The following discussion and analysis of financial condition and results of operations should be read in conjunction with our financial statements and related notes included elsewhere in this annual report. This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. See "Cautionary Note Regarding Forward-Looking Statements." Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors discussed elsewhere in this annual report.






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Overview

WeTrade Group, Inc. was incorporated in the State of Wyoming on March 28, 2019 and is in the business of providing technical services and solutions via its social e-commerce platform. We are committed to providing an international cloud-based intelligence system and independently developed a micro-business cloud intelligence system called the "YCloud." Our goal is to provide technical and auto-billing management services to micro-business online stores in China through big data analytics, machine learning mechanisms, social network recommendations, and multi-channel data analysis.

We provide technology services to both individual and corporate users. Through Yueshang Information Technology (Beijing) Limited, or Yueshang Beijing, we provide access to "YCloud" to our two customers, which are Zhuozhou Weijiafu Information Technology Limited ("Weijiafu"), a PRC technology company, which then provide "YCloud" services to individual and corporate micro-business owners and Changtongfu Technology (Hainan) Co Limited ("Changtongfu"), a PRC technology company, which provide "YCloud" services to individual and corporate business owners in the hotel and travel industries.

The market individual micro-business owners represent a potential of 330 million users by the year of 2023. (Source: iResrarch. http://xueqiu.com/8455183447/172404679?sharetime=2,2/22/2021). YCloud serves corporate users in multiple industries, including Yuetao Group, Zhiding, Lvyue, Yuebei, Yuedian, Coke GO, and Zhongyanshangyue. We conduct business operations in mainland China and have established trial operations in Hong Kong. We expect to utilize the YCloud system to establish a global strategic cooperation with various social media platforms.

The main functions of the YCloud system are to manage users' marketing relationships, CPS commission profit management, multi-channel data statistics, AI fission and management, and improved supply chain systems.

Currently, YCloud serves the micro business industry. We expect to expand the application of YCloud to tourism, hospitality, livestreaming and short video, medical beauty and traditional retail industries.





Result of Operations

The following tables provide a comparison of a summary of our results of operations for the fiscal years ended December 31, 2021 and 2020.





  Results of Operations for the fiscal years ended December 31, 2021 and 2020



                                                      For the year       For the year
                                                     ended December     ended December
                                                          31,                31,
                                                          2021               2020

Revenue:


Service revenue, non-related party                   $    9,734,966     $    3,440,312
Service revenue, related party                            4,646,329          2,831,252
                                                         14,381,295          6,271,564
Cost of Revenue                                          (2,681,939 )         (615,595 )
Gross Profit                                             11,699,356          5,655,969
Operating Expenses:
General and Administrative                               (5,705,063 )       (1,901,336 )
Operations Profit                                         5,994,293          3,754,633
Other income                                                303,665             82,960
Income before income tax                                  6,297,958          3,837,593
Income tax expense                                       (1,122,283 )       (1,162,556 )
Net Income                                           $    5,175,675     $    2,675,037





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Revenue from Operations

For the fiscal year ended December 31, 2021 and 2020, total revenue was $14,381,295 and $6,271,564, respectively. The increase was mainly due to the increase in Gross Merchandise Volume ("GMV") in Ycloud system. Service revenue from third party were $9,734,966 (2020: $3,440,312) and service revenue from related party were $4,646,329 (2020: $2,831,252) for the year ended December 31, 2021. The system services fees are collected through Weijiafu and Changtongfu from end users of YCloud system based on the GMV as follow:





Gross Merchandise Volume ("GMV")       2021              2020
                                        US$               US$
Non-related party                    292,177,817        10,437,687
Related party                        139,359,179       153,038,677
Total:                               431,536,996       163,476,364




Cost of revenue

Cost of revenue is mainly consists of staff payroll, PRC central provident fund ("CPF") and other staff benefits, the increase is mainly due to more staffs were recruited during the period. The increase is in line with the increase in revenue during the period.

General and Administrative Expenses

For the fiscal year ended December 31, 2021 and 2020, general and administrative expenses were $5,705,063 and 1,901,336, respectively. The increase is mainly due to increase in the payroll expenses as a result of more new staffs were recruited during the year.





