What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-11-12 compared with 2024-11-29 · 352 added, 243 removed, 56 unchanged (91% of the section changed)

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

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

MANAGEMENT’S DISCUSSION

AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Holdings Inc (formerly Unex Holdings Inc.) (the “Company”, “EVOH”, “we”, “us”, or “our”)

is a corporation established under the corporation laws in the State of Nevada, U.S.

on February 17, 2017.

The Company has adopted an

August 31 fiscal year end.

December 20, 2021, the Company and Dr.

Low entered into the EvoAir Transaction.

EvoAir International, through its subsidiaries upon completion of the Transactions contemplated under Note 1 to Financial Statements,

is engaged in the R&D, manufacturing, trading, sale of HVAC products and related services in Asia.

to the terms of a share transfer agreement dated December 20, 2021, Dr.

Low, the then sole executive officer and director of the

Company and the owner of 2,000,000 restricted shares of Common Stock of the Company representing approximately 67.34% of the

Company’s then issued and outstanding shares of Common Stock, sold his entire shareholding of the Company to WKL Global for an aggregate

consideration of $100.

Upon completion of the Change of Control Transaction, WKL Global owned 2,000,000 shares, or approximately

67.34% of the then issued and shares of Common Stock of the Company, which resulted in a change of control of the

December 20, 2021, several transactions took place (together, the “Allotment Transactions”) whereby the Company issued and

allotted in aggregate 98,809,323 EvoAir Shares to certain parties.

On completion of the Allotment Transactions, the total number of issued

and outstanding EvoAir Shares were 101,779,323 (“Then Enlarged Share Capital”):

On December 20, 2021, Dr.

Low and Chan Kok Wei entered into a share exchange agreement with WKL Eco Earth Holdings, pursuant to which

Low and Chan Kok Wei agreed to sell all their ordinary shares of WKL Green Energy to WKL Eco Earth Holdings in consideration for

the allotment and issuance to WKL Global and Allegro Investment (BVI) Limited (“Allegro Investment”), a company incorporated

in the British Virgin Islands with 50% shareholding held by Chan Kok Wei and Ong Bee Chen, respectively, of 24,000 EvoAir Shares and

6,000 EvoAir Shares, respectively, or approximately 0.02% and 0.01% of the Then Enlarged Share Capital, respectively.

On December 20, 2021, Dr.

Low, Chan Kok Wei, Ong Bee Chen and certain sellers (“WKLEE Sellers”) entered

into a share exchange agreement with WKL Eco Earth Holdings, pursuant to which the WKLEE Sellers agreed to sell all their ordinary shares,

of WKL Eco Earth to WKL Eco Earth Holdings in consideration for the allotment

and issuance to WKL Global, Allegro Investment and WKLEE Sellers of 49,320 EvoAir Shares, 8,280 EvoAir Shares and in aggregate 14,400

EvoAir Shares, respectively, or approximately 0.05%, 0.009% and in aggregate 0.014%, respectively, of the Then Enlarged Share Capital.

On December 20, 2021, Tan Soon Hock, Oh Ivan Joon Wern and certain relevant interest holders (“Relevant Interest

Holders”) entered into an investment exchange agreement with WKL Eco Earth Holdings, pursuant to which the Tan Soon Hock, Oh

Ivan Joon Wern and the Relevant Interest Holders agreed to sell all relevant interests in the EvoAir Group to WKL Eco Earth Holdings

in consideration for the allotment and issuance of 7,037,762 EvoAir shares, 2,520,000 EvoAir shares and in aggregate 6,001,794

EvoAir shares, respectively, or approximately 6.91%, 2.48% and in aggregate 5.90%, respectively,

of the Then Enlarged Share Capital.

The board of directors and majority shareholders of the Company have

approved the transaction.

On December 20, 2021, Dr.

Low entered into two deeds of assignment of intellectual properties with WKL Eco Earth Holdings, in

respect of Dr.

Low’s patents and patent applications relating to eco-friendly air-conditioner condenser (external unit),

EvoAir TM and the trademarks described in the deed of assignment thereunder, and in respect of Dr.

Low’s patents and

patent applications relating to the portable air-conditioner, e-Cond EVO TM and the trademarks and trademark applications

as described in the deed of assignments thereunder (together, the “IP Assignments”).

Pursuant to the IP Assignments, WKL

Global, Allegro Investment and certain nominees shall be allotted and issued 63,362,756 EvoAir Shares, 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%, respectively of the Then

Enlarged Share Capital in consideration for the IP Assignments.

