13 unchanged sentences
These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future.
−Removed: Except as required by applicable law, including the securities laws of the U.S., we do not intend to update any of the forward-looking
+Added: 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, later events or circumstances or to reflect the occurrence of unanticipated
−Removed: this report unless otherwise specified, all dollar amounts are expressed in US$ and all references to “common shares” or
−Removed: “common stock” refer to the common shares of our capital stock.
+Added: this report unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common
+Added: shares” or “common stock” refer to the common shares of our capital stock.
management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements,
7 unchanged sentences
Low entered into the “EvoAir International Share Transfer Agreement, pursuant to which Dr.
−Removed: agreed to sell all of his ordinary shares of EvoAir International to the Company for the consideration of US$100 (“EvoAir Transaction”).
−Removed: EvoAir International, through its subsidiaries upon completion of the Transactions contemplated under Note 1 to Financial Statements,
−Removed: is engaged in the R&D, manufacturing, trading, sale of HVAC products and related services in Asia.
+Added: Low agreed to sell all of his ordinary shares of EvoAir International to the Company for the consideration of US$100 (“EvoAir Transaction”).
+Added: EvoAir International, through its subsidiaries upon completion of the Transactions contemplated under Note 1, is engaged in the R&D,
+Added: manufacturing, trading, sale of HVAC products and related services in Asia.
to the terms of a share transfer agreement dated December 20, 2021, Dr.
4 unchanged sentences
outstanding ordinary shares of the Company, which resulted in a change of control of the Company.
−Removed: December 20, 2021, several transactions took place (together, the “Allotment Transactions”) whereby the Company issued and
−Removed: allotted in aggregate 98,809,323 EvoAir Shares to certain parties.
−Removed: On completion of the Allotment Transactions, the total number of issued
−Removed: and outstanding EvoAir Shares were 101,779,323 (“Then Enlarged Share Capital”):
−Removed: On December 20, 2021, Dr.
−Removed: Low and Chan Kok Wei entered into a share exchange agreement with WKL Eco Earth Holdings, pursuant to which
−Removed: Low and Chan Kok Wei agreed to sell all their ordinary shares of WKL Green Energy to WKL Eco Earth Holdings in consideration for
−Removed: the allotment and issuance to WKL Global and Allegro Investment (BVI) Limited (“Allegro Investment”), a company incorporated
−Removed: in the British Virgin Islands with 50% shareholding held by Chan Kok Wei and Ong Bee Chen, respectively, of 24,000 EvoAir Shares and
−Removed: 6,000 EvoAir Shares, respectively, or approximately 0.02% and 0.01% of the Then Enlarged Share Capital, respectively.
−Removed: On December 20, 2021, Dr.
−Removed: Low, Chan Kok Wei, Ong Bee Chen and certain sellers (collectively, the “WKLEE Sellers”) entered
−Removed: into a share exchange agreement with WKL Eco Earth Holdings, pursuant to which the WKLEE Sellers agreed to sell all their ordinary shares,
−Removed: amounting in aggregate, 240,000 shares or 80% shareholding of WKL Eco Earth to WKL Eco Earth Holdings in consideration for the allotment
−Removed: and issuance to WKL Global, Allegro Investment and WKLEE Sellers of 49,320 EvoAir Shares, 8,280 EvoAir Shares and in aggregate 14,400
−Removed: EvoAir Shares, respectively, or approximately 0.05%, 0.009% and in aggregate 0.014%, respectively, of the Then Enlarged Share Capital.
−Removed: On December 20, 2021, Tan Soon Hock, Ivan Oh Joon Wern and certain relevant interest holders (“Relevant Interest Holders”)
−Removed: entered into an investment exchange agreement with WKL Eco Earth Holdings, pursuant to which the Tan Soon Hock, Ivan Oh Joon Wern and
−Removed: the Relevant Interest Holders agreed to sell all relevant interests in the EvoAir Group to WKL Eco Earth Holdings in consideration for
−Removed: the allotment and issuance of 7,037,762 shares, 2,520,000 shares and in aggregate 6,001,794 shares, respectively, of the common stock
−Removed: of the Company, or approximately 6.91%, 2.48% and in aggregate 5.90%, respectively, of the issued and outstanding ordinary shares of
−Removed: The board of directors and majority shareholders of the Company have approved the transaction.
−Removed: On December 20, 2021, Dr.
−Removed: Low entered into two deeds of assignment of intellectual properties with WKL Eco Earth Holdings, in respect
−Removed: Low’s patents relating to eco-friendly air-conditioner condenser (external unit), EvoAir TM and the trademarks
−Removed: described in the deed of assignment thereunder, and in respect of Dr.
