Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

---

 

FORM 10-Q

 

☒      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

FOR THE QUARTERLY PERIOD ENDED APRIL 30, 2020

 

☐      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission File Number 000-52879

 

WECONNECT TECH INTERNATIONAL, INC.

(Exact Name of Registrant as Specified in Its Charter)

 

Nevada		39-2060052
(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification No.)

 

1st Floor, Block A, Axis Business Campus

No. 13A & 13B, Jalan 225, Section 51A

46100 Petaling Jaya

Selangor, Malaysia

+60 17 380 2755
(Address of Principal Executive Offices and Issuer’s
Telephone Number, including Area Code)

 

Securities registered pursuant to Section 12(b) of the Act: None

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

 

Indicate by check mark whether the registrant:  (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ☒    No ☐

 

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒  No  ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one)

 

	Large accelerated filer  ☐	Accelerated filer  ☐
	Non-accelerated filer   ☒	Smaller reporting company  ☒
	Emerging growth company  ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐     No  ☒

 

As of May 27, 2020, the issuer had outstanding 593,610,070 shares of common stock.

  

 

 

 

TABLE OF CONTENTS

 

		Page
PART I	FINANCIAL INFORMATION	3
ITEM 1	Unaudited Condensed Financial Statements	3
	Consolidated Balance Sheets as of April 30, 2019 and July 31, 2019	3
	Consolidated Statements of Operations and Comprehensive Loss for the Nine Months Ended April 30, 2020 and 2019	4
	Consolidated Statement of Changes in Stockholders’ Equity	5
	Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 2020 and 2019	6
	Notes to Unaudited Condensed Financial Statements	7
ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
ITEM 3	Quantitative and Qualitative Disclosures about Market Risk	19
ITEM 4	Controls and Procedures	19
PART II	OTHER INFORMATION	20
ITEM 1	Legal Proceedings	20
ITEM 1A	Risk Factors	20
ITEM 2	Unregistered Sales of Equity Securities and Use of Proceeds	20
ITEM 3	Defaults upon Senior Securities	20
ITEM 4	Mine Safety Disclosures	20
ITEM 5	Other Information	20
ITEM 6	Exhibits	21
SIGNATURES		22

 

 

 

 

 

 

PART I   FINANCIAL INFORMATION

 

ITEM 1  Financial Statements

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEET

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

		April 30, 2020				July 31, 2019
		(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents		$	173			$	3,343
Account receivables			6,341				11,957
Other receivables, deposits and prepayments			22,702				54,050
Amount due from related parties			8,642				829
Inventories			–				–
Total Current Assets			37,858				70,179
Non-Current Assets
Plant and equipment, net			68,274				88,649
Total Non-Current Assets			68,274				88,649
Total Assets		$	106,132			$	158,828
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payables		$	65,853			$	75,777
Other payables and accrued liabilities			171,580				199,086
Amount due to directors			–				–
Amount due to related parties			1,280,997				1,071,620
Current tax liabilities			21,187				21,211
Total Current Liabilities			1,539,617				1,367,694
Non-Current Liabilities
Deferred taxation			9,015				9,449
Total Non-Current Liabilities			9,015				9,449
Total Liabilities			1,548,632				1,377,143
Stockholders' Equity
Common Stock 593,610,070 shares issued and outstanding at April 30, 2020 and July 31, 2019			593,610				593,610
Additional paid-in capital			4,958,781				4,958,781
Accumulated loss			(6,803,196	)			(6,535,337	)
Accumulated other comprehensive loss			(191,695	)			(235,369	)
Total Stockholders' Equity			(1,442,500	)			(1,218,315	)
Total Liabilities and Stockholders' Equity		$	106,132			$	158,828

 

 

(The accompanying notes are integral part of these financial statements)

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2020

(Currency expressed in United States Dollars (“US$”), except for number of shares)

 

 

		For the Three Months Ended April 30,								For the Nine Months Ended April 30,
		2020 (Unaudited)				2019 (Unaudited)				2020 (Unaudited)				2019 (Unaudited)
Revenue		$	4,602			$	644			$	64,890			$	64,386
Cost of Revenue			–				(162	)			(2	)			(10,242	)
Gross Profit			4,602				482				64,888				54,144
Other Income			17,462				17				14,989				538
General and Administrative Expenses			(88,867	)			(222,693	)			(347,736	)			(995,763	)
Loss Before Taxation			(66,803	)			(222,194	)			(267,859	)			(941,081	)
Taxation			–				–				–				–
Loss After Taxation			(66,803	)			(222,194	)			(267,859	)			(941,081	)
Other Comprehensive Income
Foreign Currency Translation Adjustment			54,976				8,282				43,674				9,780
Total Comprehensive Loss for The Period		$	(11,827	)		$	(213,912	)		$	(224,185	)		$	(931,301	)
Earnings Per Share		$	0.00			$	0.00			$	0.00			$	0.00
Weighted Average Number of Common Shares Outstanding
Basic and Diluted			593,610,070				593,610,070				593,610,070				593,610,070

 

 

(The accompanying notes are integral part of these financial statements)

 

 

 

 

WECONNECT TECH INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(Currency expressed in United States Dollars ("US$"), except for number of shares)

 

 

