EvoAir Holdings Inc. 10-K

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES MARKET INFORMATION As of November 18, 2021, the 2,970,000 issued and outstanding shares of common stock were held by a total of 7 shareholders of record. DIVIDENDS We have never paid or declared any dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS We currently do not have any equity compensation plans. ITEM 6. SELECTED FINANCIAL DATA Not Applicable. ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our financial statements, including the notes thereto, appearing elsewhere in this annual report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed below and elsewhere in this Annual Report. Our audited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. Results of Operations The following summary of our operations should be read in conjunction with our audited financial statements for the years ended August 31, 2021 and 2020, which are included herein. Year Ended August 31, 2021 2020 Changes % General and administrative expenses $ 61,545 $ 14,364 $ 47,181 328 % Net loss $ 61,545 $ 14,364 $ 47,181 328 % Revenues We recognized no revenues for the years ended August 31, 2021 and 2020. Gross Margin Gross margin is calculated by subtracting cost of sales from revenue. Gross margin percentage is calculated by dividing gross margins by revenue. We did not record any cost of goods sold for either of the years ended August 31, 2021, and 2020. As such, we did not realize any gross margin for either of the years ended August 31, 2021 and 2020. Operating Expenses Operating expenses totaled $61,545 for the year ended August 31, 2021, compared to $14,364 in operating expenses for the year ended August 31, 2020, or an increase of $47,181. Our operating expenses are primarily comprised of professional fees or administrative contracted services, such as legal and accounting, and other general and administrative costs. The increase in operating expenses was due to an increase in professional services rendered in relation to our financial reporting and other matters. Net loss We incurred a net loss from of $61,545, or $0.02 per share, for the year ended August 31, 2021, compared to a net loss of $14,364, or $0.00 per share, for the year ended August 31, 2020. The increase in net loss was due to the increase in above operating expenses. Liquidity and Capital Resources Working Capital Year Ended August 31, 2021 2020 Changes % Current Assets $ - $ 5,676 $ 5,676 (100 )% Current Liabilities $ 53,634 $ 11,400 $ 42,234 370 % Working Capital Deficiency $ 53,634 $ 5,724 $ 47,910 837 % 5 | Page Cash Flows Year Ended August 31, 2021 2020 Changes % Cash flows used in operating activities $ (53,652 ) $ (11,864 ) $ (41,788 ) 352 % Cash flows provided by financing activities $ 47,976 $ 1,800 $ 46,176 2565 % Net changes in cash $ (5,676 ) $ (10,064 ) $ 4,388 (44 )% As at August 31, 2021, our Company had no cash and assets. As at August 31, 2021, our Company had total liabilities of $53,634, which included accrued expenses $9,500 and amount due to related party $44,134. As at August 31, 2020, our Company had total liabilities of $11,400 which included convertible stock payable of $1,950 and amount due to related party of $9,450. As at August 31, 2021, our Company had a working capital deficiency of $53,634 compared with a working capital deficiency of $5,724 as at August 31, 2020. The increase in working capital deficit was primarily due to an increase in amount due to related party. Cash Flow from Operating Activities We have not generated positive cash flow from operating activities. During the year ended August 31, 2021, net cash used in operating activities was $53,652 compared to $11,864 used during the year ended August 31, 2020. Operating activities mainly consists of professional fees (audit fees, legal fees, filing fees and transfer agent cost) and general and administrative expenses. Cash flows used in operating activities during the year ended August 31, 2021, comprised of a net loss of $61,545 which was reduced by non-cash expenses of $343 for depreciation, $9,500 for accrued expense, and write-off of stock payable of $1,950. Cash flows used in operating activities during the year ended August 31, 2020, comprised of a net loss of $14,364, which was reduced by non-cash expenses of $317 for depreciation , $1,950 for stock payable, and $233 for account payable. The increase in cash used in operating activities during the year ended August 31, 2021 was mainly due to increase in operating expenses. Cash Flow from Investing Activities During the years ended August 31, 2021 and 2020, our Company did not have any investing activities. Cash Flow from Financing Activities During the year ended August 31, 2021, our Company received $47,976 via advances from related party. During the year ended August 31, 2020, our Company received $1,800 from stock subscriptions. 6 | Page Going Concern The Company’s financial statements as of August 31, 2021, are prepared using generally accepted accounting principles in the United States of America applicable as a going concern, which contemplates the realization of assets and liquidation of liabilities in the ordinary course of business. The Company has yet to establish an ongoing source of revenue to finance its operating expenses and to continue operating as a going concern. The Company has accumulated loss from inception (February 17, 2017) to August 31, 2021 of $92,626. These factors raised substantial doubt about the ability of the Company to continue operating as a going concern for a reasonable period of time. In order to continue operating as a going concern, the Company is committed to work on procuring financial resources and develop business plans. The Management plans to procure financial resources from the Management and major shareholders to fund operating expenses as well as seeking third party equity and/or debt financing to implement its business plans. However, the Management is not able to provide any assurances that the Company will successfully executing the plans in the near term. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Plan of Operation and Funding We expect that working capital requirements will continue to be funded through further issuances of securities/ debt securities. Our working capital requirements are expected to increase in line with the growth of our business. Existing working capital, further advances and equity/ debt financing, the anticipated cash flow are expected to be adequate to finance our operations over the next twelve months. We have no lines of credit or other bank financing arrangements. Generally, we have financed operations to date through the proceeds of the private placement of equity and debt instruments. In connection with our business plans, the Management anticipates additional increases in operating expenses and capital expenditures relating to: (i) developmental expenses associated with a start-up business and (ii) marketing expenses. We intend to finance these expenses with further issuances of securities, and debt issuances. Thereafter, we expect we will need to raise additional capital and generate revenues to meet long-term operating requirements. Additional issuances of equity or convertible debt securities will result in dilution to our current shareholders. Further, such securities might have rights, preferences or privileges senior to our common stock. Additional financing may not be available upon acceptable terms, or at all. If adequate funds are not available or are not available on acceptable terms, we may not be able to take advantage of prospective new business endeavors or opportunities, which could significantly and materially restrict our business operations. Material Commitments As of the date of this Annual Report, we do not have any material commitments. Off-Balance Sheet Arrangements As of the date of this Annual Report, we do not have any 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 are material to investors. Recent Accounting Pronouncements Management has considered all recent accounting pronouncements issued. Our Company’s management believes that these recent pronouncements will not have a material effect on our financial statements. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not Applicable.