ITEM 1. UNAUDITED FINANCIAL STATEMENTS
Arion Group Corp.
Balance Sheets
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July 31,
2020
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January 31,
2020
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|
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(Unaudited)
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ASSETS
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|
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|
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|
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Current Assets
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|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
23,430
|
|
|
$
|
5,999
|
|
Total Current Assets
|
|
|
23,430
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|
|
|
5,999
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
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|
|
278
|
|
|
|
278
|
|
|
|
|
|
|
|
|
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Total Assets
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|
$
|
23,708
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|
|
$
|
6,277
|
|
|
|
|
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|
|
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LIABILITIES AND STOCKHOLDERS’ DEFICIT
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Current Liabilities
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Accounts payable
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$
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19,662
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|
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$
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12,560
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Loan from stockholder
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30,000
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|
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60,432
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Total Current Liabilities
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|
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49,662
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|
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72,992
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|
|
|
|
|
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Total Liabilities
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49,662
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72,992
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Stockholders’ Deficit
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Common stock, $0.001 par value, 75,000,000 shares
authorized; 7,630,000 shares issued and outstanding as of July 31 and January 31, 2020
|
|
|
7,630
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|
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|
7,630
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|
Additional paid-in-capital
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|
|
91,102
|
|
|
|
23,670
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|
Accumulated deficit
|
|
|
(124,686
|
)
|
|
|
(98,015
|
)
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Total Stockholders’ Deficit
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|
|
(25,954
|
)
|
|
|
(66,715
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)
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|
|
|
|
|
|
|
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Total Liabilities and Stockholders’ Deficit
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|
$
|
23,708
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|
|
$
|
6,277
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|
The accompanying notes are an integral
part of the unaudited financial statements.
Arion Group Corp.
Statements of Operations
(Unaudited)
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3 Months Ended
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3 Months Ended
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6 Months Ended
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6 Months Ended
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July 31,
2020
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July 31,
2019
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July 31,
2020
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July 31,
2019
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Revenue
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$
|
-
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$
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-
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|
$
|
-
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$
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6,000
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|
|
|
|
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Operating Expenses
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General and administrative expenses
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16,135
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18,226
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25,911
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|
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36,789
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|
Total Operating Expenses
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16,135
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|
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|
18,226
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|
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25,911
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|
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36,789
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|
Loss from Operations
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|
|
(16,135
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)
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|
|
(18,226
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)
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|
(25,911
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)
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|
|
(30,789
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)
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|
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|
|
|
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|
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Loss Before Income Taxes
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(16,135
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)
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(18,226
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)
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(25,911
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)
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|
|
(30,789
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)
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Provision for Income Taxes
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Income tax expense
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|
760
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-
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760
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-
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|
|
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|
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|
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Net Loss
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|
$
|
(16,895
|
)
|
|
$
|
(18,226
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)
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|
$
|
(26,671
|
)
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|
$
|
(30,789
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)
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|
|
|
|
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|
|
|
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Weighted average number of common shares outstanding:
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|
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|
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|
|
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|
|
|
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Basic and Diluted
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7,630,000
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|
|
|
7,630,000
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|
|
|
7,630,000
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|
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7,630,000
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|
|
|
|
|
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|
|
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Loss per Common Share:
|
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|
|
|
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|
|
|
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|
|
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Basic and Diluted
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$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
|
$
|
(0.00
|
)
|
The accompanying notes are an integral
part of the unaudited financial statements.
Arion Group Corp.
Statements of Changes in Stockholders’
Deficit
For The Six Months Ended July 31, 2020
and 2019
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Common Stock
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Additional
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Number of
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Paid-in
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Accumulated
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Shares
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Par Value
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Capital
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Deficit
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Total
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Balance as of January 31, 2020
|
|
|
7,630,000
|
|
|
$
|
7,630
|
|
|
$
|
23,670
|
|
|
$
|
(98,015
|
)
|
|
$
|
(66,715
|
)
|
Net loss for the period
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|
|
|
|
|
|
|
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|
|
|
|
|
$
|
(9,776
|
)
|
|
|
(9,776
|
)
|
Balance as of April 30, 2020 (unaudited)
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|
|
7,630,000
|
|
|
|
7,630
|
|
|
|
23,670
|
|
|
$
|
(107,791
|
)
|
|
|
(76,491
|
)
|
Capital contribution due to forgiveness of debt from former stockholder
|
|
|
|
|
|
|
|
|
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67,432
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|
|
|
|
|
|
|
67,432
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|
Net loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(16,895
|
)
|
|
|
(16,895
|
)
|
Balance as of July 31, 2020 (unaudited)
|
|
|
7,630,000
|
|
|
|
7,630
|
|
|
|
91,102
|
|
|
$
|
(124,686
|
)
|
|
|
(25,954
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 31, 2019
|
|
|
7,630,000
|
|
|
|
7,630
|
|
|
|
23,670
|
|
|
|
(44,244
|
)
|
|
|
(12,944
|
)
|
Net loss for the period
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12,563
|
)
|
|
|
(12,563
|
)
|
Balance as of April 30, 2019 (unaudited)
|
|
|
7,630,000
|
|
|
|
7,630
|
|
|
|
23,670
|
|
|
|
(56,807
|
)
|
|
|
(25,507
|
)
|
Net loss for the period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(18,226
|
)
|
|
|
(18,226
|
)
|
Balance as of July 31, 2019 (unaudited)
|
|
|
7,630,000
|
|
|
$
|
7,630
|
|
|
$
|
23,670
|
|
|
$
|
(75,033
|
)
|
|
$
|
(43,733
|
)
|
The accompanying notes are an integral
part of these unaudited financial statements.