		COMMON STOCK								ADD. PAID UP								ACCUM.				ACCUM. OTHER
		Num. of Shares				Amount				SHARE CAPITAL				DONATED CAPITAL				PROFIT / (LOSS)				COMP. LOSS				TOTAL EQUITY
Balance as of Aug 01, 2018			593,610,070			$	593,610			$	4,958,781			$	–			$	(5,048,961	)		$	(228,461	)		$	274,969
Donated services and rent			–				–				–				–				–				–				–
Issuance of shares			–				–				–				–				–				–				–
Net loss for the year			–				–				–				–				(1,486,376	)			–				(1,486,376	)
Foreign currency translation adjustment			–				–				–				–				–				(6,908	)			(6,908	)
Balance as of July 31, 2019			593,610,070				593,610				4,958,781				–				(6,535,337	)			(235,369	)			(1,218,315	)
Donated services and rent			–				–				–				–				–				–				–
Issuance of shares			–				–				–				–				–				–				–
Net loss for the period			–				–				–				–				(267,859	)			–				(267,859	)
Foreign currency translation adjustment			–				–				–				–				–				43,674				43,674
Balance as of April 30, 2020			593,610,070			$	593,610			$	4,958,781			$	–			$	(6,803,196	)		$	(191,695	)		$	(1,442,500	)

 

 

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS ENDED APRIL 30, 2020

(Currency expressed in United States Dollars (“US$”))

 

 

		Nine Months Ended April 30,
		2020 (Unaudited)				2019 (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(267,859	)		$	(941,081	)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment			–				302,134
Depreciation of plant and equipment			16,489				20,634
Gain on disposal of PPE			(45	)			(504	)
Plant and equipment written off			–				–
Unrealised exchange gain			(13,180	)			(2,670	)
Operating loss before working capital changes			(264,595	)			(621,487	)
Changes in operating assets and liabilities:
Account receivables			5,131				(1,735	)
Other receivables, deposits and prepayments			29,235				(15,345	)
Amount due to directors			–				(51,100	)
Amount due to related parties			254,122				630,658
Account payables			(7,996	)			71,834
Other payables and accrued liabilities			(19,050	)			(24,637	)
Net cash used in operating activities			(3,153	)			(11,812	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales proceed from disposal of plant and equipment			73				2,087
Purchase of plant and equipment			–				(496	)
Net cash generated from investing activities			73				1,591
Change in cash and cash equivalents			(3,080	)			(10,221	)
Foreign currency translation adjustment			(90	)			(222	)
NET CHANGE IN CASH AND CASH EQUIVALENTS			(3,170	)			(10,443	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			3,343				14,159
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	173			$	3,716

 

(The accompanying notes are integral part of these financial statements)

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

NOTES TO CONDENSED FINANCIAL STATEMENTS

FOR THE THREE AND NINE MONTHS ENDED APRIL 30, 2020

(Amount expressed in United States Dollars (“US$”), except for number of shares or stated otherwise)

(Unaudited)

 

1.	Organization and Business Background

 

WECONNECT Tech International Inc. was incorporated under the laws of the State of Nevada on April 25, 2007. For purposes of financial statements presentation, WECONNECT Tech International Inc. and its subsidiary are herein referred to as “the Company” or “We”.

 

Our business office is located at 1st Floor, Block A, Axis Business Campus, No. 13A & 13B, Jalan 225, Section 51A, 46100 Petaling Jaya, Selangor, Malaysia.

 

On June 8, 2018, we acquired approximately 99.662% equity interest of MIG Mobile Tech Bhd, a public limited company incorporated in Malaysia. MIG Mobile Tech Bhd is mainly engaged in e-commerce, online to offline marketplace and payment eco-system. The non-controlling interest remaining will be 0.338%. This transaction was accounted for as a transaction among entities under common control and the assets, liabilities, revenues, and expenses of MIG Mobile Tech Bhd were carried over to and combined with the Company at historical cost, and as if the transfer occurred at the beginning of the period. We have conducted our business through MIG Mobile Tech Bhd since the acquisition.

 

Details of the Company’s subsidiary:

 

No		Company Name		Place and date of incorporation		Particulars of issued capital		Principal activities
1		MIG Mobile Tech Bhd		Malaysia Oct 1, 2015		50,000,000 of ordinary shares		E-commerce, online to offline marketplace and payment eco-system

  

2.	Summary of Significant Accounting Policies

 

Basis of Presentation

 

The interim financial information referred to above has been prepared and presented in conformity with accounting principles generally accepted in the United States applicable to interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. The interim financial information has been prepared on a basis consistent with prior interim periods and years and includes all disclosures that are necessary and required by applicable laws and regulations. This report on Form 10-Q should be read in conjunction with the Company’s financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended July 31, 2019.

 

In the opinion of management, all adjustments (consisting of normal and recurring accruals) considered necessary for fair presentation of the Company’s financial position, results of operations and cash flows have been included. Operating results for the nine months ended April 30, 2020, are not necessarily indicative of the results that may be expected for future quarters or the year ending July 31, 2020.

 

Basis of Consolidation

 

The consolidated financial statements include the accounts of the Company and its subsidiary. All inter-company accounts and transactions have been eliminated upon consolidation.

 

Use of Estimates

 

The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America 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 revenues and expenses during the reporting period. The Company regularly evaluates estimates and assumptions related to valuation of donated services and rent, fair value measurements and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

  

 

 

Cash and Cash Equivalents

 

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments. As of April 30, 2020, and July 31, 2019, the Company had $173 and $3,343 in cash and cash equivalents, respectively.

 

Plant and Equipment

 

Plant and equipment is stated at cost less accumulated depreciation and impairment. Depreciation of plant and equipment are calculated on the straight-line method over their estimated useful lives as follows:

 

Classification	Principal annual rate / Estimated useful lives
Computer hardware and software	4 years
Furniture and fittings	10 years
Office equipment	5 years
Telecommunication	2 years
Renovation	10 years
Signboard	5 years
Security and alarm system	4 years

 

Expenditures for maintenance and repairs are expenses as incurred.