−Removed: Low’s patents relating to the portable air-conditioner, e-Cond
−Removed: EVO TM and the trademarks as described in the deed of assignments thereunder (together, the “IP Assignments”).
−Removed: Pursuant to the IP Assignments, WKL Global, Allegro Investment and certain nominees shall be allotted and issued 63,362,756 EvoAir Shares,
−Removed: 14,297,259 EvoAir Shares and in aggregate 5,487,752 EvoAir Shares, respectively or approximately 62.25%, 14.05% and in aggregate 5.39%,
−Removed: respectively of the Then Enlarged Share Capital in consideration for the IP Assignments.
−Removed: Transaction, Change of Control Transaction and Allotment Transactions are collectively to be referred to as the “Transactions”.
−Removed: The closing of the Transactions (the “Closing”) occurred on December 20, 2021 (the “Closing Date”).
−Removed: and after the Closing Date, at which time EvoAir International transferred its HVAC business to the Company, the Company’s primary
−Removed: operations consisted of the prior operations of EvoAir International.
−Removed: International is a company incorporated in BVI on November 17, 2021.
+Added: International is a company incorporated in the British Virgin Islands on November 17, 2021.
Effective from the December 20, 2021, it
13 unchanged sentences
under the new ticker symbol “EVOH”.
−Removed: November 21, 2023, the Company issued in aggregate, 52,107 shares of Common Stock to 15 referral agents (“Referral Agents”)
−Removed: in consideration for their referral to the Company of certain investors.
−Removed: Each Referral Agent is a “non-U.S.
−Removed: Persons” as defined
−Removed: in Regulation S.
−Removed: November 21, 2023, the Company issued, in aggregate, 5,500 shares of Common Stock to two individuals in consideration for marketing services
−Removed: provided to the Company by Artisan Creative Studio, a marketing entity based in Malaysia.
−Removed: Each of the individuals is a “non-U.S.
−Removed: Persons” as defined in Regulation S.
−Removed: 2 Stockholders
−Removed: Company entered into a series of offerings for an aggregate of up to 6,000,000 shares of Common Stock at a per share purchase price of
−Removed: $2.50, as follows:
−Removed: On February 15, 2022, the
−Removed: Company entered into certain share subscription agreement with Ms.
−Removed: Ang Lee Kim Jane, who is a “non-U.S.
−Removed: Persons” (the
−Removed: “Investor”) as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) pursuant
−Removed: to which the Company agreed to issue and sell 74,074 Shares, par value $0.001 per share, at a per share purchase price of $2.50,
−Removed: as part of a series of offerings by the Company for an aggregate of up to 6,000,000 shares of Common Stock at a per share purchase
−Removed: price of $2.50.
−Removed: The gross proceeds was $185,185.
−Removed: On June 3, 2022, the Company
−Removed: entered into certain share subscription agreement with Mr.
−Removed: Wong Hon Wai who is a “non-U.S.
−Removed: Persons” (the “Investor”)
−Removed: as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities Act”) pursuant to which the Company
−Removed: agreed to issue and sell 5,000 shares, par value $0.001 per share , at a per share purchase price of $2.50, as part of a series
−Removed: of offerings by the Company for an aggregate of up to 6,000,000 shares of Common Stock at a per share purchase price of $2.50.
−Removed: gross proceeds was $12,500.
−Removed: On October 25, 2022, the
−Removed: Company entered into Regulation S share subscription agreements with eight investors, each of whom represented that it was a “non-U.S.
−Removed: Persons” as defined in Securities Act.
−Removed: On the same date, the Company entered into Regulation D share subscription agreements
−Removed: with two investors, each of whom represented that it was an “Accredited Investors” as defined in Regulation D of the
−Removed: Securities Act.
−Removed: Pursuant to the share subscription agreements, the Company agreed to issue and sell in aggregate, (i) 129,621 shares
−Removed: of Common Stock, par value $0.001 per share to the Regulation S investors, and (ii) 15,000 shares of Common Stock to the Regulation
−Removed: D investors, respectively par value $0.001 per share, at a per share purchase price of $2.50, as part of a series of offerings by
−Removed: the Company for an aggregate of up to 6,000,000 shares of Common Stock at a per share purchase price of $2.50.
−Removed: The gross proceeds
−Removed: in aggregate were $361,553.
