EDGAR 10-K Filing

Company CIK: 1368275
Filing Year: 2022
Filename: 1368275_10-K_2022_0001062993-22-001065.json

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ITEM 1. BUSINESS
ITEM 1. BUSINESS
Forward Looking Statements
This report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors", that may cause our company's or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
Our financial statements are stated in United States dollars (US$) and are prepared in accordance with United States generally accepted accounting principles.
In this report, unless otherwise specified, all references to "common shares" refer to the common shares of our capital stock.
As used in this report, the terms "we", "us", "our", "W&E Source Corp." means W&E Source Corp., unless otherwise indicated.
Corporate Overview
The Company has identified the global tourism market as its first investment target. As it currently exists, the tourism industry is fragmented into various geographic regions. We believe that approaching this industry from a global perspective is an emerging market with tremendous growth potential. We plan to set up and/or acquire offices in various regions of the world and through them, develop the local tourism industry and expand our local tourism market. Ultimately, we plan to unify and manage our regional offices and to market our global services through the internet.
We have set up three subsidiaries, Airchn Travel Global, Inc. in Seattle, Washington ("ATGI"), Airchn Travel (Canada) Inc., in Vancouver, British Columbia in Canada ("ATCI") and Airchn Travel (Beijing) Inc. in Beijing, China ("ATBI"). Our Beijing office has been closed as of June 30, 2021 due to lack of business and to reduce operating costs.
We are engaged in services such as airline and cruise ticketing, customized and packaged tours, travel blogs, travel magazines, sales of travel related merchandise, group hotel reservations, business travel arrangements, conference travel arrangements, car rental and admission ticket sale for local tourist attractions.
We will continue to explore other business growth opportunities, regardless of industry, in order to diversify our business operations and investments.
On January 17, 2012, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware to change its name from News of China, Inc. to W&E Source Corp. In connection with the name change, our listing symbol also changed from "NWCH" to "WESC." In addition, the Company also increased its total authorized shares to 500,000,000 to anticipate future financing through the issuance of our equity or convertible debt to finance our business.
Employees
As of June 30, 2021, we have one part time consultant, who is responsible for sales of the various travel products and consulting services we offer. We have not experienced any labor disputes and we believe we have good relationships with our employees. We are not a party to any collective bargaining agreements.
Research and Development Expenditures
We did not incur expenditures in research and development over the last fiscal year.
Intellectual Property
We do not own, either legally or beneficially, any patent or trademark.

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ITEM 1A. RISK FACTORS
ITEM 1A. RISK FACTORS
Our common shares are considered speculative. Prospective investors should consider carefully the risk factors set out below.
Risks Related To Our Business
Our revenue is derived from the global travel industry and a prolonged or substantial decrease in global travel volume, as well as other industry trends, could adversely affect us.
Our revenue is derived from the global travel industry. As a result, our revenue is directly related to the overall level of travel activity, and is therefore significantly impacted by declines in, or disruptions to, travel in any region due to factors entirely outside of our control. Such factors include:
• global security issues, political instability, acts or threats of terrorism, hostilities or war and other political issues that could adversely affect global air travel volume;
• epidemics or pandemics, such as COVID-19, H1N1 "swine" flu, avian flu, Severe Acute Respiratory Syndrome ("SARS") and Ebola virus disease;
• natural disasters, such as hurricanes, volcanic activity and resulting ash clouds, earthquakes and tsunamis;
• general economic conditions, particularly to the extent that adverse conditions may cause a decline in travel volume, such as the crisis in the global credit and financial markets, diminished liquidity and credit availability, declines in consumer confidence and discretionary income, declines in economic growth, increases in unemployment rates and uncertainty about economic stability;
• the financial condition of travel suppliers, including airlines and hotels, and the impact of any changes such as airline bankruptcies or consolidations on the cost and availability of air travel and hotel rooms;
• changes to laws and regulations governing the airline and travel industry and the adoption of new laws and regulations detrimental to operations, including environmental and tax laws and regulations;
• fuel price escalation;
• work stoppages or labor unrest at any of the major airlines or other travel suppliers or at airports;
• increased security, particularly airport security that could reduce the convenience of air travel;
• travelers' perception of the occurrence of travel-related accidents, of the environmental impact of air travel, particularly in regards to CO2 emissions, or of the scope, severity and timing of the other factors described above; and
• changes in occupancy and room rates achieved by hotels.
If there were to be a prolonged substantial decrease in travel volume, for these or any other reason, it would have an adverse impact on our business, financial condition and results of operations.
The COVID-19 pandemic could negatively affect the Company's business and operating results.
The future impacts of the global emergence of the novel strain of Corona virus and the disease it causes (known as "COVID-19") on the Company's business or operating and financial results are unpredictable and cannot be identified with certainty at this time. The widespread health crisis has adversely affected the global economy and resulted in a widespread economic downturn which could adversely impact demand for our services. Such interruptions include significant disruptions and restrictions on travel. There is no assurance that the outbreak will not have a material adverse impact on our business or results of operations. Further, our operations could be negatively affected if a significant number of our service providers are unable to perform their normal duties because of contracting COVID-19 or based on further direction from governments, public health authorities or regulatory agencies. The extent of the impact, if any, will depend on developments beyond our control, including actions taken by governments, financial institutions, monetary policy authorities, and public health authorities to contain and respond to public health concerns and general economic conditions as a result of the pandemic.
We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required or recommended by federal, provincial, state or local authorities, or that we determine are in the best interests of our customers, partners, suppliers, shareholders and other stakeholders. We cannot be certain of potential effects any such alterations or modifications may have on our business or operating and financial results for the fiscal year ending June 30, 2022.
The travel industry may not recover from the recent global financial crisis and recession to the extent anticipated or may not grow in line with long-term historical trends following any recovery.
