EvoAir Holdings Inc. 10-Q

U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Mark One ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2025 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to _______ COMMISSION FILE NO. 333-228161 EvoAir Holdings Inc. (Exact name of registrant as specified in its charter) Nevada 98-1353613 8713 (State or Other Jurisdiction of IRS Employer Primary Standard Industrial Incorporation or Organization) Identification Number Classification Code Number EvoAir Holdings Inc. 31-A2, Jalan 5/32A 6 ½ Miles , Off Jalan Kepong 52000 Kuala Lumpur, Malaysia Tel. +603 6243 3379 (Address and telephone number of registrant’s executive office) Copies to: Lawrence Venick, Esq. Loeb & Loeb LLP 2206-19 Jardine House 1 Connaught Place, Central Hong Kong SAR Tel: +852.3923.1111 Fax: +852.3923.1100 Indicate by checkmark whether the issuer: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filed, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ Applicable Only to Issuer Involved in Bankruptcy Proceedings During the Preceding Five Years: Indicate by checkmark whether the issuer has filed all documents and reports required to be filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 after the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐ Applicable Only to Corporate ISSUERS: Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the most practicable date: Class Outstanding as of April 7, 2025 Common Stock, $ 0.001 27,180,631 EvoAir Holdings Inc. Part I FINANCIAL INFORMATION Item 1 FINANCIAL STATEMENTS 3 Item 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 20 Item 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 31 Item 4 CONTROLS AND PROCEDURES 31 PART II OTHER INFORMATION Item 1 LEGAL PROCEEDINGS 32 Item 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 32 Item 3 DEFAULTS UPON SENIOR SECURITIES 32 Item 4 MINE SAFETY DISCLOSURES 32 Item 5 OTHER INFORMATION 32 Item 6 EXHIBITS 33 SIGNATURES 34 2 | Page PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS EVOAIR HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In U.S. Dollars, except share data or otherwise stated) AS OF FEBRUARY 28, 2025 AND AUGUST 31, 2024 February 28, 2025 August 31, 2024 (Unaudited) (Audited) ASSETS Current assets Cash and cash equivalents 199,461 $ 152,985 Accounts receivable 57,970 62,914 Inventories 380,653 460,047 Deposit, prepayments and other receivables 88,018 114,806 Total current assets 726,102 790,752 Non-current assets Property, plant and equipment, net 281,799 357,778 Operating lease right-of-use assets 148,348 199,647 Deferred offering cost 3,167,640 449,576 Technology-related intangible assets, net 49,676,520 51,481,358 Total non-current assets 53,274,307 52,488,359 TOTAL ASSETS $ 54,000,409 $ 53,279,111 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities Accounts payable and accruals $ 162,278 $ 267,900 Other payables 150,671 95,831 Deferred revenue 8,687 10,012 Hire purchase creditor 8,479 8,758 Amounts due to shareholders 1,951,778 1,202,692 Operating lease liability - current 99,590 99,445 Total current liabilities 2,381,483 1,684,638 Non-current liabilities Hire purchase creditor 241 4,320 Operating lease liabilities 57,337 108,891 Total non-current liabilities 57,578 113,211 TOTAL LIABILITIES 2,439,061 1,797,849 Commitments and contingencies (Note 14) - - Shareholders’ equity Common stock, 250,000,000 authorized; $ 0.001 par value, 27,180,631 and 25,685,591 shares issued and outstanding as at February 28, 2025 and August 31, 2024 * 27,181 25,686 Additional paid in capital 97,492,063 91,513,818 Accumulated other comprehensive loss ( 46,824 ) ( 48,827 ) Accumulated deficit ( 45,163,080 ) ( 39,401,857 ) Non-controlling interest ( 747,992 ) ( 607,558 ) Total shareholders’ equity 51,561,348 51,481,262 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 54,000,409 $ 53,279,111 * Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024. The accompanying footnotes are an integral part of these condensed consolidated financial statements. 3 | Page EVOAIR HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (In U.S. Dollars, except share data or otherwise stated) FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY 29, 2024 Three months ended Six months ended February 28, 2025 February 29, 2024 February 28, 2025 February 29, 2024 Revenue $ 71,124 41,174 $ 123,053 $ 132,492 Cost of revenue 70,066 87,075 160,176 187,401 Gross profit/(loss) 1,058 ( 45,901 ) ( 37,123 ) ( 54,909 ) Operating expenses: Selling and marketing expenses 4,955 5,200 14,698 38,203 General and administrative expenses 1,271,390 1,468,559 5,864,523 2,952,548 Total operating expenses 1,276,345 1,473,759 5,879,221 2,990,751 Loss from operation ( 1,275,287 ) ( 1,519,660 ) ( 5,916,344 ) ( 3,045,660 ) Other income Interest income 91 36 179 76 Other income 2,208 88,866 2,273 90,505 Total other income 2,299 88,902 2,452 90,581 Loss from operation before income taxes ( 1,272,988 ) ( 1,430,758 ) ( 5,913,892 ) ( 2,955,079 ) Income tax expenses - - - - Net loss $ ( 1,272,988 ) $ ( 1,430,758 ) $ ( 5,913,892 ) $ ( 2,955,079 ) Less: Net loss attributable to non-controlling interests ( 67,166 ) ( 63,854 ) ( 152,669 ) ( 143,852 ) Net loss attributable to equity holders of the Company ( 1,205,822 ) ( 1,366,904 ) ( 5,761,223 ) ( 2,811,227 ) Other comprehensive (loss)/income: Foreign currency translation adjustment ( 4,532 ) 3,920 14,238 ( 84,081 ) Total comprehensive loss ( 1,210,354 ) ( 1,362,984 ) ( 5,746,985 ) ( 2,895,308 ) Less: net comprehensive income/(loss) attributable to non-controlling interests 1,302 ( 2,373 ) 12,235 ( 5,166 ) Net comprehensive loss attributable to equity holders of the Company ( 1,211,656 ) ( 1,360,611 ) ( 5,759,220 ) ( 2,890,142 ) Net loss attributable to equity holders of the Company per common share: Basic and diluted* ( 0.04 ) ( 0.05 ) ( 0.22 ) ( 0.11 ) Weighted average number of common shares outstanding: Basic and diluted* 27,180,631 25,685,591 26,470,324 25,671,196 * Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024 The accompanying footnotes are an integral part of these condensed consolidated financial statements. 4 | Page EVOAIR HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT) (In U.S. Dollars, except share data or otherwise stated) FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY 29, 2024 shares amount capital deficit income be issued interests Total Common Stock Additional paid in Accumulated Accumulated other comprehensive Shares to Non- controlling Shares * Amount capital deficit income be issued interests Total Balance as of August 31, 2023 25,577,734 $ 25,578 $ 90,447,874 $ ( 13,523,266 ) $ ( 17,036 ) $ 1,066,052 $ ( 148,180 ) $ 77,851,022 Issuance of common stock for Cash 93,455 94 934,504 - - ( 934,598 ) - - Issuance of common stock for service 14,402 14 131,440 - - ( 131,454 ) - - Foreign currency translation adjustment - - - - ( 85,208 ) - ( 2,793 ) ( 88,001 ) Net loss - - - ( 1,444,323 ) - - ( 79,998 ) ( 1,524,321 ) Balance as of November 30, 2023 25,685,591 $ 25,686 91,513,818 ( 14,967,589 ) ( 102,244 ) - ( 230,971 ) 76,238,700 Foreign currency translation adjustment - - - - 6,293 - ( 2,373 ) 3,920 Net loss - - - ( 1,366,904 ) - - ( 63,854 ) ( 1,430,758 ) Balance as of February 29, 2024 25,685,591 $ 25,686 $ 91,513,818 $ ( 16,334,493 ) $ ( 95,951 ) $ - $ ( 297,198 ) $ 74,811,862 Common Stock Accumulated Shares* Amount Additional paid in capital Accumulated deficit other comprehensive income Shares to be issued Non- controlling interests Total Balance as of August 31, 2024 25,685,591 $ 25,686 $ 91,513,818 $ ( 39,401,857 ) $ ( 48,827 ) $ - $ ( 607,558 ) $ 51,481,262 Issuance of common stock for consulting service 1,494,935 1,495 5,978,245 - - - - 5,979,740 Fraction shares issued due to reverse stock split 105 - - - - - - - Foreign currency translation adjustment - - - - 7,837 - 10,933 18,770 Net loss - - - ( 4,555,401 ) - - ( 85,503 ) ( 4,640,904 ) Balance as of November 30, 2024 27,180,631 27,181 97,492,063 ( 43,957,258 ) ( 40,990 ) - ( 682,128 ) 52,838,868 Balance 27,180,631 27,181 97,492,063 ( 43,957,258 ) ( 40,990 ) - ( 682,128 ) 52,838,868 Foreign currency translation adjustment - - - - ( 5,834 ) - 1,302 ( 4,532 ) Net loss - - - ( 1,205,822 ) - - ( 67,166 ) ( 1,272,988 ) Balance as of February 28, 2025 27,180,631 $ 27,181 $ 97,492,063 $ ( 45,163,080 ) $ ( 46,824 ) $ - $ ( 747,992 ) $ 51,561,348 Balance 27,180,631 $ 27,181 $ 97,492,063 $ ( 45,163,080 ) $ ( 46,824 ) $ - $ ( 747,992 ) $ 51,561,348 * Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024. The accompanying footnotes are an integral part of these condensed consolidated financial statements. 