 

Inventories

 

Inventories consisting of products available for sell, are stated at the lower of cost or market value. Cost of inventory is determined using the first-in, first-out (FIFO) method. Inventory reserve is recorded to write down the cost of inventory to the estimated market value due to slow-moving merchandise and damaged goods, which is dependent upon factors such as historical and forecasted consumer demand, and promotional environment. The Company takes ownership, risks and rewards of the products purchased. Write downs are recorded in cost of revenues in the Statements of Operation and Comprehensive Income.

 

Revenue Recognition

 

Revenue recognized when it is probable that the economic benefits associated with the transaction will flow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured at the fair value of consideration received or receivable.

 

a)	Sales of goods
	Revenue from sales of goods is recognized when the significant risks and rewards of ownership have been transferred to the buyer. Revenue is measured at the fair value of the consideration received or receivable, net of discounts and taxes application to the revenue.

 

b)	Rendering of Services
	Revenue from rendering of services is measured by reference to the stage of completions of the transaction at the reporting date.

 

c)	Interest income
	Interest income is recognized using the effective interest method and accrued on a timely basis.

  

Foreign Currencies Translation

 

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statement of operations.

  

 

 

 

The functional currency of the Company is the United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. In addition, the subsidiary maintains its books and record in a local currency, Malaysian Ringgit (“MYR” or “RM”), which is functional currency as being the primary currency of the economic environment in which the entity operates.

 

In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of other comprehensive income. The Company has not to, the date of these financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

 

Translation of amounts from the local currency of the Company into US$1 has been made at the following exchange rates for the respective years:

 

		As of and for the period ended April 30,
		2020				2019
Period average MYR : US$1 exchange rate			4.2717				4.1257
Period end MYR : US$1 exchange rate			4.3260				4.1355

 

Fair Value of Financial Instruments

 

The carrying value of the Company’s financial instruments: cash and cash equivalents, trade receivable, deposits and other receivables, amount due to related parties and other payables approximate at their fair values because of the short-term nature of these financial instruments.

 

The Company also follows the guidance of the ASC Topic 820-10, “Fair Value Measurements and Disclosures” ("ASC 820-10"), with respect to financial assets and liabilities that are measured at fair value. ASC 820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

 

Level 1:

Observable inputs such as quoted prices in active markets;

 

Level 2:

Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

 

Level 3:

Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

Income Tax

 

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. There were no significant deferred tax items as of April 30, 2020 and July 31, 2019.

  

The Company applied the provisions of ASC 740-10-50, Accounting for Uncertainty In Income Taxes, which provides clarification related to the process associated with accounting for uncertain tax position recognized in our financial statements. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. At April 30, 2020 and July 31, 2019, management considered that the Company had no uncertain tax positions and will continue to evaluate for uncertain positions in the future.

 

 

 

  

Basic and Diluted Net Income/(Loss) Per Share

 

The Company calculates net income/(loss) per share in accordance with ASC Topic 260, “Earnings per Share.” Basic income/(loss) per share is computed by dividing the net income/(loss) by the weighted-average number of common shares outstanding during the period. Diluted income per share is computed similar to basic income/(loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common stock equivalents had been issued and if the additional common shares were dilutive. Diluted earnings per share excludes all dilutive potential shares if their effect is anti-dilutive. As at April 30, 2020 and 2019, there were no potentially dilutive securities outstanding.

  

Recent Accounting Pronouncements

 

Management has considered all recent accounting pronouncements issued and their potential effect on our financial statements. The Company's management believes that these recent pronouncements will not have a material effect on the Company's condensed financial statements.

 

3.	Related Party Transactions

 

During the nine months ended April 30, 2020, MIG Network & Consultancy Sdn Bhd (the “MIG Network and Consultancy”), a Malaysian company of which the Executive Directors of the Company are the major shareholders, advanced to the Company an aggregate amount of $235,215, or the equivalent of RM1,004,768, for working capital purposes. The advances were unsecured, interest free, and due on demand. As of April 30, 2020, and July 31, 2019, there were $1,280,997 and $1,071,620 advances outstanding, respectively.

 

		For the Nine Months ended				For the Nine Months ended
		April 30, 2020				April 30, 2019
Revenue generated from:
East Cloud Sdn Bhd		$	16,470			$	–
MIG O2O Berhad			–				19,391
Creative Property Management Sdn Bhd			6,390				–
MIG Network & Consultancy Sdn Bhd			15,042				8,483
WPAY International Berhad			–				8,962
		$	37,902			$	36,836
Payroll outsourcing charge back to:
MIG O2O Berhad		$	–			$	36,365
MIG Network & Consultancy Sdn Bhd			212				1,572
North Cloud Sdn Bhd			–				18,225
		$	212			$	56,162
Legal fee paid to
MIG Network & Consultancy Sdn Bhd		$	6,700			$	6,850
Rental paid to
MIG Network & Consultancy Sdn Bhd		$	16,906			$	58,503

  

 

 

 

 

		April 30, 2020				July 31, 2019
Amount due from related parties:
Creative Property Management Sdn Bhd		$	551			$	829
MIG O2O Sdn Bhd			8,091				–
		$	8,642			$	829
Amount due to related parties:
MIG Network & Consultancy Sdn Bhd		$	1,280.997			$	1,071,620
MIG O2O Berhad			–				–
		$	1,280,997			$	1,071,620

 

4.	Stockholders’ Equity

 

Common Stock

   

As of April 30, 2020, and July 31, 2019, there are 593,610,070 shares of common stock issued and outstanding.