Arion Group Corp.
Statements of Cash Flows
(Unaudited)
|
|
6 Months Ended
|
|
|
6 Months Ended
|
|
|
|
July 31,
2020
|
|
|
July 31,
2019
|
|
Operating Activities
|
|
|
|
|
|
|
Net Loss
|
|
$
|
(26,671
|
)
|
|
$
|
(30,789
|
)
|
Adjustment to reconcile net loss to net cash used in operating activities
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
-
|
|
|
|
232
|
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Prepaid expense
|
|
|
-
|
|
|
|
(10,000
|
)
|
Accounts payable
|
|
|
7,102
|
|
|
|
15,209
|
|
Net cash used in operating activities
|
|
|
(19,569
|
)
|
|
|
(25,348
|
)
|
|
|
|
|
|
|
|
|
|
Financing Activities
|
|
|
|
|
|
|
|
|
Repayment of stockholder loan
|
|
|
(3,000
|
)
|
|
|
-
|
|
Proceeds of loan from stockholder
|
|
|
40,000
|
|
|
|
20,000
|
|
Net cash provided by financing activities
|
|
|
37,000
|
|
|
|
20,000
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
$
|
17,431
|
|
|
$
|
(5,348
|
)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of the period
|
|
|
5,999
|
|
|
|
9,090
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of the period
|
|
$
|
23,430
|
|
|
$
|
3,742
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
Cash paid for:
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
Taxes
|
|
$
|
760
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
Significant noncash transactions:
|
|
|
|
|
|
|
|
|
Capital contribution due to forgiveness of debt from former
stockholder
|
|
$
|
67,432
|
|
|
$
|
-
|
|
The accompanying notes are an integral
part of these unaudited financial statements.
ARION GROUP CORP.
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JULY 31, 2020
NOTE 1 – ORGANIZATION AND
BUSINESS
ARION GROUP CORP. (“we”, “our”,
the “Company”) is a corporation established under the corporation laws in the State of Nevada on November 7, 2016.
The Company has adopted January 31 as its fiscal year end.
On November 21, 2018, a change in control
of the Company occurred, pursuant to which Mr. Mingyong Huang acquired a total of 5,000,000 shares of the Company’s common
stock (or approximately 65.53% of the total issued and outstanding shares of the Company as of the date of acquisition) from Ms.
Nataliia Kriukova, a former principal shareholder of the Company. Pursuant to the Stock Purchase Agreement (the “SPA”)
and other related agreements, Ms. Kriukova resigned from all management and Board positions. The Company also paid off the shareholder
loan owed to Ms. Kriukova in the amount of $2,663 with cash and inventory on hand pursuant to the PSA on November 21, 2018.
On May 5, 2020, Mr. Hui Song resigned as
a director of the Company. On June 3, 2020, Mr. Mingyong Huang entered into another Stock Purchase Agreement (the “2020 SPA”),
pursuant to which Mr. Huang sold all of his 5,000,000 shares of the Company’s common stock to Mr. Jay Hamilton, who becomes
the Company’s majority and controlling shareholder. In connection with the change of control as of June 17, 2020 the
Board appointed Jay Hamilton to the Company’s Board of Directors. On June 4, 2020, Ms. Maria Itzel Torres Siegrist resigned
as Secretary of the Company. As of June 17, 2020, the Board appointed Mr. Hamilton as President/CEO and Ms. Brenda Bin Wang as
CFO and Mr. Mingyong Huang as Secretary. Mr. Huang remains a director of the Company.
