What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-07-10 compared with 2026-04-10 · 155 added, 152 removed, 309 unchanged (50% of the section changed)

94 unchanged sentences

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

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

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 capital.

This investment has resulted in an increase in WKL Eco Earth Holding’s

equity interest in WKL Guanzhe Green Technology to 62.5%.

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 capital.

This investment has resulted in an increase in WKL Eco Earth Holding’s

equity interest in WKL Guanzhe Green Technology to 66.67%.

2 Stockholders

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$2.50, as follows:

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

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 $185,185.

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.

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.

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

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.

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.

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.

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.

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.

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 $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.

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.

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 $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.

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

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 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

the three and nine months ended May 31, 2026, as compared to the three and nine months ended May 31, 2025.

Months Ended May 31, 2026, versus Three Months Ended May 31, 2025

Three Months Ended May 31

Cost of revenue

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$ (1,186,838 )

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.

increase significantly to $123,574 for the three months ended May 31, 2026 from $37,306 in the same period of 2025, an increase of

The growth was primarily driven by and increase of in EvoAir air-conditioner sales.

continue to build momentum through strategic distribution channels, project collaborations, private labelling and licensing models.

Group remains committed to strengthening traction of EvoAir™ and driving adoption across residential, commercial and industrial

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

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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.

of revenue increased to $116,751 from $8,505, in line with increased revenue activity.

Consequently, gross profit declined to $6,823

from $28,801 in the prior period.

This gross margin compression was driven by higher production and product costs associated with

elevated sales volumes in the current quarter.

cost of revenue encompasses production costs and purchase of goods.

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and value creation.

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

income for the three months ended May 31, 2026, and 2025 were not material.

from operations before income taxes

from operations improved by 11% to $1,079,828 from $1,208.663.

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

After accounting for other income, the loss before income taxes

improved by 21% to $1,078,217.

The improvement was mainly due to lower operating expenses, partially offset by

lower other income.

is encouraged by the strong revenue growth and continued operating-expense discipline in the third quarter.

We remain focused on distribution

expansion, private labelling/licensing and broader adoption of our eco-friendly HVAC solutions.

Months Ended May 31, 2026, versus Nine Months Ended May 31, 2025

Months Ended May 31

Cost of revenue

5 unchanged sentences

$ (7,100,730 )

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.

increased to $211,613 from $160,359, an improvement of 32%.

The increase was primarily driven by growth in EvoAir™ air-conditioner

sales, as 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

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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

of revenue increased 20% to $201,580 from $168,681, in line with higher revenue activity.

Gross profit improved to $10,033 from a gross

loss of $8,322 in the prior period, reflecting improved product mix and cost efficiency gains achieved through operational enhancements

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.

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.

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and value creation.

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

income for the nine months ended May 31, 2026, and 2025 was not material.

from operations before income taxes

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

from operations improved 56% to $3,123,127 from $7,125,007.

Loss before income taxes improved 56% to $3,121,210.

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.

The improvement was

driven by higher gross profit and significantly lower operating expenses

continued net loss reflects ongoing strategic investments in the HVAC business infrastructure.

Management is encouraged by the revenue

growth achievement and substantial operating-expense reductions over the nine-month period.

growth of 32% in the nine months ended May 31, 2026 reflects improving market traction for our eco-friendly HVAC products.

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

These positive trends demonstrate

the effectiveness of our cost optimization efforts and channel expansion strategy.

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

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and Capital Resources

February 28, 2026

August 31, 2025

As of August 31, 2025

Current assets

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Working capital

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

As of May 31, 2026, current assets decreased by $87,014, or 17%, compared

to August 31, 2025.

The decline was primarily due to lower cash and cash equivalents and accounts receivable

Current liabilities increased by $1,200,990, or 37%, mainly due to a rise

in amounts due to shareholders from $2,436,407 to $3,544,333.

This increase reflects continued shareholder funding to support operations

during the current growth phase.

As a result, the Company’s working capital deficit widened to $3,973,010

as of May 31, 2026, compared to $2,685,006 as of August 31, 2025.

The larger deficit is attributable to ongoing operational investments,

only partially mitigated by improved revenue performance and cost control measures.

Months Ended May 31, 2026, versus Nine Months Ended May 31, 2025

Net cash used in operating activities

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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.

Net cash used in operating activities increased to $980,606 in the nine

months ended May 31, 2026, from $900,095 in the comparable period of 2025.

The cash usage primarily reflects the net loss of $3,121,210,

partially offset by non-cash adjustments, including amortization of $1,909,276 and depreciation of $93,738.

Favorable working-capital

movements provided a partial offset, including increases in accounts receivable of $21,833, deferred revenue of $14,924, and other payables

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.

were no investing activities in the nine months ended May 31, 2026.

Net cash used in investing activities was $5,902 in the comparable

period of 2025, related to the purchase of property, plant, and equipment.

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.

Net cash generated from financing activities was $1,094,886, primarily from

amounts due to shareholders of $1,107,926.

This was partially offset by payments on hire purchase obligations of $4,852 and payment of

deferred offering costs of $8,188.

Overall, cash and cash equivalents decreased from $93,329 as of August 31,

2025 to $35,811 as of May 31, 2026.

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

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.

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.

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 February 28, 2026 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 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.

Company’s financial statements as of May 31, 2026 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 May 31, 2026 and August 31, 2025, the Company had an accumulated deficit of $56,959,317 and $54,028,719, respectively.

incurred a net loss of $1,078,217 and $1,186,838 for the three months ended May 31, 2026 and 2025, respectively, and $3,121,210 for the

nine months ended May 31, 2026 compared to $7,100,730 for the nine months ended May 31, 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:

of Product Offerings:

Product Offerings:

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

Geographical Expansion:

Penetrating new markets to drive revenue growth.

Diversification:

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

label and licensing opportunities.

Profitability:

Revenue Diversification:

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

opportunities.

Improved 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 February 28, 2026.

have no material commitments as of May 31, 2026.

Accounting Pronouncements

2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2023-07,

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.

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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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.

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.

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