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RADIANT CREATIONS GROUP, INC. - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operation

July 18, 2014

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report constitute "forward-looking statements." These statements, identified by words such as "plan," "anticipate," "believe," "estimate," "should," "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II - Item 1A. Risk Factors" and elsewhere in this Quarterly Report. We do not intend to update the forward-looking information to reflect actual results or changes in the factors affecting such forward-looking information. We advise you to carefully review the reports and documents, particularly our Annual Reports, Quarterly Reports and our Current Reports, we file from time to time with the Securities and Exchange Commission (the "SEC").

As used in this Quarterly Report, the terms "we," "us," "our," "Radiant," and the "Company" refer to The Radiant Creations Group, Inc. unless otherwise indicated. All dollar amounts in this Quarterly Report are expressed in U.S. dollars, unless otherwise indicated.

Introduction



Effective May 21, 2012, a change of control took place and Clarent Services Corp. acquired from Half Moon Bay Holdings, LLC, 25,000,000 shares of common stock of the Registrant, representing all of Half Moon Bay's holdings of the Registrant. The shares constitute in the approximately 83.33% of the thirty million (30,000,000) issued and outstanding shares of common stock of the Company. There are no arrangements or understandings among members of the former and new control groups and their associates with respect to election of directors or other matters.

Effective May 21, 2012, Mr. Duncan Bain resigned as our President, Chief Executive Officer, and Chief Financial Officer and was appointed as our Vice President. There were no disagreements between Mr. Bain and us regarding any matter relating to our operations, policies or practices. Mr. Carmen Joseph Carbona was appointed as President, Chief Executive Officer, and Chief Financial Officer in place of Mr. Bain.

Recent Corporate Developments

On June 20, 2013, a change of control of the Company occurred when Biodynamic Molecular Technologies, LLC a privately held company organized in the State of Florida acquired from Clarent Services Corp. the former majority stockholder of the Company in a private transaction 25,000,000 restricted shares of common stock, par value $0.00001 per share of the Company.

The Company is not aware of any arrangements, including any pledge of securities of the Company, the operation of which may at a subsequent date result in a change of control of the Company.

Departure of Directors or Principal Officers

On June 20, 2013, Mr. Carmen J. Carbona presented to the Board of the Company a letter of resignation whereby he resigned from his positions as President, Chief Executive Officer and Chief Financial Officer of the Company and as the sole member of the Board and all other positions to which he has been assigned, regardless of whether Mr. Carbona served in such capacity, of the Company, effective on June 20, 2013. Mr. Carbona's resignation was not the result of any disagreements with the Company on any matters relating to the Company's operations, policies or practices.

Appointment of New Board Members

On June 20, 2013, the stockholders of the Company holding a majority in interest of the Company's voting equity, approved by written consent and the members of the board of directors (the "Board") of the Company approved by unanimous written consent, (i) the acceptance of resignation of Mr. Carnen J. Carbona from his positions as an officer and director of the Company, and (ii) the appointment of Mr. Gary R. Smith, Mr. Manpreet Singh Thaper and Mr. Gary D. Alexander to the Board of Directors.

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Appointment of New Corporate Officers

On June 20, 2013 the new Board of Directors of the Company elected Mr. Gary R. Smith as its Chairman and appointed him as the Company's new Chief Executive Officer. The Board further appointed Mr. Manpreet Singh Thaper, a member of the Board as its President and Chief Operating Officer, appointed Mr. Gary D. Alexander, a member of the Board as its Chief Financial Officer and Corporate Secretary and appointed Michael S. Alexander as its Vice President of Corporate Finance. The Board moved the corporate offices from Marcellus, New York to 1320 South Killian Drive, in Lake Park, Florida. On December 1, 2013, the corporate offices was moved to Harbour Financial Cernter, 2401 PGA Boulevard, Suite 280-B, Palm Beach Gardens, FL 33410.

Mr. Gary R. Smith CEO of The Radiant Creations Group, Inc. is a corporate leader, manager, and consultant with extensive business experience in top management positions. He has more than three decades of operational experience as manager and CEO for leading automotive and auto finance organizations. In 2008 Mr. Smith purchased Superglass Windshield Repair franchises in the State of Florida which is still oversees. Mr. Smith joined The Renewable Corporation in March of 2012 where he serves as President and CEO.