Net Income

As a result of the factors described above, there was a net income of $5,175,675 and net income of $2,675,037 for the fiscal year ended December 31, 2021 and 2020, respectively, the increase is mainly due to increase in Gross Merchandise Volume ("GMV") in YCloud system and services are collected from YCloud users based on GMV during the year.

Liquidity and Capital Resources

The following chart provides a summary of our balance sheets on for the fiscal years ended December 31, 2021 and 2020, it should be read in conjunction with the financial statements, and notes thereto.





                                           2021             2020
Cash and Cash equivalents              $    616,593     $  4,640,603
Receivables                               9,230,865        2,609,520
Note receivable                           3,798,130        3,097,981

Other receivables and prepayments 3,458,221 332,388 Intangible asset

                             37,765           49,029
Right of use assets                       2,328,950        2,813,186
Total assets                           $ 19,470,524     $ 13,542,707
Account payable and accrued expenses        279,219          271,531
Lease liability                           2,538,340        3,041,463
Amount due to related parties             1,105,532          416,501
Other liabilities                         1,018,111          919,328
Total liabilities                      $  4,941,202     $  4,648,822
Total stockholders' equity             $ 14,529,322        8,893,885

As of December 31, 2020, we had total assets of $19,470,524, which mainly consisted of $616,593 in cash, $13,028,995 in receivables and note receivables and $2,328,950 in right of use asset; we had total liabilities of $4,941,202 which consisted of $279,219 in accounts payables & accrued expenses, $1,105,532 in amount due to related parties, $1,018,111 in other liabilities and $2,538,340 in lease liability; we had total stockholders' equity of $14,529,322.






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Operating activities

Our continuing cash flow used in operating activities is $3,753,384 for the fiscal years ended December 31, 2021 as compare to the cash flow provided by operating activities of $1,162,337 in prior year, which was increased by approximately of $4.92 million. The increase were mainly due to increase in trade receivable of approximately of $3.9 million and increase in prepaid expenses of approximately of $2.9 million during the year. The increase is partially offset by the increase of net income of approximately of $2.5 million during the year.





Investing activities

Our continuing cash flow used in investing activities is $417,112 for the fiscal years ended December 31, 2021 as compare to the cash flow of $nil in investing activities in prior year. The increase was mainly due to increase office equipment and office renovation of $417,112 during the year.

Financing activities

Cash provided in our financing activities was $77,821 for the year ended December 31, 2021 as compare to the net cash used in financing activities of $3,682,142, which was decreased by approximately of $3.6 million. There were loan repayment of $1,560,020 to related party and increase in loan to third party of $2.96 million in prior year, however there were only $689,031 loan from related party and loan to third party of $611,210 during the year and therefore resulted in decrease net cash used in financing activities during the year.





Inflation

Inflation does not materially affect our business or the results of our operations.

Critical Accounting Policies

We prepare our financial statements in accordance with generally accepted accounting principles of the United States ("GAAP"). GAAP represents a comprehensive set of accounting and disclosure rules and requirements. The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Our actual results could differ from those estimates. We use historical data to assist in the forecast of our future results. Deviations from our projections are addressed when our financials are reviewed on a monthly basis. This allows us to be proactive in our approach to managing our business. It also allows us to rely on proven data rather than having to make assumptions regarding our estimates.





Revenue recognition

The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements 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 obligations, 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.





Use of Estimate

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates.





Accounts receivable

Accounts receivable are presented net of allowance for doubtful accounts. The Group uses specific identification in providing for bad debts when facts and circumstances indicate that collection is doubtful and based on factors listed in the following paragraph. If the financial conditions of its customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowance may be required.

The Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected. The Company determines the allowance for doubtful accounts on general basis taking into consideration various factors including but not limited to the historical collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance. Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company acquires that might indicate that an account is uncollectible. The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.






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Recent Accounting Pronouncements

We have reviewed all the recently issued, but not yet effective, accounting pronouncements and we do not believe any of these pronouncements will have a material impact on the Company financial statements.

Off-Balance Sheet Arrangements

There is no off-balance sheet arrangements.

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