As a participant in the global travel industry, our business and operating results are impacted by global economic conditions, including the recent European debt crisis, a slowdown in growth of the Chinese economy, a prolonged slow economic recovery in Japan and a general reduction in net disposable income as a result of fiscal measures adopted by countries to address high levels of budgetary indebtedness, which may adversely affect our business, results of operations and financial condition. In our industry, the recent financial crisis and global recession have resulted in higher unemployment, a decline in consumer confidence, large-scale business failures and tightened credit markets. As a result, the global travel industry, which historically has grown at a rate in excess of global GDP growth during economic expansions, has experienced a cyclical downturn. A continuation of recent adverse economic developments in areas such as employment levels, business conditions, interest rates, tax rates, fuel and energy costs, particularly a rise in the price of crude oil, and other matters could reduce discretionary spending further and cause the travel industry to continue to contract. In addition, the global economy may not recover as quickly or to the extent anticipated, and consumer spending on leisure travel and business spending on corporate travel may not increase despite improvement in economic conditions. As a result, our business may not benefit from a broader macroeconomic recovery, which could adversely affect our business, financial condition or results of operations.
The travel industry is highly competitive, and we are subject to risks relating to competition that may adversely affect our performance.
Our businesses operate in highly competitive industries. If we cannot compete effectively, we may lose share to our competitors, which may adversely affect our financial performance. Our continued success depends, to a large extent, upon our ability to compete effectively in industries that contain numerous competitors, some of which may have significantly greater financial, marketing, personnel and other resources than us.
The travel industry is seasonal.
Our business travel operations will experience seasonal fluctuations, reflecting seasonal variations in demand for travel services. During the first quarter, demand for travel services generally declines and the number of bookings flattens or decreases, in part due to a slowdown in business activity during the holidays. Demand for travel services generally peaks during the second half of the year and there may be seasonal fluctuations in allocations of travel services made available to us by travel suppliers. Consequently, our revenue may fluctuate from quarter to quarter.
Our business depends on the technology infrastructure of third parties.
We rely on third-party computer systems and other service providers, including the computerized reservation systems of airlines and hotels to make reservations and confirmations. Other third parties provide, for instance, our back-up data center, telecommunications access lines, significant computer systems and software licensing, support and maintenance service and air-ticket delivery. Any interruption in these or other third-party services or deterioration in their performance could impair the quality of our service.
Risks Related To Our Company
We have only commenced our business operations in October, 2005 and we have a limited operating history. If we cannot successfully manage the risks normally faced by start-up companies, we may not achieve profitable operations and ultimately our business may fail.
As of June 30, 2021, we had an accumulated deficit of $1,255,841. We anticipate continuing to incur significant losses until, at the earliest, we generate sufficient revenues to offset the substantial up-front expenditures and operating costs associated with developing and marketing our services. There can be no assurance that we will ever operate profitably.
We will also encounter risks and difficulties frequently experienced by growing companies in evolving industries such as the travel agency and travel service industry. Our operating history to date is not adequate to evaluate how we will address these risks and difficulties in the future. Some of the risks relate to our ability to: (i) attract and retain customers and encourage our customers to engage in repeat transactions; (ii) retain our existing agreements and relationships with travel suppliers such as hotels and airlines and to expand our product and service offerings on satisfactory terms with our travel suppliers; (iii) operate, support, expand and develop our operations, our call centers, our website, and our communications and other systems; (iv) diversify our sources of revenue; (v) maintain effective control of our expenses; and (vi) respond to changes in our regulatory environment.
If we are not successful in addressing any or all of these risks, our business may be materially affected in an adverse manner.
There is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.
In their report accompanying this annual report, our independent auditors stated that our consolidated financial statements were prepared assuming that we would continue as a going concern. Our ability to continue as a going concern is an issue raised as we have losses from operations and an accumulated deficit. We anticipate that we will continue to experience net operating losses. Our ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining additional funding from the sale of our securities. Our lack of revenue and continued net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.
We have generated limited revenues and have only limited marketing experience to develop customers.
We have generated revenues by providing air ticket reservations, hotel reservations and other travel related services to our customers. We do not believe that we will generate significant revenues in the immediate future. There can be no assurance that we will ever be able to obtain a significant number of customers to generate meaningful revenues or achieve profitable operations.
We have only limited experience in developing and marketing our travel services, and there is limited information available concerning the potential performance or market acceptance of our proposed services. There can be no assurance that unanticipated expenses, problems or technical difficulties will not occur which would result in material delays in commercialization of our services or that our efforts will result in successful commercialization.
The continued growth of our business will require additional funding from time to time which would be used for general corporate purposes. General corporate purposes may include acquisitions, investments, repayment of debt, capital expenditures, repurchase of our capital stock and any other purposes that we may specify in any prospectus supplement. Obtaining additional funding would be subject to a number of factors including market conditions, operational performance and investor sentiment. These factors may make the timing, amount, terms and conditions of additional funding unattractive, or unavailable, to us.
The terms of any future financing may adversely affect your interest as stockholders.
If we require additional financing in the future, we may be required to incur indebtedness or issue equity securities, the terms of which may adversely affect your interests in our company. For example, the issuance of additional indebtedness may be senior in right of payment to your shares upon our liquidation. In addition, indebtedness may be under terms that make the operation of our business more difficult because the lender's consent will be required before we take certain actions. Similarly the terms of any equity securities we issue may be senior in right of payment of dividends to your common stock and may contain superior rights and other rights as compared to your common stock. Further, any such issuance of equity securities may dilute your interest in our company, which may reduce the value of your investment.
Our Certificate of Incorporation and Bylaws contain limitations on the liability of our directors and officers, which may discourage suits against directors and executive officers for breaches of fiduciary duties.