−Removed: On February 20, 2023, the
−Removed: Company entered into Regulation S share subscription agreements with eleven investors, each of whom represented that it was a “non-U.S.
−Removed: Persons” as defined in Regulation S of the Securities Act.
−Removed: Pursuant to the agreements, the Company agreed to issue and sell
−Removed: in aggregate, (i) 57,783 shares of Common Stock, par value $0.001 per share to the Regulation S investors, at a per share purchase
−Removed: price of $2.50 as part of a series of the private placement offerings by the Company for an aggregate of up to 6,000,000 shares of
−Removed: Common Stock at a per share purchase price of $2.50.
−Removed: The gross proceeds in aggregate was $144,443.
−Removed: On July 13, 2023, the Company
−Removed: entered into Regulation S share subscription agreements with 31 investors, each of whom represented that it was a “non-U.S.
−Removed: Persons” as defined in Regulation S of the Securities Act.
−Removed: Pursuant to the agreements, the Company agreed to issue and sell
−Removed: in aggregate, (i) 250,132 shares of Common Stock, par value $0.001 per share to the Regulation S Investors, at a per share purchase
−Removed: price of $2.50 as part of a series of the private placement offerings by the Company for an aggregate of up to 6,000,000 shares of
−Removed: Common Stock at a per share purchase price of $2.50.
−Removed: The gross proceeds in aggregate was approximately $625,330.
−Removed: On September 7, 2023, the
−Removed: Company entered into Regulation S share subscription agreements with 71 investors, each of whom represented that it was a “non-U.S.
−Removed: Persons” as defined in Regulation S of the Securities Act.
−Removed: Pursuant to the agreements, the Company agreed to issue and sell
−Removed: in aggregate, 365,164 shares of Common Stock, par value $0.001 per share to the Regulation S investors, at a per share purchase price
−Removed: of $2.50 as part of a series of the private placement offerings by the Company for an aggregate of up to 6,000,000 shares of Common
−Removed: Stock at a per share purchase price of $2.50.
−Removed: The gross proceeds in aggregate was approximately $912,889.
−Removed: On November 21, 2023, the
−Removed: Company entered into a Regulation S share subscription agreement with Wong Chun Shoong who represented that he was a “non-U.S.
−Removed: Persons” as defined in Regulation S of the Securities Act.
−Removed: Pursuant to the agreement, the Company agreed to issue and sell
−Removed: in aggregate, 8,658 shares of Common Stock, par value $0.001 per share to the Regulation S investors, at a per share purchase price
−Removed: of $2.50 as part of a series of the private placement offerings by the Company for an aggregate of up to 6,000,000 shares of Common
−Removed: Stock at a per share purchase price of $2.50.
−Removed: The gross proceeds in aggregate was approximately $21,645.
of Operations
following summary of our operations should be read in conjunction with our unaudited condensed consolidated financial statements for
−Removed: the three months ended November 30, 2023, as compared to the three months ended November 30, 2022.
−Removed: Months Ended November 30, 2023, versus Three Months November 30, 2022.
+Added: the three and six months ended February 29, 2024, as compared to the three and six months ended February 28, 2023.
+Added: Months Ended February 29, 2024, versus Three Months Ended February 28, 2023
Three Months Ended
+Added: February 29, 2024
+Added: February 28, 2023
Cost of revenue
1 unchanged sentence
Loss from operation
−Removed: Other (expenses)/income
Loss from operation before income taxes
1 unchanged sentence
$ (1,437,297 )
−Removed: The Company generated revenues of $91,318 in the
−Removed: three months ended November 30, 2023, as compared to $142,685 in the three months ended November 30, 2022, a decrease in revenue of
−Removed: The drop in revenue is mainly due to the decrease in sales in air purifier products as a result of rollback of preventative
−Removed: measures taken by businesses and public from spreading infection as the World and society progresses towards living with Covid-19.
−Removed: first mover in launching EvoAir TM , first-of-its-kind eco-friendly air-conditioner with granted patent or utility model/ patent
−Removed: or utility model pending HECS system proprietary system, the Group faced both opportunities and challenges.
−Removed: In the course of applying
−Removed: for some of the certifications, safety and performance testing, the relevant authorities/ organizations faced the challenges in assigning
−Removed: our products in the appropriate category under conventional air-conditioner regime.
−Removed: There are instances whereby some of these authorities/
−Removed: organizations do not possess the relevant equipment to conduct testings.
−Removed: It took a lot of education, discussions, deliberations and working
−Removed: with the authorities/ organizations to work out solutions to resolve compliance and testing matters.