5 | Page EVOAIR HOLDINGS INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In U.S. Dollars, except share data or otherwise stated) FOR THE SIX MONTHS ENDED FEBRUARY 28, 2025 AND FEBRUARY 29, 2024 February 28, 2025 February 29, 2024 Cash flows from operating activities Net loss $ ( 5,913,892 ) ( 2,955,079 ) Adjustments for non-cash income and expenses: Depreciation 50,074 137,106 Amortization 1,804,838 2,078,694 Stock based expense 3,261,676 - Changes in operating assets and liabilities: Accounts receivables 4,944 1,444 Inventories 79,394 ( 94,838 ) Deposit, prepayments and advances to suppliers 26,788 128,099 Operating lease right-of-use assets 51,299 41,049 Accounts payable and accruals ( 105,622 ) 81,853 Deferred revenue ( 1,325 ) ( 40,296 ) Operating lease liabilities ( 51,409 ) ( 43,128 ) Other payables 54,840 ( 48 ) Amounts due to shareholders 749,086 207,535 Net cash generated from/(used in) operations $ 10,691 $ ( 457,609 ) Cash flows from investing activity Purchase of property, plant and equipment - ( 96,186 ) Cash used in investing activity $ - $ ( 96,186 ) Cash flows from financing activities Payments of hire purchase ( 4,358 ) ( 4,144 ) Net cash used in financing activities $ ( 4,358 ) $ ( 4,144 ) Net increase/(decrease) in cash and cash equivalents 6,333 ( 557,939 ) Effect of exchange rate changes 40,143 ( 84,081 ) Cash and cash equivalents at start of period 152,985 779,049 Cash and cash equivalents at end of period 199,461 137,029 Supplemental disclosure of non-cash investing and financing information : Common stock issued for consulting service in relation to initial public offering $ 2,718,064 $ - The accompanying footnotes are an integral part of these condensed consolidated financial statements. 6 | Page EVOAIR HOLDINGS INC. NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2025, AND FEBRUARY 29, 2024 NOTE 1 – ORGANIZATION AND BUSINESS OPERATIONS EvoAir 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, United States of America (“U.S”) on February 17, 2017. The Company has adopted an August 31 fiscal year end. On December 20, 2021, the Company and Low Wai Koon (“Dr. Low”) entered into a share transfer agreement, (the “EvoAir International Share Transfer Agreement”), pursuant to which Dr. Low agreed to sell all of his ordinary shares of EvoAir International Limited (“EvoAir International”) to the Company for a consideration of US$ 100 (“EvoAir Transaction”). EvoAir International, through its subsidiaries upon completion of the Transactions (defined hereunder), is engaged in the research and development (“R&D”), manufacturing, trading, sale of heating, ventilation and air conditioning (“HVAC”) products and related services in Asia. Pursuant 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, with par value of $ 0.001 per share (“Common Stock”) of the Company (“EvoAir Shares”) representing approximately 67.34 % of the Company’s then issued and outstanding shares, sold his entire shareholding of the Company to WKL Global Limited (“WKL Global”) for an aggregate consideration of $ 100 (“Change of Control Transaction”). Upon completion of the Change of Control Transaction, WKL Global owned 2,000,000 shares, or approximately 67.34 % of the then issued and outstanding ordinary shares of the Company, which resulted in a change of control of the Company. On December 20, 2021, several transactions took place (together, the “Allotment Transactions”) whereby the Company issued and allotted in aggregate 98,809,323 ordinary shares of common stock to certain parties. On completion of the Allotment Transactions, the total number of issued and outstanding shares of common stock of the Company were 101,779,323 (“Then Enlarged Share Capital”): (A) On December 20, 2021, Dr. Low and Chan Kok Wei entered into a share exchange agreement with WKL Eco Earth Holdings Pte Ltd (“WKL Eco Earth Holdings”), pursuant to which Dr. Low and Chan Kok Wei agreed to sell all their ordinary shares of WKL Green Energy Sdn Bhd (“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 (“BVI”) with 50 % shareholdings held by Chan Kok Wei and Ong Bee Chen, respectively, of 24,000 shares and 6,000 EvoAir Shares, respectively, or approximately 0.02 % and 0.01 % of the Then Enlarged Share Capital, respectively. (B) 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 Dr. Low, Chan Kok Wei, Ong Bee Chen and WKLEE Sellers agreed to sell all their ordinary shares of WKL Eco Earth Sdn Bhd (“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 shares, respectively, or approximately 0.05 %, 0.009 % and in aggregate 0.014 %, respectively, of the Then Enlarged Share Capital. (C) On December 20, 2021, Tan Soon Hock, Ivan Oh Joon Wern and certain relevant interest holders (“Relevant Interest Holders”) entered into an investment exchange agreement with WKL Eco Earth Holdings, pursuant to which Tan Soon Hock, Ivan Oh Joon Wern and the Relevant Interest Holders agreed to sell all relevant interests in the EVOH and its subsidiaries (“EvoAir Group” or the “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. (D) 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 and trademark applications described in the deeds of assignment thereunder, and in respect of Dr. Low’s patents and patents applications relating to the portable air-conditioner, e-Cond EVO TM and the trademarks and trademark applications as described in the deeds of assignment 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. 7 | Page EvoAir Transaction, Change of Control Transaction and Allotment Transactions are collectively to be referred to as the “Transactions”. The closing of the Transactions (“Closing”) occurred on December 20, 2021 (the “Closing Date”). From and after the Closing Date, at which time EvoAir International transferred its HVAC business to the Company, the Company’s primary operations will consist of the prior operations of EvoAir International and its subsidiaries. EvoAir 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, 2021. On 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”. On 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. On 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. Round 2 Stockholders The 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: ● On February 15, 2022, the Company entered into certain share subscription agreement with Ms. Ang Lee Kim Jane, who is a “non-U.S. Persons” 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 . ● On June 3, 2022, the Company entered into certain share subscription agreement with Mr. Wong Hon Wai who is a “non-U.S. Persons” 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 . ● 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 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 of $ 2.50 . The gross proceeds in aggregate were $ 361,553 . 8 | Page ● 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 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 . ● 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 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 . ● 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 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 were approximately $ 912,889 . ● 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. 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 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 $ 21,645 . Reverse Stock Split On 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”). Split Adjustment; Treatment of Fractional Shares As 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). No fractional shares were issued in connection with the Reverse Stock Split. Fractional shares were rounded up to the nearest whole number Share Issuance On 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 project management consultant in consideration for their services in relation to proposed initial public offering. 