Transaction, Change of Control Transaction and Allotment Transactions are collectively to be referred to as the “Transactions”.

The closing of the Transactions (the “Closing”) occurred on December 20, 2021 (the “Closing Date”).

and after the Closing Date, at which time EvoAir International transferred its HVAC business to the Company, the Company’s primary

operations consisted of the prior operations of EvoAir International.

International is a company incorporated in BVI on November 17, 2021.

Effective from the December 20, 2021, it wholly owns WKL Eco

Earth Holdings, a company incorporated in Singapore on July 12, 2018, which in turn wholly owns (a) WKL Eco Earth, a Malaysian

company incorporated on May 17, 2017, and (b) WKL Green Energy a Malaysian company incorporated on October 24, 2017.

WKL Eco Earth

Holdings acquired (c) EvoAir Manufacturing (M) Sdn bhd (“EvoAir Manufacturing”) on April 19, 2021, a Malaysian company

incorporated on March 22, 2019, as well as acquiring (d) WKL EcoEarth Indochina Co Ltd (“WKL EcoEarth Indochina”), a

Cambodia company incorporated on February 4, 2021, (e) WKL Guanzhe Green Technology Guangzhou Co Ltd (“WKL Guanzhe”), a Chinese company incorporated on

April 6, 2021.

EvoAir Manufacturing wholly owns (f) Evo Air Marketing (M) Sdn Bhd (“Evo Air Marketing”), a Malaysian company incorporated on February 2,

June 15, 2022, the Company filed a Certificate of Amendment (the “Amendment”) to the Articles of Incorporation with Nevada’s

Secretary of State to change the name of the Company from Unex Holdings Inc.

to EvoAir Holdings Inc.

(the “Name Change”),

and the Name Change became market effective on November 4, 2022.

Effective on November 11, 2022, the Company’s shares began trading

under the new ticker symbol “EVOH”.

November 21, 2023, the Company issued in aggregate, 52,107 shares of Common Stock to 15 referral agents (“Referral Agents”)

in consideration for their referral to the Company of certain investors.

Each Referral Agent is a “non-U.S.

Persons” as defined

in Regulation S.

November 21, 2023, the Company issued, in aggregate, 5,500 shares of Common Stock to two individuals in consideration for marketing services

provided to the Company by Artisan Creative Studio, a marketing entity based in Malaysia.

Each of the individuals is a “non-U.S.

Persons” as defined in Regulation S.

On August 14, 2024, the WKL Eco Earth Holdings has

increased its investment in WKL Guanzhe Green Technology Guangzhou Co Ltd (China) by injecting an additional RMB2,000,000 into its registered

This investment has resulted in an increase in WKL Eco Earth Holding’s equity interest in WKL Guanzhe Green Technology

2 Stockholders

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

$2.50, as follows:

February 15, 2022, the Company entered into certain share subscription agreement with Ms.

Ang Lee Kim Jane, who is a “non-U.S.

Persons” (the “Investor”) as defined in Regulation S of the Securities Act of 1933, as amended (the “Securities

Act”) pursuant to which the Company agreed to issue and sell 74,074 Shares, of Common Stock, at a per share purchase

price of $2.50, 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 price of $2.50.

The gross proceeds were $185,185.

June 3, 2022, the Company entered into certain share subscription agreement with Mr.

Wong Hon Wai who is a “non-U.S.

Persons” (the “Investor”) as defined in Regulation S of the Securities Act pursuant to which the Company agreed to

issue and sell 5,000 shares of Common Stock, at a per share purchase price of $2.50, 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 price of $2.50.

The gross proceeds

were $12,500.

October 25, 2022, the Company entered into Regulation S share subscription agreements with eight investors, each of whom represented

that it was a “non-U.S.

Persons” as defined in Securities Act.

On the same date, the Company entered into Regulation

D share subscription agreements with two investors, each of whom represented that it was an “Accredited Investors” as

defined in Regulation D of the Securities Act.

Pursuant to the share subscription agreements, the Company agreed to issue and sell

in aggregate, (i) 129,621 shares of Common Stock, to the Regulation S investors, and (ii) 15,000 shares

of Common Stock to the Regulation D investors, respectively, at a per share purchase price of $2.50, 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 price

The gross proceeds in aggregate were $361,553.

February 20, 2023, the Company entered into Regulation S share subscription agreements with eleven investors, each of whom

represented that it was a “non-U.S.

Persons” as defined in Regulation S of the Securities Act.

