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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 November 30, 2024

 

☐ 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 January 13, 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 28
Item 4 CONTROLS AND PROCEDURES 28
     
PART II OTHER INFORMATION  
Item 1 LEGAL PROCEEDINGS 29
Item 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 29
Item 3 DEFAULTS UPON SENIOR SECURITIES 29
Item 4 MINE SAFETY DISCLOSURES 29
Item 5 OTHER INFORMATION 29
Item 6 EXHIBITS 30
  SIGNATURES 31

 

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 NOVEMBER 30, 2024 AND AUGUST 31, 2024

 

   November 30, 2024   August 31, 2024 
   (Unaudited)    (Audited) 
ASSETS          
Current assets          
Cash and cash equivalents   149,732   $152,985 
Accounts receivable   77,585    62,914 
Inventories   409,185    460,047 
Deposit, prepayments and other receivables   100,632    114,806 
Total current assets   737,134    790,752 
           
Non-current assets          
Property, plant and equipment, net   306,756    357,778 
Operating lease right-of-use assets   172,672    199,647 
Deferred offering cost   3,167,640    449,576 
Technology-related intangible assets, net   50,578,939    51,481,358 
Total non-current assets   54,226,007    52,488,359 
           
TOTAL ASSETS  $54,963,141   $53,279,111 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
Current liabilities          
Accounts payable and accruals  $226,516   $267,900 
Other payables   158,077    95,831 
Deferred revenue   20,643    10,012 
Hire purchase creditor   8,512    8,758 
Amounts due to shareholders   1,528,155    1,202,692 
Operating lease liability - current   100,478    99,445 
Total current liabilities   2,042,381    1,684,638 
           
Non-current liabilities          
Hire purchase creditor   2,220    4,320 
Operating lease liabilities   79,672    108,891 
Total non-current liabilities   81,892    113,211 
           
TOTAL LIABILITIES   2,124,273    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 November 30, 2024 and August 31, 2024*   27,181    25,686 
Additional paid in capital   97,492,063    91,513,818 
Accumulated other comprehensive loss   (40,990)   (48,827)
Accumulated deficit   (43,957,258)   (39,401,857)
Non-controlling interest   (682,128)   (607,558)
Total shareholders’ equity   52,838,868    51,481,262 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  $54,963,141   $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 MONTH ENDED NOVEMBER 30, 2024 AND 2023

 

   November 30, 2024   November 30, 2023 
         
Revenue  $51,929    91,318 
Cost of revenue   90,110    100,326 
Gross loss   (38,181)   (9,008)
           
Operating expenses:          
Selling and marketing expenses   9,743    33,003 
General and administrative expenses   4,593,133    1,483,989 
Total operating expenses   4,602,876    1,516,992 
           
Loss from operation   (4,641,057)   (1,526,000)
           
Other income          
Interest income   88    40 
Other income   65    1,639 
Total other income   153    1,679 
           
Loss from operation before income taxes   (4,640,904)   (1,524,321)
           
Income tax expenses   -    - 
           
Net loss  $(4,640,904)  $(1,524,321)
           
Less: Net loss attributable to non-controlling interests   (85,503)   (79,998)
           
Net loss attributable to equity holders of the Company   (4,555,401)   (1,444,323)
           
Other comprehensive income/(loss):          
Foreign currency translation adjustment   18,770    (88,001)
Total comprehensive loss   (4,536,631)   (1,532,324)
           
Less: net comprehensive income/(loss) attributable to non-controlling interests   10,933    (2,793)
           
Net comprehensive loss attributable to equity holders of the Company   (4,547,564)   (1,529,531)
           
Net loss attributable to equity holders of the Company per common share:          
Basic and diluted   (0.18)   (0.06)
           
Weighted average number of common stock outstanding:          
Basic and diluted*   25,766,929    25,654,769 

 

* 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 MONTHS ENDED NOVEMBER 30, 2024 AND 2023

 

   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   loss   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 

 

*Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024

 

                              
   Common Stock   Additional paid in   Accumulated  

Accumulated other

comprehensive

   Non-controlling     
   shares   amount   capital   deficit   loss   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 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 

 

* 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.

