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    WECT   US94846P1057

WECT TECHPAR

(WECT)
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WECONNECT TECH INTERNATIONAL : Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q)

06/14/2021 | 08:04am EST

Unless otherwise noted, all currency figures quoted as "U.S. dollars", "dollars" or "$" refer to the legal currency of the United States. Throughout this report, assets and liabilities of the Company's subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders' equity.



Overview


We were an IT-solutions provider that provided a multi-dimensional e-commerce platform to facilitate shopping, business, trade and integrates online & office transactions in a single application. Prior to June 2019, we developed and operated a mobile platform designed to consolidate users' cash and connect merchants to consumers by offering a cashless form of transaction, in-app shopping and a user rewards system. On June 2019, we ceased the operation of the platform but continue to maintain our IT solution business operations. During the quarters ended October 31, 2020, and 2019, we generated comprehensive losses of $62,540 and $107,637, respectively.

Since we ceased operations of our platform June 2019, we unsuccessfully attempted to diversify into the energy, oil & gas sector to strengthen our financial position. Our current principal business is to achieve long-term growth potential through a combination with a business rather than immediate, short-term earnings. Based on proposed business activities, we are a "blank check" company. We intend to comply with the periodic reporting requirements of the Exchange Act for so long as it is subject to those requirements.

As of the date of this Quarterly Report, we have not entered into any binding agreement with any party regarding acquisition opportunities for us. We hope to continue to engage in discussions with other operating businesses affiliated with our executive officers regarding potential acquisition opportunities. There is no assurance that any nonbinding term sheet will result into a definitive purchase transaction nor can we assure you that we will be able to successfully acquire such company or any company in the near future.

We are in active discussions to dispose MIG Mobile Tech Berhad, our operating subsidiary, to a third party.

Financial Condition; Going Concern

We have had limited operations and have been issued a "going concern" opinion by our auditor, based upon our reliance on the sale of our common stock and loans from a related party, as the sole source of funds for our future operations. We have no assurance that future financing will be available to us on acceptable terms, or at all. If financing is not available on satisfactory terms, we may be unable to continue our business plan. Equity financing could result in additional dilution to existing shareholders. If we are unable to raise additional capital to maintain our operations in the future, we may be unable to carry out our full business plan of finding an acquisition partner.

Our financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. As of October 31, 2020, the Company had working capital deficit of $2,338,089 and has incurred losses since its inception resulting in an accumulated deficit of $7,899,866. Further losses are anticipated, raising substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustment that might result from the outcome of this uncertainty.









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The ability to continue as a going concern is dependent upon the Company finding an acquisition partner in the future and/or to obtain the necessary financing to meet its obligations. Management intends to finance operating costs over the next twelve months with loans from directors and/or private placements of common stock.




Results of Operations



The following table provides selected financial data about our company as of October 31, 2020 and 2019.




Three Months Ended October 31, 2020, Compared to Three Months Ended October 31,
2019.



                                         Three Months Ended      Three Months Ended
                                          October 31, 2020        October 31, 2019
  Revenue                               $                  -     $            36,578
  Cost of revenue                                          -                       -
  Other income                                        (6,369 )                 3,429
  General and administrative expenses                 (7,226 )              (158,031 )
  Net Loss From Operations              $            (13,595 )   $          (118,024 )



Revenue. During the three months ended October 31, 2020, and 2019, we earned revenue of $0 and $36,578, respectively. Our revenue consisted primarily of IT service fees and merchant platform maintenance fees. The decrease in our revenue is primarily attributable to the impact of COVID-19 and related government actions on our business operations. We do not expect to generate any revenues for the foreseeable future unless an extraordinary corporate event such as a merger or acquisition or other strategic partnership occurs.

No customers accounted for 10% or more of our total net revenue during the three months ended October 31, 2020. During the three months ended October 31, 2019, the following customers accounted for 10% or more of our total net revenue:



                                            Three months ended             October 31,
                                             October 31, 2019                 2019
                                                         Percentage         Accounts
                                        Revenues         of revenues       receivable
  North Cloud Sdn Bhd                 $     15,354                42%     $       4,923
  East Cloud Sdn Bhd                        13,420                37%             4,444
  MIG Network & Consultancy Sdn Bhd          5,382                15%                 -
  TOTAL                               $     34,156                94%     $       9,367





East Cloud Sdn Bhd, MIG Network & Consultancy Sdn Bhd, and MIG O2O Berhad are affiliated with our executive officers and directors, Shiong Han Wee and Kwueh Lin Wong.