Pursuant to the share

subscription agreements, the Company agreed to issue and sell in aggregate, (i) 57,783 shares of Common Stock, to the Regulation S investors, at a per share purchase price of $2.50 as part of a series of the 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.

The gross proceeds

in aggregate were $144,443.

July 13, 2023, the Company entered into Regulation S share subscription agreements with 31 investors, each of whom represented that

it was a “non-U.S.

Persons” as defined in Regulation S of the Securities Act.

Pursuant to the share subscription

agreements, the Company agreed to issue and sell in aggregate, (i) 250,132 shares of Common Stock, to the

Regulation S Investors, at a per share purchase price of $2.50 as part of a series of the 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.

The gross proceeds in aggregate

were approximately $625,330.

September 7, 2023, the Company entered into Regulation S share subscription agreements with 71 investors, each of whom represented

that it was a “non-U.S.

Persons” as defined in Regulation S of the Securities Act.

Pursuant to the share subscription

agreements, the Company agreed to issue and sell in aggregate, 365,164 shares of Common Stock, to the

Regulation S investors, at a per share purchase price of $2.50 as part of a series of the 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.

The gross proceeds in aggregate

was approximately $912,889.

November 21, 2023, the Company entered into a Regulation S share subscription agreement with Wong Chun Shoong who represented that

he was a “non-U.S.

Persons” as defined in Regulation S of the Securities Act.

Pursuant to the share subscription

agreement, the Company agreed to issue and sell in aggregate, 8,658 shares of Common Stock, to the

Regulation S investors, at a per share purchase price of $2.50 as part of a series of the private 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.

The gross proceeds in aggregate

was approximately $21,645.

April 12, 2024, the Company’s board of directors (the “Board”) unanimously resolved to effect a reverse stock split

of the Company’s common stock, par value $0.001 per share (the “Common Stock”), at a ratio of 1-for-4.

Following such

resolution, on September 9, 2024, the Company filed a Certificate of Amendment (the “Certificate of Amendment”) with the

Secretary of State of the State of Nevada to effect the reverse stock split, with an effective time of 9:00AM.

Eastern Time on September

11, 2024 (the “Reverse Stock Split”).

Treatment of Fractional Shares

a result of the 1:4 Reverse Stock Split, each 4 pre-split shares of Common Stock outstanding will automatically combine into one new

share of Common Stock without any action on the part of the holders, and the number of outstanding shares of Common Stock was reduced

from 102,742,362 shares to 25,685,591 shares (subject to rounding up of fractional shares to the nearest whole number).

fractional shares were issued in connection with the Reverse Stock Split.

Fractional shares were rounded up to the nearest whole number.

November 25, 2024, the Company issued, in aggregate, 679,516 shares of Common Stock, representing 2.5% of the issued and outstanding

shares of Common Stock to certain consultant in consideration for their services in relation to proposed initial public

November 25, 2024, the Company issued, in aggregate, 815,419 shares of Common Stock, representing 3.0% of the issued and outstanding

shares of Common Stock to certain consultant in consideration for their consulting services.

of Operation and Funding

1 unchanged sentence

Our working capital requirements are expected to increase in line with the growth of our business.

working capital, proceeds from issuance of securities, further advances, and anticipated cash flow are expected to be adequate to

fund our operations over the next twelve months.

working capital, proceeds from issuance of securities, further advances, and anticipated cash flow are expected to be adequate to fund

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 internally generated funds, advances and proceeds from issuance of securities.

In connection

with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to:

research and development;

Generally, we have financed

operations to date through internally generated funds, advances and proceeds from issuance of securities.

In connection with our business

plan, management anticipates additional increases in operating expenses and capital expenditures relating to:

(i) research and development;

(ii) expansion of product offerings;

1 unchanged sentence

and (iv) marketing expenses.

to finance these expenses with further issuances of securities and advances.

Thereafter, we expect we will need to raise additional capital and

generate revenue to meet long-term operating requirements.

Additional issuances of equity will result in dilution to our current

shareholders.

Further, such securities might have rights, preferences, or privileges senior to our common stock.

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.

We intend to finance these expenses with

further issuances of securities and advances.

Thereafter, we expect we will need to raise additional capital and generate revenue to

meet long-term operating requirements.