9 | Page On 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 corporate and business consultant in consideration for their consulting services. Details of the Company’s subsidiaries: SUMMARY OF CONSOLIDATED SUBSIDIARIES Subsidiaries of EVOH Attributable interest EvoAir International Limited (British Virgin Islands) 100 % Subsidiary of EvoAir International Limited WKL Eco Earth Holdings Pte Ltd (Singapore) 100 % Subsidiaries of WKL Eco Earth Holdings Pte Ltd WKL Eco Earth Sdn Bhd (Malaysia) 100 % WKL Green Energy Sdn Bhd (Malaysia) 100 % EvoAir Manufacturing (M) Sdn Bhd (Malaysia) 67.5 % WKL EcoEarth Indochina Co Ltd (Cambodia) 55 % WKL Guanzhe Green Technology Guangzhou Co Ltd (China)* 62.5 % Subsidiary of EvoAir Manufacturing (M) Sdn Bhd Evo Air Marketing (M) Sdn Bhd (Malaysia) 100 % * Shareholding of WKL Guanzhe Green Technology Guangzhou Co Ltd (China) has increased from 55 % to 62.5 % on August 14, 2024. NOTE 2 – CHANGE OF CONTROL Pursuant 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 the Company’s ordinary shares representing approximately 67.34 % of the Company’s then issued and outstanding shares, 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 then owned 2,000,000 shares, or approximately 67.34 % of the Company’s then issued and outstanding shares, which resulted in a change of control of the Company. NOTE 3 – GOING CONCERN The Company’s financial statements as of February 28, 2025, is 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. As of February 28, 2025, and August 31, 2024, the Company had an accumulated deficit of $ 45,163,080 and $ 39,401,857 respectively . The Company incurred net loss of $ 5,913,892 and $ 2,955,079 for the six months ended February 28, 2025, and February 29, 2024, respectively. The cash generated from operating activities was $ 10,691 for the six months ended February 28, 2025, and the cash used in operating activities was $ 457,609 for the six months ended February 29, 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. 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. Key initiatives include: ● Expansion 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: Achieving economies of scale through operational efficiencies and growth. 10 | Page 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 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. NOTE 4 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation: The accompanying consolidated financial statements have been prepared by the Company in accordance with U.S. GAAP for financial information and pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of EvoAir International, WKL Eco Earth Holdings, WKL Eco Earth, WKL Green Energy, and its 67.5 % owned EvoAir Manufacturing which included a 100 % owned subsidiary, Evo Air Marketing, 55 % owned WKL EcoEarth Indochina, and its 62.5 % owned WKL Guanzhe. All intercompany accounts and transactions have been eliminated in consolidation. In the opinion of the Management, the accompanying financial statements contain all adjustments (consisting of normal and recurring accruals) necessary to present fairly all financial statements in accordance with U.S. GAAP. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the stockholders of the Company. Non-controlling interests in the results of the Company are presented on the face of the consolidated statements of operations and comprehensive loss as an allocation of the total loss for the year between non-controlling interest holders and the stockholders of the Company. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires 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 consolidated financial statements include, among others, revenue recognition, allowances for credit losses and product returns, allowance for obsolete inventory, valuation of long-lived assets and Rights of Use (“ROU”) assets (including lease liabilities), and deferred income tax asset valuation allowances. Actual results could differ materially from these estimates. Fiscal Year End The Company operates on a fiscal year basis with the fiscal year ending on August 31. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less to be cash equivalents. The Company places its cash with high credit quality financial institutions. WKL Guanzhe business is primarily conducted in China and substantially all of revenue are denominated in RMB. The government of People’s Republic of China (“PRC”) imposes control over its foreign currency reserves in part through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. 11 | Page Comprehensive Gain or Loss ASC 220 “Comprehensive Income,” establishes standards for the reporting and display of comprehensive income and its components in the financial statements. As of February 28, 2025, and August 31, 2024, the Company established that there are items that represented components of comprehensive income and, therefore, has included a statement of comprehensive income in the financial statements. Foreign Currency Translation The functional currency of Chinese operations is Chinese Renminbi, (“RMB”). The functional currency of the Company’s Singapore operations is Singapore dollars (“SGD”). The functional currency of the Company’s Malaysia operations is Ringgit Malaysia (“RM”). Management has adopted ASC 830 “Foreign Currency Matters” for transactions that occur in foreign currencies. Monetary assets denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Average monthly rates are used to translate revenues and expenses. Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. Assets and liabilities of the Company’s operations are translated into the reporting currency, United States Dollars, at the exchange rate in effect at the balance sheet dates. Revenue and expenses are translated at average rates in effect during the reporting periods. Equity transactions are recorded at the historical rate when the transaction occurred. The resulting translation adjustment is reflected as accumulated other comprehensive income, a separate component of stockholders’ equity in the statement of stockholders’ equity. Credit Losses In June 2016, the FASB issued Accounting Standards Update (ASU) 2016-13, specifically Financial Instruments – Credit Losses (Topic 326), denoted as ASC 326. This regulatory framework supersedes the incurred loss methodology with the Current Expected Credit Loss (CECL) methodology. CECL necessitates the derivation of credit loss estimates for the remaining projected life of financial assets, encompassing historical data, prevailing conditions, and substantiated forecasts. Broadly applicable to financial assets assessed at amortized cost, including trade receivables, loan receivables, and held-to-maturity debt securities, CECL also extends its purview to certain off-balance sheet credit exposures, such as unfunded commitments to extend credit. In adherence to this methodology, financial assets measured at amortized cost are to be presented on financial statements at the net amount anticipated to be collected, incorporating an allowance for credit losses as a means of accounting for the estimated credit losses. The Company adopted ASU 2016-13 on September 1, 2023, using the modified retrospective method. See below allowance for credit losses for more information. Accounts Receivable and Allowance for Credit Losses Accounts receivable are recorded at the net value of the face amount less any allowance for expected credit loss. The allowance for expected credit loss is the Company’s best estimate of the amount of probable credit losses in our existing accounts receivable. An allowance for credit losses is recorded in the period when loss is probable based on an assessment of specific evidence indicating troubled collection, historical experience, accounts aging and other factors. The Company reviews the allowance for credit losses on a regular basis, and all past due balances are reviewed individually for collectability. An account receivable is written off after all collection effort has ceased. Recoveries of receivables previously written off are recorded when received. Interest is not charged on past due accounts. As of February 28, 2025 and August 31, 2024, our accounts receivable amounted to $ 57,970 and $ 62,914 , respectively, with no allowance for credit losses. 