 

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EVOAIR HOLDINGS INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In U.S. Dollars, except share data or otherwise stated)

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2024 AND 2023

 

   November 30, 2024   November 30, 2023 
         
Cash flows from operating activities          
Net loss  $(4,640,904)   (1,524,321)
Adjustments for non-cash income and expenses:          
Depreciation   29,166    95,369 
Amortization   902,419    1,039,347 
Stock based expense   3,261,676    - 
Changes in operating assets and liabilities:          
Increase in accounts receivables   (14,671)   (7,490)
Decrease/(increase) in inventories   50,862    (54,528)
Decrease in deposits, prepayments, and advances to suppliers   14,174    122,057 
Decrease in operating lease right-of-use assets   26,975    17,590 
(Decrease) /increase in accounts payable and accruals   (41,384)   118,749 
Increase/(decrease) in deferred revenue   10,631    (49,986)
Decrease in operating lease liabilities   (28,186)   (18,518)
Increase/(decrease) in other payables   62,246    (8,387)
Increase in amounts due to shareholders   325,463    166,652 
           
Net cash used in operations  $(41,533)   $(103,466)
           
Cash flows from investing activity          
Purchase of property, plant and equipment   -    (107,725)
Net cash used in investing activity  $

-

   $(107,725)
           
Cash flows from financing activity          
Payments of hire purchase   (2,346)   (1,972)
Net cash used in financing activity  $(2,346)   $(1,972)
           
Net decrease in cash and cash equivalents   (43,879)   (213,163)
Effect of exchange rate changes   40,626    (88,001)
Cash and cash equivalents at start of period   152,985    779,049 
Cash and cash equivalents at end of period   149,732    477,885 
Supplemental disclosure of non-cash investing and financing information :      
Common stock issued for service in relation to Initial public offering  $2,718,064   $-  

 

 

The accompanying footnotes are an integral part of these condensed consolidated financial statements.

 

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EVOAIR HOLDINGS INC.

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2024, AND 2023

 

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 vaue 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), evoairTM 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 EVOTM 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.

 

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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.

 

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  ● 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.

 

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:

 

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.

 

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NOTE 3 – GOING CONCERN

 

The Company’s financial statements as of November 30, 2024, 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 November 30, 2024, and August 31, 2024, the Company had an accumulated deficit of $43,957,258 and $39,401,857 respectively. The Company incurred net loss of $4,640,904 and $1,524,321 for the three months ended November 30, 2024, and November 30, 2023, respectively. The cash used in operating activities was $41,533 for the three months ended November 30, 2024, and $103,466 for the three months ended November 30, 2023, 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.

 

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.

 

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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 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. Actual results could differ materially from these estimates.

 

Fiscal Year End

 

The Company operates on a fiscal yearly 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 a high credit quality financial institution.

 

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.

 

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 November 30, 2024, 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.

 

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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 expected credit loss 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 November 30, 2024 and August 31, 2024, our accounts receivable amounted to $77,585 and $62,914, respectively, with no allowance for expected credit loss.

 

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. 

 

    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.

 

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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.

 

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 $9,293 recognized as revenue for three months ended November 30, 2024. The Company recorded $20,643 deferred revenue as of November 30, 2024.

 

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 November 30, 2024, 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 November 30, 2024.

 

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.

 

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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.

 

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 November 30, 2024, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures. This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses. The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts. This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This standard will be effective for the Company in Fiscal Year 2026 and should be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

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Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by Management to have a material impact on the Company’s present or future financial statements.

 

NOTE 5 INVENTORIES

 

Inventories consist of the following:

 

   November 30, 2024   August 31, 2024 
         
Finished goods  $259,919   $334,917 
Raw materials and supplies   149,266    125,130 
           
Total  $409,185   $460,047 

 

NOTE 6 DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES

 

Deposit, prepayments, and other receivables consists of the following:

 

   November 30, 2024   August 31, 2024 
         
Deposits and Prepayments  $16,925   $33,406 
Other receivables (Advances to suppliers)   83,707    81,400 
           
Total  $100,632   $114,806 

 

NOTE 7 PROPERTY, PLANT AND EQUIPMENT, NET

 

Property, plant, and equipment consist of the following:

 

   November 30, 2024   August 31, 2024 
Plant and machineries  $587,273   $601,405 
Office equipment   59,836    61,143 
Vehicles   80,905    83,239 
Furniture and equipment   23,265    23,936 
Renovation   118,288    121,700 
Property, plant and equipment gross   869,567    891,423 
Less: Accumulated depreciation   (562,811)   (533,645)
Property, plant and equipment, net  $306,756   $357,778 

 

Depreciation expense for the three months ended November 30, 2024, was $29,166. Depreciation expense for the three months ended November 30, 2023, was $95,369.