Additional issuances of equity 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.

of Operations

following table sets forth certain selected statement of operations data for the financial year indicated in U.S.

we note that the year-to-year comparison may not be indicative of future performance.

addition, we note that the year-to-year comparison may not be indicative of future performance.

following summary of our operations should be read in conjunction with our audited financial statements for the financial years ended

3 unchanged sentences

Operating expenses

(1 1 ,341,503 )

Loss from operations

1 unchanged sentence

(26,319,806 )

Other income/(expense)

(14,968,005 )

(26,315,396 )

The Group recorded a revenue of $314,719 for FYE 2024,

representing a decrease of approximately $73,319, or 19%, compared to FYE 2023 revenue of $388,038.

This decline was primarily driven

by a reduction in sales of our eco-friendly air-conditioning units, particularly our flagship product, EvoAir™, which is a pioneering

hybrid air-conditioner designed with a proprietary HECS system.

As the first mover in the eco-friendly air-conditioning

market, the Group encountered both significant opportunities and challenges during the year.

The EvoAir™ air-conditioner, which

is either granted a patent or utility model pending, presented unique challenges related to its certifications and testings.

Specifically,

while working with relevant authorities and organizations to apply for the necessary safety and performance certifications and approvals,

the Group encountered difficulties in having our product appropriately categorized within the existing frameworks for conventional air

conditioners.

In certain cases, the authorities lacked the equipment or resources to conduct the required tests.

Despite these challenges, the Group actively engaged

in educating and collaborating with these organizations to resolve compliance and testing issues.

A positive outcome of this effort was

the recommendation from one of the authorities to apply under a newly established category:

‘Hybrid Air Conditioners.’ However,

this process, due to its novelty, was more time-consuming than the typical certification processes for traditional air-conditioning systems.

In addition to certification challenges, the adoption

of EvoAir™ by corporate clients also experienced delays.

While the Group received significant interest from several corporate clients

who were impressed with the product’s potential for energy savings and performance, many of them undertook additional studies to evaluate

the long-term benefits of EvoAir™.

This independent research and assessment by potential customers resulted in extended decision-making

Despite these hurdles, the Group remains optimistic

about the long-term potential of EvoAir™.

We are steadily building momentum and expanding the product’s reach across various

markets, including residential, commercial, and industrial sectors.

This is being achieved through the development of strategic distribution

channels, project collaborations, and private labelling and licensing models.

The Group remains committed to strengthening the traction

of EvoAir™ and driving its adoption across diverse market segments, positioning ourselves for future growth in the emerging eco-friendly

air-conditioning space.

confident in the long-term prospects of EvoAir™ and are focused on continuing to innovate and address challenges, with a view to

establishing the product as a leading solution in the sustainable cooling market.

Cost of revenue

The Company recorded a cost of revenue of $323,038

for FYE 2024, which represents 103% of total revenue, compared to $424,189, or 109% of revenue, in FYE 2023.

The decrease in cost of revenue

is consistent with the decline in sales of our eco-friendly air conditioning products and reflects improvements in our overall cost structure.

The cost of revenue encompasses production costs and

the purchase of goods.

The reduction in cost of revenue as a percentage of sales reflects both the lower volume of sales and the Company’s

ongoing efforts to optimize production efficiencies and manage costs.

These efforts include streamlining procurement processes and enhancing

cost management, which have contributed to the improvement in our overall cost of revenue despite the sales decline.

Looking ahead, the Company remains focused on further

optimizing its cost structure and maintaining efficiencies as it continues to scale its operations and expand its product offerings.

The Company reported a gross loss of $8,319 for FYE

2024, representing 3% of revenue.

This reflects a significant improvement compared to the gross loss of $36,151 in the FYE 2023, which

constituted 9% of revenue.

The improvement in gross loss margin from FYE 2023

to FYE 2024 was primarily driven by a strategic reduction in the overall cost of revenue.

These efforts included more efficient cost management,

supplier renegotiations, and optimized production processes.

This progress underscores the Company’s commitment to enhancing operational

efficiency and moving toward sustained profitability.

Management will continue to focus on cost control

measures and revenue growth initiatives to build on this positive momentum in the upcoming financial periods.

Operating expenses

Operating expenses for FYE 2024 amounted to $26,311,487,

reflecting a 332% increase compared to $6,097,019 recorded in FYE 2023.

This increase of $20,214,468 was primarily attributable to an

increase in technology-related intangible asset impairment and net off with the decrease in general administrative expenses since the

IPO related offering cost has been capitalized.

Key components of operating expenses included salaries

and related expenses, commissions, rental costs, patent and trademark application/renewal fees, professional and compliance fees.