12 | Page Inventories Inventories consist primarily of finished goods, raw materials, and work-in-process (“WIP”) from WKL Eco Earth, WKL EcoEarth Indochina, WKL Guanzhe, and EvoAir Manufacturing. We value inventories at the lower of cost or net realizable value. We determine the costs of inventory using the standard cost method, which approximates actual cost based on a first-in, first-out method. All other costs, including administrative costs, are expensed as incurred. Deposit, prepayments, and other receivables Deposit, prepayments and other receivables are comprised of prepayments paid to vendors to initiate orders and prepaid services fees and are classified as current assets if such amounts are to be recognized within one year from the balance sheet date. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related capitalized assets. Property and equipment are depreciated over 5 to 10 years. SUMMARY OF ESTIMATED USEFUL LIVES OF ASSETS Useful lives Plant and machineries 5 years Office equipment 5 years Vehicles 5 years Furniture and equipment 10 years Renovation 10 years Repair and maintenance costs are charged to expense as incurred. At the time of retirement or other disposition of property, plant and equipment, the cost and accumulated depreciation will be removed from the accounts and the resulting gain or loss, if any, will be reflected in operations. Intangible Assets and Other Long-Lived Assets The Company’s intangible assets consist of patents and trademarks related to assignments of intellectual properties by Dr. Low into WKL Eco Earth Holdings under the IP Assignments as contemplated in Note 1. The intangible assets are recorded at fair market value and are amortized using the straight-line method over an estimated life of 20 years for both patents and trademarks. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of these assets is measured by comparison of their carrying amounts to future undiscounted cash flows the assets are expected to generate. If identifiable intangibles are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the assets exceeds its fair market value. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The Company does not disaggregate its revenue streams as the economic factors underlying the contracts are similar and provide no significant distinction. The amount of revenue that is recorded reflects the consideration that the Company expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. 13 | Page The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations the Company must deliver and which of these performance obligations are distinct. The Company recognizes as revenues the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Deferred Revenue The Company collects deposits from customers in advance for some business contracts. The customer payments received in advance are recorded as deferred revenue on the balance sheet. The deferred revenue of $ 10,012 was recorded as of August 31, 2024, with $ 9,445 recognized as revenue for six months ended February 28, 2025. The Company recorded $ 8,687 deferred revenue as of February 28, 2025 . Deferred Offering Costs The Company follows the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred offering costs consist of underwriting, legal and other expenses incurred through the balance sheet date that are directly related to the intended initial public offering (“IPO”). Deferred offering costs will be charged to shareholders’ equity netted against the proceeds upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. As of February 28, 2025, and August 31, 2024, the Company deferred $ 3,167,640 and $ 449,576 of offering costs, respectively. Such costs will be deferred and will be offset against the offering proceeds upon the completion of the IPO. Leases We have entered into operating agreements primarily for office and factory. We determine if an arrangement is a lease at inception. For all classes of underlying assets, we elect not to recognize right of use assets or lease liabilities when a lease has a lease term of 12 months or less at the commencement date and does not include an option to purchase the underlying asset that we are reasonably certain to exercise. Operating lease assets and liabilities are included on our consolidated balance sheet as of February 28, 2025 . Operating lease assets and liabilities are recognized at the present value of the future lease payments at the lease commencement date. The interest rate used to determine the present value of the future lease payments is our incremental borrowing rate, because the interest rate implicit in most of our leases is not readily determinable. Our incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in the economic environments where the leased asset is located. Operating lease assets also include any prepaid lease payments and lease incentives. Our lease terms include periods under options to extend or terminate the lease when it is reasonably certain that we will exercise that option. We generally use the base, non-cancellable, lease term when determining the lease assets and liabilities. Operating lease expense is recognized on a straight-line basis over the lease term. Our lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. We combine fixed payments for non-lease components with our lease payments and account for them together as a single lease component, which increases the amount of our lease assets and liabilities. Income Taxes The Company utilizes ASC Topic 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. The Company accounts for income taxes using the asset and liability method to compute the differences between the tax basis of assets and liabilities and the related financial amounts, using currently enacted tax rates. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. 14 | Page The Company’s practice is to recognize interest and penalties, if any, related to uncertain tax positions in income tax expense in the consolidated statements of operations. Measurement of Fair Value The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined in the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market-based inputs or inputs that are corroborated by market data. Level 3: Unobservable inputs that are not corroborated by market data. Earnings (Loss) per Share The Company computes basic and diluted earnings (loss) per share amounts in accordance with ASC Topic 260, “Earnings per Share.” Basic earnings (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share reflects the potential dilution that could occur if stock options and other commitments to issue common stock were exercised or equity awards vest resulting in the issuance of common stock that could share in the earnings of the Company. As of February 28, 2025 , the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding. Recently Issued Accounting Pronouncements In 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. In 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. ASU 2023-09 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. In 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. There are no other recently issued accounting pronouncements that have not yet been adopted that the Company considers material to its consolidated financial statements. 