Our Certificate of Incorporation, as amended, and our Bylaws contain provisions limiting the liability of our directors for monetary damages to the fullest extent permissible under Delaware law. This is intended to eliminate the personal liability of a director for monetary damages on an action brought by origin our right for breach of a director's duties to us or to our stockholders except in certain limited circumstances. In addition, our Certificate of Incorporation, as amended, and our Bylaws contain provisions requiring us to indemnify our directors, officers, employees and agents serving at our request, against expenses, judgments (including derivative actions), fines and amounts paid in settlement. This indemnification is limited to actions taken in good faith in the reasonable belief that the conduct was lawful and in, or not opposed to our best interests. The Certificate of Incorporation and the Bylaws provide for the indemnification of directors and officers in connection with civil, criminal, administrative or investigative proceedings when acting in their capacities as agents for us. These provisions may reduce the likelihood of derivative litigation against directors and executive officers and may discourage or deter stockholders or management from suing directors or executive officers for breaches of their fiduciary duties, even though such an action, if successful, might otherwise benefit our stockholders and directors and officers.
Our success depends on our management team and other key personnel, the loss of any of whom could disrupt our business operations.
Our future success will depend in substantial part on the continual services of our senior management, including our President, Chief Executive Officer and Chief Financial Officer, Hong Ba. As a startup company, currently none of the senior management team draws salaries from our company. We do not carry key person life insurance on any of our officers or employees. The loss of the services of one or more of our key personnel could impede implementation of our business plan and result in reduced profitability.
Because our officers, directors and principal shareholders control a majority of our common stock, investors will have little or no control over our management or other matters requiring shareholder approval.
Our officers and directors in the aggregate, beneficially own approximately 28.4% of issued and outstanding shares of our common stock. As a result, they may have the ability to control matters affecting minority shareholders, including the election of our directors, the acquisition or disposition of our assets, and the future issuance of our shares. Because our officers, directors and principal shareholders control the company, investors will not be able to replace our management if they disagree with the way our business is being run. Because control by these insiders could result in management making decisions that are in the best interest of those insiders and not in the best interest of the investors, you may lose some or all of the value of your investment in our common stock.
Because we do not have sufficient insurance to cover our business losses, we might have uninsured losses, increasing the possibility that you would lose your investment.
We may incur uninsured liabilities and losses as a result of the conduct of our business. We do not currently maintain any comprehensive liability or property insurance. Even if we obtain such insurance in the future, we may not carry sufficient insurance coverage to satisfy potential claims. We do not carry any business interruption insurance. Should uninsured losses occur, any purchasers of our common stock could lose their entire investment.
Risks Relating to the People's Republic of China
The economic policies of the People's Republic of China could affect our business.
China is one of the regions which we will focus our business development. Accordingly, our results of operations and prospects are subject, to a significant extent, to the economic, political and legal developments in the People's Republic of China. While the People's Republic of China's economy has experienced significant growth in the past 20 years, such growth has been uneven, both geographically and among various sectors of the economy. The Chinese government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures benefit the overall economy of the People's Republic of China, but they may also have a negative effect on us.
The economy of the People's Republic of China has been changing from a planned economy to a more market-oriented economy. In recent years, the Chinese government has implemented measures emphasizing the utilization of market forces for economic reform and the reduction of state ownership of productive assets, and the establishment of corporate governance in business enterprises; however, a substantial portion of productive assets in the People's Republic of China are still owned by the Chinese government. In addition, the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies. It also exercises significant control over the People's Republic of China's economic growth through the allocation of resources, the control of payment of foreign currency-denominated obligations, the setting of monetary policy and the provision of preferential treatment to particular industries or companies.
Capital outflow policies in the People's Republic of China may hamper our ability to expand our business and/or operations. The People's Republic of China has adopted currency and capital transfer regulations. These regulations may require us to comply with complex regulations for the movement of capital. Although our management believes that it is currently in compliance with these regulations, should these regulations or the interpretation of them by courts or regulatory agencies change, we may not be able to remit income earned and proceeds received in connection with any off-shore operations or from other financial or strategic transactions we may consummate in the future.
Fluctuation of the Renminbi, or Chinese Yuan ("Renminbi"), could materially affect our financial condition and results of operations.
Fluctuation of the Renminbi, the currency of the People's Republic of China, could materially affect our financial condition and results of operations. The value of the Renminbi fluctuates and is subject to changes in the People's Republic of China's political and economic conditions. Since July 2005, the conversion of Renminbi into foreign currencies, including United States dollars, is pegged against the inter-bank foreign exchange market rates or current exchange rates of a basket of currencies on the world financial markets. As of June 30, 2021, the exchange rate between the Renminbi and the United States dollar was approximately 6.4567 Renminbi to every one United States dollar.
It will be extremely difficult to acquire jurisdiction and enforce liability against our officers, directors and assets based in The People's Republic of China.
Because some of our executive officers and current directors are Chinese citizens, it may be difficult, if not impossible, to acquire jurisdiction over these persons in the event a lawsuit is initiated against us and/or our officers and directors by a stockholder or group of stockholders in the United States.
Risks Associated With Our Common Stock
Trading on the OTC Markets may be volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their shares.
Our common stock is quoted on the OTC Markets. Trading in stock quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices due to many factors that may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like Nasdaq or a stock exchange like the New York Stock Exchange. Accordingly, our shareholders may have difficulty reselling any of their shares.
Our stock is a penny stock. Trading of our stock may be restricted by the SEC's penny stock regulations and the FINRA's sales practice requirements, which may limit a stockholder's ability to buy and sell our stock.
Our stock is a penny stock. The Securities and Exchange Commission has adopted Rule 15g-9 which generally defines "penny stock to be any equity security that has a market price (as defined) less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities are covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and "accredited investors". The term "accredited investor" refers generally to institutions with assets in excess of $5,000,000 or individuals with a net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the SEC which provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statements showing the market value of each penny stock held in the customer's account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer's confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in, and limit the marketability of, our common stock.
In addition to the "penny stock rules" promulgated by the Securities and Exchange Commission, the Financial Industry Regulatory Authority has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, the Financial Industry Regulatory Authority believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The Financial Industry Regulatory Authority requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock.
