ITEM 1.01 Entry into a Material Definitive Agreement.

On December 14, 2020, W&E Source Corp. (the "Company") entered into Debt Cancellation Agreement (the "Debt Cancellation Agreement") with each of Maotang Bai, Yongsheng Liang, Qinrong Gao and Shanxi Ai Chen Technology Ltd., who were each creditors to the Company with a total outstanding aggregate balance of US$237,980.55 (the "Debts"). Pursuant to the Debt Cancellation Agreement the Company agreed to issue an aggregate total of 47,596,110 shares of its common stock, $0.0001 par value per share (the "Shares"), at the conversion rate of US$0.005 per share as full payment for the Debts. Upon issuance and delivery of the Shares, the Debts are fully paid and the Company no longer has any obligations to the creditors under the Debts.

The foregoing description of the Debt Cancellation Agreement is qualified in its entirety by reference to the full text of the Debt Cancellation Agreement, which is filed as Exhibit 10.1 to this Current Report, and is incorporated herein by reference.

ITEM 3.02 Unregistered Sales of Equity Securities.

The information provided in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.

The Shares of Common Stock referenced herein were issued in reliance upon the exemption from securities registration afforded by the provisions of Regulation S of the Securities Act of 1933, as amended, ("Securities Act"). Our reliance upon the exemption under Rule 903 of Regulation S of the Securities Act was based on the fact that the sales of the securities were completed in an "offshore transaction", as defined in Rule 902(h) of Regulation S. The Company did not engage in any directed selling efforts, as defined in Regulation S, in the United States in connection with the sale of the securities. The investors were not US persons, as defined in Regulation S, and were not acquiring the securities for the account or benefit of any US person.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



Exhibit No.   Description
  10.1          Debt Cancellation Agreement between the Company and certain Creditors
              dated December 14, 2020

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