Prior to November 21, 2018, we distributed
an assortment of cedar phyto barrels in the USA and Europe. The business of distribution of cedar phyto barrels was discontinued
after November 21, 2018. We have classified the results of the cedar phyto barrels business as discontinued operations in our financial
statements. We are currently a start-up company exploring various manufacturing and distribution business opportunities in the
dietary ingredient and nutritional supplement industry. However, as of September 11, 2020, no definitive agreement has been entered
into in connection with our business plan related to the above targeted industry.
NOTE 2 – GOING CONCERN
The Company’s financial statements
as of and for the six months ended July 31, 2020 have been prepared using generally accepted accounting principles in the United
States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in
the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating
costs, has incurred an accumulated deficit of $124,686 as of July 31, 2020, and a working capital deficit in the amount of $26,232
as of July 31, 2020. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going
concern for a reasonable period of time.
In order to continue as a going concern,
the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for
the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses
and seeking third party equity and/or debt financing. However, management cannot provide any assurances that the Company will be
successful in accomplishing any of its plans. These financial statements do not include any adjustments related to the recoverability
and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable
to continue as a going concern.
NOTE 3 – SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
Basis of Presentation
The balance sheet as of July 31, 2020,
the statements of operations, changes in stockholders’ deficit and cash flows for the three and six months ended July
31, 2020 and 2019 have been prepared by the Company without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures, normally included in the financial statements prepared in accordance
with U.S. GAAP, have been condensed or omitted as allowed by such rules and regulations, and the Company believes that the disclosures
are adequate to make the information presented not misleading. The results of operations for the three and six months ended
July 31, 2020 are not necessarily indicative of results expected for the full year ending January 31, 2021. In the opinion of management,
all adjustments (which include only normal recurring adjustments) necessary to present fairly the Company’s financial position
and results of operations at July 31, 2020 and for the six months then ended have been made.
It is suggested that these statements be
read in conjunction with the January 31, 2020 audited financial statements and the accompanying notes included in the Company’s
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Use of Estimates
The preparation of financial statements
in conformity with U.S. GAAP requires management to make estimates and judgments that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities on the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. The Company bases its estimates and judgments on historical experience and on
various other assumptions and information that are believed to be reasonable under the circumstances. Estimates and assumptions
of future events and their effects cannot be perceived with certainty and, accordingly, these estimates may change as new events
occur, as more experience is acquired, as additional information is obtained and as our operating environment changes. While the
Company believes that the estimates and assumptions used in the preparation of the financial statements are appropriate, actual
results could differ from those estimates. Estimates and assumptions are periodically reviewed and the effects of revisions are
reflected in the financial statements in the period they are determined to be necessary. The current COVID-19 pandemic and general
economic environment also increase the degree of uncertainty inherent in these estimates and assumptions.
New Accounting Pronouncements
There were various accounting standards
and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations
or cash flows.
NOTE 4 – RELATED PARTY TRANSACTIONS
The Company may rely on advances from related
parties in support of the Company’s efforts and cash requirements until such time that the Company can support its operations
or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment
for continued support by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities.
The advances are considered temporary in nature and have not been formalized by a promissory note.
During the six-month period ended July
31, 2020, the Company’s major shareholder Mr. Jay Hamilton loaned the Company $30,000 and the Company’s former shareholder
Mr. Mingyong Huang loaned the Company $10,000 to cover the Company’s operating expenses. The loans are unsecured, non-interest
bearing and due on demand. On June 3, 2020, Mr. Mingyong Huang agreed to forgive $67,432 he had previously loaned to the Company.
The Company has recorded the amount of loan forgiven by Mr. Mingyong Huang as capital contribution due to forgiveness of debt
from former stockholder as of July 31, 2020. On July 16, 2020, the Company repaid the entire remaining balance of $3,000 to Mr.
Mingyong Huang.
During the six-month period ended July 31, 2019, the Company’s former major shareholder Mr. Mingyong Huang
loaned a total of $20,000 to cover the Company’s operating expenses. As of July 31, 2020 and January 31, 2020, the unpaid
balances of the loan were in the amounts of $30,000 and $60,432, respectively.
The Company’s office at 16839 Gale Ave., #210,
City of Industry, CA 91745 is a warehouse-office solely owned by Mr. Mingyong Huang. Given that the Company had only minimal operations
as of July 31, 2020, Mr. Huang does not charge the Company any fee for using the office at this time.
NOTE 5 – SUBSEQUENT EVENT
On August 20, 2020, Mr. Jay Hamilton loaned
the Company $10,001. Mr. Hamilton loaned another $10,000 to the Company on August 31, 2020. Mr. Hamilton, the existing majority
shareholder has agreed to loan funds to the Company when the Company’s funds are below a certain threshold. The loans are unsecured, non-interest bearing and due on demand.
