UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

AMENDMENT NO. 1 TO

FORM 10-K

 

☐   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended July 31, 2020

 

OR

 

☐   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ____________ to ____________

 

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 of		(I.R.S. Employer
incorporation or organization)		Identification No.)
1st Floor, Block A, Axis Business Campus No. 13A & 13B, Jalan 225, Section 51A 46100 Petaling Jaya Selangor, Malaysia		N/A
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: + 60 17 380 2755

 

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

Securities registered pursuant to Section 12(g) of the Act: Common Stock

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes ☐  No ☒

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.     Yes ☐ No ☒

 

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 (§ 232.405 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☒

 

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.

 

Large accelerated filer ☐	Accelerated filer  ☐
Non-accelerated filer  ☐  (Do not check if a smaller reporting company)	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 ☐

 

Approximate aggregate market value of the voting stock held by non-affiliates of the registrant as of January 30, 2020, computed by reference to the price at which our common shares was sold on that date: US$0.

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

 

Common Stock		Outstanding at May 21, 2021
Common Stock, US$.001 par value per share		593,610,070 shares

 

DOCUMENTS INCORPORATED BY REFERENCE: None

 

 

 

 

EXPLANATORY NOTE

 

This Amendment No. 1 to the Company’s Form 10-K (the “Amendment”) amends the Annual Report of WeConnect Tech International, Inc. on Form 10-K for the fiscal year ended July 31, 2020 (the “Form 10-KA”), as filed with the Securities and Exchange Commission on June 7, 2021, and is being filed solely amend and restate the Report of the Olayinka Oyebola & Co., our Independent Registered Public Accounting Firm for the year ended July 31, 2020, and to include the Report of Total Asia Associates PLT, our Independent Registered Public Accounting Firm for the year ended July 31, 2019, included in Item 8. Financial Statements and Supplementary Data of the Form 10-K. Except as set forth above, no other changes to Item 8. Financial Statements and Supplementary Data were made.

 

This Amendment includes new certifications by our Principal Executive Officer and Principal Financial Officer pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits 31.1 and 32.1 hereto.

 

Except as expressly set forth above, this Amendment does not, and does not purport to, amend, update or restate the information in any other item of the Form 10-K or reflect any events that have occurred after the filing of the original Form 10-K.

 

 

 

 

 

 

 

 

 

 

ITEM 8.   Financial Statements and Supplementary Data.

 

 

WECONNECT TECH INTERNATIONAL, INC.

Table of Contents

 

 

	INDEX
Report of Independent Registered Public Accounting Firm	F-2
Report of Independent Registered Public Accounting Firm	F-3
Consolidated Balance Sheets as of July 31, 2020 and 2019	F-4
Consolidated Statements of Operations for the years ended July 31, 2020 and 2019	F-5
Consolidated Statements of Shareholders’ Equity for the years ended July 31, 2020 and 2019	F-6
Consolidated Statements of Cash Flows for years ended July 31, 2020 and 2019	F-7
Notes to the Consolidated Financial Statements	F-8 - F-14

 

 

 

 

 

 

 

 

 

 

 

Report of Independent Registered Public Accounting Firm

To the shareholders and the board of directors of WeConnect Tech International, Inc.

 

Opinion on the Financial Statements

We have audited the accompanying balance sheets of WeConnect Tech International Inc (the "Company") as of July 31, 2020, the related consolidated statements of operations, changes in shareholders' equity and cash flows, for the year ended July 31, 2020, and the related notes collectively referred to as the "financial statements. The financial statement of WeConnect Tech International Inc. As of July 31, 2019 were audited by other auditors whose report dated October 21, 2019 expressed an unqualify opinion on those statement.

 

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2020, and the results of its operations and its cash flows for the year ended July 31, 2020, in conformity with U.S. generally accepted accounting principles.

 

Going Concern

The accompanying financial statements have been prepared assuming the company will continue as a going concern as disclosed in Note 5 to the financial statement, the Company has continuously incurred a net operating loss of $1,103,166 for the year ended July 31, 2020, and an accumulated deficit of $7,638,503 at July 31, 2020. The continuation of the Company as a going concern through July 31, 2020 is dependent upon improving the profitability and the continuing financial support from its stockholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.

 

These factors raise substantial doubt about the company ability to continue as a going concern. These financial statements do not include any adjustments that might result from the outcome of the uncertainty.

 

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. . The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion

 

Critical Audit Matters

Critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.