Other Risks
Trends, Risks and Uncertainties
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of the risk factors before making an investment decision with respect to our common stock.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

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ITEM 2. PROPERTIES
ITEM 2. PROPERTIES
We currently lease our only office in Vancouver which covers approximately 400 square feet with an annual lease of CAD$9,600. We subleased out our office in Seattle to a third party effective August 1, 2014. We did not renew our lease for our Beijing office which terminated at the end of 2013.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. LEGAL PROCEEDINGS
We know of no material, active or pending legal proceedings against our company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information
Our common stock is currently not traded on any exchange. Our common stock was quoted on the OTC Markets. We cannot assure you that there will be a market for our common stock in the future.
The following is a report of high and low bid prices for each quarterly period for the years ended June 30, 2021 and 2020 obtained from Yahoo! Finance.
Quarter Ended
High
Low
June 30, 2021
$0.02
$0.01
March 31, 2021
$0.02
$0.01
December 31, 2020
$0.03
$0.01
September 30, 2020
$0.01
$0.01
June 30, 2020
$0.01
$0.01
March 31, 2020
$0.01
$0.01
December 31, 2019
$0.01
$0.01
September 30, 2019
$0.02
$0.01
Holders of our Common Stock
As of June 30, 2021, there were approximately 61 holders of record of our common stock. As of such date, 130,085,501 shares of common stock were issued and outstanding.
Our shares of common stock are issued in registered form. Colonial Stock Transfer Co, Inc. is the registrar and transfer agent for our shares of common stock. Our CUSIP number is 65248X102.
Dividends
Since our inception, we have not declared nor paid any cash dividends on our capital stock and we do not anticipate paying any cash dividends in the foreseeable future. Our current policy is to retain any earnings in order to finance the expansion of our operations. Our board of directors will determine future declarations and payments of dividends, if any, in light of the then-current conditions they deem relevant and in accordance with applicable corporate law.
There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends.
Securities authorized for issuance under equity compensation plans.
As at June 30, 2021, we had not adopted any equity compensation plan.
Recent Sales of Unregistered Securities and Use of Proceeds
Not applicable.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. SELECTED FINANCIAL DATA
Not required for smaller reporting companies.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The Company has identified the global tourism market as its first investment target. As it currently exists, the tourism industry is fragmented into various geographic regions. We believe that approaching this industry from a global perspective is an emerging market with tremendous growth potential. We plan to set up and/or acquire offices in various regions of the world and through them, develop the local tourism industry and expand our local tourism market. Ultimately, we plan to unify and manage our regional offices and to market our global services through the internet.
We have set up three subsidiaries, Airchn Travel Global, Inc. in Seattle, Washington ("ATGI") and Airchn Travel (Canada) Inc., in Vancouver, British Columbia in Canada ("ATCI") and Airchn Travel (Beijing) Inc. in Beijing, China ("ATBI"). Our Beijing office has been closed as of June 30, 2021 due to lack of business and to reduce operating costs.
We are engaged in services such as airline and cruise ticketing, customized and packaged tours, travel blogs, travel magazines, sales of travel related merchandise, group hotel reservations, business travel arrangements, conference travel arrangements, car rental and admission ticket sale for local tourist attractions.
We will continue to explore other business growth opportunities, regardless of industry, in order to diversify our business operations and investments.
On January 17, 2012, the Company filed a Certificate of Amendment to its Certificate of Incorporation with the Secretary of State of Delaware to change its name from News of China, Inc. to W&E Source Corp. In connection the name change, our listing symbol also changed from "NWCH" to "WESC." In addition, the Company also increased its total authorized shares to 500,000,000 to anticipate future financing through the issuance of our equity or convertible debt to finance our business.
Effective January 1, 2018, the Company adopted the guidance of Accounting Standards Codification (ASC) 606, Revenue from Contracts. The implementation of ASC 606 did not have a material impact on the Company's consolidated financial statements. ASC 606 create a five-step model that requires entities to exercise judgement when considering the terms of contract, which includes (1) identifying the contracts or agreement 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 obligation, 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.
COVID-19
In December 2019, a novel strain of coronavirus, COVID-19, was first detected in Wuhan, China, and has since spread to other regions, including Europe and North America. On March 11, 2020, the World Health Organization declared that the rapidly spreading COVID-19 outbreak was a global pandemic ("COVID-19 pandemic"). In response to the pandemic, many governments around the world have implemented, and continue to implement, a variety of measures to reduce the spread of COVID-19, including travel restrictions and bans, instructions to residents to practice social distancing, quarantine advisories, shelter-in-place orders and required closures of non-essential businesses. These government mandates have forced many of the companies on whom our business relies, including hotels and other accommodation providers and airlines, to seek government support in order to continue operating, to curtail drastically their service offerings or to cease operations entirely. Further, these measures have materially adversely affected, and may further adversely affect, consumer sentiment and discretionary spending patterns, economies and financial markets, and our customers. The COVID-19 pandemic and the resulting economic conditions and government orders have resulted in a material decrease in consumer spending and an unprecedented decline in travel activities and consumer demand for related services. Our financial results and prospects are almost entirely dependent on the sale of such travel-related services. Our results for the year ended June 30, 2021 have been significantly and negatively impacted, with a material decline in gross travel bookings and total revenues as compared to the corresponding period in 2019-2020. We expect to continue to see severely reduced new travel reservation bookings as compared to 2019-2020 levels for the foreseeable future, which will have a materially adverse impact on our business, financial condition, results of operations and cash flows. Due to the uncertain and rapidly evolving nature of current conditions around the world, we are unable to predict accurately the impact that the COVID-19 pandemic will have on our business going forward. With the continued spread of COVID-19 in the United States and various other countries, we expect the pandemic and its effects to continue to have a significant adverse impact on our business for the duration of the pandemic, during any resurgences of the pandemic and during the subsequent economic recovery, which could be an extended period of time.
Results of Operations
The following summary of our results of operations should be read in conjunction with our audited financial statements for the years ended June 30, 2021 and 2020.
Years Ended June 30, 2021 and 2020:
June 30, 2021
June 30, 2020
Revenues $ -
$
Cost of revenues
-
-
Expenses
General and administrative expenses
(55,028 )
(51,286 )
Interest expense
(14,386 )
-
Gain on debt settlement
90,433
-
Foreign currency exchange gain (loss)
6,158
(4,657 )
Net income (loss) $ 27,177
$ (55,159 )
Revenues
We have generated total revenues of $Nil from operations during the year ended June 30, 2021 as compared to $784 for the same period in 2020, a decrease of $784 or 100%. The decrease was mainly due to the decrease in our travel business arrangement income caused by the COVID-19 pandemic globally in the year ended June 30, 2021.
Expenses
General and administrative expenses for the year ended June 30, 2021 was $55,028 and increased from $51,286, or 7%, compared with the year ended June 30, 2020. The increase in expenses during the current year was mainly due to an increase in legal, accounting and filing fees due to the share issuance for the debt settlement.
Net income (loss)
We had net income of $27,177 and net losses of $55,159 for the years ended June 30, 2021 and 2020, respectively, and had an accumulated deficit of $1,255,841 since the inception of our business through June 30, 2021. The increase in the net income is mainly due to the gain on debt settlement.
Liquidity and Capital Resources
Our financial condition for the years ended June 30, 2021 and 2020 are summarized as follows:
Working Capital
June 30, 2021
June 30, 2020
Current Assets $ 2,290
$ 3,546
Current Liabilities
(36,581 )
(213,480 )
Working Capital $ (34,291 ) $ (209,934 )
Our working capital deficiency for the year ended June 30, 2021 was significantly decreased by $175,643 compared with 2020 mainly due to a decrease in accrued liabilities due to the elimination of the debt for funds advanced for share issuance.
Cash Flows
June 30, 2021
June 30, 2020
Cash used in operating activities $ (33,698 ) $ (49,459 )
Cash used in investing activities
-
-
Cash provided by financing activities
32,153
49,744
Cumulative translation adjustment
Net decrease in cash $ (1,260 ) $ 1,000
Cash Used in Operating Activities
For the year ended June 30, 2021, our cash used in operating activities decreased by $15,761 compared with the previous year. The decrease is mainly due to the debt settlement by share issuance during the year ended June 30, 2021 compared with the prior year.
Cash Used in Investing Activities
For the year ended June 30, 2021, no cash was used in investing activities.
Cash Provided by Financing Activities
For the year ended June 30, 2021, the Company received $32,153 proceeds from related parties, as compared with $49,744 in the previous year.
Cash Requirements
Over the next 12-months ending June 30, 2022, we anticipate that we will incur the following operating expenses:
Expense
Amount
General and administrative $ 40,000
Professional fees
60,000
Foreign currency exchange loss
4,000
Total $ 104,000
Our CEO, Hong Ba, has committed to providing our working capital requirements for the next 12 months.
There is substantial doubt about our ability to continue as a going concern as the continuation of our business is dependent upon the continued financial support from our shareholders, our ability to obtain necessary equity financing to continue operations, and achieving a profitable level of operations. The issuance of additional equity securities by us could result in a significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.
In addition to the issues set out above regarding our ability to raise capital, global economies are currently undergoing a period of economic uncertainty related to the COVID-19 pandemic and the tightening of credit markets worldwide. This has resulted in numerous adverse effects, including unprecedented volatility in financial markets and stock prices, slower economic activity, decreased consumer confidence, increased commodity prices, reduced corporate profits and capital spending, increased unemployment, liquidity concerns and volatile and increasing energy prices. We anticipate that the current economic conditions and the credit shortage will adversely impact our ability to raise financing. In addition, if the future economic environment continues to be less favorable than it has been in recent years, we may experience difficulty in completing our current business plan.
Off Balance Sheet Arrangements
We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.
Recently Issued Accounting Standards
We continue to assess the effects of recently issued accounting standards. The impact of all recently adopted and issued accounting standards has been disclosed in the Footnotes to the financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not required.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements and notes thereto are included herein beginning at page.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
We maintain "disclosure controls and procedures", as that term is defined in Rule 13a-15(e), promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company's reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal accounting officer to allow timely decisions regarding required disclosure.
As required by paragraph (b) of Rules 13a-15 under the Securities Exchange Act of 1934, our management, with the participation of our principal executive officer and principal financial officer, evaluated our company's disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K. Based on this evaluation, our management concluded that as of the end of the period covered by this annual report on Form 10-K, our disclosure controls and procedures were not effective due to the material weaknesses described in Management's Report on Internal Control over Financial Reporting below.
Management's annual report on internal control over financial reporting
Our management, including our principal executive officer, principal financial officer and our Board of Directors, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934).
Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of June 30, 2021. Our management's evaluation of our internal control over financial reporting was based on the framework in Internal Control-Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of June 30, 2021 due to the material weaknesses described below.
(a) The Company has inadequate segregation of duties consistent with control objectives.
(b) The Company has insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements.
A material weakness is a deficiency or a combination of control deficiencies in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Limitations on Effectiveness of Controls
Our principal executive officer and principal financial officer do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additional controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting during the quarter ended June 30, 2021 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.
Certifications
Certifications with respect to disclosure controls and procedures and internal control over financial reporting under Rules 13a-14(a) or 15d-14(a) of the Exchange Act are attached to this annual report on Form 10-K.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. OTHER INFORMATION
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following table sets forth information regarding our directors and executive officers.
Date First Elected or
Name
Position Held with our Company
Age
Appointed
Hong Ba
Chief Executive Officer, Chief Financial Officer, and Director
August 1, 2011
September 1, 2011
Junjun Wu
Director
September 1, 2011
The following is a brief account of the education and business experience of directors and executive officers during the past five years, indicating their principal occupation during the period, and the name and principal business of the organization by which they were employed.
Hong Ba
Mrs. Ba joined our company in August 2011 as Chief Executive Officer and was appointed as a Director on September 1, 2011 and as our Chief Financial Officer on May 13, 2013. Mrs. Ba was born in 1966. She graduated from Taiyuan University Software in 1988. She had worked in China Eastern Airline from 1988. She has over 20 years of work experience in aviation marketing. Mrs. Ba has been working for Shanxi Jinyan Aviation Business Inc. as the president and a director from 2008. Mrs. Ba provides her services on a full time basis to our company.
