What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-10 compared with 2026-01-13 · 189 added, 132 removed, 272 unchanged (54% of the section changed)

97 unchanged sentences

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

On February 6, 2026, the WKL Eco Earth Holdings has

increased its investment in WKL Guanzhe Green Technology Guangzhou Co Ltd (China) by injecting an additional RMB1,500,000 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

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$2.50, as follows:

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

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, par value $0.001 per share, 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.

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

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The gross proceeds were $12,500.

On 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 of 1933, as amended (the “Securities Act”) pursuant to which the Company

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 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.

proceeds were $12,500.

On 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.

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, par value $0.001 per share to the Regulation S investors, and (ii) 15,000 shares of Common Stock to the Regulation

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

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 $361,553.

On 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.

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, par value $0.001 per share to the Regulation S investors, and (ii) 15,000 shares

of Common Stock to the Regulation 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 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 agreements, the Company agreed to issue and sell

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

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

Common Stock at a per share purchase price of $2.50.

Pursuant to the agreements, the Company

agreed to issue and sell 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 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 Common Stock at a per share purchase price of $2.50.

The gross proceeds in aggregate were $144,443.

On 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.

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 agreements, the Company agreed to issue and sell

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

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

Common Stock at a per share purchase price of $2.50.

Pursuant to the agreements, the Company

agreed to issue and sell 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 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 Common Stock at a per share purchase price of $2.50.

The gross proceeds in aggregate were approximately

On 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.

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 agreements, the Company agreed to issue and sell

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

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

Stock at a per share purchase price of $2.50.

Pursuant to the agreements, the Company

agreed to issue and sell 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 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 Stock at a per share purchase price of $2.50.

The gross proceeds in aggregate was approximately

On 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.

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 agreement, the Company agreed to issue and sell

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

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

Stock at a per share purchase price of $2.50.

Pursuant to the agreement, the Company

agreed to issue and sell 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 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 Stock at a per share purchase price of $2.50.

The gross proceeds in aggregate was approximately $21,645.

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following summary of our operations should be read in conjunction with our unaudited condensed consolidated financial statements for

the three months ended November 30, 2025, as compared to the three months ended November 30, 2024.

Months Ended November 30, 2025, versus Three Months Ended November 30, 2024

Three Months Ended November 30

the three and six months ended February 28, 2026, as compared to the three and six months ended February 28, 2025.

Months Ended February 28, 2026, versus Three Months Ended February 28, 2025

Months Ended February 28

Cost of revenue

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$ (1,272,988 )

Group generated revenues of $20,451 in the three months ended November 30, 2025, as compared to $51,929 in the three months ended

November 30, 2024.

The decrease of $31,478, or 61%, was primarily due to a reduction in sales volume of HVAC products and related

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.

Revenue decreased

modestly to $67,588 in the three months ended February 28, 2026 from $71,124 in the same period of 2025, a decline of 5%.

was primarily attributable to lower sales volume of Ionic Nano Copper Zinc and related products, which was partially offset by growth

in EvoAir air-conditioner sales,

We continue to build momentum through strategic distribution channels,

project collaborations, private labelling and licensing models.

The Group remains committed to strengthening traction of EvoAir™

and driving adoption across residential, commercial and industrial sectors.

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 three months ended November 30, 2025, cost of revenue decreased to $22,685, or 111% of revenue, compared to $90,110, or 174% of

revenue in the same period in 2024.

The significant decrease of $67,425, or 75%, was primarily driven by lower production volumes of

the HVAC product as well as reduced material costs.

of revenue and Gross profit

of revenue decreased to $62,144 from $70,066.

As a result, gross profit increased substantially to $5,444 from $1,058.

This 415% improvement

was driven by lower production overhead costs demonstrating improved cost management even amid softer revenue.

cost of revenue encompasses production costs and purchase of goods.

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

the three months ended November 30, 2025, the Company reported a gross loss of $2,234, or a negative gross margin of 11 %, compared

to a gross loss of $38,181, or a negative gross margin of 74% in the same period in 2024.

The improvement of $35,947, or 94%,

reflects improved manufacturing efficiency and reduced material costs, allowing for better costs control despite lower production

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

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in the future.

the three months ended November 30, 2025, operating expenses amounted to $1,036,654, compared to $4,602,876 in the same period in 2024,

reflecting a decrease of $3,566,222, or 77%.

This decrease was primarily driven by reduced general and administrative expenses, including

lower stock-based compensation and professional fees, as well as a reduction in technology-related intangible asset amortization following

the impairment of intangible assets in the year ended August 31, 2025.

expenses decreased by $266,490, or 21%, to $1,009,855 from $1,276,345.