 

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NOTE 8 – INTANGIBLE ASSETS

 

The below table summarizes the identifiable intangible assets as of November 30, 2024, and August 31, 2023: 

 

   November 30, 2024   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   (11,988,788)   (11,086,369)
Intangible assets, net  $50,578,939   $51,481,358 

 

Amortization expenses for intangible assets for the three months ended November 30, 2024 was $902,419. Amortization expenses for intangible assets for the three months ended November 30, 2023 was $1,039,347.

 

NOTE 9 ACCOUNTS PAYABLE, ACCRUALS, AND OTHER PAYABLES

 

Accounts payable, accruals, and other payables consist of the following:

 

   November 30, 2024   August 31, 2024 
         
Accounts payable  $113,521   $154,854 
Accruals   112,995    113,046 
Other payables   158,077    95,831 
Total  $384,593   $363,731 

 

As of November 30, 2024, accruals and other payables primarily consist of professional fees and staff claims.

 

NOTE 10 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 $1,528,155 and $1,202,692 as of November 30, 2024, 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 three months period ended November 30, 2023, 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 three months period ended November 30, 2023, 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.

 

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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 November 30, 2024, and August 31, 2024, the Company had 27,180,631 and 25,685,591 shares of its common stock issued and outstanding, respectively.

 

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.

 

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Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows:

 

   2024   2023 
   Three Months Ended November 30, 
   2024   2023 
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:

 

   November 30, 2024   August 31, 2024 
Net operating loss carry-forward  $44,000,000   $39,400,000 
Less: valuation allowance   (44,000,000)   (39,400,000)
Net deferred tax asset   -    - 

 

The Company had net operating loss carry forwards for tax purposes of approximately $44,000,000 on November 30, 2024, and approximately $39,400,000 on 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.

 

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.

 

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The following is a summary of ROU asset and operating lease liabilities:

 

   November 30, 2024   August 31, 2024 
Assets:          
ROU asset  $172,672   $199,647 
           
Liabilities:          
Current:          
Operating lease liabilities current  $100,478   $99,445 
Non-current          
Operating lease liabilities non current   79,672    108,891 
Total lease liabilities  $180,150   $208,336 

 

As of November 30, 2024, remaining maturities of lease liabilities were as follows:

 

    Operating lease 
2025  $100,478 
2026   62,873 
2027   16,799 
2028   - 
2029 and thereafter   - 
Total  $180,150 

 

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 November 30, 2024, 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-K.

 

NOTE 15 SUBSEQUENT EVENTS

 

In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to November 30, 2024, to the date these condensed consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these condensed consolidated financial statements.

 

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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.

 

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(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), EvoAirTM 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 EVOTM 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.

 

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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 was $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 was $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 was $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 was 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.

 

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.

 

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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 months ended November 30, 2024, as compared to the three months ended November 30, 2023.

 

Three Months Ended November 30, 2024, versus Three Months November 30, 2023.

 

   Three Months Ended         
   November 30,         
   2024   2023   Changes   % 
Revenue  $51,929   $91,318   $(39,389)   (43)%
Cost of revenue   90,110    100,326    (10,216)   (10)%
Gross loss   (38,181)   (9,008)   (29,173)   (324)%
Operating expenses   4,602,876    1,561,992    3,085,884    203%
Loss from operation   (4,641,057)   (1,526,000)   (3,115,057)   (204)%
Other income   153    1,679    (1,526)   (91)%
Loss from operation before income taxes  $(4,640,904)  $(1,524,321)   (3,116,583)   (204)%

 

Revenue

 

The Group generated revenues of $51,929 in the three months ended November 30, 2024, as compared to $91,318 in the three months ended November 30, 2023, a decrease in revenue of $39,389. This decline was primarily driven by a reduction in sales of our eco-friendly air-conditioning units, particularly our flagship product, EvoAir™, which is a pioneering hybrid air-conditioner designed with a proprietary HECS system.

 

As the first mover in the eco-friendly air-conditioning market, the Group encountered both significant opportunities and challenges during the year. The EvoAir™ air-conditioner, which is either granted a patent or utility model pending, presented unique challenges related to its certifications and testings. Specifically, while working with relevant authorities and organizations to apply for the necessary safety and performance certifications and approvals, the Group encountered difficulties in having our product appropriately categorized within the existing frameworks for conventional air conditioners. In certain cases, the authorities lacked the equipment or resources to conduct the required tests.

