What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-11 compared with 2025-04-11 · 110 added, 117 removed, 330 unchanged (41% of the section changed)

198 unchanged sentences

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.

Three Months Ended February

28, 2025, versus Three Months February 28, 2024.

profit/(loss)

from operation

from operation before income taxes

$ (1,272,988 )

the three and nine months ended May 31, 2025, as compared to the three and nine months ended May 31, 2024.

Months Ended May 31, 2025, versus Three Months May 31, 2024.

Three Months Ended May 31

Cost of revenue

Operating expenses

Loss from operation

Loss from operation before income taxes

$ (1,186,838 )

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.

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

Group generated revenues of $37,306 in the three months ended May 31, 2025, as compared to $89,616 in the three months ended May 31,

The decrease of $52,310 was primarily due to reduction in sales of EvoAir™

air-conditioner.

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

industrial sectors.

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

labelling and licensing models.

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

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

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

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

the 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 three months ended May 31, 2025, cost of revenue decreased to $8,505, or 23% of revenue, compared to $56,741, or 63% of revenue 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

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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.

profit/(loss)

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 further optimizing its cost structure

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

the three months ended May 31, 2025, the Company reported a gross profit of $28,801 or a gross margin of 77%, compared to a gross profit

of $32,875, or a gross profit margin of 37% 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.

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

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in the future.

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.

the three months ended May 31, 2025, operating expenses amounted to $1,237,464, compared to $1,007,694 in the same period in 2024, reflecting

an increase of $229,770.

This increase was primarily driven by the increased general and administrative expenses net with the reduction

in technology-related intangible asset amortization following the impairment of intangible assets in the year ended August 31, 2024.

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

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and value creation.

income for the three months ended February 28, 2025, and February 29, 2024 were not material.

income for the three months ended May 31, 2025, and 2024 were not material.

from operations before income taxes

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

Company reported a loss from operations before income taxes of $1,186,838 for the three months ended May 31, 2025, compared to $974,441

in the corresponding period in 2024.

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moving forward.

Months Ended February 28, 2025, versus Six Months February 28, 2024.

from operation

from operation before income taxes

Months Ended May 31, 2025, versus Nine Months May 31, 2024.

Nine Months Ended May 31

Cost of revenue

Operating expenses

Loss from operation

Loss from operation before income taxes

$ (7,100,730 )

$ (3,929,520 )

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.

Group generated revenues of $ 160,359 in the nine months ended May 31, 2025, as compared to $222,108 in the nine months ended May 31,

2024, a decrease in revenue of $61,749.

The overall revenue decrease of $61,000 was mainly driven by significant

reduction in EvoAir air-conditioners sales.

However, this decline was mitigated by increased in sales of Ionic Nano Copper Zinc Solution.

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.

are confident that strategic initiatives in both product segments will enable the Group to regain momentum and drive growth in the coming

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.

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.

are confident that strategic initiatives in both product segments will enable the Group to regain momentum and drive growth in the coming

the nine months ended May 31, 2025, cost of revenue increased to $168,681, or 105% of revenue, compared to $244,142 or 110% in the same

period in 2024.

This change in cost of revenue is consistent with the change in sales.

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.

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 further optimizing its cost structure

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

the nine months ended May 31, 2025, the Company reported a gross loss of $8,322 or a gross loss margin of 5%, compared to a gross loss

of $22,034 or negative gross profit margin of 10% 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.

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

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in the future.

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.

the nine months ended May 31, 2025, operating expenses amounted to $7,116,685, compared to $3,998,445 in the same period in 2024, reflecting

an increase of $3,118,240.

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

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

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and value creation.

income for the six months ended February 28, 2025, and February 29, 2024 were not material.

income decreased, mainly due to the decrease in realized foreign exchange gain from the amount due to shareholders’ wires in period

ended May 31, 2024.

from operations before income taxes

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

Company reported a loss from operations before income taxes of $7,100,730 for the nine months ended May 31, 2025, compared to $3,929,520

in the corresponding period in 2024.

