Next Technology Holding Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our audited financial statements for the years ended December 31, 2022, and 2021 are set forth on pages F-1 to F-13 immediately following the signature page to this annual report. See Item 15 for a list of the financial statements included herein. ITEM 9. CONTROLS AND PROCEDURES Disclosure Controls and Procedures We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to our management, as appropriate, to allow timely decisions regarding required disclosure. Our management has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report. Based upon that evaluation, management has concluded that, as of the end of the period covered by this annual report, our disclosure controls and procedures were not effective. Management Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is a process designed to provide reasonable assurance to management and to the Board regarding the preparation and fair presentation of published financial statements. Our internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles and that receipts and expenditures are being made only in accordance with authorizations of management and our directors; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2022. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control - Integrated Framework - Guidance for Smaller Public Companies (the COSO criteria). Based on our assessment, management identified material weaknesses related to: (i) our internal audit functions; (ii) a lack of segregation of duties within accounting functions; and the lack of multiple levels of review of our accounting data. Based on this evaluation, our management concluded that as of December 31, 2022, we did not maintain effective internal control over financial reporting. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. 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 any policies and procedures may deteriorate. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. To the extent possible, we will implement procedures to assure that the initiation of transactions, the custody of assets and the recording of transactions will be performed by separate individuals. With proper funding we plan on remediating the significant deficiencies identified above, and we will continue to monitor the effectiveness of these steps and make any changes that our management deems appropriate. A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board Auditing Standard No. 5) or combination of control deficiencies, that results in a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that has materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9A. OTHER INFORMATION None 23 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE. Directors and Executive Officers The following table sets forth information regarding each of our current directors and executive officers: Name: Age: Positions with the Company: Hechun Wei 43 Chief Executive Officer (Principal Executive Officer) Annie Huang 48 Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) Hanfeng Li 42 Vice President Grace Li 43 Independent Director Biming Guo 51 Independent Director, Chairman of the Board, and Chair of Audit Committee Chair Daxue Li 53 Independent Director and Chair of Compensation Committee Chair Yuxing Ye 45 Independent Director and Chair of Nominating Committee Chair Ning Qin 43 Independent Director Background of Directors and Executive Officers Hechun Wei, Chief Executive Officer Mr. Hechun Wei served as executive director and general manager for Shanghai Dazhiruoyu Informational Technology Limited since June 2021 and for Dazhiruoyu Information Technology (Hainan) Limited since September 30, 2022, where he was responsible for business strategies and development of China commerce retail business, digital media and entertainment business. He was also the chief operation officer of Nova Group Limited (HKEX 1360), a cultural entertainment and exhibition investment company, from January 2019 to September 2022, where he was responsible for daily business operations of the company and capital market matters. From March 2018 to October 2018, he served as the general counsel to CNI Securities Group (China), where he was responsible for expanding the company business to inland China and providing legal services. From April 2014 to March 2018, Mr. Wei was the general manager of Shanghai Jinyi Cultural Communication Limited, in charge of the company’s daily operation. Ms. Huang graduated with a bachelor’s degree in Law major at Anhui University. Annie Huang, Chief Financial Officer Ms. Annie Huang has two decades of experience serving as chief financial officers for companies in multiple industries, including convention and exhibition industry, fund management industry and real estate industry. She has also held senior management positions in many companies. She is the Chief Financial Officer of NOVA Group Holding Limited (Shanghai) since November 2018, where she oversees compliance work in public listing and auditing matters. Ms. Huang was the Chief Financial Officer of Shanghai Kaiqi Real Estate Investment Consulting Co. in 2017. She also worked as the deputy chief financial officer of Shanghai Kuailu Investment Group Co. from April 2015 to October 2016. Her responsibilities as a chief financial officer included merge and acquisition activities, capital raising, maintaining effective control of internal financial management protocols, and designing cash flow plan for the companies. She holds a CMA certificate and mutual fund practice certificate. Ms. Huang graduated with a bachelor’s degree in Economy major at Fudan University in 1997. Hanfeng Li, Vice President Mr. Hanfeng Li has held senior management positions in many companies, such as Tencent, at which he has been working since 2012. He served as the Senior Manager of Tenpay between 2013 and 2015, and Business Manager at WeChatPay Product Department from 2013 to 2016. He had been engaged in the development of various payment products, including WeChat Pay, QQ Wallet and Tenpay. His responsibilities at Tencent included designing industrial strategies, devising business expansion proposal, modeling financial service tools, and working with major banks in China to develop client relationships. Prior to joining Tencent, Mr. Li worked as a senior client manager at Ali Pay from 2010 to 2012. Grace Li, Independent Director Ms. Grace Li, age 43, has been engaged in the marketing and platform operating for technology companies for more than 20 years. She has held senior management positions in many companies. She is the Chief Executive Officer of Newbanla Technology Service Pty Ltd. in Australia since July 2022. Ms. Li was the Marketing Manager of Shanghai Boku Internet Technology Ltd. between January 2016 and April 2021 and has served various positions with the company since 2007. Her responsibilities at Shanghai Boku Internet Technology Ltd. include the expansion of marketing channels, supplier development and managing marketing department budget and maintenance and product manufacturing. She is also actively engaged in industrial events held by the associations in the industry. Ms. Li graduated with a bachelor degree in Internal Economic and Trade major at Shanghai Jiaotong University in 2004. Biming Guo, Independent Director, Chairman of the Board, Chair of Audit Committee and member of Compensation Committee Mr. Biming Guo has served as a director for the company since April 2021, and has over 25 years of experience as a CPA in M&A, investment and finance. Mr. Guo now serves as the Accountant-in-Chief and Legal Representative at Jinchengfeng (Xiamen) CPA, an accounting firm in China, where he manages a team of 20 people, focusing on various NEEQ and IPO projects, as well as internal control and tax management counseling. Between April 2016 and April 2018, Mr. Guo was a Senior Auditor at Zhongxincai Guanghua CPA LLP in Beijing, China, where he spearheaded various NEEQ, IPO, internal control and tax management counseling projects. Between July 2014 and March 2016, Mr. Guo was a Project Manager at Founder Securities Co., Ltd, where he served as a financial consultant, responsible for analyzing and performing due diligence on various major assets in underwriting, restructuring, and M&A projects. Mr. Guo started his career in 1996 at Ji’an Developmental Bank, where he served for over a decade in credit risk management. Mr. Guo graduated from Nanchang University in China with a bachelor’s degree. He has been a CPA since 2004, a Certified Tax Agent since 2005, and a licensed attorney since 2010. 