−Removed: On the positive note, one of the
−Removed: authorities advised us to apply under a new category, ‘Hybrid Air Conditioner.
−Removed: The duration of the application processes were longer
−Removed: than that of typical certifications and testing for conventional air-conditioners.
−Removed: a first mover, notwithstanding many of our corporate clients who were impressed and showed keen interest in our products, EvoAir TM ,
−Removed: many of them took a few months to conduct study on their own accord on performance and the energy savings by our products.
−Removed: is building up its traction for the evoair TM hybrid air-conditioners for both residentials and commercial/ industrial units
−Removed: through distribution channels, projects, building and businesses as well as private labelling and licensing model.
−Removed: During the financial
−Removed: year, we have entered into agreements with distributors, partners, customers to build up sales pipeline.
−Removed: Cost of revenue was $100,326 or 110% of revenue for
−Removed: the three months ended November 30, 2023, as compared to $162,858 or 114% of revenue in the same financial period in 2022.
−Removed: The decline in cost of revenue is in line with the drop in sales.
−Removed: Cost of revenues includes
−Removed: production costs and purchases of goods.
−Removed: Gross loss was $9,008 or gross loss margin of 10%
−Removed: for the three months ended November 30, 2023, as compared to gross loss of $20,173 in the same financial period in 2022 or 14% of revenue.
−Removed: The decline in gross profit margin was attributable to the drop in sales of air purifier products, of which the product range contributed
−Removed: higher gross profit margin.
−Removed: Besides, the decrease of gross profit is mainly due to the Company’s evoair TM products with
−Removed: higher cost of revenue from manufacturing and related costs as well as lack of economy of scale during commercialization stage.
−Removed: anticipates improvement of income and gross profit margin with the improvement of revenue streams from distributor and dealership model,
−Removed: projects as well as private labeling and licensing model.
−Removed: Operating expenses were $1,516,992 for the three months
−Removed: ended November 30, 2023, compared to $1,426,947 in the corresponding period in 2022, an increase of $90,045.
−Removed: The change in operating expenses
−Removed: was attributable to the capital raising costs.
−Removed: loss from operation before income taxes for the three months ended November 30, 2023, was $1,524,321 as compared to $1,440,143 for the
+Added: Company generated revenues of $41,174 in the three months ended February 29, 2024, as compared to $70,912 in the three months ended February
+Added: 28, 2023, a decrease in revenue of $29,738.
+Added: Being first mover in launching EvoAir TM ,
+Added: first-of-its-kind eco-friendly air-conditioner with granted patent or utility model/ patent or utility model pending HECS system proprietary
+Added: system, the Group faced both opportunities and challenges.
+Added: In the course of applying for some of the certifications, safety and performance
+Added: testing, the relevant authorities/ organizations faced the challenges in assigning our products in the appropriate category under conventional
+Added: air-conditioner regime.
+Added: There are instances whereby some of these authorities/ organizations do not possess the relevant equipment to
+Added: conduct testings.
+Added: It took a lot of education, discussions, deliberations and working with the authorities/ organizations to work out solutions
+Added: to resolve compliance and testing matters.
+Added: On the positive note, one of the authorities advised us to apply under a new category, ‘Hybrid
+Added: Air Conditioner.
+Added: The duration of the application processes were longer than that of typical certifications and testing for conventional
+Added: air-conditioners.
+Added: Being a first mover, notwithstanding many of our
+Added: corporate clients who were impressed and showed keen interest in our products, EvoAir TM , many of them took a few months
+Added: to conduct study on their own accord on performance and the energy savings of our products.
+Added: The Company is building up its traction
+Added: for the EvoAir TM hybrid air-conditioners for both residentials and commercial/ industrial units through distribution
+Added: channels, projects, building and businesses as well as private labelling and licensing model.
+Added: During the financial period, EvoAir
+Added: Manufacturing entered into an OEM supply agreement (the “OEM Agreement”) with Tadmonsori Holdings Sdn Bhd
+Added: (“THSB”) pursuant to which the parties have agreed for THSB to purchase certain products (the “Products”)
+Added: from EvoAir Manufacturing to resell directly under THSB’s branding, trademark, graphics, packaging designs and artwork, with
+Added: the insertion of the words “Powered by EvoAir” inserted at the back of each Product, to THSB end user customers.