Management decision to write of the company Property Plant, and Equipment, and the recognition of contingent liability in the subsidiary book as a result of litigation claim against the company as disclosed in (Note 3 & 6) during the year represent a critical audit matter due to the complexity of the transaction and its significant unusual.

These might pose challenges on the company going concern if the creditors enforce recovery on the company.

 

How the matter was addressed during the audit

Our procedures include the followings

-Obtained an understanding of the accounting process of MMTB (the subsidiary) and the correctness of the accounting treatment applied in estimating the contingent liability

-We circularized the Creditor and the legal adviser to ascertain the accuracy of the accrued figure

-We evaluated the adequacy of the judgement and assumptions made by the Directors in written off the Assets.

-We interviewed and assess the level of knowledge of the Accountant that did IFRS to US GAAP conversion and preparation of WECT financial statement.

 

 

 

OLAYINKA OYEBOLA & CO.

(Chartered Accountants)

We have served as the Company's auditor since April 2021.

July 28^th, 2021.

Lagos Nigeria

 

 

 

 

 

 

TOTAL ASIA ASSOCIATES PLT (AF002128 & LLP0016837-LCA) A Firm registered with US PCAOB and Malaysian MIA Block C-3-1, Megan Avenue 1, 189, Off Jalan Tun Razak 50400, Kuala Lumpur Tel: (603) 2733 9989

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Shareholders and Board of Directors of WECONNECT Tech International Inc.

 

1st Floor, Block A, Axis Business Campus

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

46100 Petaling Jaya, Selangor

Malaysia.

 

Opinion on the Financial Statements

 

We have audited the accompanying consolidated balance sheets of WECONNECT Tech International Inc. (“the Company”) as of July 31, 2019 and 2018, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the two years ended July 31, 2019 and 2018 and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of July 31, 2019 and 2018, and the results of its operations and its cash flow for each of the two years ended July 31, 2019 and 2018, in conformity with accounting principles generally accepted in the United States of America.

 

Going Concern

 

The financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s losses from operations raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

Basis for Opinion

 

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

  

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

 

/s/ TOTAL ASIA ASSOCIATES PLT

 

TOTAL ASIA ASSOCIATES PLT

We have served as the Company’s auditor since 2018.

 

Selangor, Malaysia.

Oct 24, 2019

 

 

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETS

 

		July 31, 2020				July 31, 2019
ASSETS
Current Assets:
Cash		$	544			$	3,343
Accounts Receivable			–				11,957
Employee Advances			–				54,050
Amount due from Related Party			–				829
Total Current Assets			544				70,179
Property and Equipment, net			–				88,649
Total Assets			544				158,828
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts Payable		$	83,458			$	75,777
Other Payable and Accrued Liabilities			933,410				199,086
Amount due to Related Party			1,236,274				1,071,620
Current tax liabilities			21,194				21,211
Total Current Liabilities			2,274,336				1,367,694
Deferred tax			9,143				9,449
Total Liabilities			2,283,479				1,377,143
Shareholders’ Equity:
Common Stock 593,610,070 shares issued and outstanding As of July 31, 2020 and 2019 respectively			593,610				593,610
Additional paid-up share capital			4,958,781				4,958,781
Accumulated loss			(7,638,503	)			(6,535,337	)
Other comprehensive loss			(196,823	)			(235,369	)
Total Owners’ Equity			(2,282,935	)			(1,218,315	)
Total Liabilities and Owners ‘Equity		$	544			$	158,828

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

 

		For the Years Ended July 31,
		2020				2019
Revenue		$	65,690			$	111,045
Cost of Revenue			–				10,394
Gross Margin			65,690				100,651
Other Income			10,794				545
General and Administrative Expense			(1,179,650	)			(1,587,572	)
Loss before tax			(1,103,166	)			(1,486,376	)
Taxation			–				–
Net Loss			(1,103,166	)			(1,486,376	)
Other Comprehensive Loss:
Translation adjustment			38,546				(6,908	)
			(1,064,620	)			(6,908	)
Comprehensive Loss		$	(1,064,620	)		$	(1,493,284	)
Income per share		$	0.0			$	0.0
Weighted average shares outstanding			593,610,070				593,610,070

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

 

 