The reduction was primarily due to lower general and administrative

expenses, including decreased professional fees, compliance costs, and other overheads.

Selling and marketing expenses also declined

modestly as the Company continued to exercise prudent cost control while supporting strategic initiatives.

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

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and value creation.

income for the three months ended November 30, 2025, and 2024 were not material.

income for the three months ended February 28, 2026, and 2025 were not material.

from operations before income taxes

Company reported a loss from operations before income taxes of $1,038,715 for the three months ended November 30, 2025, compared to $4,640,904

in the corresponding period in 2024, reflecting an improvement of $3,602,189, or 78%.

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.

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.

from operations improved by 21% to $1,004,411 from $1,275,287.

After other income, loss before income taxes improved by 21% to

The improvement was driven by higher gross profit and lower operating expenses, partially offset by lower other

While near-term revenue remains challenged, management is encouraged by

the strong gross-profit improvement and continued operating-expense discipline.

We remain focused on distribution expansion, private labelling/licensing

and broader adoption of our eco-friendly HVAC solutions.

Months Ended February 28, 2026, versus Six Months Ended February 28, 2025

Six Months Ended

Cost of revenue

Gross profit/(loss)

Operating expenses

Loss from operation

Loss from operation before income taxes

$ (2,042,993 )

$ (5,913,892 )

Revenue decreased

to $88,039 from $123,053, a reduction of 28%.

The decline was primarily due to lower sales volumes of Ionic Nano Copper Zinc and related products, which was partially offset by growth in EvoAir™ air-conditioner

sales, we continue to expand reach via

strategic distribution, project collaborations and private-labelling/licensing models, positioning the Group for future growth in the

sustainable cooling market.

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.

of revenue and Gross profit

Cost of revenue decreased 47% to $84,829.

Gross profit turned positive

at $3,210 compared with a gross loss of $37,123 in the prior period.

This 109% improvement was driven by lower production overhead costs demonstrating

improved cost management even amid softer revenue

cost of revenue encompasses production costs and the purchase of goods.

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.

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.

expenses decreased substantially by $3,832,712, or 65%, to $2,046,509 from $5,879,221.

The reduction was driven primarily by lower general

and administrative expenses, including reduced stock-based compensation, professional fees, and other overhead costs relative to the

prior period.

Selling and marketing expenses also declined as the Company maintained disciplined cost control while supporting key growth

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 six months ended February 28, 2026, and 2025 was not material.

from operations before income taxes

operations improved 65% to $2,043,299 from $5,916,334.

Loss before income taxes improved 65% to $2,042,993.

The improvement was driven by higher

gross profit and lower operating expenses

The continued net loss reflects strategic investments in infrastructure and the lack of full economies of scale during the growth phase.

Management is encouraged by gross-profit turnaround and substantial operating-expense reductions.

revenue remains under pressure in the near term due to slower-than-expected market traction for our eco-friendly HVAC products, management

is encouraged by the meaningful progress in gross profitability and the substantial reduction in operating expenses.

These positive trends

demonstrate the effectiveness of our cost optimization efforts.

remain committed to expanding distribution channels, advancing private labeling and licensing opportunities, and increasing adoption

of EvoAir™ solutions across diverse market segments.

These strategic initiatives, combined with ongoing operational improvements,

are expected to support a return to sustainable revenue growth and improved financial performance in future periods.

and Capital Resources

November 30, 2025

February 28, 2026

August 31, 2025

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Working capital

of November 30, 2025, the decrease in current assets was mainly due to the decrease in cash and accounts receivable, partially offset

by an increase in inventories.

of November 30, 2025, the increase in current liabilities was mainly due to the increase in amount due to shareholders of $382,340.

of November 30, 2025, our company had a working capital deficit of $3,038,574, compared with $2,685,006 as of August 31, 2025.

The increased

deficit reflects ongoing operational investments amid revenue challenges, partially mitigated by cost controls.

Months Ended November 30, 2025, versus Three Months Ended November 30, 2024

Cash flows used in operating activities

of February 28, 2026, current assets decreased by $22,333, or 4%, compared to August 31, 2025.

The decline was primarily due to lower

cash and cash equivalents, partially offset by increases in inventories and accounts receivable.

liabilities increased by $859,192, or 27%, mainly due to a rise in amounts due to shareholders from $2,436,407 to $3,299,033.

increase reflects continued shareholder funding to support operations during the current growth phase.

a result, the Company’s working capital deficit widened to $3,566,531 as of February 28, 2026, compared to $2,685,006 as of August

The larger deficit is attributable to ongoing operational investments and revenue challenges, only partially mitigated by cost

control measures.