+Added: Agreement will be renewable on a three-year basis, and upon the execution of the Agreement, THSB shall have made a minimum order of
+Added: 3,000 units of the Products upon signing of the OEM Agreement, and to target a total sales turnover of 105,000,000 Malaysia Ringgit
+Added: (approximately US$22,522,522, as calculated at the Foreign Exchange Rate of US$1 = 4.6620 Malaysia Ringgit on December 8, 2023, as
+Added: published in H.10 statistical release of the United States Federal Reserve Board) over 3 years from January 1, 2024 to December 31,
+Added: of revenue was $87,075 or 211% of revenue for the three months ended February 29, 2024, as compared to $88,940 or 125% of revenue in
+Added: the same financial period in 2023.
+Added: The slight decline in cost of revenue is due to the lack of economy of scale for the production.
+Added: Cost of revenues includes production
+Added: costs and purchases of goods.
+Added: loss was $45,901 or negative gross profit margin of 111% for the three months ended February 29, 2024, as compared to gross loss of $18,028
+Added: in the same financial period in 2023 or 25% of revenue.
+Added: The increase in gross loss is
+Added: mainly due to the Company commercializing EvoAir TM products with higher cost of revenue from manufacturing and related costs
+Added: as well as lack of economy of scale during commercialization stage.
+Added: The Company anticipates improvement of income and gross profit margin
+Added: with the improvement of revenue streams from distributor and dealership model, projects as well as private labeling and licensing model.
+Added: expenses were $1,473,759 for the three months ended February 29, 2024, compared to $1,426,781 in the corresponding period in 2023, an
+Added: increase of $46,978.
+Added: The increase in operating expenses was not significant as it’s within 5%.
+Added: income was $88,902 for the three months ended February 29, 2024, compared to $7,512 in the corresponding period in 2023, an increase
+Added: The change was mainly due to $82,389 realized foreign exchange gain from amounts due to shareholders.
+Added: loss from operation before income taxes for the three months ended February 29, 2024, was $1,430,758 as compared to $1,437,297 for the
corresponding period in 2023.
−Removed: The continuous net loss is attributable to the Group’s focused effort in building up the traction
−Removed: and sales pipeline, applying necessary certifications, testings, patents and trademark and creating resources to meet the business expansion
−Removed: needs of the Group’s as well as lack of economies of scale.
+Added: The continuous net loss is attributable to the Group’s focused effort in creating the infrastructure
+Added: and resource to meet the business expansion needs of the Group’s as well as lack of economies of scale.
+Added: Months Ended February 29, 2024, versus Six Months Ended February 28, 2023
+Added: Six Months Ended
+Added: February 29, 2024
+Added: February 28, 2023
+Added: Cost of revenue
+Added: Operating expenses
+Added: Loss from operation
+Added: Loss from operation before income taxes
+Added: $ (2,955,079 )
+Added: $ (2,877,440 )
+Added: Company generated revenues of $132,492 in the six months ended February 29, 2024, as compared to $213,597 in the six months ended February
+Added: 28, 2023, a decrease in revenue of $81,105.
+Added: Being first mover in launching EvoAir TM ,
+Added: first-of-its-kind eco-friendly air-conditioner with granted patent or utility model/ patent or utility model pending HECS system proprietary
+Added: system, the Group faced both opportunities and challenges.
+Added: In the course of applying for some of the certifications, safety and performance
+Added: testing, the relevant authorities/ organizations faced the challenges in assigning our products in the appropriate category under conventional
+Added: air-conditioner regime.
+Added: There are instances whereby some of these authorities/ organizations do not possess the relevant equipment to
+Added: conduct testings.
+Added: It took a lot of education, discussions, deliberations and working with the authorities/ organizations to work out solutions
+Added: to resolve compliance and testing matters.
+Added: On the positive note, one of the authorities advised us to apply under a new category, ‘Hybrid
+Added: Air Conditioner.
+Added: The duration of the application processes were longer than that of typical certifications and testing for conventional
+Added: air-conditioners.
+Added: Being a first mover, notwithstanding many of our
+Added: corporate clients who were impressed and showed keen interest in our products, EvoAir TM , many of them took a few months
+Added: to conduct study on their own accord on performance and the energy savings of our products.
+Added: The Company is building up its traction
+Added: for the EvoAir TM hybrid air-conditioners for both residentials and commercial/ industrial units through distribution
+Added: channels, projects, building and businesses as well as private labelling and licensing model.
+Added: During the financial period, EvoAir
+Added: Manufacturing entered into an OEM supply agreement (the “OEM Agreement”) with Tadmonsori Holdings Sdn Bhd
+Added: (“THSB”) pursuant to which the parties have agreed for THSB to purchase certain products (the “Products”)
+Added: from EvoAir Manufacturing to resell directly under THSB’s branding, trademark, graphics, packaging designs and artwork, with
+Added: the insertion of the words “Powered by EvoAir” inserted at the back of each Product, to THSB end user customers.
