~~September 3130, 2019 up through the date the Company presented this condensed consolidated financial statements.

OnDuring ~~April 3, 2019, Rito Group Corp. (~~the ~~“Company”) completed the issuance and sale of an aggregate of 10~~period,~~000~~ ~~shares at a price of $2 per share with each share consisting of one share of~~ the Company’s ~~common~~did ~~stock,~~not ~~par~~have ~~value~~any ~~$0.0001~~material ~~per~~recognizable ~~share (the~~subsequent ~~“Common Stock”) in a private placement to Leung Sui Ping (the “investor A”), pursuant to the Subscription Agreements dated as of April 3, 2019 between the Company and the investor A~~event. ~~The net proceeds to the Company amounted to $20,000. The $20,000 in proceeds went directly to the Company as working capital.~~

On April 5, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Leung Mee Yee Minnie (the “investor B”), pursuant to the Subscription Agreements dated as of April 5, 2019 between the Company and the investor B. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 12, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Leung Lop Yan Larry (the “investor A”), pursuant to the Subscription Agreements dated as of April 12, 2019 between the Company and the investor A. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 12, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Hau Yuen Ping Tany (the “investor B”), pursuant to the Subscription Agreements dated as of April 12, 2019 between the Company and the investor B. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 12, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Ling Lai Ngor Lisa (the “investor C”), pursuant to the Subscription Agreements dated as of April 12, 2019 between the Company and the investor C. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 12, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Tsang Hor Chiu (the “investor D”), pursuant to the Subscription Agreements dated as of April 12, 2019 between the Company and the investor D. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 12, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 15,000 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Yu Ka Wai (the “investor E”), pursuant to the Subscription Agreements dated as of April 12, 2019 between the Company and the investor E. The net proceeds to the Company amounted to $30,000. The $30,000 in proceeds went directly to the Company as working capital.

F-14

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Shek Yeuk Wong (the “investor A”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor A. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Lam Yuen (the “investor B”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor B. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 15,000 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Chung Mei San (the “investor C”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor C. The net proceeds to the Company amounted to $30,000. The $30,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Ng Chi Man (the “investor D”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor D. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Chan Ka Ling (the “investor E”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor E. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 7,500 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Leung Wai Tak (the “investor F”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor F. The net proceeds to the Company amounted to $15,000. The $15,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 15,000 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Leung Mee Yee Minnie (the “investor G”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor G. The net proceeds to the Company amounted to $30,000. The $30,000 in proceeds went directly to the Company as working capital.

On April 30, 2019, Rito Group Corp. (the “Company”) completed the issuance and sale of an aggregate of 15,000 shares at a price of $2 per share with each share consisting of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”) in a private placement to Tam Po Yee (the “investor H”), pursuant to the Subscription Agreements dated as of April 30, 2019 between the Company and the investor H. The net proceeds to the Company amounted to $30,000. The $30,000 in proceeds went directly to the Company as working capital.

F-15

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

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended June 30, ~~2018~~2019 and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

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

Company Overview

Rito Group Corp is a company that operates through its wholly owned subsidiary, Sino Union International Limited, a Company organized under the laws of the British Colony, Anguilla. It should be noted that our wholly owned subsidiary, Sino Union International Limited. owns 100% of Rito International Enterprise Company Limited, a Hong Kong Company, and Rito International Enterprise Company Limited owns 100% of 深圳市汇图贸易有限公司, a Company organized in Shenzhen, China.

At this time, we operate exclusively through our wholly owned subsidiary and share the same business plan of our subsidiary which is the sale of miscellaneous retail goods. Sino Union International Limited also shares the same business plan of Rito International Enterprise Company Limited and 深圳市汇图贸易有限公司.

We are a development stage Company. Thus far the Company has been actively searching for companies that may be interested in listing their own products for sale on our “Rito Online Mall”, which is now still at the designing stage and is believed to be launched once the development is finalized. The Rito Online Mall provides a platform for merchants and customers to facilitate transactions and take advantage of the growth opportunity we have identified in Hong Kong’s E-Commerce Industry.

Results of Operation

For the three months ended ~~March~~September 3130, 2019 and 2018

Revenues

For the three months ended ~~March~~September 3130, 2019 and 2018, the Company generated revenue in the amount of $~~113~~95,~~948~~709 and $6099,~~060~~575 respectively. Our gross profits/(loss) for the ~~nine~~three months ended ~~March~~September 3130, 2019 and 2018 was $6435,~~039~~130 and $30(13,~~219~~642), respectively.

General and administrative expenses

For the three months ended ~~March~~September 3130, 2019 and 2018, we have had general and administrative expenses in the amount of $~~460~~269,~~768~~ 294 and $~~229~~260,~~747~~175 respectively, an increase of $~~231~~9,~~021~~119 or ~~100~~3%. These expenses are comprised of advertising and promotion expenses of $127,~~021~~574, marketing expenses of $1917,~~780~~364 information technology development expenses of $3713,~~443~~496 and payroll expenses of $2467,~~000~~379 for the three months ended ~~March 31~~September 30, 2019.

Net loss

Our net loss for the three months ended ~~March~~September 3130, 2019 and 2018 was $~~395~~235,~~926~~248 and $~~201~~270,~~336~~666 respectively. The net loss mainly derived from the general and administrative expenses incurred.

For the nine months ended March 31, 2019 and 2018

Revenues

For the nine months ended March 31, 2019 and 2018, the Company generated revenue in the amount of $319,136 and $88,569 respectively. Our gross profits for the nine months ended March 31, 2019 and 2018 was $86,483 and $37,801, respectively.