15 | Page NOTE 5 INVENTORIES Inventories consist of the following: SCHEDULE OF INVENTORIES February 28, 2025 August 31, 2024 Finished goods $ 260,671 $ 334,917 Raw materials and supplies 119,982 125,130 Total $ 380,653 $ 460,047 NOTE 6 DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES Deposit, prepayments, and other receivables consists of the following: SCHEDULE OF DEPOSIT PREPAYMENTS AND OTHER RECEIVABLES February 28, 2025 August 31, 2024 Deposits and Prepayments $ 46,394 $ 33,406 Other receivables (Advances to suppliers) 41,624 81,400 Total $ 88,018 $ 114,806 NOTE 7 PROPERTY, PLANT AND EQUIPMENT, NET Property, plant, and equipment consist of the following: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT February 28, 2025 August 31, 2024 Plant and machineries $ 584,337 $ 601,405 Office equipment 59,590 61,143 Vehicles 80,590 83,239 Furniture and equipment 23,174 23,936 Renovation 117,827 121,700 Property, plant and equipment gross 865,518 891,423 Less: Accumulated depreciation ( 583,719 ) ( 533,645 ) Property, plant and equipment, net $ 281,799 $ 357,778 Depreciation expense for the six months ended February 28, 2025 , was $ 50,074 . Depreciation expense for the period ended February 29, 2024 , was $ 137,106 . NOTE 8 – INTANGIBLE ASSETS The below table summarizes the identifiable intangible assets as of February 28, 2025 , and August 31, 2023: SUMMARY OF INTANGIBLE ASSETS February 28, 2025 August 31, 2024 Technology 1-Portable Air Cooler $ 27,438,763 $ 27,438,763 Technology 2-Condensing Unit 55,709,004 55,709,004 Finite- lived intangible assets, gross 83,147,767 83,147,767 Less: Technology-related intangible asset impairment ( 20,580,040 ) ( 20,580,040 ) Adjusted carrying amount 62,567,727 62,567,727 Less: Accumulated amortization ( 12,891,207 ) ( 11,086,369 ) Intangible assets, net $ 49,676,520 $ 51,481,358 Amortization expenses for intangible assets for the three months ended February 28, 2025 , and February 29, 2024 were $ 1,804,838 and $ 2,078,694 respectively. 16 | Page NOTE 9 ACCOUNTS PAYABLE, ACCRUALS, AND OTHER PAYABLES Accounts payable and accruals, and other payables consist of the following: SCHEDULE OF ACCOUNTS PAYABLES ACCRUALS AND OTHER PAYABLE February 28, 2025 August 31, 2024 Accounts payable $ 114,606 $ 154,854 Accruals 47,672 113,046 Other payables 150,671 95,831 Total $ 312,949 $ 363,731 NOTE 10 RELATED PARTY TRANSACTIONS Amounts due to shareholders Amounts due to shareholders are unsecured, with interest of 3% per annum and tenure of 6 months, or mutually between the parties. The Company reported amount due to shareholders of $ 1,951,778 and $ 1,202,692 as of February 28, 2025 , and August 31, 2024, respectively. NOTE 11 STOCKHOLDERS’ EQUITY On December 16, 2021, the Company increased the authorized common stock from 75,000,000 shares with a par value of $ 0.001 per share to 1,000,000,000 shares with a par value of $ 0.001 per share. During the six months period ended February 29, 2024, the Company issued 373,822 shares of Common Stock at a per share purchase price of $ 2.50 as the Offering for gross proceeds of $ 934,534 received in the fiscal year ended August 31,2023. During the six months period ended February 29, 2024, the Company issued in aggregate 52,107 shares of Common Stock to 15 referral agents in consideration for their referral to the Company of certain investors. On 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. On April 12, 2024, the Company’s board of directors unanimously resolved to effect a reverse stock split of the Company’s common stock, par value $ 0.001 per share, at a ratio of 1-for-4. Following such resolution, on September 9, 2024, the Company filed a Certificate of Amendment with the Secretary of State of the State of Nevada to effect the reverse stock split, with effective on September 11, 2024. On 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 project management consultant in consideration for their services in relation to the proposed initial public offering. On 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 in consideration for their corporate and business development consulting services. As 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. Therefore, as of February 28, 2025, and August 31, 2024, the Company had 27,180,631 and 25,685,591 shares of its common stock issued and outstanding, respectively. 17 | Page NOTE 12 INCOME TAXES The Company’s operating subsidiaries are governed by the Income Tax Law (defined hereunder), which concerns Foreign Investment Enterprises and Foreign Enterprises and various local income tax laws (“Income Tax Laws”). We routinely undergo examinations in the jurisdictions in which we operate. The Company has operations in Singapore, Malaysia, Cambodia, BVI, and China that are subject to taxes in the jurisdictions in which they operate, as follows: Singapore WKL Eco Earth Holdings is incorporated in Singapore, and under the current tax laws of Singapore, its standard corporate income tax rate is 17 %. Malaysia WKL Eco Earth, WKL Green Energy and Evoair Manufacturing (including its 100 % subsidiary Evo Air Marketing) are incorporated in Malaysia and are subject to common corporate income tax rate at 24 %. Cambodia WKL EcoEarth Indochina is incorporated in Cambodia, and under the current tax laws of Cambodia, its standard corporate tax rate is 20 %. BVI EvoAir International is incorporated in BVI, and a BVI Business Company is exempt from the BVI income tax. China WKL Guanzhe is incorporated in China. Under the current tax law in the PRC, WKL Guanzhe is subject to the enterprise income tax rate of 25 %. Due to the Company’s net loss position, there was no provision for income taxes recorded. As a result of the Company’s losses to date, there exists doubt as to the ultimate realization of the deferred tax assets. Accordingly, a valuation allowance equal to the total deferred tax assets has been recorded. Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows: SCHEDULE OF RECONCILIATION BETWEEN THE STATUTORY TAX RATE AND THE ACTUAL PROVISION February 28, 2025 February 29, 2024 Six Months Ended February 28, 2025 February 29, 2024 US Statutory rate 21 % 21 % Effect of reconciling items for tax purposes ( 21 )% ( 21 )% Effective income tax rate - % - % The components of net deferred tax assets are as follows: SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS February 28, 2025 August 31, 2024 Net operating loss carry-forward $ 45,200,000 $ 39,400,000 Less: valuation allowance ( 45,200,000 ) ( 39,400,000 ) Net deferred tax asset - - The Company had net operating loss carry forwards for tax purposes of approximately $ 45,200,000 at February 28, 2025, and approximately $ 39,400,000 at August 31, 2024, which may be available to offset future taxable income. Utilization of the net operating loss carry forwards may be subject to substantial annual limitations due to the ownership change limitations provided by Section 381 of the Internal Revenue Code of 1986, as amended. The annual limitation may result in the expiration of net operating loss carry forwards before utilization. 18 | Page NOTE 13 ROU ASSET AND LEASES A lease is defined as a contract that conveys the right to control the use of identifiable tangible property for a period of time in exchange for consideration. The Company adopted ASC Topic 842 which primarily affected the accounting treatment for operating lease agreements in which the Company is the lessee including the Company’s leases of office and factory. The Company elected to not recognize ROU assets and lease liabilities arising from short-term leases with initial lease terms of twelve months or less (deemed immaterial) on the accompanying consolidated balance sheets. ROU assets include any prepaid lease payments and exclude any lease incentives and initial direct costs incurred. Lease expense for minimum lease payments is recognized on the effective interest, the effective amortization on the lease liability. The lease terms may include options to extend or terminate the lease if it is reasonably certain that the Company will exercise that option. When measuring lease liabilities for leases that were classified as operating leases, the Company discounted lease payments using its estimated incremental borrowing rate of 10 %. On March 28, 2023, the Company entered into a lease termination agreement to its Cambodia office lease at #65, 1st, 2nd and 3rd Floor, Street 123, Sangkat Toul Tumpong I, Khan Chamkarman, Phnom Penh, Cambodia (the “Lease Termination”). The Lease Termination terminated the Company’s rights and obligations with