 

Preferred Stock

 

As of April 30, 2020, and July 31, 2019, there are no issued and outstanding preferred stocks.

 

5.	Subsequent Events

 

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred after April 30, 2020 up through the date the Company presented these financial statements, except for the Share Exchange Agreement dated June 18, 2019, by and among WeConnect Tech International, Inc., OZ Seventy Five Holdings (M) Berhad and certain Investors which will expire on June 30, 2020.

  

6.	Commitment and Contingencies

The Company entered into an agreement with Digiland Pte Ltd. on September 12, 2017, amounting to SGD$1,600,000 (approximately US$1,168,000) for eMobile Apps (User and Merchant) and Backed Admin Web Portal. The remaining cost to complete the eMobile Apps (User and Merchant) and Backed Admin Web Portal in future is approximately US$584,000. The Company and Digiland are parties to legal claims against each other, as more fully described in Note 7 Estimates of Notes to our Condensed Financial Statements.

 

When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses an estimate of the possible loss or range of loss, if such estimate can be made or discloses that an estimate cannot be made.

 

The assessments whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is estimable, often involve a series of complex judgments about future events. Management is often unable to estimate a range of reasonably possible loss, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel or unsettled legal theories or a large number of parties. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, therefore, no contingencies were provided as at April 30, 2020.

  

 

 

 

7.

Estimates

 

On November 12, 2018, MIG Mobile Tech Berhad, a subsidiary of the Company, filed a claim against Digiland Private Limited (“Digiland”) for breach of contract and misrepresentation arising from, among other things, Digiland’s failure to perform under its supplier contract with the Company. In its suit, MIG Mobile Tech Berhad is seeking a return of funds previously paid to Digiland in the amount of S$800,000 Singaporean Dollars (approximately US $584,000) together with a claim for damages to be assessed by the Singapore Court. Within the same suit, Digiland has filed a counterclaim against MIG Mobile Tech Berhad for the balance of the payment due to it under contract in the sum of S$800,000, together with a claim for damages to be assessed by the Singapore Court.

 

In accordance with applicable accounting guidance, the Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred, and the amount of loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings, investigations or claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. The Company discloses the amount of the accrual if the financial statements would be otherwise misleading, which was not the case for the three months ended April 30, 2020.

  

When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses an estimate of the possible loss or range of loss, if such estimate can be made or discloses that an estimate cannot be made.

 

The assessments whether a loss is probable or a reasonable possibility, and whether the loss or a range of loss is estimable, often involve a series of complex judgments about future events. Management is often unable to estimate a range of reasonably possible loss, particularly where (i) the damages sought are substantial or indeterminate, (ii) the proceedings are in the early stages, or (iii) the matters involve novel or unsettled legal theories or a large number of parties. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any.

 

Prior to the filing of the its claims against Digiland, the Company recognized the amount of $596,912 in receivable, deposits and prepayments. The amount is being recognized as deposit because the development of the application-based software has not been materialized to-date. Subsequent to the filing of its claims, the Company has recognized a full impairment in the amount of $596,612. The Company is unable to ascertain the result of the legal proceedings as the proceedings are in the early stages and there is uncertainty arising from the development of the case.

  

We expect that the aggregate range of reasonably possible losses, in excess of accruals established, if any, for such legal proceeding is likely to range from S$800,000 and upwards if Digiland prevails in its counterclaim against us. The estimated aggregate range of reasonably possible losses is based upon currently available information for those proceedings in which the Company is involved, taking into account the Company’s best estimate of such losses for those cases for which such estimate can be made. Those matters for which an estimate is not possible are not included within this estimated range. Therefore, such range represents what the Company believes to be an estimate of possible loss only for those matters meeting such criteria. It does not represent the Company’s maximum loss exposure.

 

As the COVID-19 pandemic had seriously affected the economy and business environment worldwide, in view of the uncertainty on the recovery of the refund of deposit paid to Digiland and the prolong legal proceedings and the Company may not have the resources to continue pursue the case, the Company has decided to discontinue the proceedings on 17^th April 2020.

 

8.	Significant Event

 

The Share Exchange Agreement dated June 18, 2019, by and among WeConnect Tech International, Inc., OZ Seventy Five Holdings (M) Berhad and certain Investors has been further extended to June 30, 2020. Extension Agreement dated December 27, 2019 was signed by the parties to the agreement.

 

 

 

 

ITEM 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

Forward-looking statements

 

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this quarterly report on Form 10-Q. This quarterly report on Form 10-Q contains certain forward-looking statements and our future operating results could differ materially from those discussed herein. Certain statements contained in this discussion, including, without limitation, statements containing the words "believes," "anticipates," "expects" and the like, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). However, as we issue “penny stock,” as such term is defined in Rule 3a51-1 promulgated under the Exchange Act, we are ineligible to rely on these safe harbor provisions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We disclaim any obligation to update any such factors or to announce publicly the results of any revisions of the forward-looking statements contained herein to reflect future events or developments.

 

Currency and exchange rate

 

Unless otherwise noted, all currency figures quoted as “U.S. dollars”, “dollars” or “$” refer to the legal currency of the United States. Throughout this report, assets and liabilities of the Company’s subsidiaries are translated into U.S. dollars using the exchange rate on the balance sheet date. Revenue and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income within the statement of stockholders’ equity.