		Common Stock								Additional Paid-in				Other Comprehensive				Retained
		Shares				Amount				Capital				Loss				Earnings				Total
Balance, August 1, 2018			593,610,070			$	593,610			$	4,958,781			$	(228,461	)		$	(5,048,961	)		$	274,969
Net Loss for the year			–				–				–				–				(1,486,376	)			(1,486,376	)
Translation Adjustment			–				–				–				(6,908	)			–				(6,908	)
Balance, July 31, 2019			593,610,070				593,610				4,958,781				(235,369	)			(6,535,337	)			(1,218,315	)
Net loss for the year			–				–				–				–				(1,103,166	)			(1,103,166	)
Translation Adjustment			–				–				–				38,546				–				38,546
Balance, July 31, 2020			593,610,070			$	593,610			$	4,958,781			$	(196,823	)		$	(7,638,503	)		$	(2,282,935	)

 

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WECONNECT TECH INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

		For the Years Ended July 31,
		2020				2019
Cash Flows from Operating Activities:
Net Loss		$	(1,103,166	)		$	(1,486,376	)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			16,687				26,918
Impairment of deposit			–				694,959
Inventory written off			–				3,231
Plant & Equipment written off			68,247				(503	)
Gain on Disposal of Asset			(26	)			–
Foreign translation reserve			7,092				(10	)
Operation loss			(1,011,166	)			(761,781	)
Changes in operating assets and liabilities
Account receivables			11,696				(11,767	)
Other receivables, deposit, and prepayments			52,869				(13,693	)
Amount due to directors			–				(51,017	)
Due to related party			200,110				789,499
Account payable			9,258				74,236
Other payables and accrued liabilities			734,308				(37,648	)
Net cash provided by operations			(2,925	)			(12,171	)
Cash Flows from Investing Activities:
Purchase of property and equipment							(496	)
Proceed from disposal of property and equipment			126				2,084
Funds placed in escrow			–				–
Net cash used in investing activities			126				(1,588	)
Cash Flows from Financing Activities:
Proceeds from issuance of share capital			–				–
Payment on loan payable			–				–
Net cash provided by financing activities			–				–
Foreign currency translation adjustment			–				(233	)
Net increase (decrease) in cash			(2,799	)			(10,816	)
Cash at Beginning of Year			3,343				14,159
Cash at End of Year		$	544			$	3,343
Supplemental Disclosure of non-cash activity:
Interest paid		$	–			$	–
Taxes paid		$	–			$	–

 

The accompanying notes are an integral part of these consolidated financial statements.

 

 

 

 

  

WECONNECT TECH INTERNATIONAL, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JULY 31, 2020

 

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

 

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 25, Jalan Puteri 7/15, Bandar Puteri, 47100 Puchong, Selangor, Malaysia.

 

On June 8, 2018, we have 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. 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 then.

 

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 ordinary shares	E-commerce, online to offline Marketplace and payment ceo-system

  

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Basis of presentation

The Company’s consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).

 

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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.   Actual results could differ from those estimates.

 

Concentrations of Credit Risk

We maintain our cash in bank deposit accounts, the balances of which at times may exceed federally insured limits. We continually monitor our banking relationships and consequently have not experienced any losses in our accounts. We believe we are not exposed to any significant credit risk on cash.

 

 

 

 

 

Cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. There were no cash equivalents for the years ended July 31, 2020 or 2019.

 

Inventories

Inventories are valued at the lower of cost or net realizable value. In general cost is determined by applying either the first in first out (FIFO) or percentages mark-up to the selling price valuations for the inventory item. Net realizable value is the estimated selling price in the ordinary course of business, less selling expenses. Allowances is made for obsolete, slow moving and defective inventories. All of the Company’s inventories consists of merchandise held for sale

 

Net income (loss) per common share

Net income (loss) per common share is computed pursuant to section 260-10-45 of the FASB Accounting Standards Codification.  Basic net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period.  Diluted net income (loss) per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock and potentially outstanding shares of common stock during the period.  The weighted average number of common shares outstanding and potentially outstanding common shares assumes that the Company incorporated as of the beginning of the first period presented. There are no potentially dilutive shares of common stock.

 

Revenue recognition

Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods in the contract; (ii) determination of whether the promised goods are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation.

 

Comprehensive Income

ASC Topic 220, “Comprehensive Income” establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying statements of stockholders’ equity consists of changes in unrealized gains and losses on foreign currency translation and cumulative net change in the fair value of available-for-sale investments held at the balance sheet date. This comprehensive income is not included in the computation of income tax expense or benefit.

 

Accounts receivable

Accounts receivable, which generally have thirty-day terms are recognized and carried at original invoice amount, less an allowance for uncollectible amounts, if applicable.

 

The Company maintains an allowance for doubtful accounts at a level considered adequate to provide for potential uncollectible receivables. The level of this allowance is evaluated by management based on collection experience and other factors affecting the accounts such as customer relationship and market factors.

