10-Q: Welsis Corp. Faces Going Concern Doubt Amid Crypto Pivot

Welsis Corp. reported a net loss of $10,020 for Q4 2025, with zero revenue and significant going concern doubts, despite a strategic pivot to cryptocurrency.

Summary

• Welsis Corp. is a development-stage company that shifted its focus from virtual psychological therapy to the cryptocurrency and blockchain industry in September 2024.
• The company reported no revenue for the three months ended December 31, 2025, and December 31, 2024.
• Net loss for the three months ended December 31, 2025, was $10,020, an improvement from a net loss of $24,256 in the prior year period, primarily due to decreased operating expenses.
• Accumulated deficit reached $236,146 as of December 31, 2025, up from $226,126 at September 30, 2025.
• The company has a working capital deficiency of $81,934 as of December 31, 2025, a slight improvement from $82,439 at September 30, 2024.
• Cash and cash equivalents were $0 at the end of the period.
• Management has identified substantial doubt about the company's ability to continue as a going concern due to accumulated deficit and negative operating cash flows.
• A $40,000 note payable is currently in default.
• The company continues to rely on convertible notes for financing, issuing $10,525 in new convertible notes during the quarter.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this filing with significant concern due to the company's zero revenue, increasing accumulated deficit, ongoing going concern doubt, and ineffective disclosure controls, despite a slight reduction in net loss.

Positives

• Net loss decreased to $10,020 for the three months ended December 31, 2025, from $24,256 in the same period last year, primarily due to a significant reduction in operating expenses.
• Operating expenses decreased by $15,451, from $22,244 in Q4 2024 to $6,793 in Q4 2025.
• Working capital deficiency slightly improved to $(81,934) from $(82,439) in the prior quarter.

Negatives

• The company generated no revenue for the three months ended December 31, 2025, and December 31, 2024.
• Accumulated deficit increased to $236,146 as of December 31, 2025.
• Negative operating cash flow of $10,525 for the three months ended December 31, 2025.
• The company had no cash and cash equivalents at the end of the period.
• A $40,000 note payable is currently in default, incurring a default interest rate of 12% per annum.
• Accrued interest increased for both the note payable and convertible notes.
• Disclosure controls and procedures were deemed not effective as of December 31, 2025.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern due to accumulated deficit and negative operating cash flow.
• The company's cash position may not be sufficient to support daily operations.
• There are no assurances that the company can raise additional funds through equity, related party loans, or unaffiliated party loans.
• The ability to continue as a going concern is dependent on implementing its business plan, generating sufficient revenue, and raising additional funds.
• Additional issuances of equity or convertible debt securities will result in dilution to current shareholders.
• Additional financing may not be available upon acceptable terms, or at all, which could significantly restrict business operations.
• The $40,000 note payable is in default, potentially leading to further financial or legal repercussions.

Future Outlook

Management expects working capital requirements to be funded through existing funds and further issuances of securities, anticipating adequacy for the next three months. However, the company will need to raise additional capital in the next twelve months to sustain and expand operations, likely through equity financing, with no current arrangements in place for future equity financing or director loans.

Management Comments

• We are a development-stage company formed to commence operations concerned with the virtual psychological therapy that is also known as teletherapy or telepsychology services.
• On September 23, 2024, Welsis Corp announced that it is entering the cryptocurrency and blockchain industry by launching TokenTraders.net, a fully functional crypto-exchange site.
• The Company is attempting to commence operations and generate sufficient revenue; however, the Company's cash position may not be sufficient to support the Company's daily operations.
• Management intends to raise additional funds through equity market, related party loan and loan from unaffiliated parties through the issuance of convertible notes.
• 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.
• Existing working capital, further advances and debt instruments, and anticipated cash flow are expected to be adequate to fund our operations over the next three months.
• We will have to raise additional funds in the next twelve months in order to sustain and expand our operations.
• We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock.
• Our Chief Executive Officer has concluded that as of such date, our disclosure controls and procedures were not effective.

Industry Context

StockSavvy.ai notes that Welsis Corp.'s pivot from teletherapy to cryptocurrency in late 2024 places it in a highly volatile and competitive sector. While the crypto market offers significant growth potential, the company's current development stage, lack of revenue, and substantial financial deficits indicate it is far from establishing a competitive foothold. The shift also suggests a struggle to gain traction in its initial teletherapy venture, highlighting the challenges of market entry and execution in both industries.

Comparison to Industry Standards

• Welsis Corp.'s zero revenue and significant accumulated deficit are far below industry standards for operational companies in either the teletherapy or cryptocurrency exchange sectors.
• Established crypto exchanges like Coinbase or Binance generate billions in revenue and operate with robust financial controls, a stark contrast to Welsis Corp.'s non-existent revenue and ineffective disclosure controls.
• Successful teletherapy platforms such as Teladoc Health or Amwell have substantial user bases and revenue streams, which Welsis Corp. failed to achieve before its pivot.
• The company's reliance on convertible notes for operational funding and its "going concern" warning are typical of early-stage startups but indicate a lack of significant progress or market validation compared to peers that successfully secure venture capital or generate early revenue.

Management Changes

Corporate Governance

Legal Proceedings

• No material, existing or pending legal proceedings against the company, nor is the company involved as a plaintiff in any material proceeding or pending litigation. No proceedings where directors, officers, affiliates, or shareholders are adverse parties or have a material adverse interest.

Related Party Transactions

• The company has and will continue to seek to obtain short-term loans from its directors, although no future arrangement for additional loans has been made and no agreements exist concerning these loans. Management intends to raise additional funds through related party loans.

Stakeholder Impact

• Shareholders face significant dilution risk from future equity or convertible debt issuances. Current shareholders' deficit is increasing. The company's going concern doubt poses a substantial risk to investment value.
• Creditors: The $40,000 note payable is in default, indicating a risk of non-payment or delayed payment for creditors. Convertible note holders face uncertainty regarding conversion value given the company's financial state.
• Employees: Future employment and stability are dependent on successful capital raises and revenue generation.
• Customers: The company's financial instability and ineffective controls could impact the reliability and security of its crypto exchange platform, potentially deterring users.

Next Steps

• Implement its business plan to generate sufficient revenue.
• Raise additional funds through equity market, related party loans, and unaffiliated party loans (convertible notes).
• Address the ineffectiveness of disclosure controls and procedures.
• Acquire inventory, incur developmental expenses for start-up business, and increase marketing expenses.
• Seek additional funding in the next twelve months, likely through equity financing.
• Continue to seek short-term loans from directors.

Key Dates

Recommendation

The company exhibits severe financial distress, including zero revenue, a growing accumulated deficit, negative operating cash flow, and no cash on hand. The explicit 'going concern' warning, coupled with a defaulted note payable and ineffective disclosure controls, signals extreme operational and financial risk. While a net loss reduction is noted, it's overshadowed by the fundamental lack of business activity and precarious funding situation. The strategic pivot to crypto without any demonstrable success or revenue generation further compounds the uncertainty. Investors face high dilution risk and a significant probability of capital loss.

Keywords

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