 

Overview

 

We are an IT-solutions provider and until recently, provided a multi-dimensional e-commerce platform that facilitates shopping, business, trade and integrates online & office transactions in a single application. Prior to June 2019, we developed and operated a mobile platform designed to consolidate users’ cash and connect merchants to consumers by offering a cashless form of transaction, in-app shopping and a user rewards system. On June 2019, we ceased the operation of the platform but continue to maintain our IT solution business operations. During the nine months ended April 30, 2020, and 2019, we suffered comprehensive losses of $212,885 and $931,301, respectively.

 

In March 2019, we embarked on a diversification plan to move into the energy, oil & gas sector to strengthen our financial position. On October 24, 2019, we entered into a nonbinding Memorandum of Understanding with MIG Next Technologies Sdn. Bhd. (the “MOU”) pursuant to which the parties agreed to explore a strategic partnership to exploit that certain thermal catalytic cracking technology with proprietary permanent catalyst, named as CHCSTDRP (CH Closed System Thermally Depolymerisation Refining Process) Technology, in accordance with the terms and conditions set forth in the MOU. Pursuant to the MOU, MIG Next Technologies Sdn. Bhd. (“MIG Next”), agreed not to initiate, solicit, encourage, directly or indirectly, or accept any offer or proposal, regarding a strategic partnership relating to the exploitation of such technology by any person other than Company. The MOU expires on the date that is six (6) months from the date of the MOU unless otherwise extended by the parties.

 

Two Hundred Sixty Thousand and Two Hundred Fifty Thousand (260,000 and 250,000 respectively) ordinary shares of MIG Next, representing 27.66% and 26.60%, respectively, of the issued and outstanding securities of MIG Next, are held by Shiong Han Wee, our Chief Executive Officer and Director and Kwueh Lin Wong, our Secretary and Director.

 

Our goal is to explore green technology in the pursuit of improving the quality of living through positive economic contributions and responsible energy production. We believe that we will require approximately USD3,000,000 to fund our diversification plan for the next 18 months. We intend to finance our business expansion efforts through sales of our securities to existing shareholders and loans from existing shareholders or financial institutions.

 

 

 

  

History

 

We were incorporated under the laws of the State of Nevada on April 25, 2007. Prior to our acquisition of MIG Mobile Tech Berhad (“MMT”), a corporation organized under the laws of Malaysia, we were an exploration stage company engaged in the acquisition and exploration of mineral properties. We were also a “shell company” with no meaningful assets or operations other than our efforts to identify and merge with an operating company. We operated under the name “Contact Minerals Corp. and our securities traded under the symbol “CNTM.” Effective November 6, 2017, we changed our name to “WECONNECT Tech International, Inc.” and our symbol to “WECT.” Our business office is located at 1^st Floor, Block A, Axis Business Campus, No. 13A & 13B, Jalan 225, Section 51A, 46100 Petaling Jaya, Selangor, Malaysia. Effective June 8, 2018, we consummated the acquisition of 49,831,007 shares of MMT (the “MMT Shares”), constituting approximately 99.662% of the issued and outstanding securities of MMT. As a result of our acquisition of the MMT Shares, we ventured into the payment solution business with a focus on users located in Malaysia.

  

Effective August 29, 2017, the Company and Kerry McCullagh, the Company’s former Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer (the “Seller”) entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Shiong Han Wee and Kwueh Lin Wong (collectively, the “Purchasers”). Under the terms of the Stock Purchase Agreement, the Purchasers agreed to purchase 7,000,000 shares from the Seller (the Seller Shares”) and 78,770,000 shares from the Company (the “Issued Shares”) for an aggregate purchase price of $350,000. The sale of the Seller Shares and the Issued Shares consummated September 11, 2017.

 

Upon the consummation of the sale, Kerry McCullagh, Alex Langer and William McCullagh, our former executive officers and directors, resigned from all of their positions with the Company. Their resignations were not due to any dispute or disagreement with the Company on any matter relating to the Company's operations, policies or practices.

 

The following individuals were appointed to serve in the positions set forth next to their names below:

 

Name		Age		Position
Shiong Han Wee		42		Director, Chief Executive Officer
Kwueh Lin Wong		42		Director, Secretary

 

Chee Kuen Chim and Pui Hold Ho were each appointed to serve as a Director of the Company effective September 22, 2017. Mr. Chim resigned from his positions with the Company effective May 11, 2018, and Mun Wai Wong was appointed to fill the vacancy caused by such resignation on June 1, 2018.

 

Effective June 1, 2018, Kwueh Lin Wong resigned from his position as the Chief Financial Officer of the Company and Chow Wing Loke was appointed to fill the vacancy caused by Mr. Wong’s resignation.

 

Effective June 8, 2018, we consummated the acquisition of 49,831,007 shares of MMT (the “MMT Shares”), constituting approximately 99.662% of the issued and outstanding securities of MMT. As consideration, we agreed to issue to the MMT shareholders 498,310,070 shares of our common stock, at a value of US $0.05 per share, for an aggregate value of US$24,915,503.50. As a result of our acquisition of the MMT Shares, we entered into the payment solution business with a focus on users located in Malaysia.

 

MMT was established in 2015 and commenced operations in Malaysia on October 2015. MMT has developed and operated a mobile platform designed to consolidate users’ cash and connect merchants to consumers by offering a cashless form of transaction, in-app shopping and a user rewards system. On June 2019, MMT ceased the operation of the platform and currently only maintains its IT solution business operations.