General and administrative expenses

For the nine months ended March 31, 2019 and 2018, we have had general and administrative expenses in the amount of $996,573 and $618,774 respectively, an increase of $377,799 or 61%. The increase is mainly due to the business is still under development and expansion. These expenses are mainly comprised of information technology development expenses of $150,839, advertising and promotion expenses of $75,133, marketing expenses of $4,185, payroll expenses of $216,000 and entertainment expenses of $18,729 for the nine months ended March 31, 2019.

Net loss

Our net loss for the nine months ended March 31, 2019 and 2018 was $908,684 and $586,105 respectively. The net loss mainly derived from the general and administrative expenses incurred.

Liquidity and Capital Resources

Cash Used in Operating Activities

Net cash used in operating activities was $1246,~~157,020~~623 for the ~~nine~~three months ended ~~March~~September 3130, 2019 as compared to net cash used in operating activities of $~~173~~278,~~104~~025 for the ~~nine~~three months ended ~~March~~September 3130, 2018. The cash used in operating activities was a result of our net loss attributable to payroll expenses, marketing expenses and advertising and promotion.

Cash Used in Investing Activities

Net cash used in investing activities was $~~52,473~~0 and $~~179~~51,~~764~~182 for the ~~nine~~three months ended ~~March~~September 3130, 2019 and 2018, respectively. ~~The~~ The cash used in investing activities for the ~~nine~~three months ended ~~March~~September 3130, 2019 was resulted from the ~~purchase~~no addition of plant and equipment.

Cash Provided by Financing Activities

Net cash provided by financing activities were $~~552~~26,~~044~~276 and $~~987~~287,~~178~~567 for the ~~nine~~three months ended ~~March~~September 3130, 2019 and 2018 respectively. The cash provided by financing activities was contributed from ~~the~~advances ~~aggregate~~from ~~proceeds~~holding ofcompany ~~$701,409~~and ~~from~~directors ~~the issuance~~ of ~~shares~~ in$12,755 ~~initial public offering~~ and ~~private~~$17,051 respectively ~~placement~~ during the ~~nine~~three months ended ~~March~~September 3130, 2019, ~~repayment of advances from director of $141,098,~~ offset by the repayment of bank borrowings of $52,~~406,~~426 ~~and there were no advances from directors~~ as ~~March 31~~September 30, 2018.

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

Going Concern

As of ~~March~~September 3130, 2019, the Company suffered an accumulated deficit of $34,~~369~~208,~~968~~950 and incurred a continuous net operating ~~loss~~ loss of $~~909~~235,~~684~~248 for the ~~nine~~three months ended ~~March~~September 3130, 2019. These matters raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements included elsewhere in this report have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate our ~~continuation~~ continuation as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the condensed consolidated financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Off-balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to our stockholders as of ~~March~~September 3130, 2019.

Related party transactions

	For the nine months ended March 31,
	For the three months ended September 30,
	2019			2018
Professional fee paid to:
- Related party A	$	114,~~562~~216		$	111,~~601~~352
- Related party B		~~17,103~~5.850			134,~~200~~603
- Related party C		~~287~~780			~~430~~147
Website design and maintenance fee paid to:
- Related party D		~~441~~149			~~588~~72
	$	29,393		$	25,819
Advance from holding company
- Related party E		(12,755	)		-
	$	(1,760	)	$	6,174

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

Contractual Obligations

As of ~~March~~September 3130, 2019, the Company has no contractual obligations involved.

Item 3 Quantitative and Qualitative Disclosures About Market Risk

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

Item 4 Controls and Procedures

Evaluation of Disclosure Controls and Procedures:

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of ~~March~~September 3130, 2019. This evaluation was carried out under the supervision ~~and~~ and with the participation of our Chief Executive Officer and our Chief Financial Officer. Based upon that evaluation, our Chief ~~Executive~~ Executive Officer and Chief Financial Officer concluded that, as of ~~March~~September 3130, 2019, our disclosure controls and procedures were not effective due to the presence of material weaknesses in internal control over financial reporting.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weaknesses which have caused management to conclude that, as of ~~March~~September 3130, 2019, our disclosure controls and procedures were not effective: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both US GAAP and SEC guidelines.

Changes in Internal Control Over Financial Reporting:

There were no changes in our internal control over financial reporting during the quarter ended ~~March~~September 3130, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

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

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information.

None.

ITEM 6. Exhibits

31.1		Rule 13(a)-14(a) / 15(d)-14(a) Certification of principal executive office

31.2		Rule 13(a)-14(a) / 15(d)-14(a) Certification of principal financial officer

32.1		Section 1350 Certification of principal executive officer

32.2		Section 1350 Certification of principal financial officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	RITO GROUP CORP.
	(Name of Registrant)
Date: May 14, 2019
Date: November 12, 2019
	By:	/s/ Choi Tak Yin Addy
	Title:	Chief Executive Officer, President, Director (Principal Executive Officer)
Date: May 14, 2019
Date: November 12, 2019
	By:	/s/ Choy Wing Fai
	Title:	Chief Financial Officer, Chief Accounting Officer, Treasurer and Director
		(Principal Financial Officer and Principal Accounting Officer)
Date: May 14, 2019
Date: November 12, 2019
	By:	/s/ Or Ka Ming
	Title:	Chief Operating Officer, Secretary, Director
Date: May 14, 2019
Date: November 12, 2019
	By:	/s/ Kao Pun Yiu Philip
	Title:	Chief Technical Officer, Director

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