24 Table of Contents Daxue Li, Independent Director, Chair of Compensation Committee and member of Audit Committee and Nominating Committee Mr. Li has more than 20 years of experience in TMT, e-commerce and information technology industry. He was the vice-president and CTO of Tianji Network Company, in charge of technology research and development, technical service and customer execution. From 2008-2015, he served as senior vice president of JD.com group (Nasdaq: JD), in charge of technology research and development system. In 2015 he founded the Ciyun Technology Co Ltd. and remains the CEO. He is also the honorary technical advisor of the JD.com group. In 1988, he was admitted to the Mathematics Department of Shandong University with the highest score of Science in the college entrance examination of the whole country and holds a Bachelor degree in Mathematics from Shandong University. Yuxing Ye, Independent Director, Chair of Nominating Committee and member of Audit Committee and Compensation Committee Mr. Ye is an attorney licensed to practice in New York State and has over 13 years of experience in advising multinational and PRC companies in corporate law, banking law, investment funds, mergers and acquisitions and regulatory and compliance matters. Mr. Ye started his career as an in-house legal counsel with Bank of China, New York Branch and subsequently with The Bank of Nova Scotia, Singapore Branch, covering a broad range of legal matters involving US sanctions, regional credit markets, derivatives and fixed income products. From 2011 to 2017, he worked as an associate/of counsel with the UK based magic circle law firm Allen Overy LLP and PRC based red circle law firm King & Wood Mallesons and became a partner in 2018 at King & Wood Malleson. Mr. Ye’s legal practice focuses on cross-border merger and acquisitions as well as the related regulatory and compliance matters, involving take-over bids, asset and share purchases/divestures, project/acquisition financings, restructuring, US export control and other commercial arrangements etc. In early 2020, Mr. Ye joined another PRC red circle law firm Zhong Lun as a partner and continues his practice in the aforementioned space, with an even broader coverage of PRC listed companies and investment funds in their outbound acquisitions as well as compliance with US and European regulatory regimes. Mr. Ye obtained his Juris Doctor degree from the Benjamin N. Cardozo School of Law, Yeshiva University in New York in 2007. Ning Qin, Independent Director and member of the Compensation Committee and Nominating Committee Mr. Qin has over 15 years of experience as a corporate counsel and lawyer, in M&A, investment and finance. In 2003, he started his career as Clerk with the Court of Baqiao District of Xi’an in China and left in 2004. From 2004 to 2005, he worked as Paralegal with Shaanxi Haipu Law Firm in Xi’an of China. In 2008, he worked as a paralegal with Jane Willems’ Firm in Paris, France. From 2009 to 2013, he served as Senior Manager in Tian An China Investment Ltd., (stock code: 0028), listed on the HK stock exchange, responsible for the China legal and investment. In 2013, he worked as General Manager in Shaanxi HDTX Investment Ltd. In 2016, he served as Executive Director in Yulin FFL Environmental Energy Limited (member of ENGIE Group in France). In 2018, he worked as Assistant President in Guanghui Energy Group (stock code: 600256), listed on the SHH stock exchange. From 2020 to present, he is working as Equity Partner in Zhonglun W&D Law Firm in Xi’an. Mr. Qin is a graduate from the Law school of Versailles University in France, and majored in Arbitration and International business in 2008. Family Relationships None of the directors or executive officers at the Company have a family relationship as defined in Item 401 of Regulation S-K. Election of Officers Each of our directors is appointed to hold office until the next annual meeting of our shareholders, until her or her respective successor is elected and qualified, or until he or she resigns or is removed in accordance with the applicable provisions of Wyoming law. Our officers are appointed by our board of directors and hold office until removed by our board of directors or until their resignation. Board of Directors We currently have a board of directors consisting of six members, a majority of whom are “independent” as defined in Nasdaq Rule 5605. We expect that all current directors will continue to serve after this offering. The directors will be re-elected at our annual general meeting of shareholders. A director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the directors. A general notice given to the directors by any director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. A director may vote in respect of any contract or proposed contract or arrangement notwithstanding that he may be interested therein and if he does so his vote shall be counted and he may be counted in the quorum at any meeting of the directors at which any such contract or proposed contract or arrangement shall come before the meeting for consideration. Board Committees We have established three committees under the board of directors: Audit Committee, Compensation Committee and Nominating Committee. Each committee is governed by a charter approved by our board of directors. Copies of the charters have been submitted as exhibits to the registration statement of which this prospectus is a part and will be available at our investor relations website. Audit Committee Our Audit Committee consists of Biming Guo (Chair), Daxue Li, and Yuxing Ye. Each member of the Audit Committee will satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market and meet the independence standards under Rule 10A-3 under the Exchange Act. Our Audit Committee Financial Expert is Biming Guo who qualifies as an “audit committee financial expert” within the meaning of the SEC rules and possesses financial sophistication within the definition of the Listing Rules of the Nasdaq Stock Market. The Audit Committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company. The Audit Committee is responsible for, among other things: 25 Table of Contents · selecting our independent registered public accounting firm and pre-approving all auditing and non-auditing services permitted to be performed by our independent registered public accounting firm; · reviewing with our independent registered public accounting firm any audit problems or difficulties and management’s response and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K; · discussing the annual audited financial statements with management and our independent registered public accounting firm; · annually reviewing and reassessing the adequacy of our Audit Committee charter; · meeting separately and periodically with the management and our independent registered public accounting firm; · regularly reporting to the full board of directors; · reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposure; and · such other matters that are specifically delegated to our Audit Committee by our board of directors from time to time. Compensation Committee Our Compensation Committee consists of Daxue Li (Chair), Biming Guo, Yuxing Ye and Ning Qin. Each of the Compensation Committee members satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. Our Compensation Committee will assist the board in reviewing and approving the compensation structure, including all forms of compensation, relating to our directors and executive officers. No officer may be present at any committee meeting during which such officer’s compensation is deliberated upon. The Compensation Committee will be responsible for, among other things: · reviewing and approving to the board with respect to the total compensation package for our most senior executive officers; · approving and overseeing the total compensation package for our executives other than the most senior executive officers; · reviewing and recommending to the board with respect to the compensation of our directors; · periodically reviewing and approving any long-term incentive compensation or equity plans; · selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management; and · programs or similar arrangements, annual bonuses, employee pension and welfare benefit plans. Nominating Committee Our Nominating Committee consists of Yuxing Ye (Chair), Daxue Li, and Ning Qin. Each member of the Nominating Committee will satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the Nasdaq Stock Market. The nominating committee will assist the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees. The Nominating Committee will be responsible for, among other things: · selecting and recommending to the board nominees for election by the shareholders or appointment by the board; · annually reviewing