Overview
The Company has identified the global tourism market as its first investment
target. As it currently exists, the tourism industry is fragmented into various
geographic regions. We believe that approaching this industry from a global
perspective is an emerging market with tremendous growth potential. We plan to
set up and/or acquire offices in various regions of the world and through them,
develop the local tourism industry and expand our local tourism market.
Ultimately, we plan to unify and manage our regional offices and to market our
global services through the internet.
We have set up three subsidiaries, Airchn Travel Global, Inc. in Seattle,
Washington ("ATGI") and Airchn Travel (Canada) Inc., in Vancouver, British
Columbia in Canada ("ATCI") and Airchn Travel (Beijing) Inc. in Beijing, China
("ATBI"). Our Beijing office has been closed as of June 30, 2022 due to lack of
business and to reduce operating costs.
We are engaged in services such as airline and cruise ticketing, customized and
packaged tours, travel blogs, travel magazines, sales of travel related
merchandise, group hotel reservations, business travel arrangements, conference
travel arrangements, car rental and admission ticket sale for local tourist
attractions.
We will continue to explore other business growth opportunities, regardless of
industry, in order to diversify our business operations and investments.
On January 17, 2012, the Company filed a Certificate of Amendment to its
Certificate of Incorporation with the Secretary of State of Delaware to change
its name from News of China, Inc. to W&E Source Corp. In connection the name
change, our listing symbol also changed from "NWCH" to "WESC." In addition, the
Company also increased its total authorized shares to 500,000,000 to anticipate
future financing through the issuance of our equity or convertible debt to
finance our business.
On June 6, 2022, certain shareholders of the Company entered into a Stock
Purchase Agreement (the "SPA") with Hong Ba and Christina Chen for the sale and
purchase of an aggregate of 118,123,001 shares of common stock of the Company.
One June 8, 2022, the transaction contemplated by the SPA closed, representing
approximately 90.8% of the Company's issued and outstanding common shares. It
resulted in change of control of the Company with Christina Chen owning
approximately 70% of the Company's outstanding stock. Effective June 8, 2022,
Junjun Wu resigned as member of the Board of Directors and the Board appointed
Christina Chen as a new director of the Company. Hong Ba continues to serve as a
director, CEO and CFO of the Company.
Effective January 1, 2018, the Company adopted the guidance of Accounting
Standards Codification (ASC) 606, Revenue from Contracts. The implementation of
ASC 606 did not have a material impact on the Company's consolidated financial
statements. ASC 606 create a five-step model that requires entities to exercise
judgement when considering the terms of contract, which includes (1) identifying
the contracts or agreement with a customer, (2) identifying our performance
obligations in the contract or agreement, (3) determining the transaction price,
(4) allocating the transaction price to the separate performance obligation, and
(5) recognizing revenue as each performance obligation is satisfied. The Company
only applies the five-step model to contracts when it is probable that the
Company will collect the consideration it is entitled to in exchange for the
services it transfers to its clients.
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COVID-19
In December 2019, a novel strain of coronavirus, COVID-19, was first detected in
Wuhan, China, and has since spread to other regions, including Europe and North
America. On March 11, 2020, the World Health Organization declared that the
rapidly spreading COVID-19 outbreak was a global pandemic ("COVID-19 pandemic").
In response to the pandemic, many governments around the world have implemented,
and continue to implement, a variety of measures to reduce the spread of
COVID-19, including travel restrictions and bans, instructions to residents to
practice social distancing, quarantine advisories, shelter-in-place orders and
required closures of non-essential businesses. These government mandates have
forced many of the companies on whom our business relies, including hotels and
other accommodation providers and airlines, to seek government support in order
to continue operating, to curtail drastically their service offerings or to
cease operations entirely. Further, these measures have materially adversely
affected, and may further adversely affect, consumer sentiment and discretionary
spending patterns, economies and financial markets, and our customers. The
COVID-19 pandemic and the resulting economic conditions and government orders
have resulted in a material decrease in consumer spending and an unprecedented
decline in travel activities and consumer demand for related services. Our
financial results and prospects are almost entirely dependent on the sale of
such travel-related services. Our results for the year ended June 30, 2022 have
been significantly and negatively impacted, with a material decline in gross
travel bookings and total revenues as compared to the corresponding period in
2019-2020. We expect to continue to see severely reduced new travel reservation
bookings as compared to 2019-2020 levels for the foreseeable future, which will
have a materially adverse impact on our business, financial condition, results
of operations and cash flows. Due to the uncertain and rapidly evolving nature
of current conditions around the world, we are unable to predict accurately the
impact that the COVID-19 pandemic will have on our business going forward. With
the continued spread of COVID-19 in the United States and various other
countries, we expect the pandemic and its effects to continue to have a
significant adverse impact on our business for the duration of the pandemic,
during any resurgences of the pandemic and during the subsequent economic
recovery, which could be an extended period of time.