We believe Mrs. Ba is qualified to serve on our board of directors because of her extensive business experience and network of business associates in China which will assist our company to seek and identify future opportunities.
Junjun Wu
Mr. Wu was born in 1970. He graduated from Wanbailin High School in 1990. He started to do business from 1990 such as garage, scrap steel recycling, decoration materials, storage and logistics, trade, etc. Mr. Wu is the founder of Shanxi Baisheng Investment Ltd and has been serving as President and Director since founding the company in June, 2004 (Date of Inception). Shanxi Baisheng Investment Ltd is focused on investments in coal mining and real estate.
We believe Mr. Wu is qualified to serve on our board of directors because of his extensive business experience and network of business associates in China which will assist our company to seek and identify future opportunities.
Corporate Governance
Director Independence
Our board of directors has concluded that none of our directors will be independent as the term "independent" is defined by the rules of the New York Stock Exchange and Rule 10A-3 of the U.S. Securities Exchange Act of 1934, as amended.
Board Meetings and Committees
Our board of directors held no formal meetings during the year ended June 30, 2021. All proceedings of the board of directors were conducted by resolutions consented to in writing by all the directors and filed with the minutes of the proceedings of the directors. Such resolutions consented to in writing by the directors entitled to vote on that resolution at a meeting of the directors are, according to the Delaware Corporation Law and the bylaws of our company, as valid and effective as if they had been passed at a meeting of the directors duly called and held.
We do not have standing audit, nominating or compensation committees, or committees performing similar functions. Our board of directors believes that it is not necessary to have a standing audit or compensation committees at this time because the functions of such committees are adequately performed by our board of directors.
Our board of directors also is of the view that it is appropriate for us not to have a standing nominating committee because the current size of our board of directors does not facilitate the establishment of a separate committee. Our board of directors has performed and will perform adequately the functions of a nominating committee. The directors who perform the functions of a nominating committee are not independent because they are also officers of our company. The determination of independence of directors has been made using the definition of "independent director" contained under Rule 4200(a)(15) of the Rules of the Financial Industry Regulatory Authority. Our board of directors has not adopted a charter for the nomination committee. There has not been any defined policy or procedure requirements for stockholders to submit recommendations or nomination for directors. Our board of directors does not believe that a defined policy with regard to the consideration of candidates recommended by stockholders is necessary at this time because we believe that, given the early stages of our development, a specific nominating policy would be premature and of little assistance until our business operations are at a more advanced level. There are no specific, minimum qualifications that our board of directors believes must be met by a candidate recommended by our board of directors. The process of identifying and evaluating nominees for director typically begins with our board of directors soliciting professional firms with whom we have an existing business relationship, such as law firms, accounting firms or financial advisory firms, for suitable candidates to serve as directors. It is followed by our board of directors' review of the candidates' resumes and interview of candidates. Based on the information gathered, our board of directors then makes a decision on whether to recommend the candidates as nominees for director. We do not pay any fee to any third party or parties to identify or evaluate or assist in identifying or evaluating potential nominee.
Our company does not have any defined policy or procedural requirements for shareholders to submit recommendations or nominations for directors. Our directors believe that, given the stage of our development, a specific nominating policy would be premature and of little assistance until our business operations develop to a more advanced level. Our company does not currently have any specific or minimum criteria for the election of nominees to the Board of Directors and we do not have any specific process or procedure for evaluating such nominees. Our board of directors will assess all candidates, whether submitted by management or shareholders, and make recommendations for election or appointment.
A shareholder who wishes to communicate with our Board of Directors may do so by directing a written request addressed to our President, at the address appearing on the first page of this annual report.
Audit Committee and Audit Committee Financial Expert
We do not have a standing audit committee at the present time. Our board of directors has determined that we do not have a board member that qualifies as an "audit committee financial expert" as defined in Item 401(h) of Regulation S-K, nor do we have a board member that qualifies as "independent" as the term is used in Item 7(d)(3)(iv) of Schedule 14A under the Securities Exchange Act of 1934, as amended.
We believe that our board of directors is capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. The board of directors of our company does not believe that it is necessary to have an audit committee because we believe that the functions of an audit committee can be adequately performed by the board of directors. In addition, we believe that retaining an independent director who would qualify as an "audit committee financial expert" would be overly costly and burdensome and is not warranted in our circumstances given the early stages of our development.
Family Relationships
There are no family relationships between any director or executive officer.
Involvement in Certain Legal Proceedings
Our directors, executive officers, or control persons have not been involved in any of the following events during the past ten years:
1.
any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;
2.
any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offences);
3.
being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; or
4.
being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.
Code of Ethics
On September 10, 2007, our board of directors confirmed the adoption of our Code of Ethics and Business Conduct that applies to, among other persons, our company's chief executive officer, president and chief financial officer (being our principal executive officer, principal financial officer and principal accounting officer), as well as persons performing similar functions. As adopted, our Code of Ethics and Business Conduct sets forth written standards that are designed to deter wrongdoing and to promote:
Our Code of Ethics and Business Conduct requires, among other things, that all of our company's senior
1.
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
2.
full, fair, accurate, timely, and understandable disclosure in reports and documents that we file with, or submit to, the Securities and Exchange Commission and in other public communications made by us;
3.
compliance with applicable governmental laws, rules and regulations;
4.
the prompt internal reporting of violations of the Code of Ethics and Business Conduct to an appropriate person or persons identified in the Code of Ethics and Business Conduct; and
5.
accountability for adherence to the Code of Ethics and Business Conduct.
officers commit to timely, accurate and consistent disclosure of information; that they maintain confidential information; and that they act with honesty and integrity.
In addition, our Code of Ethics and Business Conduct emphasizes that all employees have a responsibility for maintaining financial integrity within our company, consistent with generally accepted accounting principles, and federal and state securities laws. Any employee who becomes aware of any incidents involving financial or accounting manipulation or other irregularities, whether by witnessing the incident or being told of it, must report it to our company. Any failure to report such inappropriate or irregular conduct of others is to be treated as a severe disciplinary matter. It is against our company policy to retaliate against any individual who reports in good faith the violation or potential violation of our company's Code of Ethics and Business Conduct by another.
