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.
We were incorporated pursuant to the laws of the State of Nevada on 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 (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 . Effective , 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 , 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 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 , 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 changing our name to "Baying Ecological Holding Group Inc." (the "Name Change"). The Name Change was effected to better reflect our future business operations.
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 full 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 10 Table of Contents 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. 11 Table of Contents
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
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 six months ended and 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 .
SUMMARY COMPARISON OF OPERATING RESULTS* Six Month Period Ended December 31, 2016 2015 Operating Expenses $ 14,341 $ 25,385 Other -0- -0- Net Income (Loss) (14,341 ) (25,385 )
Net Income (Loss) Per Share (0.0 ) (0.0 )
Six-Month Period Ended Compared to Six-Month Period Ended .
Our net loss for the six-month period ended was ($14,341) compared to a net loss of ($25,385) during the six-month period ended (a decrease of $11,044). We did not generate any revenues during the six-month periods ended or , respectively.
During the six-month period ended , we incurred operating expenses of $14,341 (2015: $25,385). These operating expenses incurred during the six-month period ended consisted of: (i) management fees of $9,000 (2015: $9,000); (ii) professional fees of $5,200 (2015: $14,000); and (iii) general and administrative expenses of $141 (2015: $2,385).
Thus, our operating loss during the six-month period ended was $14,341compared to $25,385 during the six-month period ended .
During the six-month periods ended and , respectively, we did not record any other income or expenses.
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Therefore, our net loss was ($14,341) or ($0.00) for the six-month period ended compared to a net loss of ($25,385) or ($0.00) during the six-month period ended . The weighted average number of shares outstanding was 260,983 for the six-month periods ended and , respectively.
Three-Month Period Ended Compared to Three-Month Period Ended .
Our net loss for the three-month period ended was ($7,046) compared to a net loss of ($8,635) during the three-month period ended (a decrease of $1,589). We did not generate any revenues during the three-month periods ended or , respectively.
During the three-month period ended , we incurred operating expenses of $7,046 (2015: $8,635). These operating expenses incurred during the three-month period ended consisted of: (i) management fees of $4,500 (2015: $4,500); (ii) professional fees of $5,200 (2015: $1,750); and (iii) general and administrative expenses of $46 (2015: $8,635).
Thus, our operating loss during the three-month period ended was $7,046 compared to $8,635 during the three-month period ended .
During the three-month periods ended and , respectively, we did not record any other income or expenses.
Therefore, our net loss was ($7,046) or ($0.00) for the three-month period ended compared to a net loss of ($8,635) or ($0.00) during the three-month period ended . The weighted average number of shares outstanding was 260,983 for the three-month periods ended and , respectively.
LIQUIDITY AND CAPITAL RESOURCES
Six-Month Period Ended
As at the six-month period ended , our current assets were $767 and our current liabilities were $149,647, which resulted in a working capital deficit of $148,880. As at fiscal year ended , our current assets were $1,978 and our current liabilities were $136,517. The increase in current liabilities of $13,130 was primarily due to the increase in amounts due to related parties of $19,885. Mr. Parsh Patel, our Chief Executive Officer, advanced $3,000 as working capital to pay our expenses. Mr. Zhouping Jiao, one of our directors, has advanced working capital to pay our expenses. As of , the outstanding amount due to related parties was $146,647.
Stockholders' deficit increased from ($134,539) for fiscal year ended to ($148,880) for the six-month period ended .
Cash Flows from Operating Activities
We have not generated positive cash flows from operating activities. For the six-month period ended , net cash flows used in operating activities was $21,096. During the six-month period ended , net cash flows used in operating activities consisted primarily of a net loss of ($14,341) (2015: ($25,385)), which was partially adjusted by $-0- (2015: $3,000) in contribution to additional paid in capital. Cash flows was further changed by $6,755 (2015: $7,350) in accrued expenses.
Cash Flows from Investing Activities
For the six-month periods ended and , respectively, net cash flows used in investing activities was $-0-.
Cash Flows from Financing Activities
We intend to finance our operations primarily from debt or the issuance of equity instruments. For the six-month period ended , net cash flows provided from financing activities was $19,885 (2015: $16,925) consisting of proceeds from related parties.
13 Table of Contents PLAN OF OPERATION AND FUNDING
We have incurred losses for the past two fiscal years and had a net loss of $14,341 at six-month period ended . Management intends to finance our 2017 operations primarily with the potential revenue from walnut product sales and any cash short falls will be addressed through 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 $1,200,000 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 2017, then we may be required to reduce our expenses and scale back our operations.
If we cannot obtain financing or generate sufficient revenue to fund our operations in 2017, 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 audited financial statements contained in this Annual 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 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.
One of our directors, Mr. Zhouping Jiao, has advanced working capital to pay our expenses. The advances are due on demand and non-interest bearing. Our executive officer, Mr. Parsh Patel, also advanced $3,000 as working capital to pay our expenses. The outstanding amount due to related parties was $146,647 and $126,762 as of and , respectively.
Our executive officer, Mr. Parsh Patel, provides various consulting and professional services to us for which he is compensated. Management fees were $9,000 for both six-month periods ended and , respectively. These fees remain unpaid and have accrued.
RECENT ACCOUNTING PRONOUNCEMENTS
In , the FASB issued ASU No. 2016-02, Leases, requiring lessee's to recognize assets and liabilities for leases with lease terms of more than 12 months in the balance sheet. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new guidance is effective for fiscal years and for interim periods within those fiscal years, beginning after . A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the adoption on its consolidated financial statements.
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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