Results of Operations
The following summary of our results of operations should be read in conjunction
with our audited financial statements for the years ended June 30, 2022 and
2021.
Years Ended June 30, 2022 and 2021:
June 30, 2022 June 30, 2021
Revenues $ - $ -
Cost of revenues - -
Expenses
General and administrative expenses (65,730 ) (55,028 )
Interest expense (542 ) (14,386 )
Gain on debt settlement - 90,433
Foreign currency exchange gain (loss) (5,321 ) 6,158
Net income (loss) $ (71,593 ) $ 27,177
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Revenues
We have generated total revenues of $Nil from operations during the year ended
June 30, 2022 as compared to $Nil for the same period in 2021. The lack of
revenues was mainly due to the decrease in our travel business arrangement
income caused by the COVID-19 pandemic globally in the years ended June 30, 2022
and 2021.
Expenses
General and administrative expenses for the year ended June 30, 2022 was $65,730
and increased from $55,028, or 19%, compared with the year ended June 30, 2021.
The increase in expenses during the current year was mainly due to an increase
in legal, accounting and filing fees due to the stock sale resulting in a a
change of control of the Company during the year ended June 30, 2022.
Net income (loss)
We had net losses of $71,593 and net income of $27,177 for the years ended June
30, 2022 and 2021, respectively, and had an accumulated deficit of $1,327,434
since the inception of our business through June 30, 2022. The decrease in the
net income is mainly due to the gain on debt settlement which occurred in the
year ended June 30, 2021 and the increased expenses in the year ended June 30,
2022.
Liquidity and Capital Resources
Our financial condition for the years ended June 30, 2022 and 2021 are
summarized as follows:
Working Capital
June 30, 2022 June 30, 2021
Current Assets $ 893 $ 2,290
Current Liabilities (100,784 ) (36,581 )
Working Capital $ (99,891 ) $ (34,291 )Our working capital deficiency for the year ended June 30, 2022 was
significantly increased by $65,600 compared with 2021 mainly due to a increase
in accrued liabilities.
Cash Flows
June 30, 2022 June 30, 2021Cash used in operating activities $ (43,085 ) $ (33,698 )
Cash used in investing activities
- -
Cash provided by financing activities 40,478 32,153
Cumulative translation adjustment 1,212 285
Net decrease in cash $ (1,395 ) $ (1,260 )
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Cash Used in Operating Activities
For the year ended June 30, 2022, our cash used in operating activities
increased by $9,387 compared with the previous year. The increase is mainly due
to the stock sale resulting in a change of control of the Company during the
year ended June 30, 2022.
Cash Used in Investing Activities
For the year ended June 30, 2022, no cash was used in investing activities.
Cash Provided by Financing Activities
For the year ended June 30, 2022, the Company received $40,478 proceeds from
related parties, as compared with $32,153 in the previous year.
Cash Requirements
Over the next 12-months ending June 30, 2023, we anticipate that we will incur
the following operating expenses:
Expense Amount
General and administrative $ 40,000
Professional fees 60,000
Foreign currency exchange loss 4,000
Total $ 104,000
Our CEO, Hong Ba, has committed to providing our working capital requirements
for the next 12 months.
There is substantial doubt about our ability to continue as a going concern as
the continuation of our business is dependent upon the continued financial
support from our shareholders, our ability to obtain necessary equity financing
to continue operations, and achieving a profitable level of operations. The
issuance of additional equity securities by us could result in a significant
dilution in the equity interests of our current stockholders. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments.
In addition to the issues set out above regarding our ability to raise capital,
global economies are currently undergoing a period of economic uncertainty
related to the COVID-19 pandemic and the tightening of credit markets worldwide.
This has resulted in numerous adverse effects, including unprecedented
volatility in financial markets and stock prices, slower economic activity,
decreased consumer confidence, increased commodity prices, reduced corporate
profits and capital spending, increased unemployment, liquidity concerns and
volatile and increasing energy prices. We anticipate that the current economic
conditions and the credit shortage will adversely impact our ability to raise
financing. In addition, if the future economic environment continues to be less
favorable than it has been in recent years, we may experience difficulty in
completing our current business plan.
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Off Balance Sheet Arrangements
We have no significant 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
stockholders.
Recently Issued Accounting Standards
We continue to assess the effects of recently issued accounting standards. The
impact of all recently adopted and issued accounting standards has been
disclosed in the Footnotes to the financial statements.
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W&E SOURCE CORP. 