with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; · making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and · advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors and officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has been a party to any judicial or administrative proceeding during the past ten (10) years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement. Except as set forth in our discussion below in “Related Party Transactions,” our directors and officers have not been involved in any transactions with us or any of our affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC. Code of Business Conduct and Ethics We have adopted a code of business conduct and ethics applicable to our directors, officers and employees. Board Diversity The Board of Directors does not have a formal policy with respect to Board nominee diversity. In recommending proposed nominees to the Board of Directors, the Nominating Committee is charged with building and maintaining a board that has an ideal mix of talent and experience to achieve our business objectives in the current environment. In particular, the Nominating Committee is focused on relevant subject matter expertise, depth of knowledge in key areas that are important to us, and diversity of thought, background, perspective and experience so as to facilitate robust debate and broad thinking on strategies and tactics pursued by us. The following table provides certain information regarding the diversity of our Board of Directors as of the date of this annual report. Board Diversity Matrix (As of the date of this annual report) Country of Principal Executive Offices: China Foreign Private Issuer No Disclosure Prohibited Under Home Country Law No Total Number of Directors 5 Female Male Non-Binary Did Not Disclose Gender Part I: Gender Identity Directors 1 4 0 0 Part II: Demographic Background Underrepresented Individual in Home Country Jurisdiction — LGBTQ+ — 26 Table of Contents ITEM 11. EXECUTIVE COMPENSATION The following table sets forth certain information with respect to compensation for the years ended December 31, 2022 and 2021, earned by or paid to our chief executive officer and principal executive officer, our principal financial officer, and our other most highly compensated executive officers whose total compensation exceeded US$2,000 (the “named executive officers”). Name and Principal Position Year Salary($) Bonus($) Stock Awards ($) All Other Compensation ($) Total($) Zheng Dai 2022 96,000 - - - 96,000 Chairman (as of December 21, 2022) 2021 80,000 - - - 80,000 Liu Pijun 2022 96,000 - - - 96,000 CEO (as of December 21,2022) 2021 80,000 - - - 80,000 Hechun Wei 2022 2,000 - - - 2,000 (1) CEO 2021 - - - - - Kean Tat Che 2022 55,000 - - - 55,000 CFO (as of November 29, 2022) 2021 50,000 - - - 50,000 Annie Huang 2022 4,000 - - - 4,000 (1) CFO and Secretary 2021 - - - - - Hanfeng Li 2022 16,700 - - - 16,700 (1) 2021 - - - - - Zhuo Li 2022 31,000 - - - 31,000 COO (as of August 12, 2022) 2021 50,000 - - - 50,000 (1) Such amounts were accrued based on their appointment date in 2022. Mr. Hechun Wei was appointed as the CEO of the Company on December 21, 2022 and Ms. Annie Huang was appointed as the CFO of the Company on November 29, 2022. Mr. Hanfeng Li was appointed as the Vice President of the Company on October 13, 2022. Employment Agreements Our employment agreements with our officers generally provide employment for a specific term and set annual salaries, health insurance, pension insurance, paid vacation, and family leave time. The agreement may be terminated by either party as permitted by law. We have entered into an employment agreement with each of Biming Guo, our Chairman, and Hechun Wei, our Chief Executive Officer, effective from December 21, 2022 through December 20, 2026. Under the terms of the agreements, Messrs. Guo and Wei are entitled to receive a monthly salary of $2,000 respectively, effective from December 21, 2022, plus one month’s additional salary by the end of each year. All of these are payable in the equivalent amount of either in Hong Kong Dollars or Chinese Renminbi. Any variances are mainly due to fluctuation of currency exchange. We have also entered into an employment agreement with Annie Huang, our Chief Financial Officer, effective from November 29, 2022 through November 28, 2026. Under the terms of the agreements, each of Messrs. Huang is entitled to receive a monthly salary of $2,000, effective from November 29, 2022, and plus one month’s additional salary by the end of each year. All of these are payable in the equivalent amount of either in Hong Kong Dollars or Chinese Renminbi. Any variances are mainly due to fluctuation of currency exchange. Director Compensation On September 1, 2020, we entered into a service contract with each of our independent directors Daxue Li, Yuxing Ye and Ning Qin. The contracts have a term of two years commencing September 1, 2020 and we agree to pay $2,000 per month commencing March 1, 2021 plus one month’s additional payment by the end of each year. On April 19, 2021, we entered into a service contract with our independent director Biming Guo. The contract has a term of two years commencing April 19, 2021 and we agree to pay $2,000 per month commencing April 19, 2021 plus one month’s additional payment by the end of each year. On August 12, 2022, we entered into a service contract with our independent director Grace Li. The contract has a term of two years commencing August 12, 2022 and we agree to pay $2,000 per month commencing August 12, 2022 plus one month’s additional payment by the end of each year. For the years ended December 31, 2022 and 2021, we did not compensate our executive directors for their services other than to reimburse them for out-of-pocket expenses incurred in connection with their attendance at meetings of the Board of Directors. For the year ended December 31, 2022, a total of $4,000 were accrued for each of our executive director Grace Li, and a total of $96,000 were accrued for our independent director Biming Guo, Daxue Li, Yuxing Ye and Ning Qin. The parties agreed that the compensation payment to be deferred until the launching of WTpay project of the Company. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth information with respect to beneficial ownership of our common stock as of the date of hereof by: ● Each person who is known by us to beneficially own more than 5% our outstanding common stock; ● Each of our director, director nominees and named executive officers; and ● All directors and named executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC and generally requires that such person have voting or investment power with respect to securities. In computing the number of shares of common stock beneficially owned by a person listed below and the percentage ownership of such person, common stock underlying options, warrants or convertible securities held by each such person that are exercisable or convertible within 60 days of the date of this prospectus are deemed outstanding but are not deemed outstanding for computing the percentage ownership of any other person. Except as otherwise indicated in the footnotes to this table, or as required by applicable community property laws, all persons listed have sole voting and investment power for all common stock shown as beneficially owned by them. Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of our Company at No. 18, Kechuang 10th Street, Beijing Economic and Technological Development Zone, Beijing, People Republic of China. As of the date hereof, we have approximately 400 shareholders of record. 27 Table of Contents Executive Officers and Directors Amount of Beneficial Ownership of Common Stock (1) Percentage Ownership of Common Stock (2) Directors and Named Executive Officers : Biming Guo - - Daxue Li - - Yuxing Ye - - Grace Li - - Hung Fai Choi - - Ning Qin - - Hechun Wei - - Annie Huang - - Hanfeng Li - - All executive officers and directors as a group (9 persons) - 5% or Greater Shareholders Future Science and Technology Co Ltd (3) 282,650 26.81 % Aishangyou Limited (4) 265,055 25.14 % *Less than 1%. (1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the common stock. All shares represent only common stock held by shareholders as no options are issued or outstanding. (2) Calculation based on 1,054,530 shares of common stock issued and outstanding as of the date of this report. (3) Zheng Dai has sole voting and dispositive power over the shares held by Future Science and Technology Co Ltd. (4) Shufeng Zang, a non-affiliate of the registrant, has sole voting and dispositive power over the shares held by AiShangYou Limited. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE RELATED PARTY TRANSACTIONS Transactions with Related Persons Except as described below, no director, executive officer, shareholder holding at least 5% of shares of our common stock, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transaction during the last two fiscal years in which the amount involved in the transaction exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES As reported on our Form 8-K filed May 15, 2023, we had a change of auditor from TAAD LLP to Grant Assentsure PAC for the fiscal year ended December 31, 2022. The Audit Committee has ratified Assentsure PAC, Independent Registered Public Accounting Firm, to audit our books, records and accounting for the year ended December 31, 2022. The Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change will be in the best interests of us and our shareholders. The aggregate fees billed for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our quarterly reports on Form 10-Q and services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements for these fiscal periods were as follows: Year Audit Fees Audit Related Fees Tax Fees All Other Fees Total Fees 2021 $ 95,000 $ 0 $ 8,000 $ 30,000 $ 133,000 2022 $ 235,000 $ 0 $ 12,000 $ 43,500 $ 290,500 Audit Fees : The aggregate fees billed for professional services rendered by the principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-K and other services that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements for those fiscal years. Audit-Related Fees : The aggregate fees billed for assurance and related services rendered by the principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under the previous item, Audit Fees. Tax Fees : The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning. All Other Fees : The aggregate fees billed for legal fee and services provided by the lawyers and other parties other than those disclosed above. 28 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES The following documents are filed as part of this annual report: (1) Financial Statements · Reports of Independent Registered Public Accounting Firm · Consolidated Balance Sheets at December 31, 2022 and 2021 · Consolidated Statements of Operations for the year ended December 31, 2022 and 2021 · Consolidated Statements of Stockholders’ Equity for the year ended December 31, 2022 and 2021 · Consolidated Statements of Cash Flows for the year ended December 31, 2022 and 2021 · Notes to the Consolidated Financial Statements (2) Financial Statement Schedules All schedules are omitted because they are not applicable, or not required, or because the required information is included in the financial statements or notes thereto. (3) Exhibits 29 Table of Contents Exhibit No. Description 3.1 Amended and Restated Articles of Incorporation (Incorporated herein by reference to WeTrade Group Inc’s Current Report on Form 8-K filed with the SEC on April 3, 2023) 3.2 Second Amended By-Laws (Incorporated herein by reference to WeTrade Group Inc’s Current Report on Form 8- K filed with the SEC on April 3, 2023) 10.1 Employment Agreement between Wetrade Group Inc. and Hechun Wei, dated December 21, 2022 (Incorporated herein by reference to WeTrade Group Inc’s Current Report on Form 8- K filed with the SEC on December 21, 2022) 10.2 Employment Agreement between Wetrade Group Inc. and Annie Huang, dated November 29, 2022 (Incorporated herein by reference to WeTrade Group Inc’s Current Report on Form 8- K filed with the SEC on December 2, 2022) 10.3 Employment Agreement with Hanfeng Li dated October 10, 2022 (Incorporated herein by reference to WeTrade Group Inc’s Current Report on Form 8- K filed with the SEC on October 18, 2022) 10.4 Service Contract by and between the Registrant and Daxue Li (Incorporated herein by reference to WeTrade Group Inc’s Registration Statement on Form S-1/A filed with the SEC on June 9, 2021) 10.5 Service Contract by and between the Registrant and Yuxing Ye (Incorporated herein by reference to WeTrade Group Inc’s Registration Statement on Form S-1/A filed with the SEC on June 9, 2021) 10.6 Service Contract by and between the Registrant and Ning Qin (Incorporated herein by reference to WeTrade Group Inc’s Registration Statement on Form S-1/A filed with the SEC on June 9, 2021) 10.7 Technical Principal Agreement between Zhuozhou Weijiafu Information Technology Limited and the Company (Incorporated herein by reference to WeTrade Group Inc’s Registration Statement on Form S-1 filed with the SEC on April 6, 2021) 10.8 Technical Principal Agreement between Changtongfu Technology (Hainan) Co Limited and the Company (Incorporated herein by reference to WeTrade Group Inc’s Registration Statement on Form S-1/A filed on June 9, 2021) 21.1* List of Subsidiaries 31.1* Certification of Principal Executive Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer filed pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of Principal Executive Officer furnished 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 Principal Financial Officer furnished pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101 Financial statements of WeTrade Group Inc for the year ended December 31, 2022 and 2021 formatted in XBRL: (i) the Balance Sheet; (ii) the Statement of Income; (iii) Statement of Changes in Stockholders’ Equity; (iv) the Statement of Cash Flows; and (v) the Notes to the Financial Statements *** _______________ * Filed herein. 30 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. WETRADE GROUP INC Dated: July 14, 2023 By: /s/ Hechun Wei Hechun Wei Chief Executive Officer (Principal Executive Officer) 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. Dated: July 14, 2023 By: /s/ Annie Huang Annie Huang Chief Financial Officer, (Principal financial officer and principal accounting officer) 31 Table of Contents FINANCIAL STATEMENTS Reports of Independent Registered Public Accounting Firm F-2 Consolidated Balance Sheets at December 31, 2022 and 2021 F-4 Consolidated Statements of Income Statement for the years ended December 31,2022 and 2021 F-5 Consolidated Statements of Equity Statement for the years ended December 31, 2022 and 2021 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 F-7 Notes to the Consolidated Financial Statements F-8 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors WeTrade Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of WeTrade Group, Inc. and subsidiaries (the “Company”) as of December 31, 2022, the related statements of operations and comprehensive income, stockholders’ equity, and cash flows for the year ended December 31, 2022 and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and the results of their operations and their cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit. 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 audit 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 consolidated 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 audit, 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 entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /S/ Assenture PAC We have served as the Company’s auditor since 2023. Assentsure PAC Singapore July 14, 2023 PCAOB ID Number 6783 F-2 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors WeTrade Group, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of WeTrade Group, Inc. and subsidiaries (the “Company”) as of December 31, 2021 and the related statements of operations, of comprehensive income, stockholders’ equity, and cash flows for the year ended December 31, 2021. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021, and the results of their operations and their cash flows for the period then ended, in conformity with U.S. generally accepted accounting principles. Basis for Opinion These consolidated 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 audit. 