Our Code of Ethics and Business Conduct was filed with the Securities and Exchange Commission as Exhibit 14.1 to our annual report on Form 10-KSB filed on September 28, 2007. We will provide a copy of the Code of Ethics and Business Conduct to any person without charge, upon request. Requests can be sent to our President at the address appearing on the first page of this annual report.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission. Based solely on our review of such filings or written representations from certain reporting persons, we believe that during the fiscal year ended June 30, 2021, all filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied with except that no Form 3 was filed by Shanxi Ai Chen Technology Ltd.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation
The particulars of compensation paid to the following persons:
• our principal executive officer;
• each of our two most highly compensated executive officers who were serving as executive officers at the end of the year ended June 30, 2021; and
• up to two additional individuals for whom disclosure would have been provided under (b) but for the fact that the individual was not serving as our executive officer at the end of the most recently completed financial year, who we will collectively refer to as the named executive officers, for our fiscal years ended June 30, 2021 and 2020, are set out in the following summary compensation table:
Name and
Principal
Position Year Salary
($) Bonus
($) Stock
Awards
($) Option
Awards
($) Non-Equity
Incentive Plan
Compensation
($) Nonqualified
Deferred
Compensation
Earnings
($) All Other
Compensation
($) Total
($)
Hong Ba
CEO, CFO and Director
Nil
Nil Nil
Nil Nil
Nil Nil
Nil Nil
Nil Nil
Nil Nil
Nil Nil
Nil
Employment Agreements
We have not entered into any employment agreement or consulting agreement with our executive officers.
There are no arrangements or plans in which we provide pension, retirement or similar benefits for executive officers. Our executive officers may receive stock options at the discretion of our board of directors in the future. We do not have any material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of our board of directors.
We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.
Outstanding Equity Awards at Fiscal Year-End
As at June 30, 2021, we had not adopted any equity compensation plan and no stock, options, or other equity securities were awarded to our executive officers.
Option exercises and stock vested
As at June 30, 2021, we had not adopted any equity compensation plan and no stock, options, or other equity securities were awarded to our executive officers. No options have been exercised.
Compensation of Directors
The particulars of compensation paid to our director for our year ended June 30, 2021, is set out below:
Name
Fees
Earned or
Paid in
Cash
($)
Stock
Awards
($)
Option
Awards
($)
Non-Equity
Incentive Plan
Compensation
($) Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation
($)
Total
($)
Junjun Wu Nil Nil Nil Nil Nil Nil Nil
Hong Ba Nil Nil Nil Nil Nil Nil Nil
We reimburse our directors for expenses incurred in connection with attending board meetings. We did not pay director's fees or other cash compensation for services rendered as a director in the year ended June 30, 2021.
We have no formal plan for compensating our directors for their service in their capacity as directors, although such directors are expected in the future to receive stock options to purchase common shares as awarded by our board of directors or (as to future stock options) a compensation committee which may be established. Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of our board of directors. Our board of directors may award special remuneration to any director undertaking any special services on our behalf other than services ordinarily required of a director. No director received and/or accrued any compensation for their services as a director, including committee participation and/or special assignments.
Aggregated Options Exercised in the Year Ended June 30, 2021 and Year End Option Values
As at June 30, 2021, we had not adopted any equity compensation plan and no stock, options, or other equity securities were awarded to our executive officers. No options have been exercised.
Re-pricing of Options/SARS
There were no options granted during the year ended June 30, 2021 therefore no options were re-priced.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
In the following tables, we have determined the number and percentage of shares beneficially owned in accordance with Rule 13d-3 of the Exchange Act based on information provided to us by our controlling shareholders, executive officers and directors, and this information does not necessarily indicate beneficial ownership for any other purpose. In determining the number of shares of our common stock beneficially owned by a person and the percentage ownership of that person, we include any shares as to which the person has sole or shared voting power or investment power, as well as any shares subject to warrants or options held by that person that are currently exercisable or exercisable within 60 days.
(1) Title of
class
(2) Name and address of
beneficial owner
(3) Amount and nature of
beneficial ownership
(4) Percent of
class
Officers and Directors
common stock
Hong Ba
Unit 2702, Sanlitun SOHO Building 2,
No. 8, Gongtibeilu
Chaoyang District, Beijing China 100027
22,000,000 Direct
16.9%
common stock
Junjun Wu
1-97 Hongqi North Street
Xiaowang Village, Wanbailin District
Taiyuan Shanxi PRC 030024
15,000,000 Direct
11.5%
Directors and Officers as a Group (2 persons)
37,000,000 Direct
28.4%
5% Beneficial Owner
common stock
Shuzhen Lin
#6-6-202 Juifeng Rd.
39 Jiancaoping Zone
Taiyuan, Shanxi
China
12,975,800 Direct
10.0%
common stock
Shanxi Ai Chen Technology Ltd.
#515 - Building A, High-tech International, No. 227 Changzhi Road, Zonggai District, Taiyuan, Shanxi Province, China
21,385,001 Direct
16.4%
common stock
Youzhe Li
2020-91111 Beckwith Road, Richmond BC V6X 1V7
14,338,364 Direct
11.0%
common stock
Maotang Bai
#602 - Unit 4, No.4 Building, Minhangsushe, Tiyulu, Xiaolin District, Taiyuan, Shanxi Province, China
9,671,391 Direct
7.4%
common stock
Yongsheng Liang
#302 - Unit 4, No.35 Building, Jichangsushe, No.199 Taiyu Road, Taiyuan, Shanxi Province, China
9,573,038 Direct
7.4%
common stock
Qinrong Gao
15 Floor, Huanneng Technology Plaza, Chuangye Street, Changzhi Road, Xiaodian District, Taiyuan, Shanxi Province, China
6,966,680 Direct
5.4%
Security ownership of certain beneficial owners
Percentage of ownership is based on 130,085,501 shares of common stock issued and outstanding as of January 14, 2022. Except as otherwise indicated, we believe that the beneficial owners of the common stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of common stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants, but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Transactions with related persons
Mrs. Hong Ba serves as the Chief Executive Officer and Director of the Company. Mr. Feng Li, the husband of Mrs. Hong Ba, is the owner of the Canada Airchn Financial Inc. ("CAFI"). The shareholders make advances to the Company from time to time for the Company's operations. These advances are due on demand and non-interest bearing.