+Added: Agreement will be renewable on a three-year basis, and upon the execution of the Agreement, THSB shall have made a minimum order of
+Added: 3,000 units of the Products upon signing of the OEM Agreement, and to target a total sales turnover of 105,000,000 Malaysia Ringgit
+Added: (approximately US$22,522,522, as calculated at the Foreign Exchange Rate of US$1 = 4.6620 Malaysia Ringgit on December 8, 2023, as
+Added: published in H.10 statistical release of the United States Federal Reserve Board) over 3 years from January 1, 2024 to December 31,
+Added: of revenue was $187,401 or 141% of revenue for the six months ended February 29, 2024, as compared to $251,798 or 118% of revenue in
+Added: the same financial period in 2023.
+Added: The decline in cost of revenue for the comparative figures is in line with the drop in sales.
+Added: Cost of revenues includes production costs and purchases of goods.
+Added: loss was $54,909 or negative gross profit margin of 41% for the six months ended February 29, 2024, as compared to gross loss of $38,201
+Added: in the same financial period in 2023 or 18% of revenue.
+Added: The increase of gross loss is
+Added: mainly due to the Company commercialized EvoAir TM products with higher cost of revenue from manufacturing and related costs
+Added: as well as lack of economy of scale during commercialization stage.
+Added: The Company anticipates improvement of income and gross profit margin
+Added: with the improvement of revenue streams from distributor and dealership model, projects as well as private labeling and licensing model.
+Added: expenses were $2,990,751 for the six months ended February 29, 2024, compared to $2,853,728 in the corresponding period in 2023, an increase
+Added: The increase in operating expenses was not significant as it’s within 5%.
+Added: income was $90,581 for the six months ended February 29, 2024, compared to $14,489 in the corresponding period in 2023,
+Added: an increase of $76,092.
+Added: The change was mainly due to $82,389 realized foreign exchange gain from amounts due to shareholders.
+Added: loss from operation before income taxes for the six months ended February 29, 2024, was $2,955,079 as compared to $2,877,440 for the
+Added: corresponding period in 2023.
+Added: The continuous net loss is attributable to the Group’s focused effort in creating the infrastructure
+Added: and resource to meet the business expansion needs of the Group’s as well as lack of economies of scale.
and Capital Resources
−Removed: November 30, 2023
−Removed: August 31, 2023
+Added: February 29 ,
Current assets
1 unchanged sentence
Working capital
−Removed: of November 30, 2023, the decrease of current assets was mainly due to the decrease in cash and cash equivalent as well as decrease in deposit, prepayment and other
−Removed: for the three months period ended November 30, 2023.
−Removed: of November 30, 2023, the increase in current liabilities was mainly due to the increase in amount due to shareholders of
−Removed: $166,652 and accounts payable and accruals of $118,749.
−Removed: of November 30, 2023, our company had a positive working capital of $561,934 compared with the positive working capital of $1,106,522
−Removed: as of August 31, 2023.
−Removed: Months Ended November 30, 2023, versus Three Months Ended November 30, 2023
+Added: at February 29, 2024, our company’s current liabilities stood at $1,394,439, which included accounts payable and accruals of $252,741,
+Added: other payables of $27,439, current portion hire purchase creditor $7,412, amounts due to shareholders $439,630, current portion operating
+Added: lease liabilities of $88,952 and the deferred revenue of $399,773.
+Added: at February 29, 2024 our company had a positive working capital of $178,492 compared with the positive working capital of $1,106,522
+Added: as at August 31, 2023.
+Added: The drop in working capital for the comparative figures was mainly attributable to the decrease in cash proceeds
+Added: from issuance of common stock or capital contribution, decrease in deposits, prepayments and other receivables, increase in accounts
+Added: payable and accruals, and the increase in amounts due to shareholders.
+Added: Months Ended February 29, 2024, versus Six Months Ended February 28, 2023
Cash flows used in operating activities
2 unchanged sentences
Net changes in cash
−Removed: Company’s cash and cash equivalents stood at $477,885 as of November 30, 2023.
−Removed: Cash used in operating activities for the three
−Removed: months ended November 30, 2023, was $103,466.