Mr. Manpreet Singh Thaper began his career after he earned a BS in Accounting from Arizona State University, W.P. Carey School of Business. Upon his graduation from Arizona State, He worked in the mining and metals industry for several years, which is where he gained valuable experience and knowledge in the fields of public company accounting and SEC reporting. His experiences also include holding the key position of Financial Controller in the healthcare and consumer financial world and later moving on to become the leading professional working as the CFO and Principal of Long Island Casino, Inc. Mr. Singh joined the executive team at The Renewable Corporation in May 2012 and has been a valuable member of the team until his resignation in January 2013 in anticipation of this transaction. He brings his ability to apply tenacious improvements and development of new technologies, procedures and policies to maximize on the success of Company.

Mr. Gary D. Alexander, a founder and chairman of Technology River Investment, LLC a Florida based investment firm. He has more than 30 years of experience in the fields of accounting and investments. His knowledge and skills include initiating public and private offerings for small companies, professional accounting services with "go-public" transactions, private placement syndications, mergers, and acquisitions. He has extensive experience in forensic and reconstructive accounting and litigation matters. He has appeared with counsel in mediation and/or with a special master representing NASD broker-dealers as an auditor and consultant. He has also led and participated in projects in other fields, including the aviation industry, automotive, petroleum, internet services, telephone and VoIP industries, medical facilities, cosmetic and the entertainment, music and film industries.

Previously, Mr. Alexander was chairman of Treasure Coast Private Equity, a Florida based private equity firm that specializes in providing debt and equity resources for privately owned business seeking expansion capital. In December 2011, the Company was combined with Technology River Investments. In January 2013, he was appointed as officer and member of the board of directors of Brick Top Productions, Inc. a Florida base film production company (BTOP). On January 6, 2014 Mr. Alexander resigned from Brick Top Productions to expand on other existing opportunities.In June 2013 he became director, chief financial officer and corporate secretary of The Radiant Creations Group, Inc. a/k/a Nova Mining Corporation (NVMN). Through an asset acquisition, the company is designed to capitalize on innovative patented DNA based technologies to be used in the cosmetic and medical industries.

In December 2011, Mr. Alexander was appointed director, chief financial officer, corporate secretary and treasurer of The Renewable Corporation (RNWB), a state of Washington Corporation doing business in Florida. The company is a manufacturer and distributor of innovative and proprietary surface coatings and nano-bonding products. In November 2007, Mr. Alexander was appointed outside/independent director of FirstPlus Financial Group, Inc. (FPFX) a former member of the New York Stock Exchange, was a diversified company providing commercial loans, consumer lending, residential and commercial restoration, facility maintenance services, insurance adjusting services, construction management services and a facilities and restoration franchise business. In early 2008, following a managerial restructuring, he was appointed "acting CFO" and designated corporate officer for SEC interface.From November 2006 to April 2007, Mr. Alexander was acting chief financial officer of Air Rutter International, LLC and Airspace, LLC located in Long Beach, California. Air Rutter and Airspace were engaged in the business of private jet charter and aircraft management. From November 2005 to March 2006, Mr. Alexander was acting chief financial officer for Jet First, Inc. located in West Palm Beach, Florida. Jet First was a private jet charter company.

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In December 1977, Mr. Alexander earned a Bachelor of Business Administration (Accounting) degree from Florida Atlantic University, Boca Raton, FL. He owned and operated a successful CPA practice from April 1982 through December 2006. Throughout his career, he has served as a member and chair of numerous charitable organizations to help provide needed services in his local community.

Mr. Michael S. Alexander, Vice President of Corporate Finance of The Radiant Creations Group, began his career as Manager of Treasure Coast Private Equity, with a focus on technology and the development of start-up companies with patented or prototype products. He participated in equity market trading, including small cap, micro cap and options, and assisted with the acquisition and advancement of existing technologies. During his time there he was invited to become a Board Member for Greenwood Gold Mining, a small public company. In December, 2011, Mr. Alexander became the CEO and President of Technology River Investments the predecessor to Treasure Coast Private Equity where Mr. Alexander was incremental in the acquisition and management of numerous portfolio investments on behalf of Technology River. Currently, Mr. Alexander serves as the VP of Corporate Finance at The Renewable Corporation (RNWB). Mr. Alexander is a graduate of the University of North Florida, and holds a Bachelor of Science degree in Business Administration (Finance). He has been an active volunteer with a number of local philanthropic organizations, including The United Way of Martin County in Stuart, Florida.