 

 

 

 

 

Taxes

Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. The Company computes tax asset benefits for net operating losses carried forward. The potential benefits of net operating losses have not been recognized in these financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future year.

 

The company conducts major businesses in Malaysia and is subject to tax in their own jurisdiction. As a result of its business activities, the company will file separate tax returns that are subject to examination by the foreign tax authorities.

 

Fair Value Measurements

Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is estimated by applying the following hierarchy, which prioritize the inputs used to measure fair value into three levels and bases the categorization with the hierarchy upon the lowest level of input that is available and significant to the fair value measurement.

  

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).  

 

The three levels of the fair value hierarchy under ASC 820 are described below:  

 

Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

 

Level 2 - Inputs, other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g. interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

 

Level 3 - Inputs that are both significant to the fair value measurement and unobservable.

 

The Company’s cash and cash equivalents and short-term investments are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices.  The carrying amounts of accounts payable, advances payable and short-term loans approximate their fair value due to short term maturities.

 

Recently issued accounting pronouncements

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018 and interim periods in fiscal years beginning after December 15, 2018, with early adoption permitted. The Company has adopted this accounting standard update.

 

On June 20, 2018, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 is intended to reduce cost and complexity and to improve financial reporting for share-based payments to nonemployees (for example, service providers, external legal counsel, suppliers, etc.). Under the new standard, companies will no longer be required to value non-employee awards differently from employee awards. Meaning that companies will value all equity classified awards at their grant-date under ASC718 and forgo revaluing the award after this date. The guidance is effective for interim and annual periods beginning after December 15, 2018.

 

 

 

 

 

In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivative and Hedging (Topic 815, and Leases (Topic 841). This new guidance will be effective for annual reporting periods beginning after December 15, 2019, including interim periods within those annual reporting periods. While the Company is continuing to assess the potential impacts of ASU 2019-10, it does not expect ASU 2019-10 to have a material effect on its financial statements.

 

The Company has implemented all new accounting pronouncements that are in effect.  These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

Foreign currency 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:

 

		For the Years Ended July 31,
		2020				2019
Year-end MYR: US$1 exchange rate			4.2657				4.1275
Yearly average MYR: US$1 exchange rate			4.2197				4.1323

  

 

 

 

 

NOTE 3 – PROPERTY AND EQUIPMENT

 

Property and Equipment are first recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the various classes of assets.

 

Long lived assets, including property and equipment, to be held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Impairment losses are recognized if expected future cash flows of the related assets are less than their carrying values. Measurement of an impairment loss is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

 

Maintenance and repair expenses, as incurred, are charged to expense. Betterments and renewals are capitalized in plant and equipment accounts. Cost and accumulated depreciation applicable to items replaced or retired are eliminated from the related accounts with any gain or loss on the disposition included as income.

 

Property and equipment stated at cost, less accumulated depreciation consisted of the following:

 

		July 31, 2020				July 31, 2019
Computer Hardware		$	34,064			$	35,835
Computer Software			14,340				15,030
Furniture and Fittings			22,557				23,641
Office Equipment			13,178				13,811
Telecommunication			5,335				5,592
Renovation			54,317				56,930
Signboard			1,503				1,575
Security and alarm system			2,150				2,253
			147,444				154,667
Asset Written Off			(68,247	)			–
Disposal			(126	)			–
Less: accumulated depreciation			(79,071	)			(66,018	)
Property and equipment, net		$	–			$	88,649

 

Depreciation expense

Depreciation expense for the years ended July 31, 2020 and 2019 was $16,687 and $26,918, respectively.

 

During the year ended July 31, 2019, the Company disposed of $126 of Computer and $26 gain on disposal was recognized in other income

 

On May 31 2020, due to the closing down of the operating office of the subsidiary in Malaysia, Management carried out an impairment test on its fixed asset and realized its fixed asset has no recoverable value hence, write off.

 

 

 

 

NOTE 4 – RELATED PARTY TRANSACTIONS

 

The Company, in the regular conduct of business, has entered transaction with related parties in the form of cash or expenses paid on behalf of the related party and rendering of services. All advances are unsecured, due on demand and non-interest bearing.