As of June 30, 2021, there was $12,020 (June 30, 2020 - $32,683) due to related parties in total.
During the year ended June 30, 2021, on December 14, 2020, the CEO of the Company assigned the debt owed to her by the Company to a transferee who entered into a debt cancellation agreement to convert the debt of $10,584 into 2,116,804 common shares of the Company at a price of $0.005 per share.
During the year ended June 30, 2021, the CEO of the Company advanced $7,048 (June 30, 2020 - $2,729) to the Company for operating expenditure.
For the year ended June 30, 2021, on December 14, 2020, the debt of $33,402 (2020 - $28,201) owed to a company owned by Feng Li, the husband of Mrs. Hong Ba, our CEO was assigned to a transferee who entered into a debt cancellation agreement to convert the debt into 6,680,448 common shares of the Company at a price of $0.005 per share.
During the year ended June 30, 2021, a company owned by Feng Li charged the Company $7,498 (CAD$9,600) (June 30, 2020 - $7,140 (CAD$9,600)) in rent. As of June 30, 2021, the debt of $3,850 (June 30, 2020 - $27,392) has been due to the related party.
For the year ended June 30, 2021, Li Feng, the husband of Mrs. Hong Ba, our CEO, advanced $900 (June 30, 2020 - $1,550) to the Company for operating expenditures.
As of June 30, 2021, the Company has received advances for future share issuance of $192,444 (June 30, 2020 - $165,446) and an advance of $222 (June 30, 2020 - $203) for operating expenditure from a related party who is an over 10% shareholder of the Company and the Company expensed $14,326 (June 30, 2020 - Nil) in imputed interest on the accumulated amount of advances for future share issuance. On December 14, 2020, such related party assigned the debt owed to him by the Company to a transferee who entered into a debt cancellation agreement to convert the debt into 38,488,858 common shares of the Company at a price of $0.005 per share. All advances for future share issuance were issued common shares of the Company and no outstanding as of June 30, 2021.
Other than the disclosure above, none of the following parties has, during the Company's last two fiscal years or thereafter, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us, other than as noted in this section:
(i)
Any of our directors or officers;
(ii)
Any person proposed as a nominee for election as a director;
(iii)
Any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock;
(iv)
Any of our promoters; and
(v)
Any member of the immediate family (including spouse, parents, children, siblings and in- laws) of any of the foregoing persons.
Employment Contracts
We are not party to any employment contracts with our directors and officers.
Pension, Retirement or Similar Benefit Plans
There are no arrangements or plans in which we provide pension, retirement or similar benefits for directors or executive officers. We have no material bonus or profit sharing plans pursuant to which cash or non-cash compensation is or may be paid to our directors or executive officers, except that stock options may be granted at the discretion of the Board of Directors or a committee thereof.
We have no plans or arrangements in respect of remuneration received or that may be received by our executive officers to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds $60,000 per executive officer.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Audit and Accounting Fees
The following table sets forth the fees billed to the Company for professional services rendered by the Company's principal accountant, for the years ended June 30, 2021 and 2020:
Services
Audit fees $ 31,250
$ 22,100
Tax fees
1,500
All other fees
-
-
Total fees $ 31,750
$ 23,600
Audit Fees
Consist of fees billed for professional services rendered for the audits of our financial statements, reviews of our interim financial statements included in quarterly reports, services performed in connection with filings with the Securities and Exchange Commission and related comfort letters and other services that are normally provided by independent auditors and accountants for the fiscal years ended June 30, 2021 and 2020 in connection with statutory and regulatory filings or engagements.
Tax Fees
Consisted of fees billed for professional services rendered by the principal accountant for tax compliance.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) (1) Financial Statements.
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of June 30, 2021 and 2020
Consolidated Statements of Operations and Comprehensive Loss for the Years Ended June 30, 2021 and 2020
Consolidated Statements of Changes in Shareholders' (Deficit) as of June 30, 2021 and 2020
Consolidated Statements of Cash Flows for the Years Ended June 30, 2021 and 2020
Notes to Consolidated Financial Statements
(3) The following Exhibits are filed as part of this report on Form 10-K:
(3) Articles of Incorporation and By-laws
3.1 Articles of Incorporation (attached as an exhibit to our registration statement on Form SB-2 filed September 25, 2006)
3.2 Certificate of Amendment of Certificate of Incorporation (incorporated by reference to an exhibit to the Quarterly Report on form 10-Q filed on February 10, 2012)
3.3 By-Laws (attached as an exhibit to our registration statement on Form SB-2 filed September 25, 2006)
(4) Description of Registrant's Securities
4.1 Description of Common Stock (incorporated by reference to an exhibit to the Annual Report on Form 10-K filed on September 27, 2019)
(10) Material Contracts
10.1 Debt Cancellation Agreement between the certain Creditors dated December 14, 2020 (attached as an exhibit to our Current Report on Form 8-K filed December 18, 2020)
(14) Code of Ethics
14.1 Code of Ethics adopted September 10, 2007 (attached as an exhibit to our annual report on Form 10-KSB filed September 28, 2007)
(21) Subsidiaries of Registrant
21.1 List of Subsidiaries (attached as an exhibit to our annual report on Form 10-K filed on October 11, 2012)
(31) Section 302 Certification
31.1* Certification Statement of the Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(32) Section 906 Certification
32.1* Certification Statement of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101* Interactive Data Files
101.INS XBRL Instance Document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
*filed herewith