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 audit 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 consolidated 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 audit, 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 entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ TAAD LLP We have served as the Company’s auditor from 2019 to 2023. Diamond Bar, California April 14, 2022 PCAOB ID Number 05854 F-3 Table of Contents WETRADE GROUP INC CONSOLIDATED BALANCE SHEETS (All amounts shown in U.S. Dollars) As of December 31, 2022 As of December 31, 2021 ASSETS Current Assets: Cash and cash equivalents $ 20,025,495 $ 616,593 Accounts receivable- non related parties, net 6,828,195 5,627,463 Account receivable- related parties, net 549,606 3,603,402 Loan receivable 1,614,841 3,798,130 Other receivables 50,839 30,147 Prepayments 3,160,932 2,760,658 Prepayments- related parties 1,914,515 - Total Current Assets 34,144,423 16,436,393 Non-Current Assets: Prepayments 10,000,000 - Amortised expenses, net 828,983 Property and equipment, net 992,445 395,353 Right of use assets - 2,328,950 Intangible asset, net 23,188 37,765 Other receivable 240,202 Rental deposit- related party - 272,063 Total Non-Current Assets 12,084,818 3,034,131 Total Assets: $ 46,229,241 $ 19,470,524 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities: Account payables $ 143,917 $ 7,710 Account payables- related parties 281,136 54,436 Accrued expenses 298,595 217,073 Tax payables 128,979 711,841 Amount due to related parties 1,291,296 1,105,532 Lease liabilities, current - 596,098 Other payables 2,365,808 306,270 Total Current Liabilities 4,509,731 2,998,960 Non-current liabilities: Lease liabilities, non-current - 1,942,242 Total Liabilities 4,509,731 4,941,202 Stockholders’ Equity: Common Stock; no par value; 195,057,503 issued and outstanding at December 31, 2022 and 305,451,498 issued and outstanding at December 31, 2021* - - Additional Paid in Capital 43,732,196 6,197,520 Accumulated other comprehensive income ( 298,576 ) 898,497 (Accumulated Deficits)/ Retained Earnings ( 1,714,110 ) 7,433,305 Total Stockholders’ Equity 41,719,510 14,529,322 Total Liabilities and Stockholders’ Equity $ 46,229,241 $ 19,470,524 *Share and per share amounts have been adjusted to reflect the decreased number of shares resulting from a cancellation of shares. The accompanying notes are an integral part of these financial statements. F-4 Table of Contents WETRADE GROUP INC Consolidated Statements of Operations and Comprehensive Income For the year ended December 31, 2022 For the year ended December 31, 2021 Revenue: Service revenue, non-related party $ 10,803,232 $ 9,734,966 Service revenue, related party 868,103 4,646,329 11,671,335 14,381,295 Cost of Revenue ( 9,695,290 ) ( 2,681,939 ) Gross Profit 1,976,045 11,699,356 Operating Expenses: General and Administrative ( 11,843,048 ) ( 5,705,063 ) Operations (Loss)/ profit ( 9,867,003 ) 5,994,293 Other income 636,934 303,665 (Loss)/ Income before income tax ( 9,230,069 ) 6,297,958 Income tax income/ (expense) 82,654 ( 1,122,283 ) Net (Loss)/Income $ ( 9,147,415 ) $ 5,175,675 Other Comprehensive Income Foreign currency translation adjustment ( 1,197,073 ) 319,762 Comprehensive (Loss)/ Income ( 10,344,488 ) 5,495,437 Net (loss)/ income per share - basic and diluted $ ( 0.04 ) $ 0.02 Weighted average number of shares outstanding*; Basic and Diluted 223,259,181 305,451,498 *Share and per share amounts have been retroactively adjusted to reflect the decreased number of shares resulting from a share cancellation and issuance of new shares. The accompanying notes are an integral part of these financial statements. F-5 Table of Contents WETRADE GROUP INC Consolidated Statements of Changes in Stockholders’ Equity Common Share Additional Paid in Capital Retained Earnings Accumulated Other comprehensive Total Shareholder Shares* Amount Amount /(Accumulated Deficits) income Equity Balance as of December 31, 2020 305,451,498 - 6,057,520 2,257,630 578,735 8,893,885 Related party payable forgiveness - - 140,000 - - 140,000 Foreign currency translation adjustment - - - - 319,762 319,762 Net income for the year - - - 5,175,675 - 5,175,675 Balance as of December 31, 2021 305,451,498 - 6,197,520 $ 7,433,305 $ 898,497 $ 14,529,322 Share cancellation ( 120,418,995 ) - - - - - Sale of common shares, net of fees 10,000,000 - 37,057,176 - - 37,057,176 Stock compensation 25,000 - 477,500 - - 477,500 Foreign currency translation adjustment - - - - ( 1,197,073 ) ( 1,197,073 ) Net loss for the year - - - ( 9,147,415 ) - ( 9,147,415 ) Balance as of December 31, 2022 195,057,503 $ - 43,732,196 $ ( 1,714,110 ) ( 298,576 ) $ 41,719,510 *Share and per share amounts have been adjusted to reflect the decreased number of shares resulting from a share cancellation and new share issuances. The accompanying notes are an integral part of these financial statements. F-6 Table of Contents WETRADE GROUP INC CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended December 31, 2022 For the year ended December 31, 2021 Reclassification Cash Flows from Operating Activities: Net (Loss)/ Income $ ( 9,147,415 ) $ 5,175,675 Adjustment to reconcile net income to cash flows from operating activities: Depreciation expenses 263,260 23,353 Amortization of intangible assets 14,577 12,519 Forgiveness of related party debt - 140,000 Changes in Operating Assets and Liabilities: Account receivables ( 1,200,732 ) ( 2,910,665 ) Account receivables- related parties 2,813,594 ( 3,558,398 ) Other receivables 251,371 244,749 Prepaid expenses ( 10,400,274 ) ( 2,926,541 ) Prepaid expenses- related parties ( 1,914,515 ) - Account payable 136,207 ( 910 ) Account payable- related parties 226,700 51,031 Accrued expenses 81,522 ( 52,178 ) Tax payables ( 582,862 ) ( 177,836 ) Other payables 2,059,538 250,870 Lease liabilities ( 2,538,340 ) ( 585,253 ) Right of use assets 2,328,950 560,200 Net cash flows used in operating activities: ( 17,608,419 ) ( 3,753,384 ) Cash flow from Investing activities: Loan receivable 2,183,289 ( 611,210 ) Amortised expenses ( 995,775 ) Office equipment ( 693,560 ) ( 417,112 ) Net cash flows provided by/(used in) investing activities: 493,954 ( 1,028,322 ) Cash flow from financing activities: Proceeds from issuance of common stock 37,534,676 - Related party loan 185,764 689,031 Net cash provided by financing activities: 37,720,440 689,031 Effect of exchange rate changes on cash ( 1,197,073 ) 68,665 Change in Cash and Cash Equivalents: 19,408,902 ( 4,024,010 ) Cash and Cash Equivalents, Beginning of Period 616,593 4,640,603 Cash and Cash Equivalents, End of Period $ 20,025,495 $ 616,593 NON-CASH FINANCING TRANSACTION Forgiveness of related party payable $ - $ 140,000 Supplemental Cash Flow Information: Cash paid for interest $ - $ - Cash paid for taxes $ - $ 480,528 The accompanying notes are an integral part of these financial statements. F-7 Table of Contents WeTrade Group Inc Notes to Consolidated Financial Statements December 31, 2022 NOTE 1. NATURE OF BUSINESS Organization WeTrade Group, Inc was incorporated in the State of Wyoming on March 28, 2019. As of December 31, 2022, the company is in the business of providing technical services and solutions via its social e-commerce platform and chatGPT technical services. We are committed to providing an international cloud-based intelligence system and independently developed a micro-business cloud intelligence system called the “YCloud.” Our goal is to provide technical and auto-billing management services to micro-business online stores in China through big data analytics, machine learning mechanisms, social network recommendations, and multi-channel data analysis. We provide technology services to both individual and corporate users. Through Yueshang Information Technology (Beijing) Limited, or Yueshang Beijing, we provide access to “YCloud” to our two customers, which are Zhuozhou Weijiafu Information Technology Limited (“Weijiafu”), a PRC technology company, which then provide “YCloud” services to individual and corporate micro-business owners and Changtongfu Technology (Hainan) Co Limited (“Changtongfu”), a PRC technology company, which then provide “YCloud” services to individual and corporate business owners in the hotel and travel industries. The market of individual micro-business owners represents a potential of 330 million users by the year of 2023. YCloud serves corporate users in multiple industries, including Yuetao Group, Zhiding, Lvyue, Yuebei, Yuedian, Coke GO, and Zhongyanshangyue. We conduct business operations in mainland China and have established trial operations in Singapore. We expect to utilize the YCloud system to establish a global strategic cooperation with various social media platforms. The main functions of the YCloud system are assisting users to manage its marketing relationships, CPS commission profit management, multi-channel data statistics, AI fission and management, and improved supply chain systems. Currently, YCloud serves the micro business industry which include tourism, hospitality, medical beauty and traditional retail industries. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Recently Issued and Adopted Financial Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02”), which requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under current U.S. GAAP. ASU 2016-02 requires a lessee to recognize a lease liability and a right-of-use asset for each lease with a term longer than twelve months. The new guidance also requires additional qualitative and quantitative disclosures related to the nature, timing and uncertainty of cash flows arising from leases. The Company adopted the new standard effective January 1, 2022, using a modified retrospective approach and electing to use the package of practical expedients permitted under the transition guidance, which allows for the carry forward of historical lease classification for existing leases on the adoption date and does not require the assessment of existing lease contracts to determine whether the contracts contain a lease or initial direct costs. Prior periods were not retrospectively adjusted. The Company did not have any finance lease liabilities as of the adoption date. There was no cumulative effect adjustment to the opening balance of accumulated deficit as of January 1, 2022. Adoption of this new guidance did not have a material impact on the consolidated statements of operations or cash flows. Accounting Standards Effective in Future Periods Financial Instruments—Credit Losses In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-03”).” The amendments in this update introduce a new standard to replace the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. Subsequent to the initial standards, the FASB has also issued several ASUs to clarify specific topics. ASU 2016-13 is effective for the Company’s fiscal year beginning January 1, 2023. The Company does not expect the implementation of ASU 2016-13 to have a material impact on consolidated financial statements. F-8 Table of Contents Basis of Presentation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The consolidated financial statements include the financial statements of the Company and its subsidiaries. All significant inter-company transactions and balances have been eliminated on consolidation. As of December 31, 2022, the details of the consolidating subsidiaries are as follows: Place of Attributable Name of Company incorporation equity interest % Utour Pte Ltd Singapore 100 % WeTrade Information Technology Limited (“WITL”) Hong Kong 100 % Yueshang Information Technology (Beijing) Co., Ltd. (“YITB” P.R.C 100 % Yueshang Group Network (Hunan) Co., Limited (“Yueshang Hunan”) P.R.C 100 % WeTrade Digital Technology (Beijing) Limited P.R.C 100 % Yueshang Technology Group (Zhuhai Hengqin) Limited P.R.C 100 % Tibet XiaoShang Technology Co Limited (“Tibet Xiaoshang”) P.R.C 100 % Shanghai Yueshang Information Technology Limited P.R.C 100 % Consolidation The Company’s consolidated financial statements include the financial statements of the Group and subsidiaries. All transactions and balances among the Group and its subsidiaries have been eliminated upon consolidation. Use of Estimates and Assumptions The preparation of financial statements in conformity with US GAAP requires management to make judgement estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that the estimates used in preparing the financial statements are reasonable and prudent; however, actual results could differ from these estimates. Significant accounting estimates include the allowance for doubtful accounts, useful lives of intangible asset, valuation of deferred tax assets, and certain accrued liabilities such as contingent liabilities. F-9 Table of Contents Fair Value Measurements The Company follows guidance for accounting for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Additionally, the Company adopted guidance for fair value measurement related to nonfinancial items that are recognized and disclosed at fair value in the financial statements on a nonrecurring basis. The guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 inputs are unobservable inputs for the asset or liability. The carrying amounts of financial assets such as cash approximate their fair values because of the short maturity of these instruments. Concentrations of Credit Risk, Significant Customers The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of accounts receivable. The Company does not require collateral for accounts receivables. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. The Company does not record the allowance against bad debt expense through the consolidated statements of operations, included in general and administrative expense, up to the amount of revenues recognized to date. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of December 31, 2022 and 2021, accounts receivable from two main customers amounted to $ 7,377,801 and $ 9,230,865 respectively. Revenue Recognition The Company follows the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of contracts, which includes (1) identifying the contracts or agreements with a customer, (2) identifying our performance obligations in the contract or agreement, (3) determining the transaction price, (4) allocating the transaction price to the separate performance obligations, and (5) recognizing revenue as each performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it transfers to its clients. Cash and Cash Equivalents The Company considers all highly liquid debt instruments purchased with a maturity period of three months or less to be cash or cash equivalents. The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents approximate their fair value. All of the Company’s cash that is held in bank accounts in Singapore, Hong Kong, and PRC are not protected by Federal Deposit Insurance Corporation (“FDIC”) insurance. F-10 Table of Contents Foreign Currency The Company’s principal country of operations is the PRC. The accompanying consolidated financial statements are presented in US$. The functional currency of the Company is US$, and the functional currency of the Company’s subsidiaries is RMB. The consolidated financial statements are translated into US$ from RMB at year-end exchange rates as to assets and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The resulting translation adjustments are recorded as a component of shareholders’ equity included in other comprehensive income. Gains and losses from foreign currency transactions are included in profit or loss. There were no gains and losses from foreign currency transactions from the inception to December 31, 2022. Year ended December 31, 2022 2021 RMB: US$ exchange rate 6.9 6.36 The balance sheet amounts, with the exception of equity, December 31, 2022 and December 31, 2021 were translated at 6.9 RMB and 6.36 RMB to $1.00, respectively. The equity accounts were stated at their historical rates. The average translation rates applied to statements of operations and comprehensive income (loss) accounts for the year ended December 31, 2022 and year ended December 31, 2021 were 6.75 RMB and 6.44 RMB to $1.00, respectively. Cash flows were also translated at average translation rates for the year and, therefore, amounts reported on the statement of cash flows would not necessarily agree with changes in the corresponding balances on the consolidated balance sheet. The transactions dominated in SGD are immaterial. Intangible Asset Intangible asset is software development cost of YCloud system incurred by the Company, it will be amortized on a straight line basis over the estimated useful life of 5 years. Software Development Costs We apply ASC 985-20, Software—Costs of Software to Be Sold, Leased, or Marketed, in analyzing our software development costs. ASC 985-20 requires the capitalization of certain software development costs subsequent to the establishment of technological feasibility for a software product in development. Research and development costs associated with establishing technological feasibility are expensed as incurred. Based on our software development process, technological feasibility is established upon the completion of a working model. In addition, we apply this to our review of development projects related to software used exclusively for our SaaS subscription offerings. In these reviews, all costs incurred during the preliminary project stages are expensed as incurred. Once the projects have been committed to and it is probable that the projects will meet functional requirements, costs are capitalized. F-11 Table of Contents Leases The Company adopted Accounting Standards Update No. 2016-02, Leases (Topic 842) (ASU 2016-02), and generally requires lessees to recognize operating and financing lease liabilities and corresponding right-of-use (ROU) assets on the balance sheet and to provide enhanced disclosures surrounding the amount, timing and uncertainty of cash flows arising from leasing arrangements. Operating leases are included in operating lease right-of-use (“ROU”) assets and short-term and long-term lease liabilities in our consolidated balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the leases do not provide an implicit rate, we use the industry incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. ASU 2016-02 requires that public companies use a secured incremental browning rate for the present value of lease payments when the rate implicit in the contract is not readily determinable. We determine a secured rate on a quarterly basis and update the weighted average discount rate accordingly. Income Tax Income taxes are determined in accordance with the provisions of ASC Topic 740, “Income Taxes” (“ASC Topic 740”). Under this 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 basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the periods in which those temporary differences are expected to be recovered or settled. Any 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. ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company has a subsidiary in Singapore and PRC. The Company is subject to tax in Singapore and PRC jurisdictions. As a result of its future business activities, the Company will be required to file tax returns that are subject to examination by the Inland Revenue Authority of Singapore and Tax Department of PRC. F-12 Table of Contents Capital Structure The Company currently has unlimited authorized shares of $ 0.00 par value common stock, with 195,057,503 shares issued and outstanding as of December 31, 2022. Earnings (Loss) Per Share Basic net income per share of common stock attributable to common stockholders is calculated by dividing net income attributable to common stockholders by the weighted-average shares of common stock outstanding for the period. Potentially dilutive shares, which are based on the weighted-average shares of common stock underlying outstanding stock-based awards, warrants, options, or convertible debt using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted net income per share of common stock attributable to common stockholders when their effect is dilutive. Potential dilutive securities are excluded from the calculation of diluted EPS in loss periods as their effect would be anti-dilutive. As of December 31, 2022 and 2021, there were no potentially dilutive shares. 2022 2021 Statement of Operations Summary Information: Net (loss)/ profit $ ( 9,147,415 ) $ 5,175,675 Weighted-average common shares outstanding - basic and diluted 223,259,181 305,451,498 Net (loss) / profit per share, basic and diluted $ ( 0.04 ) $ 0.02 NOTE 3. REVENUE The Company is in the business of providing an international cloud-based intelligence system, namely “YCloud” system. We aim to provide technical and auto-billing management system services to micro-business online stores in China through big data analytics, machine learning mechanisms, social network recommendations, and multi-channel data analysis. Weijiafu and Changtongfu are our customers to take charge of the Ycloud users’ profiles. Meanwhile, all YCloud users’ information is retained within YCloud system. We derive our revenue from system service fees charged for transactions conducted through YCloud. We receive 2%-3.5% of the total Gross Merchandise Volume generated in the platform as a system service fee from YCloud users through service agreement with our customers (such as Weijiafu and Changtongfu), depending on the type of service and industry. Gross Merchandise Volume, or GMV, is a term used in online retailing to indicate a total sales monetary-value for merchandise sold through a particular marketplace over a certain time frame. We generally receive the system service fee from Weijiafu and Changtongfu within the first ten days of each calendar month. As of reporting date, all the service fee receivable has been fully settled and received. As of December 31, 2022 and 2021, the Gross Merchandise Volume, or GMV in YCloud systems are as follow: Gross Merchandise Volume (“GMV”) 2022 2021 US$ US$ Non-related party 327,183,593 292,177,817 Related party 26,291,122 139,359,179 Total: 353,474,715 431,536,996 For the year end December 31, 2022 and 2021, we generated revenues from YCloud service fees amounting to $ 11,671,335 and $ 14,381,295 . Service revenue from third party were $ 10,803,232 (2021: $ 9,734,966 ) and service revenue from related party were $ 868,103 (2021: $ 4,646,329 ) for the year ended December 31, 2022. F-13 Table of Contents NOTE 4 – CASH AND CASH EQUIVALENTS As of December 31, 2022 and 2021, the Company held cash in bank amounting to $ 20,025,495 which consists of the following: December 31, 2022 December 31, 2021 Bank Deposits-USA $ 22,926 - Bank Deposits- Outside USA 20,002,569 616,593 20,025,495 616,593 NOTE 5 – INTANGIBLE ASSET, NET Intangible asset is software development cost incurred by the Company which is amortized on a straight line basis over the useful life of 5 years as follow: December 31, 2022 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Life (Years) Intangible assets: Software development $ 57,143 $ ( 36,347 ) $ 20,796 5 Foreign currency translation adjustment - - 2,392 Intangible assets, net $ 57,143 $ ( 36,347 ) $ 23,188 December 31, 2021 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Useful Life (Years) Intangible assets: Software development $ 57,143 $ ( 25,176 ) $ 31,967 5 Foreign currency translation adjustment - - 5,798 Intangible assets, net $ 57,143 $ ( 25,176 ) $ 37,765 F-14 Table of Contents Amortization expense for intangible assets was $ 14,577 and $ 12,519 for the year ended December 31, 2022 and 2021. Expected future intangible asset amortization as of December 31, 2022 was as follows: Fiscal years: Remaining 2023 $ 14,577 2024 8,611 NOTE 6 – PROPERTY AND EQUIPMENT, NET As of December 31, 2022 and 2021, property and equipment consists of the following: December 31, 2022 December 31, 2021 Property and equipment: Office equipment $ 865,623 $ 150,915 Leasehold improvement 246,643 267,791 Subtotal 1,112,266 418,706 Less: Accumulated depreciation ( 119,821 ) ( 23,353 ) Property and equipment, net $ 992,445 $ 395,353 There is addition of $ 693,560 in office equipment and leasehold improvement in 2022. Depreciation expenses of office equipment and leasehold improvement were $ 96,468 and $ 23,353 for the year ended December 31, 2022 and 2021. December 31, 2022 December 31, 2021 Amortised expenses 995,775 - Less: Accumulated depreciation ( 166,792 ) - Amortised expenses, net $ 828,983 $ - Amortised expenses are related to the office renovation. There is addition of $ 995,775 in office renovation in 2022. Depreciation expense were $ 166,792 and $nil for the year ended December 31, 2022 and 2021. NOTE 7 – ACCOUNT RECEIVABLES, NET As of December 31, 2022 and 2021, account receivables consists of the following: December 31, 2022 December 31, 2021 Account Receivables- Non related party $ 6,828,195 $ 5,627,463 Account Receivables- Related party 549,606 3,603,402 $ 7,377,801 $ 9,230,865 The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of accounts receivable. The Company does not require collateral for accounts receivable. The Company maintains an allowance for its doubtful accounts receivable due to estimated credit losses. The Company records the allowance against bad debt expense through the consolidated statements of operations, included in general and administrative expense, up to the amount of revenues recognized to date. Receivables are written off and charged against the recorded allowance when the Company has exhausted collection efforts without success. As of December 31, 2022, account receivable from non-related customers amounted to $ 6,828,195 (2021: $ 5,627,463 ) and related parties- Changtongfu are amounted to $ 549,606 (2021: $ 3,603,402 ). As of the reporting date, all the account receivables have been fully settled from 4 main non-related customers and 1 related party customer- Changtongfu. F-15 Table of Contents NOTE 8 –LOAN RECEIVABLE December 31, 2022 December 31, 2021 Loan receivables $ 1,614,841 $ 3,798,130 Loan receivable relates to the short-term loan of RMB 23 million (approximately of US$3.33 million) to a third party, which will mature on August 31, 2023 . The accrued interest and principal amount of the loan for the year ended December 31, 2022 and 2021 are as follow: December 31, 2022 December 31, 2021 Principal $ 1,614,841 $ 3,630,504 Accrued interest - 167,626 $ 1,614,841 $ 3,798,130 In 2022, the Company has waived the interest to the borrower and therefore there is no accrued interest during the year. NOTE 9 – OTHER RECEIVABLES As of December 31, 2022 and 2021, other receivables-current consists of staff advances and system set up fees as follow: December 31, 2022 December 31, 2021 Advances to staff 50,839 19,302 Others - 10,845 50,839 30,147 As of December 31, 2022 and 2021, other receivable non-current consist of office rental deposit as follow: December 31, 2022 December 31, 2021 Rental deposit 240,202 - F-16 Table of Contents NOTE 10 – PREPAYMENTS As of December 31, 2022 and 2021, prepayments consist of the following: December 31, 2022 December 31, 2021 Software