Involvement in Certain Legal Proceedings

During the past five years no director or executive officer of the company (i) has been involved as a general partner or executive officer of any business which has filed a bankruptcy petition; (ii) has been convicted in any criminal proceeding nor is subject to any pending criminal proceeding; (iii) has been subjected to any order, judgment or decree of any court permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and (iv) has been found by a court, the Commission or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law.

Family Relationships



Mr. Gary R. Smith directly owns fifty percent, Mr. Gary D. Alexander owns twenty five percent, Mr. Michael S. Alexander owns twenty five percent and Mr. Manpreet Singh Thaper has no direct or indirect financial interest in Biodynamic Molecular Technologies, LLC, the majority shareholder of the Company.

Entry into a Material Definitive Agreement

On June 27, 2013, The Radiant Creations Group, Inc. (the "Company") entered into an Asset Purchase Agreement with The Renewable Corporation, a Washington corporation and its wholly owned subsidiary Renewable Bioscience Technologies, Inc., a Florida corporation to purchase their license, certain assets and processes to innovative technologies in skin protection from the sun, industrial UV sources (such as welding), and reducing collateral damage from medical radiation treatment which consists of various patented skin products generally under the "Radiant Creations" label for One Million Two Hundred Twenty Five Thousand ($1,225,000) US Dollars payable with 6,805,556 newly issued shares of the Company based on the seven (7) day average closing price of Sellers's common shares from Tuesday the 18th day of June to Wednesday the 26th day of June, 2013 with a fifteen (15%) discount.

On July 10, 2013 the Original Agreement was amended to whereby the purchase price was reduced to One Million Thirty Thousand ($1,030,000) US Dollars payable with 7,545,788 newly issued shares of the Company based on the seven (7) day average closing price of Sellers's common shares from Monday the 17th day of June to Tuesday the 25th day of June, 2013 with a thirty five (35%) percent discount.

The license purchased is with Dr. Yin-Xiong Li, MD, Ph.D. to his patent in Enhanced Broad-Spectrum UV Radiation Filters and Methods as disclosed and claimed in U.S. Patent No. US Patent # 6,117,846 - Nucleic acid filters and US Patent Application # 20080233626 - Enhanced broad-spectrum UV radiation filters and methods, and the following international filings European Application # 07811023.6, and Australian Application # 2007281485 and as trade secrets associate with the above listed intellectual property and trade secrets and potential patent applications for an anti-aging skin rejuvenation cream, an acne OTC treatment, a wrinkle reduction cream, BioSalt redistribution technology using supplements. The License Agreement, as of June 25, 2013 has added an addendum to it allowing Renewable to transfer the license agreement to The Radiant Creations Group.

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The various patented skin products acquired include all the patented technologies that strips out the four nucleotide code molecules from DNA strands and uses them in a system that can provide up to 99% protection from DNA damage, which is the cause of aging and skin cancer. A second technology is the delivery system to house the nucleotides, and also, a hydration agent that is time released to infuse uniform hydration into the skin for up to 10 hours. The resulting products are a DNA based SPF-30 day cream; an anti-aging and rejuvenating night cream featuring the hydration system, Chinese herbs, and aloe; a medical radiation protection and healing cream for use by dermatologists in radiation therapy for skin cancer and a rejuvenating DNA protection cream for the tanning bed industry for DNA damage protection.

Amendment to Articles of Incorporation

On July 16, 2013, the Company changed its name officially to The Radiant Creations Group, Inc. by filing a Certificate of Amendment to its Articles of Incorporation, pursuant to Nevada Revised Statutes 78.385 and 78.390 with the office of the Secretary of State for the State of Nevada.

Other Regulatory Disclosure (FINRA)

On July 24, 2013, the Company received confirmation from FINRA that effective at the opening of business on Friday, July 26, 2013, we will be trading as The Radiant Creations Group, Inc. under the symbol OTCBB: RCGP.

Concurrently with the change of our President, we moved our principal executive offices to:

1313 South Killian Drive, Suite B

Lake Park, FL 33403

Subsequently, we moved our principal executive offices to:

Harbour Executive Center

2401 PGA Boulevard, Suite 280-B

Palm Beach Gardens, FL 33410

Our new telephone number is: (561) 420-0380

This location is the office of our new President, Mr. Gary R. Smith.