ITEM 2. MANAGEMENT’S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
This report contains forward-looking statements
which relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by
terminology such as “may”, “should”, “expects”, “plans”, “anticipates”,
“believes”, “estimates”, “predicts”, “potential” or “continue” or the
negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks,
uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these
forward-looking statements.
While these forward-looking statements,
and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction
of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions
or other future performance suggested herein. Except as required by applicable law, including the securities laws of the United
States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Description of Business
Arion Group Corp. was incorporated in the
State of Nevada on November 7, 2016 and established a fiscal year end of January 31. We are currently a start-up company exploring
various manufacturing and distribution business opportunities in the dietary ingredient and nutritional supplement industry. However,
as of the filing of this statement 10-Q, no definitive agreement has been entered into in connection with our business plan related
to the above targeted industry.
On November 21, 2018 (the “Closing
Date”), a change in control of the Company occurred, pursuant to which Mr. Mingyong Huang acquired a total of 5,000,000 shares
of the Company’s common stock (or approximately 65.53% of the total issued and outstanding shares of the Company as of the
date of acquisition) from Ms. Nataliia Kriukova, the previous principal shareholder of the Company. Pursuant to the SPA and other
related agreements, Ms. Nataliia Kriukova resigned from all management and Board positions. The Company also paid off shareholder
loan owed to Ms. Kriukova in the amount of $2,663 with cash and inventory on hand pursuant to the SPA on November 21, 2018.
On May 5, 2020, Hui Song, a member of the
Board of Directors of Arion Group Corp. (the “Company”), resigned as a director. On June 3, 2020, Mr. Mingyong Huang
entered into another Stock Purchase Agreement (the “2020 SPA”), pursuant to which Mr. Huang sold all of his 5,000,000
shares of the Company’s common stock to Mr. Jay Hamilton. Currently, the Buyer is the Company’s majority, and controlling
stockholder. On June 4, 2020, Maria Itzel Torres Siegrist resigned as Secretary. In connection with the change of control as of
June 17, 2020 the Board appointed Jay Hamilton to the Company’s Board of Directors. Also, as of June 17, 2020, the Board
appointed Mr. Hamilton as President/CEO and Ms. Brenda Bin Wang as CFO and Mr. Mingyong Huang as Secretary. Mr. Huang remains the
Company’s Director and officer.
Prior to November 21, 2018, we distributed
an assortment of cedar phyto barrels in the USA and Europe. Our products were offered at prices marked-up from 80% to 100% of our
cost. Our customers were asked to pay us 100% in advance. We filled placed orders and supplied the products within a period of
thirty days (30) days or less following receipt of any written order. Customers were responsible for the custom duties, taxes,
insurance or any other additional charges that might incur. The business of distribution of cedar phyto barrels was discontinued
after November 21, 2018.
Concurrent with change of control, we have
changed our business plan to focus on medical & health care industry, including consulting services provided to third parties
for planning, design and compliance of cannabis cultivation in the USA. However, as of July 31, 2020, we have not generated additional
revenue since the period ending April 30, 2019, whereby $6,000 of revenue was generated from consulting services.
RESULTS OF OPERATIONS
As of July 31,
2020, we had total assets of $23,708 and total liabilities of $49,662. We have incurred recurring losses to date. Our financial
statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating
to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to
continue in operation.
We expect we will
require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other
things, the sale of equity or debt securities.
We discontinued
our cedar phyto barrels distribution business upon the change in control occurred on November 21, 2018 and started to implement
a new business plan to pursue business opportunities in manufacturing and distribution of certain dietary ingredient and nutritional
supplement products. As of July 31, 2020, we have not entered into any definitive agreement in connection with the business plan.
Our net loss for the three-month period ended July 31, 2020 was $16,895, as compared to a net loss of $18,226 during the three-month
period ended July 31, 2019.
Three Months Ended July 31, 2020
compared to Three Months Ended July 31, 2019
Revenue,
Cost of Revenue, and Gross Profit
During the three-month
period ended July 31, 2020 and July 31, 2019, we generated $0 and $0 in revenue, respectively. We discontinued cedar phyto barrel
business activities in the year ended January 31, 2019, following the change in control of November 21, 2018.
Operating
Expenses
During the three-month
period ended July 31, 2020, we incurred $16,135 in general and administrative expenses compared to $18,226 in the same period of
2019, which represents a decrease in the amount of $2,091. General and administrative expenses incurred are mostly related to professional
and corporate compliance services. Legal and professional fees for the three-month period ended July 31, 2020 decreased since the
Company was operating on a minimal scale and did not require as much legal and professional support and services.
