10-Q: Welsis Corp. Reports Q1 2024 Results: Revenue Declines Amid Going Concern Concerns

Welsis Corp. reports a net loss for Q1 2024 and expresses concerns about its ability to continue as a going concern.

Summary

• Welsis Corp. reported its financial results for the quarter ended December 31, 2023.
• The company is a development-stage company focused on virtual psychological therapy services.
• The company's revenue for the quarter was $2,000, compared to $3,500 in the same period last year.
• The net loss for the quarter was $13,264, compared to a net loss of $9,211 for the same period in 2022.
• The company had an accumulated deficit of $154,017 as of December 31, 2023.
• The financial statements have been prepared assuming the company will continue as a going concern, but there is substantial doubt about its ability to do so.
• Management intends to raise additional funds through private or public offerings.
• As of December 31, 2023, the company's total assets were $22,701 and total liabilities were $153,939.
• The company's disclosure controls and procedures were not effective as of December 31, 2023.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the company's declining revenue, increasing net loss, accumulated deficit, and concerns about its ability to continue as a going concern. The ineffective disclosure controls and procedures further contribute to the negative sentiment.

Positives

• The company is actively seeking additional funding through private or public offerings.
• The director is providing his own premises for office needs free of charge.
• The company generated positive cash flows from financing activities of $23,133 for the three months ended December 31, 2023.

Negatives

• The company has a significant accumulated deficit of $154,017.
• Revenue decreased compared to the same period last year.
• The net loss increased compared to the same period last year.
• The company's cash position is very low at $1,368.
• The company's disclosure controls and procedures were not effective as of December 31, 2023.
• The company has not generated positive cash flows from operating activities.

Risks

• The company's ability to continue as a going concern is uncertain.
• The company may not be able to raise additional funds on acceptable terms or at all.
• Additional issuances of equity or convertible debt securities will result in dilution to current shareholders.
• The COVID-19 outbreak could materially adversely affect the company's future operating results.
• The company's disclosure controls and procedures are not effective.

Future Outlook

The company expects to require additional capital to meet its long-term operating requirements and intends to raise additional capital through the sale of equity or debt securities.

Management Comments

• Management intends to raise additional funds by way of a private or public offering.
• Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.
• Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.

Industry Context

The company operates in the virtual psychological therapy market, which has seen increased demand due to factors such as increased accessibility and convenience. However, the company faces competition from established players and the need to build trust and credibility in the online therapy space.

Comparison to Industry Standards

• It is difficult to compare Welsis Corp.'s results to industry standards due to its early development stage and limited revenue.
• Larger, more established telehealth companies like Teladoc Health and Amwell have significantly higher revenue and user base.
• Welsis Corp.'s financial performance is significantly below industry benchmarks for established telehealth providers.

Management Changes

Legal Proceedings

• Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties.

Related Party Transactions

• As of December 31, 2023, the Company owed $27,315 to the Company's director, Dusan Zindovic for the Company's working capital purposes.
• For three months ended of December 31, 2023, Accounts payable to a director for consulting services was $1,800.
• Our officer and director, Dusan Zindovic, has agreed to provide his own premise under office needs and will not take any fee for these premises.

Stakeholder Impact

• Shareholders face potential dilution from future equity issuances.
• Employees (currently only the director) face uncertainty due to the company's going concern issues.
• Customers may be impacted if the company is unable to continue operations.

Next Steps

• The company intends to raise additional funds through private or public offerings.
• The company will continue to seek to obtain short-term loans from its directors.
• The company will need to raise additional capital and generate revenues to meet long-term operating requirements.

Key Dates

Keywords

financial statements, going concern, teletherapy, net loss, revenue, Welsis Corp, psychology