 

The table below show the breakdown of revenue generated from related party during the period

 

Related Party		July 31, 2018				July 31, 2019				July 31, 2020
East Cloud Sdn Bhd		$	–			$	18,190			$	16,470
Creative Property Management			–				2,708				6,390
MIG 020 Berhad			78,938				19.360				–
MIG Network and Consultancy Sdn Bhd			34,536				16,053				15,042
Wpay International Bhd			–				8,948				–
MIG F&B Sdn Bhd			2				–				–
		$	113,476			$	65,259			$	37,902

 

East Cloud Sdn Bhd, Creative Property Management Sdn Bhd, MIG O2O Berhad and MIG Network & Consultancy Sdn Bhd are owned by our executive officers and directors, Shiong Han Wee and Kwueh Lin Wong. Messrs. Wee and Wong also serve as directors of these companies.

 

As of July 31, 2020 and 2019, the Company was indebted to MIG Network & Consultancy Sdn Bhd, our related company, in the amount of $1,236,274 and $1,037,691, respectively, for advances and expenses incurred on behalf of the Company. The amounts are included in due to related parties and are non-interest bearing, unsecured, and due on demand.

   

As of July 31, 2020 and 2019 we recognized a total of $18,026 and $43,083 respectively for manpower charge back to MIG O2O Berhad, our related company, which have been included in the statements of operations and comprehensive (loss) income.

 

During the years ended July 31, 2020 and 2019, we recognized the following transactions with MIG Network & Consultancy Sdn Bhd, our related company. 

 

NOTE 5 – GOING CONCERN

 

The accompanying financial statements have been prepared using the going concern basis of accounting, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

 

As of July 31, 2020, the Company suffered an accumulated deficit of $7,638,503 and continuously incurred a net operating loss of $1,103,166 for year ended July 31, 2020. The continuation of the Company as a going concern through July 31, 2020 is dependent upon improving the profitability and the continuing financial support from its stockholders. Management believes the existing shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.

 

These and other factors raise substantial doubt about the Company’s ability to continue as a going concern. These financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result in the Company not being able to continue as a going concern.

 

 

 

 

 

NOTE 6 – CONTINGENT LIABILITY

 

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.

 

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.

 

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 costs of prolonging the legal proceedings in light of the Company’s limited resources, the Company discontinued its proceedings on April 17, 2020.

 

On November 5, 2020, the Singapore Court awarded a judgment in favor of Digiland, and as a result, MIG Mobile Tech Berhad was ordered to pay: -

 

a)

The Judgment Sum of S$800,000

b)

Interest on the Judgment Sum at 5.33% per annum from 29th November 2018 to the date of payment; and

c)

Legal costs of the action to be taxed if not agreed.

 

Interest on the Judgment Sum calculated up to February 16, 2021 is S$94,507.38. Digiland further claimed legal cost together with disbursement in the sum of S$79,616.88. The total liabilities is estimated to be at S$974,124.26 and was accrued in the financial statement for the period ended July 31, 2020.

 

NOTE 7 – COMMITMENTS AND CONTINGENCIES

 

The Company entered into an agreement with Digiland Pte Ltd. on September 12, 2017, amounting to SGD$1,600,000.00 (approximately US$1,189,061) 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$617,559. The Company and Digiland are parties to legal claims against each other, as more fully described.

 

Subsequent to the financial year end, the Company’s future lease payments of US$5,929 per month for office premise is expected to end on Oct 31, 2019.

 

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 July 31, 2019.

 

NOTE 8 - SUBSEQUENT EVENTS

 

Management has evaluated subsequent events pursuant to the requirements of ASC Topic 855, from the balance sheet date through the date the financial statement were available to be issued and has determined that there are no material subsequent events that require disclosure in these financial statements.

 

 

 

 

 

 

 

SIGNATURES

 

 

Pursuant to the requirements of Section 13 or 15(d) 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.
	(Registrant)
	By:	/s/Shiong Han Wee
		Shiong Han Wee
		Chief Executive Officer
	Dated:	August 25, 2021

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant, and in the capacities and on the dates indicated:

 

Signature		Title		Date
/s/ Shiong Han Wee		Chief Executive Officer, Chief Financial Officer and Director
Shiong Han Wee		(Principal Executive Officer and Principal Financial Officer)		August 25, 2021
/s/ Kwueh Lin Wong* Kwueh Lin Wong		Secretary and Director		August 25, 2021
/s/ Pui Hold Ho* Pui Hold Ho		Director		August 25, 2021
/s/ Mun Wai Wong* Mun Wai Wong		Director		August 25, 2021

 

 

Representing all of the members of the Board of Directors.

 

* By	/s/    Shiong Han Wee
	Shiong Han Wee
	Attorney-in-Fact