Months Ended February 28, 2026, versus Six Months Ended February 28, 2025

Net cash used in operating activities

Cash flows used in investing activity

Cash flows used in financing activities

Cash flows generated from financing activities

Net changes in cash

Company’s cash and cash equivalents stood at $74,918 as of November 30, 2025, compared to $93,329 as of August 31, 2025.

used in operating activities for the three months ended November 30, 2025, was $34,790.

This resulted primarily from a net loss of

$1,038,715, which was offset by non-cash adjustments including depreciation of $27,904 and amortization of $636,425.

operating assets and liabilities included decreases in accounts receivable of $34,155, deposits, prepayments, and advances to

suppliers of $2,177, and operating lease right-of-use assets of $14,704;

increases in deferred revenue of $18,625, other payables of

$2,212, and amounts due to shareholders of $382,340;

partially offset by increases in inventories of $10,976, decreases in accounts

payable and accruals of $88,067, and operating lease liabilities of $15,574.

used in investing activities resulted from the purchase of property, plant, and equipment amounting to $15,292 during the three months

ended November 30, 2025.

used in financing activities resulted from payments of hire purchase amounting to $2,020 during the three months ended November 30, 2025.

changes in cash and cash equivalents included a positive effect from exchange rate changes of $33,691.

Flows from Operating Activities

Net cash used in operating activities improved slightly to $716,152 in the period ended February 28, 2026, from $738,395

in the comparable period of 2025.

The cash usage primarily reflects the net loss of $2,042,993, partially offset by non-cash adjustments,

including amortization of $1,272,851 and depreciation of $75,590.

Favorable working-capital movements provided a partial offset, including

increases in accounts payable and accruals of $83,133 and other payables of $69,480.

Flows from Investing Activities

cash used in investing activities was $61,920, related to the purchase of property, plant, and equipment.

There were no investing

cash flows in the comparable period of 2025.

Flows from Financing Activities

Net cash generated from financing activities was $853,410, primarily from amounts due to shareholders of $862,626.

This was partially offset by payments on hire purchase obligations of $4,104 and payment of deferred offering costs of $5,112.

cash and cash equivalents decreased from $93,329 as of August 31, 2025 to $45,835 as of February 28, 2026.

The net decrease was also

affected by foreign currency translation adjustments of $122,832.

Company’s business is not subject to seasonality.

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of the promised goods and services in the contract;

determination of whether

the promised goods and services are performance obligations, including whether they are distinct in the context of the contract;

measurement of the transaction

price, including the constraint on variable consideration;

allocation of the transaction

price to the performance obligations;

recognition of revenue

when (or as) the Company satisfies each performance obligation.

determination

of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the

of the transaction price, including the constraint on variable consideration;

of the transaction price to the performance obligations;

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

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The actual results could differ materially from these estimates.

Company’s financial statements as of November 30, 2025, is prepared using generally accepted accounting principles in the United

Company’s financial statements as of February 28, 2026 are prepared using generally accepted accounting principles in the United

States of America (“U.S.

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

of November 30, 2025, and August 31, 2025, the Company had an accumulated deficit of $55,006,861 and $54,028,719 respectively.

incurred net loss of $1,038,715 and $4,640,904 for the three months ended November 30, 2025, and 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 business.

of February 28, 2026 and August 31, 2025, the Company had an accumulated deficit of $ 55,945,881and $54,028,719, respectively.

incurred a net loss of $ 1,004,278 and $1,272,988 for the three months ended February 28, 2026 and 2025, respectively, and $ 2,042,993

for the six months ended February 28, 2026 compared to $5,913,892 for the six months ended February 28, 2025.

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

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Key initiatives include:

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.

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that might be necessary should the Company be unable to continue as a going concern.

have no material commitments as of November 30, 2025.

have no material commitments as of February 28, 2026.

Accounting Pronouncements

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

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.

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

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foreign jurisdiction.

The Company adopted ASU 2023-09 effective

September 1, 2025.

The adoption did not have a material effect on its financial position, results of operations, or cash flows, but resulted

in expanded disclosures in its consolidated financial statements.

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

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

In September 2025, the FASB issued ASU 2025-06-Intangibles-Goodwill

and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which

is intended to simplify the capitalization guidance for internal-use software by removing references to project stages and clarifying

when the capitalizing of eligible costs is required.

ASU 2025-06 is effective for annual periods beginning after December 15, 2027, and

interim periods within those fiscal years.

Early adoption is permitted.

The Company is in the process of evaluating the impact of this

new guidance on its disclosures.

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

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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.

What changed 10-Q

Item 2. Management’s Discussion and Analysis