Our net loss for
the three months ended July 31, 2020 was $16,895 which is a decrease for $1,331 compared to net loss of $18,226 for the three months
ended July 31, 2019. Despite the lack of revenue generated in the three months ended July 31, 2020, the Company incurred less expenses
with a decrease in all operating expenses that eliminated the decrease in revenue and resulted in a net decrease in net loss as
compared to the same period ended July 31, 2019.
LIQUIDITY AND CAPITAL RESOURCES
The accompanying financial statements have
been prepared assuming that the Company will continue as a going concern. The Company has not yet established an ongoing source
of revenues sufficient to cover its operating costs. This raises substantial doubt about its ability to continue as a going concern.
Our independent auditor’s report
accompanying our January 31, 2020 and 2019 audited financial statements contains an explanatory paragraph expressing substantial
doubt about our ability to continue as a going concern. These financial statements have been prepared “assuming that we will
continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments
in the ordinary course of business. This assumption may, however, not hold true for a variety of reasons, many of which are out
of our control.
As at July 31, 2020 our current assets
were $23,430 compared to $5,999 in current assets at January 31, 2020. As at July 31, 2020 our total assets were $23,708 compared
to $6,277 in total assets at January 31, 2020. As at July 31, 2020, our current liabilities were $49,662, or a decrease in the
amount of $23,330 (or 31.96%) compared to $72,992 as of January 31, 2020. As of July 31, 2020, we had loan from stockholder in
the total amount of $30,000, or 60.41% of our total liabilities, as we have not been able to generate a steady cash flow to cover
our operating expenses and have to rely heavily on the financial support from our shareholder.
Total stockholders’ deficit was $25,954
as of July 31, 2020, compared to $66,715 as of January 31, 2020, representing an increase in the amount of $40,761.
Cash Flows from Operating Activities
For the six months ended July 31, 2020,
net cash used by operating activities was $19,569, consisting of net loss of $26,671 and an increase in accounts payable for $7,102.
For the six months ended July 31, 2019,
net cash used by operating activities was $25,348, consisting of net loss of $30,789, a non-cash expense of depreciation of $232,
an increase in prepaid expense for $10,000 and an increase in accounts payable for $15,209.
Cash Flows from Investing Activities
Cash flows used in investing activities
for the six months ended July 31, 2020 and 2019 were $0 and $0, respectively.
Cash Flows from Financing Activities
Cash flows provided by financing activities
for the six months ended July 31, 2020 and 2019 were $37,000 and $20,000, respectively. We were able to borrow an additional $30,000
loan from our major shareholder during the quarter ended July 31, 2020, and $20,000 from our former major shareholder during the
quarter ended July 31, 2019 to pay operating expenses.
PLAN OF OPERATION AND FUNDING
We have no lines of credit or other bank
financing arrangements. Currently we are financed by our major shareholder. Our working capital requirements for the next 12 months
are expected to increase if and when we are able to execute on our current business plan. As of July 31, 2020, we had a working
capital deficit in the amount of $26,232.
We also intend to finance our operating
expenses and business development costs with further issuances of securities and debt issuances. Additional issuances of equity
or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights,
preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all.
If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective
new business endeavors or opportunities, which could significantly and materially restrict our business operations.
MATERIAL COMMITMENTS
As of the date of this Quarterly Report,
we do not have any material commitments.
PURCHASE OF SIGNIFICANT EQUIPMENT
We do not intend to purchase any significant
equipment during the next twelve months.
OFF-BALANCE SHEET ARRANGEMENTS
As of the date of this Quarterly Report,
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 are material to investors.
RECENT DEVELOPMENTS
In December 2019,
a strain of coronavirus entitled COVID-19 emerged in China and spread to other countries including to the United States. In March
2020, the World Health Organization declared COVID-19 to be a public health pandemic of international concern, which has resulted
in travel restrictions and in some cases, prohibitions of non-essential activities, disruption and shutdown of businesses and greater
uncertainty in global financial markets.
In the United
States in which we and our customers, and partners operate, the health concerns as well as political or governmental developments
in response to COVID-19 could result in economic, social or labor instability or prolonged contractions in certain end markets.
These events could have a material adverse effect on the business and results of operations and financial condition.
At this time,
it is difficult to predict the extent to which the COVID-19 outbreak will impact our business or operating results, which is highly
dependent on uncertain future developments, including the severity of the pandemic and the actions taken or to be taken by governments
and private businesses in relation to its containment. The Company’s plan pf conducting new businesses might be delayed and
the effect of the outbreak may not be fully reflected in our operating results until future periods.