 

In March 2019, we embarked on a diversification plan to move into the energy, oil & gas sector to strengthen our financial position. On October 24, 2019, we entered into a nonbinding Memorandum of Understanding with MIG Next Technologies Sdn. Bhd. (the “MOU”) pursuant to which the parties agreed to explore a strategic partnership to exploit that certain thermal catalytic cracking technology with proprietary permanent catalyst, named as CHCSTDRP (CH Closed System Thermally Depolymerisation Refining Process) Technology, in accordance with the terms and conditions set forth in the MOU. Pursuant to the MOU, MIG Next Technologies Sdn. Bhd. (“MIG Next”), agreed not to initiate, solicit, encourage, directly or indirectly, or accept any offer or proposal, regarding a strategic partnership relating to the exploitation of such technology by any person other than Company. The MOU expires on the date that is six (6) months from the date of the MOU unless otherwise extended by the parties.

 

 

  

Two Hundred Sixty Thousand and Two Hundred Fifty Thousand (260,000 and 250,000 respectively) ordinary shares of MIG Next, representing 27.66% and 26.60% respectively of the issued and outstanding securities of MIG Next, are held by Shiong Han Wee, our Chief Executive Officer and Director and Kwueh Lin Wong, our Secretary and Director.

 

Our goal is to explore green technology in the pursuit of improving the quality of living through positive economic contributions and responsible energy production. We believe that we will require approximately USD3,000,000 to fund our diversification plan for the next 18 months. We intend to finance our business expansion efforts through sales of our securities to existing shareholders and loans from existing shareholders or financial institutions.

 

Going Concern

 

The financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. Accordingly, our financial statements do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation. As at April 30, 2020, the Company has working capital deficiency of $1,501,759 and has accumulated losses of $6,803,196 since its inception. Further losses are anticipated in the development of the business, raising substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

 

The ability to continue as a going concern is dependent upon the Company generating profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management expects to finance operating costs over the next twelve months with loans from directors and/or private placements of common stock, but we cannot guarantee that we will be able to achieve same.

 

Results of Operations

 

The following table provides selected financial data about our company as of April 30, 2020 and 2019.

 

		For the Three Months Ended April 30,								For the Nine Months Ended April 30,
		2020 (Unaudited)				2019 (Unaudited)				2020 (Unaudited)				2019 (Unaudited)
Revenue		$	4,602			$	644			$	64,890			$	64,386
Cost of revenue			–				(162	)			(2	)			(10,242	)
Other income			17,462				17				14,989				538
General and administrative expenses			(88,867	)			(222,693	)			(347,736	)			(995,763	)
Other comprehensive income / (loss)			54,976				8,282				43,674				9,780
Total Comprehensive Loss for the Year		$	(11,827	)		$	(213,912	)		$	(224,185	)		$	(931,301	)

 

Three Months Ended April 30, 2020, Compared to Three Months Ended April 30, 2019

 

Revenues. During the three months ended April 30, 2020, and 2019, we earned revenues of $4,602 and $644, respectively. The increase in net revenues is primarily attributable to increase in rental of event equipment fee during the three months ended.

 

During the three months ended April 30, 2020, and 2019, the following customers accounted for 10% or more of our total net revenues:

 

		Three months ended April 30, 2020								Three months ended April 30, 2019
		Revenues				Percentage of revenues				Revenues				Percentage of revenues
MIG Network & Consultancy Sdn Bhd		$	4,244				92.22%			$	–				–
Creative Property Management Sdn Bhd			1,545				33.57%				–				–
MIG O2O Berhad			–				–				–				–
East Cloud Sdn Bhd			(450	)			(9.78%	)			–				–
North Cloud Sdn Bhd			(737	)			(16.01%	)			–				–
		$	4,602							$	–

 

 

 

  

Creative Property Management Sdn Bhd, East Cloud Sdn Bhd, MIG O2O Berhad and MIG Network & Consultancy Sdn Bhd are affiliated with our executive officers and directors, Shiong Han Wee and Kwueh Lin Wong. North Cloud Sdn Bhd is a shareholder holding less than 5% of our issued and outstanding securities.

 

General and Administrative Expenses. General and administrative expenses were $88,867 and $222,693 for the three months ended April 30, 2020, and 2019, respectively. The decrease in operating expenses was primarily attributable to the decrease of payroll expenses and rental of office.

 

During the three months ended April 30, 2020 and 2019, no vendors accounted for 10% or more of our total operating costs. 

 

Gross Profit. We recorded a gross profit of $4,602 and gross profit of $482 for the three months ended April 30, 2020, and 2019, respectively. The increase in gross profit is mainly attributable to the increase in revenue of rental of event equipment charged and less cost of revenue incurred.

 

Income Tax Expense. We did not record income tax expenses for the three months ended April 30, 2020, and 2019 respectively.

 

Comprehensive Loss. We suffered a comprehensive net loss of $11,827 and $213,912 for the three months ended April 30, 2020, and 2019, respectively. The decrease in gross loss is primarily attributable to the increase of revenues earned and lower general and administrative expenses recorded during the period.

 

Nine Months Ended April 30, 2020, Compared to Nine Months Ended April 30, 2019

 

Revenues. During the nine months ended April 30, 2020, and 2019, we earned revenues of $64,890 and $64,386, respectively. No significant difference noted between the revenue earned during the period.