development fee- Current $ 2,580,416 $ 61,165 Software development fee- Non current 10,000,000 Block chain software and annual fee 580,516 630,291 Office furniture - 1,895,591 Office rental - 173,611 $ 13,160,932 $ 2,760,658 As of December 31, 2022, software development fee and others is mainly related to the WT Pay system development prepayment of $ 10 million, which is expected to be completed by September 2023. As of December 31, 2022 and 2021, prepayments- related parties consist of the following: December 31, 2022 December 31, 2021 Y-cloud system upgrade $ 1,914,515 $ - As of December 31, 2022, the prepayment-related parties of $ 1.9 million are mainly related to the Y-cloud system upgrade, which is expected to be completed by September 2023. NOTE 11 – RENTAL DEPOSIT-RELATED PARTIES As of December 31, 2022 and December 31, 2021, rental deposit of $nil and $ 272,063 relates to office lease deposit. The office tenancy period is 5 years and it will be refundable after the end of tenancy. With effect from July 1, 2022, the office tenancy has been transferred to a related company- Zhiding Network Technology (Beijing) Co Limited (“ZNTB”), in which the remaining office rental will be paid by ZNTB under the remaining tenancy period. On July 1, 2022, the difference between the carrying amounts of the right-of-use asset and the lease liability amounting to $ 209,402 was recognized as other income. F-17 Table of Contents NOTE 12 – AMOUNT DUE TO RELATED PARTIES As of December 31, 2022 As of December 31, 2021 Related parties payable $ 521,296 $ 745,532 Director fee payable 770,000 360,000 $ 1,291,296 $ 1,105,532 As of December 31, 2022, the related party balance of $ 521,296 represented advances and professional expenses paid on behalf by Director, which consists of $ 260,198 advance from Dai Zheng, $ 42,000 advance from Li Zhuo, $ 10,000 from Che Kean Tat and $ 209,098 office rental advance from Liu Pijun through Zhiding Network Technology (Beijing) Co Limited (“ZNTB”). It is unsecured, interest-free with no fixed payment term and imputed interest is considered to be immaterial. As of December 31, 2022, the director fee payable of $ 770,000 represented the accrual of director fees from the appointment date to December 31, 2022. NOTE 13 – TAX PAYABLES As of December 31, 2022, tax payable of $ 128,979 (2021: $ 711,841 ) consisted of PRC corporate income tax at the rate from 15 % to 25 %, Value-added Tax at the rate from 6 % to 13 % and PRC Urban construction tax and levies as follow: As of December 31, 2022 As of December 31, 2021 Corporate income tax $ - $ 649,032 VAT, Urban construction tax and levies 128,979 62,809 $ 128,979 $ 711,841 NOTE 14 – ACCRUED EXPENSES Accrued expenses of $ 298,595 consists of the accrued payroll, CPF and social welfare as follow: December 31, 2022 December 31, 2021 Accrued payroll $ 298,595 $ 217,073 F-18 Table of Contents NOTE 15 – OTHER PAYABLES Other payables of $ 2,365,808 consists of the payables for system set up fee and related documentation expenses as follows: December 31, 2022 December 31, 2021 Y-Cloud System upgrade and iteration payables $ 1,879,673 $ - Security account set up fee-Staff 486,135 306,270 $ 2,365,808 $ 306,270 NOTE 16 – EQUITY The Company has an unlimited number of ordinary shares authorized, and has issued 195,057,503 shares with no par value as of December 31, 2022. On March 29, 2019, the Company has issued 100,000,000 shares with no par value to thirty-three founders. On September 3, 2019, the Company has issued a total 74,000 shares at $ 3 each to 5 non-US shareholders. The total outstanding shares has increased to 100,074,000 shares as of December 31, 2019. In February 2020, there are 1,666,666 shares were issued at $ 3 per share to 2 new shareholders. On July 10, 2020, the Company issued another 26,000 shares at $ 3 per share to 2 new shareholders and the total outstanding shares has increased to 101,766,666 shares. On September 15, 2020, the Wyoming Secretary of State approved the Company’s certificate of amendment to amend its Articles of Incorporation to effect 3 for 1 forward stock split . The total issued and outstanding shares of the Company’s common stock has been increased from 101,766,666 to 305,299,998 shares, with the par value unchanged at zero. On September 21, 2020, there are 151,500 shares issued at $ 5 per share to 303 new shareholders, the Company’s common stock issued has been increased to 305,451,498 shares as of December 31, 2020. On April 13, 2022, the Company and 15 Shareholders entered into that certain Share Exchange Agreement (the “Share Exchange Agreement”), pursuant to which Company and the 15 Shareholders have cancelled 120,418,995 shares of Common Stock (“Cancellation Shares”). Upon completion of the transaction, the outstanding shares of the Company’s Common Stock has been decreased from 305,451,498 shares to 185,032,503 shares as of June 30, 2022. On July 21, 2022, the Company has uplisted its common stock to the Nasdaq Capital Market, and the closing of its public offering of 10,000,000 shares of common stock with the gross proceeds of $ 40,000,000 and net proceeds of $ 37,057,176 after deducting the total offering cost of $ 2,942,824 . The shares were priced at $ 4.00 per share, and the offering was conducted on a firm commitment basis. The shares continue to trade under the stock symbol “WETG.” The Company’s total issued and outstanding common stock has been increased to 195,032,503 shares after the offering. On July 22, 2022, the Company issued 25,000 shares of common stock to certain service providers for services in connection with the public offering, the fair value of the share was $ 477,500 . The Company’s total issued and outstanding common stock has been increased to 195,057,503 shares as of December 31, 2022. NOTE 17 – INCOME TAXES The Company is subject to U.S. Federal tax laws. The Company has not recognized an income tax benefit for its operating losses in the United States because the Company does not expect to commence active operations in the United States. UTour Pte Ltd (“UTour”) was incorporated in Singapore and is subject to Singapore profits tax at a tax rate of 17 %. Since UTour had no taxable income during the reporting period, it has not paid Singapore profits taxes. UTour has not recognized an income tax benefit for its operating losses in Singapore because it does not expect to commence active operations in Singapore. WeTrade Information Technology Limited (“WITL”) was incorporated in Hong Kong and is subject to Hong Kong profits tax at a tax rate of 16.5 %. Since WITL had no taxable income during the reporting period, it has not paid Hong Kong profits taxes. WITL has not recognized an income tax benefit for its operating losses in Hong Kong because the Company does not expect to commence active operations in Hong Kong. The Company is currently conducting its major operations in the PRC through Yueshang Information Technology (Beijing) Co., Ltd., Yushang Group (Hunan) Network Technology Limited, Yueshang Technology Group ( Hainan) Limited and Tibet Xiaoshang Technology Group Limited, which are subject to tax from 15 % to 25 %. NOTE 18 – SUBSEQUENT EVENT On June 9, 2023, the Wyoming Secretary of State approved the Company’s certificate of amendment to amend its Articles of Incorporation to effect 1 for 185 reverse stock split. The total issued and outstanding shares of the Company’s common stock decreased from 195,057,503 to 1,054,364 shares, with the par value unchanged at zero . The Reverse Stock Split is intended to more expediently enable to Company to regain compliance to achieve a minimum bid price of $1.00 per share for continued listing on Nasdaq, as set forth in Nasdaq Listing Rule 5550(a)(2) (the "Minimum Bid Requirement"). As a result of the Reverse Stock Split, every one-for-one hundred and eighty-five (185) shares of the Company's Common Stock then issued and outstanding will automatically, and without any action of the Company or any holder thereof, be combined, converted, and changed into one (1) validly issued and non-assessable share of Common Stock. No fractional shares will be issued to any shareholder, and in lieu of issuing any such fractional shares, the fractional shares resulting from the Reverse Stock Split will be rounded up to the nearest whole share of Common Stock. NOTE 19 – RECLASSIFICATION A prior year amount have been reclassified for consistency with the current year presentation. This reclassification had no effect on the reported results of operations and performance position. A reclassification has been made to the Consolidated Statements of Cash Flows for the year ended December 31, 2021, to reclassify the loan receivable from cash flow financing activities to cash flow investing activities. F-19