The Company remains focused on prudent cost management

to maintain operational efficiency while supporting strategic initiatives for growth and value creation.

Other income/ (expenses)

Other income for FYE 2024 was not material.

By comparison,

in FYE 2023, other income primarily comprised realized foreign exchange losses.

The minimal impact of other income in FYE 2024 reflects

a limited exposure to foreign exchange fluctuations.

Management remains committed to monitoring external factors that may affect foreign

exchange losses and will take proactive measures to mitigate any potential risks in the future.

The Company reported a loss from operations before

income taxes of $26,315,369 for FYE 2024, compared to $6,317,373 for FYE 2023.

Apart from the technology-related intangible asset

impairment, the continued net loss is primarily attributable to the Company’s strategic investments in building the necessary infrastructure

and resources to support its business expansion objectives.

Additionally, the lack of economies of scale during this growth phase has

impacted the bottom line.

Management remains confident that these investments

will position the Company for long-term growth and profitability as it scales operations and capitalizes on emerging opportunities.

to enhance operational efficiencies and achieve economies of scale are key priorities moving forward.

(11,347,391 )

Group generated revenue of $284,666 for the year ended August 31, 2025, as compared to $314,719 for the year ended August 31, 2024,

a decrease of $30,053 or 9.5%.

The decline was mainly attributable to lower sales volumes of air-conditioners

and related services, reflecting softer demand in certain market segments.

This decrease, however, was partially offset by stronger sales

contributions from the Ionic Nano Copper Zinc product line, which continued to gain traction and achieve wider market acceptance.

are steadily building momentum and expanding the product’s reach across various markets, including residential, commercial, and

industrial sectors.

This is being achieved through the development of strategic distribution channels, project collaborations, and private

labelling and licensing models.

The Group remains committed to strengthening the traction of EvoAir™ air-conditioner and driving

its adoption across diverse market segments, positioning ourselves for future growth in the emerging eco-friendly air-conditioning space.

remain confident in the long-term prospects of EvoAir™ and are focused on continuing to innovate and address challenges, with a

view to establishing the product as a leading solution in the sustainable cooling market.

the year ended August 31, 2025, cost of revenue decreased to $304,433, or 106.9% of revenue, compared to $323,038, or 102.6% of revenue

in the year ended August 31, 2024.

The slight decrease in absolute cost of revenue was primarily attributable to lower production volumes,

which resulted in reduced operating efficiency and the absence of economies

cost of revenue encompasses production costs and purchase of goods.

The Company remains focused on further optimizing its cost structure

and maintaining efficiencies as it continues to scale its operational and expand its product offering.

the year ended August 31, 2025, the Company reported a gross loss of $19,767, compared to a gross loss of $8,319 in the year ended August

31, 2024, an increase in gross loss of $11,448 or 137.6%.

The widened gross loss was primarily attributable to lower revenue levels

and reduced production activity, which led to inefficient absorption of fixed manufacturing costs during the period of decreased sales

Company remains focused on optimizing its cost structure and enhancing operational efficiencies.

As we continue to scale operations and

expand our product offerings, we are positive that these efforts will improve gross margins and position the Company for profitability

in the future.

the year ended August 31, 2025, operating expenses amounted to $14,969,984, compared to $26,311,487 in the year ended August 31,

2024, reflecting a decrease of $11,341,503 or 43.1%.

The reduction was mainly attributable to the absence of the significant

intangible asset impairment charge of $20,580,040 recorded in fiscal year 2024, as compared to a lower impairment charge of $6,931,502

recognized in fiscal year 2025.

This improvement was partially offset by an increase in stock based compensation expense related to consulting

services incurred during the year.

components of operating expenses included salaries and related expenses, commissions, rental costs, patent and trademark application/renewal

fees, professional and compliance fees.

Company remains focused on prudent cost management to maintain operational efficiency while supporting strategic initiatives for growth

and value creation.

income for the year ended August 31, 2025, was $21,746, compared to $4,410 in the year ended August 31, 2024, an increase of $17,336

The increase was primarily attributable to foreign exchange gain during the year.

from operations before income taxes

Company reported a loss from operations before income taxes of $14,968,005 for the year ended August 31, 2025, compared to $26,315,396

in the year ended August 31, 2024, an improvement of $11,347,391 or 43.1%.

improvement in net loss is primarily attributable to the absence of the significant intangible asset impairment in fiscal year 2025,

which was partially offset by an increase in stock based compensation expense related to consulting services incurred during the

However, ongoing investments in building the necessary infrastructure and resources to support business expansion objectives

continue to impact profitability.