−Removed: This resulted primarily from a net loss of $1,524,321 which was offset by depreciation
−Removed: of $95,369, amortization of $1,039,347, decrease in operating lease right-of-use assets of $17,590, decrease in operating leases liabilities
−Removed: of $18,518, increase in inventories of $54,528, decrease in deferred revenue of $49,986, decrease in deposit, prepayment and other receivables
−Removed: of $122,057, increase in accounts receivable of $7,490, increase in accounts payable and accruals of $118,749, increase in amounts due
−Removed: to shareholders of $166,652, and decrease in other payables of $8,387.
−Removed: used in investing activity resulted from purchase of property plant and equipment amounting to $107,725 for the three months ended November
−Removed: used in financing activities resulted in payments of hire purchase amounting to $1,972 during the three months ended November 30, 2023.
+Added: Company’s cash and cash equivalents stood at $137,029 as of February 29, 2024.
+Added: Cash used in operating activities for the six months
+Added: ended February 29, 2024, was $457,609.
+Added: This resulted primarily from a net loss of $2,955,079 which was offset by depreciation of $137,106,
+Added: amortization of $2,078,694, decrease in operating lease right-of-use assets of $41,049, decrease in operating leases liabilities of $43,128,
+Added: increase in inventories of $94,838, decrease in deferred revenue of $40,296, decrease in deposit, prepayment and other receivables of
+Added: $128,099, decrease in accounts receivable of $1,444, increase in accounts payable and accruals of $81,853, increase in amounts due to
+Added: shareholders of $207,535, and decrease in other payables of $48.
+Added: used in investing activity resulted from purchase of property plant and equipment amounting to $96,186 for the six months ended February
+Added: used in financing activities resulted from the payments of hire purchase amounting to $4,144 during the six months ended February 29,
Company’s business is not subject to seasonality.
11 unchanged sentences
to receive in exchange for those goods.
−Removed: apply the following five-step model in order to determine this amount:
+Added: We apply the following five-step model in order to determine this amount:
identification
of the promised goods and services in the contract;
−Removed: determination of whether
−Removed: the promised goods and services are performance obligations, including whether they are distinct in the context of the contract;
−Removed: measurement of the transaction
−Removed: price, including the constraint on variable consideration;
−Removed: allocation of the transaction
−Removed: price to the performance obligations;
−Removed: recognition of revenue
−Removed: when (or as) the Company satisfies each performance obligation.
+Added: determination
+Added: of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the
+Added: of the transaction price, including the constraint on variable consideration;
+Added: of the transaction price to the performance obligations;
+Added: of revenue when (or as) the Company satisfies each performance obligation.
only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange
9 unchanged sentences
and Assumptions
−Removed: preparation of financial statements in conformity with U.S.
−Removed: GAAP requires the Management to make estimates and assumptions that affect
−Removed: the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
−Removed: and the reported amounts of sales and expenses during the reporting periods.
−Removed: Key estimates in the accompanying unaudited condensed consolidated
−Removed: financial statements include, inter-alia , revenue recognition, allowances for doubtful accounts and product returns, provisions
−Removed: for obsolete inventory, valuation of long-lived assets and rights of use (“ROU”) assets (including lease liabilities), and
−Removed: deferred income tax asset valuation allowances.
−Removed: Actual results could differ materially from these estimates.
−Removed: Company’s financial statements as of November 30, 2023, is prepared using generally accepted accounting principles in the United
−Removed: States of America (“U.S.
−Removed: GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation
−Removed: of liabilities in the normal course of business.
−Removed: The Company has not yet established a sustainable ongoing source of revenue sufficient
−Removed: to cover its operating costs and allow it to continue as a going concern.
−Removed: of November 30, 2023, and August 31, 2023, the Company
−Removed: had an accumulated deficit of $14,967,589 and $13,523,266 respectively.
−Removed: The Company incurred net loss of $1,524,321 and $ $1,440,362 for the three months ended November 30, 2023, and November 30, 2022, respectively.
−Removed: The cash used in operating activities was $103,466 and $264,216 for the three months ended November 30, 2023, and November 30, 2022,
+Added: preparing our unaudited condensed consolidated financial statements, we use estimates and assumptions that affect the reported amounts
+Added: and disclosures.
+Added: Our estimates are often based on complex judgments, probabilities and assumptions that we believe to be reasonable,
+Added: but that are inherently uncertain and unpredictable.
+Added: We are also subject to other risks and uncertainties that may cause actual results
+Added: to differ from estimated amounts.
+Added: Significant estimates in 2024 and 2023 include the assumptions used to value tax liabilities, derivative
+Added: financial instruments, the estimates of the allowance for deferred tax assets, the accounts receivable allowance, impairment of intangible
+Added: assets and long-lived assets and inventory write-offs.