Plan of Operation

On June 20, 2013, following a change of control and subsequent acquisition of an exclusive license agreement, certain assets and processes to innovative technologies in skin protection and enhancement, which consist of various proprietary products including an anti-aging and revitalizing skin cream generally under the "Radiant Creations" label, the Company changed its principal business to the development and marketing of unique and proprietary scientific technologies and cosmetic and over-the-counter personal enhancement products and devices.

As of May 31, 2014, we had cash assets of $40,161 and a working capital deficit of $(770,541) and an accumulated deficit of $(6,718,020). As such, we anticipate that we will require substantial financing in the near future in order to meet our current obligations and to continue our operations. In addition, in the event that we are successful in identifying suitable alternative business opportunities, of which there is no assurance, we anticipate that we will need to obtain additional financing in order to pursue those opportunities.

Currently, we do not have any financing arrangements in place and there are no assurances that we will be able to obtain sufficient financing on terms acceptable to us, if at all. Due to the lack of our operating history and our present inability to generate significant revenues, our auditors have stated in their audit report included in our audited financial statements for the year ended February 28, 2014 that there currently exists substantial doubt about our ability to continue as a going concern.

Off-Balance Sheet Arrangements

None. Financing Requirements



From December 29, 2005 (Inception) to May 31, 2014, we have suffered cumulative losses of $(6,718,020). We expect to continue to incur substantial losses as we continue the growth of our business. Since our inception, we have funded operations through common stock issuances, related party loans, and the support of creditors in order to meet our strategic objectives.

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Our management believes that sufficient funding will be available to meet our business objectives, including anticipated cash needs for working capital, and are currently evaluating several financing options, including a public offering of securities. However, we do not have any financing arrangements currently in place and there can be no assurance that we will be able to obtain sufficient financing when needed. As a result of the foregoing, our independent auditors believe there exists substantial doubt about our ability to continue as a going concern.

There is no assurance that we will be able to obtain additional financing if and when required. We anticipate that additional financing may come in the form of sales of additional shares of our common stock which may result in dilution to our current shareholders.

Going Concern Qualification



Several conditions and events cast substantial doubt about the Company's ability to continue as a going concern. The Company has incurred net losses of $(6,718,020) for the period from December 29, 2005 to May 31, 2014; we have revenues of $1,214,763 (from August 26 through May 31, 2014) and requires additional financing in order to finance its business activities on an ongoing basis. The Company's future capital requirements will depend on numerous factors including, but not limited to, executing the company's marketing and business plans and the pursuit of other business opportunities. The Company is actively pursuing alternative financing and has had discussions with various third parties, although no firm commitments have been obtained. In the interim, shareholders of the Company have committed to meeting its operating expenses. Management believes that actions presently being taken to revise the Company's operating and financial requirements provide them with the opportunity to continue as a going concern.

At May 31, 2014, we had $40,161 in cash assets, $1,521,655 in liabilities, and an accumulated deficit of $(6,718,020). See "Liquidity and Capital Resources."

Liquidity and Capital Resources

It is the intent of our management, stockholders, and specifically the majority Shareholder, BioDynamic Molecular Technologies, LLC and our Chief Executive Officer, Gary R. Smith, our Chief Financial Officer, Gary D. Alexander and Our Chief Operating Officer, Manpreet Singh Thaper to provide sufficient working capital necessary to support and preserve the integrity of our Company as a corporate entity. However, there is no legal obligation for either the majority Shareholder(s) or Officer(s) to provide additional future funding. If our management ceases to provide us the needed financing and we fail to identify any alternative sources of funding, there will be substantial doubt about our ability to continue as a "going concern".

We have no current plans, proposals, arrangements or understandings with respect to the sale or issuance of additional securities. As a result, there can be no assurance that sufficient funds will be available to us to enable us to pay the expenses related to such activities.

Regardless of whether or not our cash assets prove to be adequate to meet our operational needs, we may have to compensate providers of services by issuances of our common stock in lieu of cash.

At May 31, 2014, we had $40,161 in cash, $1,521,655 in liabilities, and an accumulated deficit of $(6,718,020). Our primary source of liquidity has been from loans from a majority shareholder(s) and loans from outside parties. As of May 31, 2014, the Company owed $1,515,729 in notes and accrued interest.