Additionally, the lack of economies of scale during this growth phase has affected the bottom

remains confident that these investments will position the Company for long-term growth and profitability as it scales operations and

capitalizes on emerging opportunities.

Strategies to enhance operational efficiencies and achieve economies of scale are key priorities

moving forward.

and Capital Resources

August 31, 2025

August 31, 2024

Current assets

$ (1,280,412 )

Current liabilities

Working capital

As of August 31, 2024, our company’s current liabilities stood at

$1,684,638, which included accounts payable and accruals of $267,900, other payables of $95,831, deferred revenue $10,012, current portion

hire purchase creditor $ 8,758 , amount due to shareholders $1,202,692, and current portion

operating lease liabilities of $ 99.445 .

The increase in current liabilities was mainly

attributable to amount due to shareholders.

As of August 31, 2024, the Company had a deficit working capital of $ 893,886

compared with the positive working capital of $1,106,522 as of August 31, 2023.

The drop in working capital for the comparative

figures was mainly attributable to the decrease in cash proceeds from issuance of common stock or capital contribution, decrease in deposits,

prepayments and other receivables, increase in accounts payable and accruals and the increase in amount owing to shareholders.

The decline in working capital underscores the Company’s

strategic use of resources to support ongoing operations and investments during a critical growth phase.

Management is actively monitoring

the Company’s liquidity position and evaluating strategies to enhance working capital and ensure sustainable financial stability.

Cash flows generated from / (used in) operating activities

As of August 31, 2025, the decrease in current assets was primarily attributable

to lower balances in cash and cash equivalents, inventories, and deposits, prepayments, and other receivables.

Conversely, the increase

in current liabilities was mainly due to higher accounts payable and accruals, other payables, and amounts due to shareholders.

As a result, the Company recorded a working capital deficit of $2,685,006

as of August 31, 2025, compared to $893,886 as of August 31, 2024.

The widening deficit reflects the impact of continued operational losses

and ongoing investments in business development and growth initiatives, which were partially financed through shareholder advances.4

2025, versus FYE 2024

August 31, 2025

August 31, 2024

Net cash used in operating activities

$ (1,158,760 )

Cash flows used in investing activities

Cash flows (used in) / generated from financing activities

Net changes in cash

The Company generated net cash from operating activities

of $30,822 for FYE 2024, compared to a net cash outflow of $1,674,395 in FYE 2023.

The improvement in cash flow from operating activities

mainly attributable to a reduction of $170,431 in inventory levels, significant decreases in

deposits, prepayments, and advances to suppliers, contributing $502,701 to cash flow and increased support from shareholders, with amounts

due to shareholders rising by $970,597.

These improvements were partially offset by reductions in deferred revenue

and increased accounts payable and accruals.

As of August 31, 2024, the Company’s cash and cash equivalents stood at $152,985.

improved operating cash flow reflects the Company’s ongoing efforts to optimize cost efficiency positioning it for sustainable growth.

During the FYE 2024, cash used in investing activities amounted to $146,269.

This was primarily attributable to capital expenditures for the purchase of property, plant and equipment, reflecting the company’s

continued investments in operational infrastructure to support its long-term growth stategy.

Cash used in financing activities for FYE 2024 totaled $456,253, consisting

of $6,677 for hire purchase payments and $449,576 related to the payment of offering cots.

Net cash used in investing activities

Net cash provided by financing activities

Net decrease in cash and cash equivalents

Company’s cash and cash equivalents stood at $93,329 as of August 31, 2025.

Cash used in operating activities for the year

ended August 31, 2025, was $1,158,760.

This resulted primarily from a net loss of $14,968,005, which was offset by non-cash items

including depreciation of $110,212, amortization of $2,970,078, intangible asset impairment of $6,931,502, and stock-based expense

of $3,261,676.

Changes in operating assets and liabilities included decreases in accounts receivable of $6,679, inventories of

$143,539, deposit, prepayments, and other receivables of $53,130, and operating lease right-of-use assets of $108,239;

accounts payable and accruals of $280,294, other payables of $53,203, and deferred revenue of $993;

and a decrease in operating

lease liabilities of $110,300.

used in investing activities for the year ended August 31, 2025, was $16,991, primarily related to purchases of property, plant, and

provided by financing activities for the year ended August 31, 2025, was $1,167,665, primarily from loans from shareholders of $1,233,715,

partially offset by payments of hire purchase of $8,226 and deferred offering costs of $57,824.

