10-K: Welsis Corp. Shifts to Crypto Amid Mounting Losses

Welsis Corp. reported a significant increase in net loss to $60,690 for fiscal year 2025, transitioning from teletherapy to a cryptocurrency exchange business while facing substantial doubt about its ability to continue as a going concern.

Summary

• Welsis Corp., originally a teletherapy service provider, pivoted to the cryptocurrency and blockchain industry by launching TokenTraders.net on September 23, 2024.
• The company reported a net loss of $60,690 for the year ended September 30, 2025, a substantial increase from the $24,683 net loss in 2024.
• Revenue declined from $2,000 in 2024 to $0 in 2025, reflecting the cessation of its original teletherapy business.
• Working capital deficiency worsened to $82,439 as of September 30, 2025, from $71,696 in the prior year.
• The company has no cash and cash equivalents as of September 30, 2025 and 2024.
• Management and auditors express substantial doubt about the company's ability to continue as a going concern due to accumulated deficit, net losses, and negative working capital.
• Disclosure controls and internal control over financial reporting were deemed ineffective, with material weaknesses identified in segregation of duties and accounting policies.
• Skywest Pinnacle Limited acquired a 73% controlling stake on April 1, 2024, leading to the resignation of previous management and the appointment of Kwok Boon Kit as CEO.
• The mobile application and website for the former teletherapy business were fully impaired in 2024, resulting in a $15,333 loss, as the business ceased operations.

Sentiment

Score: 1

Explanation: The company faces severe financial distress, including zero revenue, increasing net losses, a worsening working capital deficiency, and a 'going concern' warning from auditors. Its internal controls are ineffective, and a significant note payable is in default. The strategic pivot to crypto is unproven and has not yet generated revenue, while the previous business was fully impaired. The overall financial health and operational stability are extremely poor.

Positives

• Successfully launched TokenTraders.net, a fully functional crypto-exchange site with an in-built crypto wallet, on September 23, 2024.
• Operating expenses decreased by $9,325 from $59,898 in 2024 to $50,573 in 2025.

Negatives

• Net loss significantly increased to $60,690 in 2025 from $24,683 in 2024.
• Revenue dropped to $0 in 2025 from $2,000 in 2024.
• Working capital deficiency worsened to $82,439 in 2025 from $71,696 in 2024.
• No cash and cash equivalents at the end of both fiscal years (September 30, 2025 and 2024).
• Accumulated deficit grew to $226,126 as of September 30, 2025.
• A $40,000 note payable is currently in default.
• Disclosure controls and procedures were ineffective.
• Internal control over financial reporting was not effective, with material weaknesses identified.
• The company's stock is not currently trading.
• The previous teletherapy business's mobile application and website were fully impaired in 2024 due to cessation of operations.

Risks

• Substantial doubt about the company's ability to continue as a going concern due to an accumulated deficit of $226,126, a net loss of $60,690, and negative working capital of $82,439.
• Inability to raise additional funds on acceptable terms, which could significantly restrict business operations and prevent taking advantage of new opportunities.
• Additional issuances of equity or convertible debt securities will result in dilution to current shareholders.
• Such securities might have rights, preferences, or privileges senior to common stock.
• Ineffective disclosure controls and procedures and internal control over financial reporting, leading to potential misstatements or fraud.
• Material weaknesses in internal control over financial reporting, including inadequate segregation of duties, ineffective risk assessment, and insufficient written policies.
• The company's stock is not trading, limiting liquidity for investors.
• The $40,000 note payable is in default, potentially leading to legal action or further financial strain.
• Usage of net operating loss carryforwards ($226,000) is subject to annual limitations following greater than 50% ownership changes (Section 382 of the U.S. Internal Revenue Code).

Future Outlook

Management expects working capital requirements to be funded through existing funds and further issuances of equity and debt securities. The company anticipates needing to raise additional capital in the next twelve months to sustain and expand operations, primarily through equity financing and short-term loans from directors. There is a risk that additional financing may not be available on acceptable terms, which could materially restrict business operations.