respect to the leased premises on April 15, 2023. As such, the ROU assets and operating lease liabilities were remeasured, and the Company recorded a gain of $ 14,890 as a component of operating expenses for the year ended August 31, 2023. No impairment of the ROU assets was deemed to have occurred. The following is a summary of ROU asset and operating lease liabilities: SUMMARY OF ROU ASSET AND OPERATING LEASE LIABILITIES February 28, 2025 August 31, 2024 Assets: ROU asset $ 148,348 $ 199,647 Liabilities: Current: Operating lease liabilities current $ 99,590 $ 99,445 Non-current Operating lease liabilities non current 57,337 108,891 Total lease liabilities $ 156,927 $ 208,336 As of February 28, 2025, the remaining maturities of lease liabilities were as follows: SCHEDULE OF MATURITIES OF LEASE LIABILITIES Operating lease 2025 $ 99,590 2026 48,901 2027 8,436 Total $ 156,927 NOTE 14 COMMITMENTS AND CONTINGENCIES In the normal course of business, we are subject to the effects of certain contractual stipulations, events, transactions, and laws and regulations that may, at times, require the recognition of liabilities. We establish estimated liabilities when the associated costs related to uncertainties or guarantees become probable and can be reasonably estimated. For the period ended February 28, 2025, no material changes have occurred in our estimated liabilities from those disclosed in the Commitments and Contingencies of the Notes to condensed consolidated financial statements in our Form 10-Q. NOTE 15 SUBSEQUENT EVENTS In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to February 28, 2025, to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements. 19 | Page ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-looking Statements This Quarterly Report contains forward-looking statements relating to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “intends”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors which may cause our or our industry’s actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these statements, which speak only as of the date that they were made. These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities laws of the U.S., we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events. In this report unless otherwise specified, all dollar amounts are expressed in US$ and all references to “common shares” or “common stock” refer to the common shares of our capital stock. The management’s discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with U.S. GAAP. General Overview EvoAir 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. On December 20, 2021, the Company and Dr. Low entered into the EvoAir International Share Transfer Agreement, pursuant to which Dr. Low agreed to sell all of his ordinary shares of EvoAir International to the Company for the consideration of US$100 (“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. Pursuant 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 the Company’s ordinary shares representing approximately 67.34% of the Company’s then issued and outstanding shares, 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 outstanding ordinary shares of the Company, which resulted in a change of control of the Company. On 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”): (A) On December 20, 2021, Dr. Low and Chan Kok Wei entered into a share exchange agreement with WKL Eco Earth Holdings, pursuant to which Dr. 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. 20 | Page (B) On December 20, 2021, Dr. Low, Chan Kok Wei, Ong Bee Chen and certain sellers (collectively, the “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, amounting in aggregate, 240,000 shares or 80% shareholding 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. (C) On December 20, 2021, Tan Soon Hock, Ivan Oh 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, Ivan Oh 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 shares, 2,520,000 shares and in aggregate 6,001,794 shares, respectively, of the common stock of the Company, or approximately 6.91%, 2.48% and in aggregate 5.90%, respectively, of the issued and outstanding ordinary shares of the Company. The board of directors and majority shareholders of the Company have approved the transaction. (D) 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 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 relating to the portable air-conditioner, e-Cond EVO TM and the trademarks 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. EvoAir 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”). From 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. EvoAir 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 on April 19, 2021, a Malaysian company incorporated on March 22, 2019, as well as acquiring (d) WKL EcoEarth Indochina, a Cambodia company incorporated on February 4, 2021, (e) WKL Guanzhe Green Technology Guangzhou, a Chinese company incorporated on April 6, 2021. EvoAir Manufacturing wholly owns (f) Evo Air Marketing, a Malaysian company incorporated on February 2, 2021. On 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”. On 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. On 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. 21 | Page Round 2 Stockholders The 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: ● On 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. ● 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. The gross 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 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. 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. 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. The gross proceeds in aggregate were approximately $625,330. ● 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. The gross proceeds in aggregate was approximately $912,889. ● 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. 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. The gross proceeds in aggregate was approximately $21,645. 22 | Page Reverse Stock Split On 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”). Split Adjustment; Treatment of Fractional Shares As 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). No fractional shares were issued in connection with the Reverse Stock Split. Fractional shares were rounded up to the nearest whole number Share Issuance On 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 project management consultant in consideration for their services in relation to proposed initial public offering. On 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 corporate and business consultant in consideration for their consulting services. Plan of Operation and Funding We expect that working capital requirements will continue to be funded through internally generated funds and proceeds from issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business. Existing 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: (i) research and development; (ii) expansion of product offerings; (iii) geographical expansion; and (iv) marketing expenses. 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. Results of Operations The 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, 2025, as compared to the three and six months ended February 29, 2024. 23 | Page Three Months Ended February 28, 2025, versus Three Months February 28, 2024. Three Months Ended February 28, 2025 February 29, 2024 Changes % Revenue $ 71,124 $ 41,174 $ 29,950 73 % Cost of revenue 70,066 87,075 (17,009 ) (20 )% Gross profit/(loss) 1,058 (45,901 ) 46,959 102 % Operating expenses 1,276,345 1,473,759 (197,414 ) (13 )% Loss from operation (1,275,287 ) (1,519,660 ) 244,373 16 % Other income 2,299 88,902 (86,603 ) (97 )% Loss from operation before income taxes $ (1,272,988 ) $ (1,430,758 ) 157,770 11 % Revenue The Group generated revenues of $71,124 in the three months ended February 28, 2025, as compared to $41,174 in the three months ended February 29, 2024, an increase in revenue of $29,950. This increase was primarily driven by the sale of Ionic Nano Copper Zinc solution, an airborne disinfectant product. 