Company’s business is not subject to seasonality.

1 unchanged sentence

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, revenue or expenses, results of operations, liquidity,

capital expenditures or capital resources that are material to investors.

or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital

expenditures or capital resources that are material to investors.

Accounting Policies

revenue recognition policy is in compliance with ASC 606, Revenue from Contracts with Customers whereby revenue is recognized

when a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that we expect to receive

revenue recognition policy is in compliance with ASC 606, Revenue from Contracts with Customers that revenue is recognized when

a customer obtains control of promised goods and is recognized in an amount that reflects the consideration that we expect to receive

in exchange for those goods.

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to receive in exchange for those goods.

We apply the following five-step model to determine this amount:

apply the following five-step model in order to determine this amount:

identification

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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 it is entitled to in exchange

for the goods or services it transfers to the customer.

only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange

for the goods or services we transfer to the customer.

Once a contract is determined to be within the scope of ASC 606 at contract inception,

we review the contract to determine which performance obligations we must deliver and which of these performance obligations are distinct.

We recognize as revenues the amount of the transaction price that is allocated to the respective performance obligation when the performance

We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance

obligation is satisfied or as it is satisfied.

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and Assumptions

preparing our consolidated financial statements, we use estimates and assumptions that affect the reported amounts and disclosures.

Our estimates are often based on complex judgments, probabilities, and assumptions that we believe to be reasonable, but that are

inherently uncertain and unpredictable.

We are also subject to other risks and uncertainties that may cause actual results to differ

from estimated amounts.

Significant estimates in FYE 2024 and 2023 include the assumptions used to value tax liabilities, derivative

financial instruments, estimates of the allowance for deferred tax assets, accounts receivable allowance, impairment of long-lived

assets and inventory write-offs.

Company’s financial statements as of August 31, 2024, is prepared using generally accepted accounting principles in the United States of America (“U.S.

applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of

The Company has not yet established a sustainable ongoing source of revenue sufficient to cover its operating costs and

allow it to continue as a going concern.

of August 31, 2024, and 2023, the Company had an accumulated deficit of $39,401,857 and $13,523,266 respectively.

The Company incurred

net loss of $26,315,396 and $6,317,373 for the years ended August 31, 2024, and 2023, respectively.

The cash generated from operating

activities was $30,822 for the year ended August 31, 2024, the cash used in operating activities was $1,674,395 for the year ended August

It was brought to the attention of the Management to assess going concern considering all facts and circumstances about 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 them

in the normal course of business.

To address these challenges and ensure the Company’s

long-term viability, Management has developed a strategic plan focused on the continued development and expansion of its HVAC business.

preparation of financial statements in conformity with U.S.

GAAP requires the Management to make estimates and assumptions that

affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the

financial statements and the reported amounts of sales and expenses during the reporting periods.

Key estimates in the accompanying

unaudited condensed consolidated financial statements include, inter-alia , revenue recognition, allowances for credit loss

and product returns, allowances for obsolete inventory, valuation of long-lived assets and rights of use (“ROU”) assets

(including lease liabilities), and deferred income tax asset valuation allowances.

The actual results could differ materially from

these estimates.

Company’s financial statements as of August 31, 2025, are prepared using generally accepted accounting principles in the United

States of America (“U.S.

GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation

of liabilities in the normal course of business.

The Company has not yet established a sustainable ongoing source of revenue sufficient

to cover its operating costs and allow it to continue as a going concern.

of August 31, 2025, and August 31, 2024, the Company had an accumulated deficit of $54,028,719 and $39,401,857 respectively.

incurred net loss of $14,968,005 and $26,315,396 for the years ended August 31, 2025, and 2024, respectively.

The cash used in operating

activities was $1, 158 , 760 for the year ended August 31, 2025, and $939,775 for the year ended August 31, 2024, respectively.

It was brought

to the attention of the Management to assess going concern considering all facts and circumstances about 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 them in the normal course of

address these challenges and ensure the Company’s long-term viability, Management has developed a strategic plan focused on the

continued development and expansion of its HVAC business.

Key initiatives include:

● Expansion of Product Offerings:

of Product Offerings:

Broadening the range of HVAC products to meet diverse market needs.

● Geographical Expansion:

Penetrating new markets to drive revenue growth.

● Revenue Diversification:

Expanding customer segments across retail, commercial, industrial, and project-based

clients, as well as private label and licensing opportunities.

