In this report, unless the context requires otherwise, references to the
"Company", "Baying Ecological", "we", "us" and "our" are to Baying Ecological
Holding Group, Inc.
CORPORATE HISTORY
We were incorporated pursuant to the laws of the State of Nevada on April 11,
2005 under the name Toro Ventures Inc. We were initially in the fast food
services industry. In accordance with the terms and provisions of that certain
stock purchase agreement dated December 31, 2013 (the "Stock Purchase
Agreement") between Joe Arcaro, seller of control block of restricted shares of
common stock of the Company and our sole officer and director ("Arcaro") and The
World Financial Holdings Group Co., Ltd., purchaser of the control block of
shares of ("World Financial"), there was a change in our control. Arcarco
tendered his resignation as the sole member of the Board of Directors and our
President/Chief Executive Officer, Secretary, Treasurer/Chief Financial Officer
effective February 7, 2014. Effective February 7, 2014, the Board of Directors
simultaneously appointed (i) Zhouping Jiao as the sole member of the Board of
Directors and as the President/Chief Executive Officer and Treasurer/Chief
Financial Officer of the Company; and (ii) Yuehong Yan as our Secretary. In
light of the upcoming new business operations, effective May 1, 2014, Zhouping
Jiao resigned as the sole member of the Board of Directors and as our
President/Chief Executive Officer, Treasurer/Chief Financial Officer and Yuehong
Yan resigned as our Secretary. Simultaneously, the Board of Directors effective
May 1, 2014 appointed Parsh Patel as the sole member of the Board of Directors
and as our President/Chief Executive Officer, Secretary, Treasurer/Chief
Financial Officer.
Effective January 9, 2014, our Board of Directors and the majority shareholders
approved an amendment to the articles of incorporation to change our name from
"Toro Ventures Inc." to "Baying Ecological Holding Group Inc." (the "Name Change
Amendment"). The Amendment was filed with the Secretary of State of Nevada on
January 23, 2014 changing our name to "Baying Ecological Holding Group Inc."
(the "Name Change"). The Name Change was effected to better reflect our future
business operations.
OUR BUSINESS
Management believes that agriculture is one of the fastest growing investment
areas of the 21st century and is posturing the Company to embark on building an
industry leading presence as one of China's walnut conglomerates. Based on
management's research, management further believes that in order to capitalize
on the growth potential of the walnut market, we will need to revolutionize the
industry by building a large scale, all-inclusive, standardized industrial
chain. Management intends to achieve this goal by fully utilizing a strong
technical force and cultural awareness and heritage to build a strong marketing
plan and achieve peak brand operational capability.
Management has been identifying and seeking potential corporate partnerships
with the Yangling Modern Agricultural Standardization Institute, which provides
an array of technical support for us, as well as Shaanxi Yuanwangda Venture
Capital Co., Ltd. in an effort to continue our operational plans. We have been
researching an industry-wide chain of production standards for China's entire
walnut industry to fully realize the development potential that will lead the
industry. We intend to incorporate national policy regulations into every step
of our business as well as eco-friendly, yet markedly efficient, methods to
ensure the very best product is available to our consumers, while also securing
the appropriate profit margins for our investors.
As of the date of this Quarterly Report, we intend to meet the following
milestones to prepare ourselves for complete self-sufficiency and dominance
throughout the walnut industry:
· Successful cultivation of large-scale, eco-efficient walnut reserves
(including seed bases and harvesting techniques)
· Independent development of a specialized compound, biological fertilizer
that fights the most common forms of walnut disease and create a barrier
to prevent future infection
· Acquisition and retention of a top-tier production management team to
ensure continued success and growth
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PRODUCTS AND SERVICES
We intend to offer a high quality, new to market brand that encompasses expertly
grafted walnut breeds including the American red spike-shaped walnut and premier
fragrant walnuts. We have a focus on providing all of our customers with the
absolute pinnacle of walnut perfection while also offering our VIPs the
ecologically sound, organic products that are in such high demand with our
upper-level clientele.
We intend to provide the following products and services:
No. Items Individual Membership Corporate
Membership
Pre-paid
consumer 100--10,000 1,000--20,000
credit(RMB)
1 Sales Pre-paid to enjoy double discount
Discount for Double discount
2 special products 15% off if paid by cash for corporate
credit card
Discount for Double discount
3 consuming in the 15% off if paid by cash for corporate
Club credit card
Discount for Double discount
4 normal products 10% off if paid by cash for corporate
credit card
5 Service fee for 1%--3%
group buying
6 A variety of 20 hours in total
free workshop
7 Annual Not limited
fruit-picking
8 Group trips Yes
As special incentives to our long-term clients we will be prepared to offer the
following programs through our retail location, the Baying Precious and
Delicious Food Club:
· Rechargeable Membership Cards: We will offer a discount to our members
that choose to pre-pay for their products using a membership card system.
· Special Products: Working in tandem with our cooperative business
partners, we will be ready to offer our customers unique products only
available through our collaboration.
· Glamorous VIP Reception Center: At our physical location we intend to
feature a VIP tasting experience within our established reception center.
Our members will have an opportunity to host guests as they enjoy sampling
our offerings at a discount.
· Superior Offerings: With a focus on providing our clients with the very
best walnuts and related products, we are committed to producing only the
finest ecologically sound, organic products for our VIPs.
· Group Discount Purchasing: Our VIPs will have the opportunity to purchase
products as a group, thereby taking advantage of a bulk discount.
· Personal and Professional Development Opportunities: The Fine and
Delicious Food Club will be offering free lectures to our clients so as to
expand their knowledge base about nutritional and dietary options, health
related topics, finance and investment opportunities, as well as classic
Chinese cultural studies.
· Group Enrichment Trips and Annual Fruit Picking Opportunities: The
agricultural hubs of the Baying Company will be made available to our VIPs
in an effort to offer true transparency to our top clients. We intend to
also offer group trips, organized with both leisure and education in mind,
as well as a family-friendly annual fruit picking trip that will cultivate
not only an appreciation of the richness of our products, but also a
holistic approach to a family's health and nutrition.
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The Baying Precious & Delicious Food Club was an idea that has allowed us to
directly reach our customers as we market our products to them. Specializing in
selling high-quality and organic fruits, vegetables, cereals, and precious oils,
we believe that this aspect of our corporate strategy will be a strong
solidifier of profit and top-of-mind presence. In the end, the Club has nearly
infinite profit-making applications and as of now we are capitalizing on these:
(i) membership card sales; (ii) direct profits from product sales; (iii)
cooperation base supply; (iv) public media advertising revenue; and (v) website
and periodical advertisement income.
We also intend on applying for and accepting subsidies from the following
national organizations/branches of government to enrich our products and our
production standards: (i) Department of Commerce: 'Rural Construction
Development' project which is designed to assist companies with operations in
rural areas who help serve local populations; (ii) Ministry of Agriculture:
where the government provides subsidies for the construction of pollution-free
base and food deep-processing factories countrywide; (iii) Development and
Reform Commission: subsidies from government for agricultural machinery
equipment; (iv) The Provincial Labor Union; and(v) funds from SME Promotion
Bureau.
As of the date of this Quarterly Report, we have offices located in Troy
Michigan and in China on the 6th Floor of Huihao Building, off of 3rd Keji Road,
in the heart of Xi'an city.
RESULTS OF OPERATIONS
The following discussions are based on our consolidated financial statements,
including our subsidiaries. These charts and discussions summarize our financial
statements for the three month periods ended September 30, 2019 and 2018 and
should be read in conjunction with the financial statements, and notes thereto,
included with our most recent Form 10-K for fiscal year ended June 30, 2019.
SUMMARY COMPARISON OF OPERATING RESULTS
Three Months Period
Ended September 30,
2019 2018
Operating Expenses $ 9,683 $ 8,355
Other -0- -0-
Net Income (Loss) (9,683 ) (8,355 )
Net Income (Loss) Per Share (0.0 ) (0.0 )
Three-Month Period Ended September 30, 2019 Compared to Three-month period Ended
September, 2018.
Our net loss for the three-month period ended September 30, 2019 was ($9,683)
compared to a net loss of ($8,355) during the three-month period ended September
30, 2018 (a increase of $1,328). We did not generate any revenues during the
three-month period ended September 30, 2019 or, 2018, respectively.
During the three-month period ended September 30, 2019, we incurred operating
expenses of $9,683 (2018: $8,355). These operating expenses incurred during the
three-month period ended September 30, 2019 consisted of: (i) management fees of
$4,500 (2018: $4,500); (ii) professional fees of $4,700 (2018: $3,700); and
(iii) general and administrative expenses of $483 (2018: $155).
Thus, our operating loss during the three-month period ended September 30, 2019
was $9,683 compared to $8,355 during the three-month period ended September 30,
2018.
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During the three-month periods ended September 30, 2019 and 2018, respectively,
we did not record any other income or expenses.
Therefore, our net loss was ($9,683) or ($0.00 per share) for the three-month
period ended September 30, 2019 compared to a net loss of ($8,355) or ($0.00 per
share) during the three-month period ended September 30, 2018. The weighted
average number of shares outstanding was 260,983 for the three-month period
ended September 30, 2019 and September 30, 2018, respectively.