 

During the nine months ended April 30, 2020, and 2019, the following customers accounted for 10% or more of our total net revenues:

 

		Nine months ended April 30, 2020								Nine months ended April 30, 2019
		Revenues				Percentage of revenues				Revenues				Percentage of revenues
North Cloud Sdn Bhd		$	26,961				41.55%			$	26,662				41.5%
Creative Property Management Sdn Bhd			6,394				9.85%				–				–
East Cloud Sdn Bhd			16,482				25.40%				–				–
MIG O2O Berhad			–				–				19,391				30.2%
MIG Network & Consultancy Sdn Bhd			15,053				23.20%				8,483				13.8%
WPAY International Berhad			–				–				8,962				13.9%
		$	64,890							$	54,499

 

Creative Property Management Sdn Bhd, East Cloud Sdn Bhd, MIG O2O Berhad and MIG Network & Consultancy Sdn Bhd are affiliated with our executive officers and directors, Shiong Han Wee and Kwueh Lin Wong. North Cloud Sdn Bhd is a shareholder holding less than 5% of our issued and outstanding securities.

 

General and Administrative Expenses. General and administrative expenses were $347,736 and $995,763 for the nine months ended April 30, 2020, and 2019, respectively. The decrease in operating expenses was primarily attributable to the decrease of payroll expenses and rental of office.

 

During the nine months ended April 30, 2020 and 2019, no vendors accounted for 10% or more of our total operating costs.

  

Gross Profit. We recorded a gross profit of $64,888 and gross profit of $54,144 for the nine months ended April 30, 2020, and 2019, respectively. The increase in gross profit is mainly attributable to the increase in revenue of rental of event equipment charged and less cost of revenue incurred.

 

 

 

 

Income Tax Expense. We did not record income tax expenses for the nine months ended April 30, 2020, and 2019 respectively.

 

Comprehensive Loss. We suffered a net loss of $224,185 and $931,301 for the nine months ended April 30, 2020, and 2019, respectively. The decrease in comprehensive loss is primarily attributable to the decrease of general and administrative expenses.

 

Liquidity and Capital Resources

 

Working Capital

 

		April 30, 2020				July 31, 2019
Current Assets		$	37,858			$	70,179
Current Liabilities			1,539,617				1,367,694
Working Capital Deficit		$	(1,501,759	)		$	(1,297,515	)

 

We had current assets of $37,858 consisting primarily of account receivables of $6,341, other receivables, deposits and prepayments of $22,702, amount due from related parties of $8,642 and cash and cash equivalents of $173 as of April 30, 2020. Our current liabilities consisted of $1,539,617, $ 1,280,997 of amount due to related parties, $171,580 of other payables and accruals, $21,187 of current tax liabilities and $65,853 of account payables.

  

As of July 31, 2019, we had current assets of $70,179 and current liabilities of $1,367,694. Our current assets consisted of account receivables of $11,957, other receivables, deposits and prepayments of $54,050, amount due from related parties $829, and cash and cash equivalents of $3,343. Our current liabilities consisted of $1,071,620 of amount due to related parties, $199,086 of other payables and accruals, $21,211 of current tax liabilities and $75,777 of account payables.

 

Cash Flows

 

		Nine Months Ended				Nine Months Ended
		April, 2020				April 30, 2019
Net Cash Used in Operating Activities		$	(3,153	)		$	(11,812	)
Net Cash Provided by Investing Activities		$	73			$	1,591
Net Cash Provided by Financing Activities		$	–			$	–
Effects on changes in foreign exchange rate		$	(90	)		$	(222	)
Net decrease in cash and cash equivalents		$	(3,080	)		$	(10,221	)

  

Cash Flow from Operating Activities

 

During the nine months ended April 30, 2020, net cash used in operating activities was $3,153, compared to $11,812 for the nine months ended April 30, 2019. Net cash used in operating activities during the nine months ended April 30, 2020 consisted primarily of a net loss of $267,859, a decrease in account payables of $7,996, a decrease in other payables and accrued liabilities of $19,050, unrealized exchange gain of $13,180 and gain on disposal of plant and equipment $45, offset by an increase in account receivables of $5,131, an increase in other receivables, deposits and prepayments of $29,235, an increase in amount due to related parties of $254,122, and depreciation of plant and equipment of $ 16,489.

 

Net cash used in operating activities during the nine months ended April 30, 2019 consisted primarily of a net loss of $941,081, a decrease in account receivables of $1,735, a decrease in other receivables, deposits and prepayments of $15,345, a decrease in amount due to directors of $51,100, a decrease in other payables and accrued liabilities of $24,637, unrealized exchange gain of $2,670 and gain on disposal of plant and equipment $504, offset by an increase in amount due to related parties of $630,658, an increase in account payables of $71,834, impairment of $302,134, and depreciation of plant and equipment of $ 20,634.

  

 

 

 

Cash Flow from Investing Activities

 

During the nine months ended April 30, 2020, there was net cash generated from investing activities of $73 consisted of sales proceeds from disposal of plant and equipment of $73.

 

During the nine months ended April 30, 2019, there was net cash generated from investing activities of $1,591 consisted of sales proceeds from disposal of plant and equipment of $2,087 and offset by $496 from purchase of plant and equipment.

 

Cash Flow from Financing Activities

 

During the nine months ended April 30, 2020, financing activities did not provide any net cash.

 

During the nine months ended April 30, 2019, financing activities did not provide any net cash.

 

Financing Requirements

 

During the twelve-month period following the date of this quarterly report, we anticipate that we will not generate sufficient operating revenue. Accordingly, we will be required to obtain additional financing in order to pursue our plan of operations during and beyond the next twelve months. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock or shareholder loans. However, there is no assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our business plan should we decide to proceed.