+Added: to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets which could impact our
+Added: estimates and assumptions.
+Added: We have assessed the impact and are not aware of any specific events or circumstances that required an update
+Added: to our estimates and assumptions or materially affected the carrying value of our assets or liabilities as of the date of issuance of
+Added: this Quarterly Report on Form 10-Q.
+Added: These estimates may change as new events occur and additional information is obtained.
+Added: Actual results
+Added: could differ materially from these estimates under different assumptions or conditions.
+Added: of February 29, 2024, and August 31, 2023, the
+Added: Company had an accumulated deficit of $16,334,493 and $13,523,266 respectively.
+Added: The Company incurred net loss of $2,955,079 and $ $2,877,440 for the six months ended February 29, 2024, and February 28, 2023,
respectively.
−Removed: It was brought to the attention of the Management to assess going concern considering all facts and circumstances about
−Removed: the foreseeable future of the Company as well as its assets and liabilities on the basis that it will be able to realize and discharge
−Removed: them in the normal course of business.
−Removed: the development of HVAC business (“HVAC Business”) pursuant to the Transactions (defined in Note 1 ),
+Added: The cash used in operating activities was $457,609 and $326,333 for the six months ended February 29, 2024, and
+Added: February 28, 2023, respectively.
+Added: It was brought to the attention of the Management to assess going concern considering all facts and
+Added: circumstances about the foreseeable future of the Company as well as its assets and liabilities on the basis that it will be able to
+Added: realize and discharge them in the normal course of business.
+Added: With the development of HVAC business (“HVAC Business”) pursuant to the Transactions (defined in Note
1), the Management believes that the actions to be taken by the Management to further implement the business plans for the HVAC Business
−Removed: including expansion in product offerings, geographical expansion, generate revenue through expansion of revenue streams and customer
−Removed: base (retail, commercial, industrial, projects as well as private label and licensing clientele), improvement of profitability by achieving
+Added: including expansion in product offerings, geographical expansion, generate revenue through expansion of revenue streams and customer base
+Added: (retail, commercial, industrial, projects as well as private label and licensing clientele), improvement of profitability by achieving
economies of scale provide the opportunity for the Company to continue as a going concern.
In addition, the Company is also working on
−Removed: raising additional funding in conjunction with the Company’s plan to uplist on Nasdaq Capital
−Removed: Market/ NYSE American LLC to finance the operations as well as business expansion.
−Removed: consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly financial
−Removed: statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification
+Added: raising additional funding in conjunction with the Company’s plan to uplist on Nasdaq Capital Market/ NYSE American LLC to finance
+Added: the operations as well as business expansion.
+Added: unaudited condensed consolidated financials have been prepared assuming that the Company will continue as a going concern and accordingly
+Added: 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.
−Removed: have no material commitments as of November 30, 2023.
+Added: have no material commitments as of February 29, 2024.
Accounting Pronouncements
+Added: for rules and interpretive releases of the SEC under the authority of federal securities laws and a limited number of grandfathered standards,
+Added: the ASC is the sole source of authoritative GAAP literature recognized by the FASB and applicable to the Company.
+Added: Management has reviewed
+Added: the aforementioned rules and releases and believes any effect will not have a material impact on the Company’s present or future
+Added: financial statements.
August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging
10 unchanged sentences
of this standard did not have a material impact on its consolidated financial statements.
+Added: November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures.
+Added: This ASU aims to improve segment disclosures
+Added: through enhanced disclosures about significant segment expenses.
+Added: The standard requires disclosure of significant expense categories and
+Added: amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily
+Added: computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts.
+Added: This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods
+Added: presented in the financial statements.
+Added: The Company is currently evaluating the impact of the additional disclosure requirements on the
+Added: Company’s condensed consolidated financial statements.
+Added: December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures
+Added: which applies to all entities subject to income taxes.
+Added: The standard requires disaggregated information about a reporting entity’s
+Added: effective tax rate reconciliation as well as information on income taxes paid.
+Added: The standard is intended to benefit investors by providing
+Added: more detailed income tax disclosures that would be useful in making capital allocation decisions.
+Added: This standard will be effective for
+Added: the Company in Fiscal Year 2026 and should be applied prospectively.
+Added: The Company is currently evaluating the impact of the additional
+Added: disclosure requirements on the Company’s condensed consolidated financial statements.
recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public
5 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.