● Improved Profitability:

Diversification:

Expanding customer segments across retail, commercial, industrial, and project-based clients, as well as private

label and licensing opportunities.

Profitability:

Achieving economies of scale through operational efficiencies and growth.

Additionally, the Company is actively pursuing plans

to raise additional funding to support operations and business expansion.

This includes preparations to uplist on the Nasdaq Capital Market,

which is expected to enhance access to capital and further strengthen the Company’s financial position.

The consolidated financial have been

prepared assuming that the Company will continue as a going concern and accordingly 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 .

Additionally,

the Company is actively pursuing plans to raise additional funding to support operations and business expansion.

This includes preparations

to uplist on the Nasdaq Capital Market, which is expected to enhance access to capital and further strengthen the Company’s financial

consolidated financials have been prepared assuming that the Company will continue as a going concern and accordingly 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.

have no material commitments as of August 31, 2025.

Accounting Pronouncements

Issued Accounting Pronouncements – Adopted

August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging

– Contracts in Entity’s Own Equity (Subtopic 815-40).

This ASU reduces the number of accounting models for convertible debt

instruments and convertible preferred stock and amends the guidance for the derivatives scope exception for contracts in an entity’s

own equity to reduce form-over-substance-based accounting conclusions.

In addition, this ASU improves and amends the related earnings

per share guidance.

This standard becomes effective for the Company beginning on October 1, 2024.

Adoption is either a modified retrospective

method or a fully retrospective method of transition.

The Company adopted this guidance effective September 1, 2023, and the adoption

of this standard did not have a material impact on its consolidated financial statements.

June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

Instruments (“ASU 2016-13”).

ASU 2016-13 provides guidance for recognizing credit losses on financial instruments based on

an estimate of current expected credit losses model.

The amendments are effective for fiscal years beginning after December 15, 2019.

Recently, the FASB issued the final ASU to delay adoption for smaller reporting companies for discal years beginning after December 15,

We adopted ASU 2016-13 on September 1, 2023, and it did not have a material impact on out consolidated financial statements and

related disclosures.

Issued Accounting Pronouncements – Unadopted

November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures.

This ASU aims to improve segment disclosures

through enhanced disclosures about significant segment expenses.

The standard requires disclosure of significant expense categories and

amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily

computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts.

This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods

presented in the financial statements.

The Company is currently evaluating the impact of the additional disclosure requirements on the

Company’s consolidated financial statements.

December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures

which applies to all entities subject to income taxes.

The standard requires disaggregated information about a reporting entity’s

effective tax rate reconciliation as well as information on income taxes paid.

The standard is intended to benefit investors by providing

more detailed income tax disclosures that would be useful in making capital allocation decisions.

This standard will be effective for

the Company in Fiscal Year 2026 and should be applied prospectively.

The Company is currently evaluating the impact of the additional

disclosure requirements on the Company’s consolidated financial statements.

recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public

Accountants, and the Securities and Exchange Commission did not or are not believed by Management to have a material impact on the Company’s

present or future financial statements.

November 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”)

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, by introducing key amendments to enhance disclosures

in public entities’ reportable segments.

Notable changes include the mandatory disclosure of significant segment expenses regularly

provided to the chief operating decision maker (“CODM”), disclosure of other segment items, and requirements for consistency

in reporting measures used by the CODM.

The amendments in this update are effective for fiscal years beginning after December 15, 2023,

and interim periods within fiscal years beginning after December 15, 2024.

Accordingly, the Company adopted the provisions of ASU 2023-07

as of January 31, 2025.

The adoption of the new standard had no impact on the Company’s financial position, results of operations

or cash flows on the date of transition.

December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which introduces more detailed

requirements for annual disclosures for income taxes.

The ASU requires public business entities to present specific categories in the

income tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

also requires all entities to disclose the amounts of income taxes paid, net of refunds received, disaggregated by federal, state, and

foreign jurisdiction.

The ASU is effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the

effects, if any, that the adoption of ASU 2023-09 may have on its financial position, results of operations, cash flows, or disclosures.

November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures

(Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires public business entities to disclose specific information

about certain costs and expenses.

The amendments in this update are effective for fiscal years beginning after December 15, 2026, and

interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating

the effects, if any, that the adoption of ASU 2024-03 may have on its financial position, results of operations, cash flows, or disclosures.

are no other recently issued accounting pronouncements that have not yet been adopted that the Company considers material to its consolidated

financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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What changed 10-K

Item 7. Management’s Discussion and Analysis