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resources to support its business expansion objectives.

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

the bottom line.

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

on the bottom line.

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

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and Capital Resources

February 28, 2025

August 31, 2024

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Working capital

of February 28, 2025, the decrease in current assets was mainly due to the decrease in inventories.

of February 28, 2025, the increase in current liabilities was mainly due to the increase in amount due to shareholders of $749,086.

of February 28, 2025, our company had a working capital deficit of $1,655,381, compared with $893,886 as of August 31, 2024.

Months Ended February 28, 2025, versus Six Months Ended February 29, 2024

flows provided by/(used in) operating activities

flows used in investing activity

flows used in financing activities

changes in cash

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.

used in financing activities resulted in payments of hire purchase amounting to $4,358 during the six months ended February 28, 2025.

of May 31, 2025, the decrease in current assets was mainly due to the decrease in cash, and prepayments.

of May 31, 2025, the increase in current liabilities was mainly due to the increase in amount due to shareholders of $972,045.

of May 31, 2025, our company had a working capital deficit of $2,084,204, compared with $893,886 as of August 31, 2024.

Months Ended May 31, 2025, versus Nine Months Ended May 31, 2024

Cash flows used in operating activities

Cash flows used in investing activity

Cash flows generated from financing activities

Net changes in cash

Company’s cash and cash equivalents stood at $81,016 as of May 31, 2025.

Cash used in operating activities for the nine months

ended May 31, 2025, was $900,095.

This resulted primarily from a net loss of $7,100,730 which was offset by depreciation of $84,729, amortization

of $ 2,707,257, stock-based expense of $$3,261,676, decrease in operating lease right-of-use assets of $61,007, decrease in operating

leases liabilities of $63,847, decrease in inventories of $25,026, increase in deferred revenue of $ 6,002, decrease in deposit, prepayment

and other receivables of $32,624, decrease in accounts receivable of $3,419, increase in accounts payable and accruals of $14,162, and increase in other payables of $68,580.

Cash used in investing activities resulted in purchase of property, plant

and equipment amounting to $5,902 during the nine months ended May 31, 2025.

Cash generated from financing activities resulted in proceeds from shareholders

of $972,045, payments of hire purchase amounting to $6,003 and deferred offering costs of $42,454 during the nine months ended May 31,

Company’s business is not subject to seasonality.

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The actual results could differ materially from these estimates.

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.

of February 28, 2025, and August 31, 2024, the

Company had an accumulated deficit of $45,163,080 and $39,401,857 respectively .

incurred net loss of $5,913,892 and $2,955,079 for the six months ended February 28, 2025, and February 29, 2024, respectively.

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.

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.

Company’s financial statements as of May 31, 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.

of May 31, 2025, the Company had an accumulated deficit of $46,280,904 and a working capital deficiency of $2,084,204.

August 31, 2024, the accumulated deficit was $39,401,857 and the working capital deficiency

was $893,886.

The Company incurred net loss of $7,100,730 and $3,929,520 for the nine months ended May 31, 2025, and 2024, respectively.

The cash used in operating activities was $900,095 for the nine months ended May 31, 2025, and the cash used in operating activities

was $595,059 for the nine months ended May 31, 2024, respectively.

It was brought to the attention of the Management to assess going

concern considering all facts and circumstances about the foreseeable future of the Company as well as its assets and liabilities on

the basis that it will be able to realize and discharge them in the normal course of business.

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

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

have no material commitments as of February 28, 2025.

have no material commitments as of May 31, 2025.

Accounting Pronouncements

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

2023-07, Segment Reporting (Topic 280):

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

in public entities’ reportable segments.

Notable changes include the mandatory disclosure of significant segment expenses regularly

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

in reporting measures used by the CODM.

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

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

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

as of January 31, 2025.

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

or cash flows on the date of transition.

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

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financial statements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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.

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.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis