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
 2       Discount for special     15% off if paid by cash    Double discount for
               products                                     corporate credit card
 3    Discount for consuming in   15% off if paid by cash    Double discount for
               the Club                                     corporate credit card
 4   Discount for normal products 10% off if paid by cash    Double discount for
                                                            corporate credit card
 5   Service fee for group buying                      1%--3%
 6    A variety of free workshop                  20 hours in total
 7       Annual fruit-picking                        Not limited
 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- and six-months periods ended December 31, 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.

Three-Month Period Ended December 31, 2019 Compared to Three-month period Ended December 31, 2018.





        SUMMARY COMPARISON OF OPERATING RESULTS
                                Three Months Period
                                 Ended December 31,
                                 2019           2018
Operating Expenses            $    11,791     $  9,905
Other                                   0            0
Net Income (Loss)                 (11,791 )     (9,905 )
Net Income (Loss) Per Share         (0.05 )      (0.04 )

Our net loss for the three-month period ended December 31, 2019 was ($11,791) compared to a net loss of ($9,905) during the three-month period ended December 31, 2018 (a increase of $1,886). We did not generate any revenues during the three-month period ended December 31, 2019 or, 2018, respectively.

During the three-month period ended December 31, 2019, we incurred operating expenses of $11,791 (2018: $9,905). These operating expenses incurred during the three-month period ended December 31, 2019 consisted of: (i) management fees of $4,500 (2018: $4,500); (ii) professional fees of $4,060 (2018: $5,320); and (iii) general and administrative expenses of $3,231 (2018: $85). The increase of $1,886 in operating expenses for the three months ended December 31, 2019, as compared to the three months ended December 31, 2018 is a result of increase in Edgar filling fee and translation service in general and administrative expenses & decrease in professional fee.

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 December 31, 2019 and 2018, respectively.






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Six-Month Period Ended December 31, 2019 Compared to Six-month period Ended December 31, 2018.





        SUMMARY COMPARISON OF OPERATING RESULTS
                                 Six Months Period
                                Ended December 31,
                                2019          2018
Operating Expenses            $  21,474     $  18,260
Other                                 0             0
Net Income (Loss)               (21,474 )     (18,260 )
Net Income (Loss) Per Share       (0.08 )       (0.07 )

Our net loss for the six-month period ended December 31, 2019 was ($21,474) compared to a net loss of ($18,260) during the six-month period ended December 31, 2018 (an increase of $3,214). We did not generate any revenues during the six-month period ended December 31, 2019 or 2018, respectively.

During the six-month period ended December 31, 2019, we incurred operating expenses of $21,474 (2018: $18,260). These operating expenses incurred during the six-month period ended December 31, 2019 consisted of: (i) management fees of $9,000 (2018: $9,000); (ii) professional fees of $8,760 (2018: $9,020); and (iii) general and administrative expenses of $3,714 (2018: $240). The increase of $3,214 to operating expenses during the six months ended December 31, 2019, as compared to the six months ended December 31, 2018, is attributable to of increase in Edgar filling fee and translation service in general and administrative expenses & decrease in professional fee.

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 $9,000 and $9,000 for the six-month period ended December 31, 2019 and 2018, respectively.

LIQUIDITY AND CAPITAL RESOURCES

As at and Six-month period Ended December 31, 2019

As of December 31,2019 our current assets were $nil and our current liabilities were $276,617, which resulted in a working capital deficit of $276,617. As of

June 30, 2019, our current assets were $nil and our current liabilities were $255,143.

The increase in current liabilities of $21,474 was primarily due to the increase in amounts due to related parties of $25,712 and the decrease of $4,238 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 $268,082 and $242,370 as of December 31 and June 30, 2019, respectively.

Stockholders' deficit increased from ($255,143) at June 30, 2019 to ($276,617) at December 31 2019, as a result of net losses totaling $21,474 for the six months ended December 31, 2019.






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Cash Flows from Operating Activities

We have not generated positive cash flows from operating activities. For the six -month period ended December 31, 2019, net cash flows used in operating activities were $25,712 (2018: $21,310). During the six -month period ended December 31, 2019, net cash flows used in operating activities consisted primarily of a net loss of ($21,474) (2018: ($18,260), which was changed by $4,238 (2018: $3,050) in accrued expenses.

Cash Flows from Investing Activities

For the six-month periods ended December 31, 2019 and 2018, respectively, net cash flows used in investing activities were $-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 six-month period ended December 31, 2019, net cash flows provided from financing activities was $25,712 (2018: $21,310) 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 $21,474 at the six-month period ended December 31, 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 2019, then we may be required to reduce our expenses and scale back our operations.





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. As of December 31, 2019, we had no cash, negative working capital, an accumulated deficit and recurring net operating losses. 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 reports on the accompanying financial statements for December 31, 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.






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CONTRACTUAL OBLIGATIONS

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 Mr. Zhouping Jiao was $268,082 and $242,370 as of December 31, 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 $9,000 and $9,000 for the six months ended December 31, 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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