LIQUIDITY AND CAPITAL RESOURCES
As at and three-month period Ended September 30, 2019
As at the three-month period ended September 30, 2019, our current assets were
$nil and our current liabilities were $264,826, which resulted in a working
capital deficit of $264,826. As at fiscal year ended June 30, 2019, our current
assets were $nil and our current liabilities were $255,143.
The increase in current liabilities of $9,683 was primarily due to the increase
in amounts due to related parties of $11,306 and the decrease of accrued
expenses and accounts payable. Mr. Zhouping Jiao, one of our directors, has
advanced working capital to pay our expenses. The advances are due on demand and
non-interest bearing. The outstanding amount due to related parties was $253,676
and $242,370 as of September 30 and June 30, 2019, respectively.
Mr. Parsh Patel, one of our directors and sole executive officer, provides
various consulting and professional services to us for which he is compensated.
The management fees were $4,500 and $4,500 for the three-month period ended
September 30 and 2018, respectively.
Stockholders' deficit increased from ($255,143) at June 30, 2019 to ($264,826)
at September 30 2019.
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the
three-month period ended September 30, 2019, net cash flows used in operating
activities was $11,306 (2018: $12,120). During the three-month period ended
September 30, 2019, net cash flows used in operating activities consisted
primarily of a net loss of ($9,683) (2018: ($8,355)), which was changed by
$1,623 (2018: $3,765) in accrued expenses.
Cash Flows from Investing Activities
For the three-month periods ended September 30, 2019 and 2018, respectively, net
cash flows used in investing activities was $-0-.
Cash Flows from Financing Activities
We intend to finance our operations primarily from related party debt or the
issuance of equity instruments. For the three-month period ended September 30,
2019, net cash flows provided from financing activities was $11,306 (2018:
$12,120) consisting of proceeds from related parties.
PLAN OF OPERATION AND FUNDING
We have incurred losses for the past two fiscal years and had a net loss of
$9,683 at the three-month period ended September 30, 2019. Management intends to
finance our operations primarily with the potential revenue from walnut product
sales and any cash short falls will be addressed through related party debt or
equity or debt financing, if available. We will need to raise additional
capital, both internally and externally, to cover cash shortfalls and to compete
in our markets. Management believes we will require an additional $50,000 in
equity financing during the next 12 months to satisfy our cash requirements for
operations and to facilitate our business plan.
These operating costs include cost of sales, general and administrative
expenses, salaries and benefits and professional fees related to contracting
personnel. If we cannot obtain financing to fund our operations in 2018, then we
may be required to reduce our expenses and scale back our operations.
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Going Concern
If we cannot obtain financing or generate sufficient revenue to fund our
operations for the next twelve months, then we may be required to reduce our
expenses and scale back our operations. These factors raise substantial doubt of
our ability to continue as a going concern. Footnote 2 to our financial
statements provides additional explanation of Management's views on our status
as a going concern. The reviewed financial statements contained in this
Quarterly Report do not include any adjustments to reflect the possible future
effects on the recoverability of assets or the amounts of liabilities that may
result should we be unable to continue as a going concern.
Our independent registered accounting firm included an explanatory paragraph in
their report on the June 30, 2019 financial statements included in the form 10-K
filed on October 2, 2019 regarding concerns about our ability to continue as a
going concern. Our financial statements contain additional note disclosures
describing the circumstances that lead to this disclosure by our independent
auditors.
OFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements that have or are reasonably
likely to have a current or future effect on our financial condition, changes in
financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures or capital resources that is material to investors.
Mr. JinHai Tao, one of our directors, has advanced working capital to pay our
expenses. The advances are due on demand and non-interest bearing. The
outstanding amount due to related parties was $253,676 and $242,370 as of
September 30, 2019 and June 30, 2018, respectively.
Mr. Parsh Patel, one of our directors and sole executive officer, provides
various consulting and professional services to us for which he is compensated.
The management fees were $4,500 and $4,500 for the three months ended September
30, 2019 and 2018, respectively. These fees remain unpaid and have accrued.
RECENT ACCOUNTING PRONOUNCEMENTS
The Company believes that there were no other accounting standards recently
issued that had or are expected to have a material impact on our financial
position or results of operations.
We have implemented all new accounting pronouncements that are in effect. These
pronouncements did not have any material impact on the financial statements
unless otherwise disclosed, and we do not believe that there are any other new
accounting pronouncements that have been issued that might have a material
impact on its financial position or results of operations.
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