 

We anticipate continuing to rely on equity sales of our common shares and advances from our executive officers and directors in order to continue to fund our business operations. Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance that we will achieve any additional sales of our equity securities or arrange for debt or other financing to fund our business operations.

 

Off-Balance Sheet Arrangements

 

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

 

  

Critical Accounting Policies

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Based on this definition, we have not identified any additional critical accounting policies and judgments. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in note 2 to our financial statements. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

 

 

 

  

Recent accounting pronouncements

 

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

  

ITEM 3 Quantitative and Qualitative Disclosures about Market Risk

 

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

 

ITEM 4 Controls and Procedures

 

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

 

We conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (Exchange Act), under the supervision of and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer. Based on that evaluation, our management, including the Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures, subject to limitations as noted below, as of April 30, 2020, and during the period prior to and including the date of this report, were effective to ensure that all information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (i) recorded, processed, summarized and reported, within the time periods specified in the Commission’s rule and forms; and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

 

Inherent Limitations

 

Because of its inherent limitations, our disclosure controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.

 

 

Changes in Internal Control over Financial Reporting

 

Our annual report on Form 10-K reported that our internal control over financial reporting was effective as of July 31, 2019. Subject to the foregoing disclosures in this Item 4, there were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended April 30, 2020, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 

 

 

 

 

 

PART II OTHER INFORMATION

 

ITEM 1 Legal Proceedings

 

On November 12, 2018, MIG Mobile Tech Berhad, a subsidiary of the Company, filed a claim against Digiland Private Limited (“Digiland”) for breach of contract and misrepresentation, among other claims, in connection with Digiland’s failure to perform under its supplier contract with the Company. In its suit, MIG Mobile Tech Berhad is seeking a return of funds previously paid to Digiland in the amount of S$800,000 Singaporean Dollars (approximately US $584,000) together with a claim for damages to be assessed by the Singapore Court. Within the same suit, Digiland has filed a counterclaim against MIG Mobile Tech Berhad for the balance sum of S$800,000 together with a claim for damages to be assessed by the Singapore Court.

 

As the COVID-19 pandemic had seriously affected the economy and business environment worldwide, in view of the uncertainty on the recovery of the refund of deposit paid to Digiland and the prolong legal proceedings and the Company may not have the resources to continue pursue the case, the Company has decided to discontinue the proceedings on 17^th April 2020. This matter is more fully described in Note 7 Estimates of Notes to our Consolidated Financial Statements.

 

Other than the item set forth in Note 5 Subsequent Events of Notes to our Consolidated Financial Statements, we are not a party to any legal or administrative proceedings that we believe, individually or in the aggregate, would be likely to have a material adverse effect on our financial condition or results of operations.

 

ITEM 1A Risk Factors

 

None.

 

ITEM 2 Unregistered Sales of Equity Securities and Use of Proceeds

 

None.

 

ITEM 3 Defaults upon Senior Securities

 

None.

 

ITEM 4 Mine Safety Disclosures

 

Not applicable.

 

ITEM 5 Other Information

 

None.

  

 

 

 

ITEM 6 Exhibits

 

Exhibit Number	Description of Exhibit
3.1	Amended and Restated Articles of Incorporation (1)
3.3	Bylaws.(2)
4.1	Form of Common Stock Certificate(3)
4.2	Description of Securities(4)
10.1	Development Agreement, dated October 16, 2017, by and between Digiland Pte. Ltd. and MIG Mobile Tech Bhd.(5)
10.2	Letter of Appointment, dated April 1, 2016, by and between MIG Mobile Tech Berhad and Dato’ Stanley Kwuen Lin Wong(5)
10.3	Letter of Appointment, dated April 1, 2016, by and between MIG Mobile Tech Berhad and Dato’ Brian Wee Shiong Han(5)
10.4	Letter of Appointment, effective March 1, 2018, by and between MIG Mobile Tech Berhad and Chow Wing Loke(5)
10.5	Form of Letter of Appointment of Independent Director – Ho Pui Hold(3)
10.6	Form of Letter of Appointment of Independent Director – Wong Mun Wai(3)
14	Code of Ethics (5)
21	List of Subsidiaries(4)
31.1	Certification of Chief Executive Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act.*
31.2	Certificate of Chief Financial Officer required under Rule 13a-14(a)/15d-14(a) under the Exchange Act. *
32.1	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
99.1	Audit Committee Charter.(6)
99.2	Pre-Approval Procedures. (6)
101.INS	XBRL Instance Document*
101.SCH	XBRL Schema Document*
101.CAL	XBRL Calculation Linkbase Document*
101.DEF	XBRL Definition Linkbase Document*
101.LAB	XBRL Label Linkbase Document*
101.PRE	XBRL Presentation Linkbase Document*

____________________

Notes:
(1)	Incorporated by reference from Exhibit 1 of our Definitive Information Statement on Schedule 14C filed with the Securities and Exchange Commission on October 18, 2017.
(2)	Incorporated by reference from our Registration Statement on Form SB-2 filed with the Securities and Exchange Commission on October 1, 2007.
(3)	Incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 29, 2018.
(4)	Incorporated by reference from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 29, 2019.
(5)	Incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on June 11, 2018.
(6)	Incorporated by reference from our Current Report on Form 8-K filed with the Securities and Exchange Commission on September 22, 2017.

 

*Filed Herewith.

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

	WECONNECT TECH INTERNATIONAL, INC.
	By:	/s/ Shiong Han Wee
		Shiong Han Wee
		Chief Executive Officer
Date: June 11, 2020