10-K: Welsis Corp. Reports Net Loss but Sees Improvement Amidst Business Overhaul in 10-K Filing

Welsis Corp.'s latest 10-K filing reveals a net loss, but also highlights a decrease in the loss compared to the previous year, alongside a strategic shift into the cryptocurrency sector.

Summary

• Welsis Corp., a Wyoming-based company, filed its Form 10-K for the period ended September 30, 2024.
• The company, initially focused on online psychological help services, has transitioned into the cryptocurrency and blockchain industry with the launch of TokenTraders.net.
• A significant change in control occurred on April 1, 2024, with Skywest Pinnacle Limited acquiring approximately 73% of the company's common stock, leading to a change in management.
• The company reported a net loss of $24,683 for the year ended September 30, 2024, compared to a net loss of $41,068 for the year ended September 30, 2023.
• This decrease in net loss is attributed to an increase in other income, specifically a gain on debt loan forgiveness of $55,000.
• As of September 30, 2024, the company had no cash and assets, and a working capital deficiency of $71,696.
• The company's independent registered public accounting firm, Boladale Lawal & Co., has issued an opinion on the financial statements, but also raised concerns about the company's ability to continue as a going concern.
• Management acknowledges material weaknesses in internal control over financial reporting and plans to implement changes to address these weaknesses.
• The company's stock is not currently trading, and it has never declared or paid cash dividends.
• The company anticipates needing to raise additional capital in the next twelve months to sustain and expand its operations, potentially through equity financing.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the net loss, working capital deficiency, and concerns about the company's ability to continue as a going concern. However, the decrease in net loss and the strategic shift to the cryptocurrency sector offer some potential for future improvement.

Positives

• The company's net loss decreased by $16,385, from $41,068 in 2023 to $24,683 in 2024.
• The company recognized a gain on debt loan forgiveness of $55,000.
• Current liabilities decreased from $151,140 as of September 30, 2023 to $71,696 as of September 30, 2024.
• The company is entering the cryptocurrency and blockchain industry, potentially opening new revenue streams.

Negatives

• The company reported a net loss of $24,683 for the year ended September 30, 2024.
• As of September 30, 2024, the company had no cash and assets.
• The company had a working capital deficiency of $71,696 as of September 30, 2024.
• The company's auditor has raised concerns about its ability to continue as a going concern.
• Management has identified material weaknesses in internal control over financial reporting.
• The company's stock is not currently trading, and it has never declared or paid cash dividends.

Risks

• The company's auditor has raised concerns about its ability to continue as a going concern.
• Management has identified material weaknesses in internal control over financial reporting.
• The company needs to raise additional capital in the next twelve months to sustain and expand its operations.
• Additional issuances of equity or convertible debt securities will result in dilution to current shareholders.
• The company's plan to enter the cryptocurrency and blockchain industry may not be successful.
• The company's internal controls are ineffective.

Future Outlook

The company expects working capital requirements to be funded through existing funds and further issuances of securities. Management anticipates additional increases in operating expenses and capital expenditures. The company will have to raise additional funds in the next twelve months in order to sustain and expand our operations.

Management Comments

• Kwok Boon Kit, the current CEO, is responsible for establishing and maintaining disclosure controls and procedures and internal control over financial reporting.
• Management concluded that, as of September 30, 2024, our internal control over financial reporting was not effective.
• Management intends to raise additional funds through the equity market, related party loan and loan from unaffiliated party through the issuance of convertible notes.

Industry Context

The company's shift to the cryptocurrency and blockchain industry reflects a broader trend of businesses exploring opportunities in this sector. The success of this transition will depend on the company's ability to effectively compete with established players and navigate the regulatory landscape.

Comparison to Industry Standards

• It is difficult to compare Welsis Corp.'s financial performance to industry standards due to its transition from online psychological help services to the cryptocurrency and blockchain industry.
• Companies like Coinbase and Binance are major players in the cryptocurrency exchange market, and Welsis Corp.'s TokenTraders.net will need to differentiate itself to gain market share.
• The company's small size and limited resources may pose challenges in competing with larger, more established companies in the cryptocurrency space.

Management Changes

Related Party Transactions

• During the year ended September 30, 2024 and 2023, the former director for the Company who resigned on April 1, 2024 upon the change of control advanced to the Company for payment to vendors of $2,200 and $13,003, respectively.
• During the year ended September 30, 2024 and 2023, the Company incurred consulting fees of $3,000 and $7,200 to the former Director of the Company, respectively.
• During the year ended September 30, 2024, the Company incurred debt forgiveness of $53,015, comprised of $38,615 for payable amount to the Companys former director who resigned on April 1, 2024 and $14,400 for payable amount to another Companys former director who resigned on June 20, 2023.

Stakeholder Impact

• Shareholders will experience dilution if the company issues additional equity.
• Employees may be affected by the company's strategic shift and potential restructuring.
• Customers of the former online psychological help services will no longer be served.
• Suppliers and creditors may be impacted by the company's financial challenges and need to raise additional capital.

Next Steps

• The company plans to implement changes to address material weaknesses in internal control over financial reporting.
• The company plans to raise additional capital in the next twelve months.
• The company will focus on developing and growing its TokenTraders.net cryptocurrency exchange platform.

Key Dates

Keywords

Welsis Corp, cryptocurrency, blockchain, TokenTraders.net, net loss, debt forgiveness, going concern, internal control, equity financing, financial statements