Management Comments

• "We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities."
• "We will have to raise additional funds in the next twelve months in order to sustain and expand our operations."
• "We anticipate that additional funding will be in the form of equity financing from the sale of our common stock."
• "We have and will continue to seek to obtain short-term loans from our directors, although no future arrangement for additional loans has been made."
• "Our management identified the following material weaknesses in our internal control over financial reporting, which are indicative of many small companies with small staff: (i) inadequate segregation of duties and effective risk assessment; and (ii) insufficient written policies and procedures for accounting and financial reporting."
• "The remediation efforts... are largely dependent upon our securing additional financing to cover the costs of implementing the changes required."

Industry Context

Welsis Corp.'s pivot from online psychological help services (teletherapy) to the cryptocurrency and blockchain industry with TokenTraders.net represents a significant strategic shift. This move places the company in a highly volatile and competitive sector, contrasting sharply with its initial healthcare focus. While the crypto market offers high growth potential, it also carries substantial regulatory and market risks, especially for a company with limited financial resources and a history of operational losses. The complete cessation and impairment of its teletherapy assets indicate a full commitment to this new, unproven venture for the company, without any apparent overlap or synergy with its prior business.

Comparison to Industry Standards

• The company's financial performance, including zero revenue and increasing net losses, is significantly below industry standards for established companies in either the teletherapy or cryptocurrency exchange sectors.
• Unlike successful crypto exchanges (e.g., Coinbase, Binance), Welsis Corp. has not demonstrated revenue generation or profitability from its new platform, TokenTraders.net, since its launch in September 2024.
• The company's substantial working capital deficiency and reliance on future capital raises for basic operations are not comparable to financially stable industry players.
• The identified material weaknesses in internal controls and the "going concern" warning from auditors are red flags that would typically deter institutional investors and are far below the governance standards of publicly traded companies in either industry.

Management Changes

Corporate Governance

Legal Proceedings

• Not involved in any pending legal proceeding or litigation, and no governmental authority is contemplating any proceeding likely to have a material adverse effect.

Related Party Transactions

• During the year ended September 30, 2024, the company incurred debt forgiveness of $53,015. This included $38,615 for a payable amount to the former Director, Dusan Zindovic, and $14,400 for a payable amount to the majority shareholder, Skywest Pinnacle Limited.
• During the year ended September 30, 2024, the company incurred consulting fees of $3,000 to the former Director, Dusan Zindovic.

Stakeholder Impact

• Shareholders: Significant dilution risk from future equity raises, no dividends, stock not trading, and substantial doubt about the company's going concern status. The 73% control by Skywest Pinnacle Limited means minority shareholders have limited influence.
• Creditors: The $40,000 note payable is in default, indicating a high risk of non-payment. The overall financial instability and "going concern" warning increase credit risk.
• Employees: (If any beyond the sole officer) The company's precarious financial position and reliance on future funding pose job security risks.
• Customers (of TokenTraders.net): The company's financial instability and ineffective internal controls could raise concerns about the security and reliability of the crypto exchange platform and its in-built wallet.

Next Steps

• Raise additional funds in the next twelve months to sustain and expand operations, primarily through equity financing and short-term loans from directors.
• Appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management.
• Adopt sufficient written policies and procedures for accounting and financial reporting.
• Generate sufficient revenue from the new cryptocurrency and blockchain business.

Key Dates

Recommendation

The company exhibits severe financial distress, including zero revenue, escalating net losses, a worsening working capital deficiency, and a critical 'going concern' warning from its auditors. Its internal controls are ineffective, and a significant debt is in default. The strategic pivot to the highly speculative cryptocurrency market is unproven and has yet to generate any revenue, while the previous business was fully impaired. The stock is not trading, indicating a complete lack of liquidity. Given the profound financial instability, operational weaknesses, and high execution risk of its new venture, the company presents an extremely high-risk investment with no clear path to profitability or solvency. Investors should exit any position immediately.

Keywords

Welsis Corp, 10-K, cryptocurrency, blockchain, crypto exchange, TokenTraders.net, teletherapy, financial results, net loss, going concern, internal controls, SEC filing, Wyoming corporation, Skywest Pinnacle Limited, Kwok Boon Kit, convertible notes, working capital deficiency