Operating Expenses. Operating expenses were $7,226 and $158,031 for the three months ended October 31, 2020, and 2019, respectively. The decrease in operating expenses was primarily attributable to the cessation of business operations arising from the COVID-19 pandemic and related government actions.

During the three months ended October 31, 2020 and 2019, no vendors accounted for 10% or more of our total operating costs.









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Income Tax Expense. We did not record income tax expenses for the three months ended October 31, 2020, and 2019 respectively.

Net Loss. We recorded a net loss of $13,595 and $118,024 for the three months ended October 31, 2020, and 2019, respectively. The decrease in net loss is primarily attributable to the the cessation of business operations arising from the COVID-19 pandemic and related government actions.

Liquidity and Capital Resources




Working Capital



                                      October 31, 2020       July 31, 2020
           Current Assets            $              544     $           544
           Current Liabilities                2,338,633           2,274,336
           Working Capital Deficit   $       (2,338,089 )   $    (2,273,792 )



We had current assets of $544 consisting solely of cash and cash equivalents as of October 31, 2020. Our current liabilities of $2,338,633 consisted of $1,267,831 of amount due to related parties, $964,185 of other payables and accrued liabilities, $85,409 of accounts payable and $21,207 of current tax liabilities.

As of July 31, 2020, we had current assets of $544 and current liabilities of $2,274,336. Our current assets consisted solely of cash and cash equivalents. Our current liabilities consisted of $1,236,274 of amount due to related parties, $933,410 of other payables and accrued liabilities, $83,458 of accounts payable and $21,194 of current tax liabilities.




Cash Flows



                                              Three Months       Three Months
                                              Ended October      Ended October
                                                31, 2020           31, 2019
       Net Cash (Used in) / Provided by
       Operating Activities                   $           -     $         2,126
       Net Cash Provided by Investing
       Activities                             $           -     $             -
       Net Cash Provided by Financing
       Activities                             $           -     $             -



Cash Flow from Operating Activities

There was no net cash used in or provided by operating activities during the three months ended October 31, 2020.

During the three months ended October 31, 2019, net cash used in operating activities was $2,165. Net cash used in operating activities during the three months ended October 31, 2019, consisted primarily of a loss before taxation of $118,024, unrealized foreign exchange gains of $2,974, a decrease in account payables of $17,134 and other payables and accrued liabilities of $7,296, offset by depreciation of plant and equipment of $6,002, a decrease in account receivables of $1,978, other receivables, deposits and prepayments of $25,235 and an increase in amount due to related parties of $110,087.

Cash Flow from Investing Activities

During the three months ended October 31, 2020, and 2019, investing activities did not provide nor use any net cash.









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Cash Flow from Financing Activities

During the three months ended October 31, 2020, and 2019, financing activities did not provide nor use any net cash.



Financing Requirements


During the twelve-month period following the date of this quarterly report, we anticipate that we will not generate sufficient operating revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations during and beyond the next twelve months. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or shareholder loans. However, there is no assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our business plan should we decide to proceed.

We anticipate continuing to rely on equity sales of our common shares and advances from our executive officers and directors in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our business operations.

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.




Critical Accounting Policies



The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The SEC has defined a company's critical accounting policies as the ones that are most important to the portrayal of the company's financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in note 2 to our financial statements. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

Recent accounting pronouncements

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

© Edgar Online, source Glimpses

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Financials (USD)
Sales 2021 - - -
Net income 2021 -0,03 M - -
Net cash 2021 0,00 M - -
P/E ratio 2021 -1 407x
Yield 2021 -
Capitalization 23,1 M 23,1 M -
EV / Sales 2020 389x
EV / Sales 2021 -
Nbr of Employees -
Free-Float -
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Managers and Directors
Vance Harrison President, Chief Executive Officer & Director
Terina Liddiard Chief Financial Officer, Secretary & Director
Taylor Brody Director & Chief Marketing Officer