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™ air-conditioner and driving its adoption across diverse market segments, positioning ourselves for future growth in the emerging eco-friendly air-conditioning space. We 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. Cost of revenue For the three months ended February 28, 2025, cost of revenue increased to $70,066, or 99% of revenue, compared to $87,075 or 211% in the same period in 2024. The significant decrease in the cost of revenue as a percentage of sales was primarily driven by the lower production costs of the Ionic Nano Copper Zinc solution. The 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. 24 | Page Gross profit/(loss) For the three months ended February 28, 2025, the Company reported a gross profit of $1,058 or a gross margin of 1%, compared to a gross loss of $45,901 or 111% in the same period in 2024. The significant improvement in gross profit margin was primarily driven by the better margins achieved from the sale of the Ionic Nano Copper Zinc solution, which has contributed positively to our overall profitability. The 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. Operating expenses For the three months ended February 28, 2025, operating expenses amounted to $1,276,345, compared to $1,473,759 in the same period in 2024, reflecting a decrease of $197,414. This decrease was primarily driven by a reduction in technology-related intangible asset amortization following the impairment of intangible assets in the year ended August 31, 2024. 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 Other income for the three months ended February 28, 2025, and February 29, 2024 were not material. Loss from operations before income taxes The Company reported a loss from operations before income taxes of $1,273,148 for the three months ended February 28, 2025, compared to $1,430,758 in the corresponding period in 2024. 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. Strategies to enhance operational efficiencies and achieve economies of scale are key priorities moving forward. Six Months Ended February 28, 2025, versus Six Months February 28, 2024. Six Months Ended February 28, 2025 February 29, 2024 Changes % Revenue $ 123,053 $ 132,492 $ (9,439 ) (7 )% Cost of revenue 160,176 187,401 (27,225 ) (15 )% Gross loss (37,123 ) (54,909 ) 17,786 32 % Operating expenses 5,879,221 2,990,751 2,888,470 97 % Loss from operation (5,916,344 ) (3,045,660 ) (2,870,684 ) (94 ) % Other income 2,452 90,581 (88,129 ) (97 )% Loss from operation before income taxes $ (5,913,892 ) $ (2,955,079 ) (2,958,813 ) (100 ) % 25 | Page Revenue The Group generated revenues of $123,053 in the six months ended February 28, 2025, as compared to $132,492 in the six months ended February 29, 2024, a slight decrease in revenue of $9,439. The movement of revenue was attributable to the reduction in sale decline in EvoAir™ air-conditioner offset by the performance of Ionic Nano Copper Zinc solution, an airborne disinfectant product. While the reduction in EvoAir™ air-conditioner sales impacted overall revenue, the growth in sales of the Ionic Nano Copper Zinc solution provided a partial cushion, contributing positively to the Group’s financial performance. The Group remains focused on driving the adoption of both products, and efforts to enhance the performance of EvoAir™ are ongoing, alongside continued expansion of the Ionic Nano Copper Zinc solution’s market presence. We are confident that strategic initiatives in both product segments will enable the Group to regain momentum and drive growth in the coming quarters. 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. We are confident that strategic initiatives in both product segments will enable the Group to regain momentum and drive growth in the coming quarters. Cost of revenue For the six months ended February 28, 2025, cost of revenue increased to $160,176, or 130% of revenue, compared to $187,401 or 141% in the same period in 2024. This change in cost of revenue is consistent with the change in sales. The cost of revenue encompasses production costs and purchase of goods. The Company remains focused on further optimizing its cost structure and maintaining efficiency as it continues to scale its operational and expand its product offering. Gross loss For the six months ended February 28, 2025, the Company reported a gross loss of $37,123 or a gross loss margin of 30%, compared to a gross loss of $54,909 or 41% in the same period in 2024. The improvement in gross loss margin was primarily driven by the better margins achieved from the sale of the Ionic Nano Copper Zinc solution. The 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. 26 | Page Operating expenses For the six months ended February 28, 2025, operating expenses amounted to $5,879,221, compared to $2,952,751 in the same period in 2024, reflecting an increase of $2,888,470. This increase was primarily driven by a $3,261,676 rise in stock-based compensation, partially offset by a reduction in technology-related intangible asset amortization following the impairment of intangible assets in the year ended August 31, 2024. 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 Other income for the six months ended February 28, 2025, and February 29, 2024 were not material. Loss from operations before income taxes The Company reported a loss from operations before income taxes of $5,913,892 for the six months ended February 28, 2025, compared to $2,955,079 in the corresponding period in 2024. 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 on 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. Strategies to enhance operational efficiencies and achieve economies of scale are key priorities moving forward. Liquidity and Capital Resources Working Capital As of As of February 28, 2025 August 31, 2024 Changes % Current assets $ 726,102 $ 790,752 $ (64,650 ) (8 )% Current liabilities 2,381,483 1,684,638 696,845 41 % Working capital (1,655,381 ) (893,886 ) (761,495 ) (85 )% As of February 28, 2025, the decrease in current assets was mainly due to the decrease in inventories. As of February 28, 2025, the increase in current liabilities was mainly due to the increase in amount due to shareholders of $749,086. As of February 28, 2025, our company had a working capital deficit of $1,655,381, compared with $893,886 as of August 31, 2024. Cash Flows Six Months Ended February 28, 2025, versus Six Months Ended February 29, 2024 February 28, February 29, 2025 2024 Changes % Cash flows provided by/(used in) operating activities $ 10,691 $ (457,609 ) 468,300 102 % Cash flows used in investing activity - (96,186 ) 96,186 100 % Cash flows used in financing activities (4,358 ) (4,144 ) (214 ) (5 ) % Net changes in cash 6,333 (557,939 ) 564,272 101 % 27 | Page The Company’s cash and cash equivalents stood at $199,461 as of February 28, 2025. Cash provided by operating activities for the six months ended February 28, 2025, was $10,691. This resulted primarily from a net loss of $5,913,892 which was offset by depreciation of $50,074, amortization of $1,804,838, stock-based expense of $$3,261,676, decrease in operating lease right-of-use assets of $51,299, decrease in operating leases liabilities of $51,409, decrease in inventories of $79,394, decrease in deferred revenue of $1,325, decrease in deposit, prepayment and other receivables of $26,788, decrease in accounts receivable of $4,944, decrease in accounts payable and accruals of $105,622, increase in amounts due to shareholders of $749,086, and increase in other payables of $54,840. Cash used in financing activities resulted in payments of hire purchase amounting to $4,358 during the six months ended February 28, 2025. Seasonality The Company’s business is not subject to seasonality. Off-Balance Sheet Arrangements As of the date of this Quarterly Report on Form 10-Q, 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. Critical Accounting Policies Revenue recognition Our 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. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The amount of revenue that is recorded reflects the consideration that we expect to receive in exchange for those goods. We apply the following five-step model in order to determine this amount: (i) identification of the promised goods and services in the contract; (ii) determination of whether the promised goods and services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. We 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 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. Generally, our performance obligations are transferred to customers at a point in time, typically upon delivery for local sales and upon shipment of the products for export sale. 28 | Page For all reporting periods, we have not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adopted rules. Estimates and Assumptions The 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 doubtful accounts and product returns, provisions 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. Going Concern The Company’s financial statements as of February 28, 2025, is 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. As of February 28, 2025, and August 31, 2024, the Company had an accumulated deficit of $45,163,080 and $39,401,857 respectively . The Company incurred net loss of $5,913,892 and $2,955,079 for the six months ended February 28, 2025, and February 29, 2024, respectively. The cash generated from operating activities was $10, 691 for the six months ended February 28, 2025, and the cash used in operating activities was $457,609 for the six months ended February 29, 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. 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. Key initiatives include: ● Expansion 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: 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 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. Material Commitments We have no material commitments as of February 28, 2025. Recent Accounting Pronouncements 29 | Page In 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. In 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. ASU 2023-09 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. In 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. There are no other recently issued accounting pronouncements that have not yet been adopted that the Company considers material to its consolidated financial statements. 30 | Page ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information required by this Item. ITEM 4. CONTROLS AND PROCEDURES Disclosure Controls and Procedures Our Management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-14(a)(e) and 15d-14(a) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s Management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. An evaluation was conducted under the supervision and with the participation of our Management of the effectiveness of the design and operation of our disclosure controls and procedures as of February 28, 2025. Based on our Management’s evaluation under the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, our Management concluded that our disclosure controls and procedures were not effective as of such date to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms. A material weakness is a control deficiency, or combination of control deficiencies, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. In connection with the assessment described above, Management identified the following control deficiencies that represent material weaknesses as at February 28, 2025: ■ Due to our limited resources, we do not have enough accounting personnel with extensive experience in maintaining books and records and preparing financial statements in accordance with U.S. GAAP which could lead to untimely identification and resolution of accounting matters inherent in our financial transactions in accordance with U.S. GAAP. ■ The Company has insufficient written policies and procedures for accounting and financial reporting, which led to inadequate financial statement closing process. ■ The Company has a lack of segregation of duties, a lack of audit committee or independent governance/oversight. Changes in Internal Controls over Financial Reporting There have been no changes in the Company’s internal control over financial reporting during the three-month period covered by this Quarterly Report that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting. 31 | Page PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS We are not currently subject to any legal proceedings, and to the best of our knowledge, no such proceeding is threatened, the results of which would have a material impact on the Company’s properties, results of operations, or financial condition. Nor, to the best of our knowledge, are any of the Company’s officers or directors involved in any legal proceedings in which we are an adverse party. ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS The Management is not aware of any unregistered sales of equity securities and use of proceeds. ITEM 3. DEFAULTS UPON SENIOR SECURITIES No senior securities were issued and outstanding during the six-month period ended February 28, 2025. ITEM 4. MINE SAFETY DISCLOSURES Not applicable to our Company. ITEM 5. OTHER INFORMATION None. 32 | Page ITEM 6. EXHIBITS Exhibits: 10.1 Certificate of Amendment, filed with the Secretary of State of Nevada on September 9, 2024* 10.2 Share Transfer Agreement between Low Wai Koon and Unex Holdings Inc., dated December 20, 2021* 10.3 Share Transfer Agreement between Low Wai Koon and WKL Global Limited, dated December 20, 2021* 10.4 Share Transfer Agreement between Low Wai Koon and EvoAir International Limited, dated December 20, 2022* 10.5 Form of Share Exchange Agreement between certain sellers and WKL Eco Earth Holdings Pte. Ltd. whereby Unex Holdings Inc. is the Issuer, dated December 20, 2021* 10.6 Form of Share Exchange Agreement between certain sellers and WKL Eco Earth Holdings Pte. Ltd. whereby Unex Holdings Inc. is the Issuer, dated December 20, 2022* 10.7 Form of Investment Exchange Agreement between certain Seller and WKL Eco Earth Holdings Pte. Ltd. whereby Unex Holdings Inc. is the Issuer, dated December 20, 2021* 10.8 Form of Deed of Assignment between Low Wai Koon and WKL Eco Earth Holdings Pte Ltd, dated December 20, 2021* 10.9 Form of Deed of Assignment between Low Wai Koon and WKL Eco Earth Holdings Pte Ltd, dated December 20, 2021* 10.10 Form of Subscription Agreement between Ang Lee Kim Jane and Unex Holdings Inc., dated February 15, 2022* 10.11 Form of Subscription Agreement between Wong Hon Wai and Unex Holdings Inc., dated June 3, 2022* 10.12 Supplemental Agreement between Wong Hon Wai and Unex Holdings Inc., dated October 19, 2022* 10.13 Form of Subscription Agreement between Regulation S Investors and Unex Holdings Inc., dated October 25, 2022* 10.14 Form of Subscription Agreement between Regulation D Investors and Unex Holdings Inc., dated October 25, 2022* 10.15 Form of Subscription Agreement between Regulation S Investors and Unex Holdings Inc., dated July 13, 2023* 10.16 Form of Subscription Agreement between Regulation S Investors and Unex Holdings Inc., dated September 7, 2023* 10.17 Form of Subscription Agreement between Regulation S Investor and EvoAir Holdings Inc., dated November 21, 2023* 31.1 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a) 31.2 Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a) 32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 101. INS Inline XBRL Instance Document 101. SCH Inline XBRL Taxonomy Extension Schema Document 101. CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document 101. DEF Inline XBRL Taxonomy Extension Definition Document 101. LAB Inline XBRL Taxonomy Extension Label Linkbase Document 101. PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) *Previously filed 33 | Page SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. EvoAir Holdings Inc. Dated: April 11, 2025 By: /s/ Low Wai Koon Low Wai Koon Chairman and Chief Executive Officer Dated: April 11, 2025 By: /s/ Ong Bee Chen Ong Bee Chen Chief Financial Officer 34 | Page