Net cash used in operating activities was $(18,635) during the quarter ended May 31, 2014.

Cash used in investing activities was $(1,767) during the quarter ended May 31, 2014.

Cash used in financing activities was $(60,312) during the quarter ended May 31, 2014.

Our expenses to date are largely due to professional fees that include accounting and legal fees.

To date, we have revenues of $1,214,763 (from August 26 through May 31, 2014) and require additional financing in order to finance our business activities on an ongoing basis. Our future capital requirements will depend on numerous factors, including, but not limited to, executing our marketing and business plans and the ability to pursue other business opportunities. We are actively pursuing alternative financing and have had discussions with various third parties, although no firm commitments have been obtained to date. In the interim, shareholders of the Company have agreed to meet our operating expenses. We believe that actions presently being taken to revise our operating and financial requirements provide the Company with the opportunity to continue as a "going concern," although no assurances can be given.

14 Net Loss from Operations



The Company had a net loss of $(6,718,020) for the period from inception through May 31, 2014. The Company had a net loss of $(1,897,131) for the three months ended May 31, 2014 as compared to a net loss of $(35,795) for the three months ended May 31, 2013.

Cash Flow



Our primary source of liquidity has been cash from shareholder loans, loans from outside parties and advances.

Working Capital



As of May 31, 2014, the Company had total current assets of $294,015 and total current liabilities of $1,064,556 resulting in a working capital deficit of $(770,541). As of February 28, 2014, the Company had total current assets of $317,213 and total current liabilities of $765,336, resulting in a working capital deficit of $(448,123).

Lack of Revenues

We have had limited operations since our inception on December 29, 2005 to May 31, 2014. We have generated revenues of $1,214,763 beginning on August 26, 2013. As of May 31, 2014, we have an accumulated deficit of $6,718,020. Our financial statements contain an additional explanatory paragraph in Note 1, which identifies issues that raise substantial doubt about our ability to continue as a going concern. Our financial statements do not include any adjustment that might result from the outcome of this uncertainty.

Net Loss



We incurred a net loss of $1,897,131 for the three months ended May 31, 2014, compared to a net loss of $35,795 for the three months ended May 31, 2013. From inception on December 29, 2005 to May 31, 2014, we have incurred a net loss of $6,718,020. Our basic and diluted loss per share was $(0.03) for the three months ended May 31, 2014, and $(0.00) for the three months ended May 31, 2013.

Operating and Administration Expenses

Operating expenses increased by $2,311,552 from $7,817 in the three months ended May 31, 2013, to $2,319,369 in the three months ended May 31, 2014. Operating expenses for the three months comparison primarily consist of office administration, professional and regulatory compliance, investor relations and marketing and advertising.

Other Expenses



Other expenses increased by $86,319 from $27,978 in the three months ended May 31, 2013, to $114,297 in the three months ended May 31, 2014. Other expenses for the three months comparison primarily consist of interest expense, depreciation and derivative related costs.

Common and Preferred Stock



We are authorized by our Amended and Restated Articles of Incorporation and our Additional Articles of Incorporation to issue an aggregate of 200,000,000 shares of capital stock, of which 100,000,000 are shares of common stock, par value $0.00001 per share (the "Common Stock") and 100,000,000 are shares of preferred stock (the "Preferred Stock"), par value $0.00001 per share. As of May 31, 2014, 54,271,336 shares of Common Stock were issued and outstanding and there were 77 shareholders of our Common Stock and 0 shares of Preferred Stock were issued and outstanding.

On October 27, 2011 the Company declared a stock dividend of five common shares for each common share on record. The total number of shares to be distributed is 24,000,000. Since the total number of shares to be issued exceed 25% of the common shares outstanding, the transaction is recorded as a stock split and offset to additional paid in capital at par value and the effect of the issuance is applied retroactively to all periods presented.

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All outstanding shares of Common Stock are of the same class and have equal rights and attributes. The holders of Common Stock are entitled to one vote per share on all matters submitted to a vote of stockholders of the Company. All stockholders are entitled to share equally in dividends, if any, as may be declared from time to time by our Board of Directors out of funds legally available. In the event of liquidation, the holders of our Common Stock are entitled to share ratably in all assets remaining after payment of all liabilities. The stockholders do not have cumulative or preemptive rights. We have not paid any dividends to date, and have no plans to do so in the near future.


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