 

23 | Page
 

 

Despite these challenges, the Group actively engaged in educating and collaborating with these organizations to resolve compliance and testing issues. A positive outcome of this effort was the recommendation from one of the authorities to apply under a newly established category: ‘Hybrid Air Conditioners.’ However, this process, due to its novelty, was more time-consuming than the typical certification processes for traditional air-conditioning systems.

 

In addition to certification challenges, the adoption of EvoAir™ by corporate clients also experienced delays. While the Group received significant interest from several corporate clients who were impressed with the product’s potential for energy savings and performance, many of them undertook additional studies to evaluate the long-term benefits of EvoAir™. This independent research and assessment by potential customers resulted in extended decision-making timelines.

 

Despite these hurdles, the Group remains optimistic about the long-term potential of EvoAir™. We are steadily building momentum and expanding the product’s reach across various markets, including residential, commercial, and industrial sectors. This is being achieved through the development of strategic distribution channels, project collaborations, and private labelling and licensing models. The Group remains committed to strengthening the traction of EvoAir™ and driving its adoption across diverse market segments, positioning ourselves for future growth in the emerging eco-friendly air-conditioning space.

 

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 November 30, 2024, cost of revenue decreased to $90,110, or 174% of revenue, compared to $100,326 or 110% in the same period in 2023. This decrease was primarily attributed to a decline in sales.

 

The cost of revenue encompasses production costs and purchase of goods. While the cost of revenue as a percentage of revenue is higher due to the fixed nature of certain operational costs, 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.

 

Gross loss

 

For the three months ended November 30, 2024, the Company reported a gross loss of $31,181 or a gross loss margin of 74%, compared to a gross loss of $9,008 or 10% in the same period in 2023. This change was driven by the fixed nature of certain operational costs, which did not scale with the decline in revenue.

 

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 November 30, 2024, operating expenses amounted to $4,602,876, compared to $1,516,992 in the same period in 2023, reflecting an increase of $3,085,884. 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.

 

24 | Page
 

 

Other income

 

Other income for the three months ended November 30, 2024, and 2023 were not material.

 

Loss from operations before income taxes

 

The Company reported a loss from operations before income taxes of $4,640,904 for the three months ended November 30, 2024, compared to $1,524,321 in the corresponding period in 2023.

 

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.

 

Liquidity and Capital Resources

 

Working capital

 

   As of   As of         
   November 30, 2024  

August 31, 2024

   Changes   % 
Current assets  $737,134   $790,752   $(53,618)   (7)%
Current liabilities   2,042,381    1,684,638    357,743    21%
Working capital   (1,305,247)   (893,886)   (411,361)   (46)%

 

As of November 30, 2024, the decrease in current assets was mainly due to the decrease in cash and cash equivalents and inventories.

 

As of November 30, 2024, the increase in current liabilities was mainly due to the increase in amount due to shareholders of $325,463.

 

As of November 30, 2024, our company had a working capital deficit of $1,305,247, compared with $893,886 as of August 31, 2024.

 

Management is actively monitoring the Company’s liquidity position and is evaluating strategic initiatives to enhance working capital, including improving cash flow, optimizing inventory management, and considering various funding alternatives. These efforts are aimed at ensuring the Company’s long-term financial stability and strengthening its ability to support ongoing operations and growth initiatives.

 

Cash flows

 

Three Months Ended November 30, 2024, versus Three Months Ended November 30, 2023

 

   November 30, 2024   November 30, 2023   Changes   % 
Cash flows used in operating activities  $(41,533)  $(103,466)   61,933    60%
Cash flows used in investing activity   -    (107,725)   107,725    100%
Cash flows used in financing activity   (2,346)   (1,972)   

(374

)   

(19

)%
Net changes in cash   (43,879)   (213,163)   

169,284

    

79

%

 

The Company’s cash and cash equivalents stood at $149,732 as of November 30, 2024. Cash used in operating activities for the three months ended November 30, 2024, was $41,533. This resulted primarily from a net loss of $4,640,904 which was offset by depreciation of $29,166, amortization of $902,419, stock-based expense of $3,261,676, decrease in operating lease right-of-use assets of $26,975, decrease in operating leases liabilities of $28,186, decrease in inventories of $50,862, increase in deferred revenue of $10,631, decrease in deposit, prepayment and other receivables of $14,174, increase in accounts receivable of $14,671, decrease in accounts payable and accruals of $41,384, increase in amounts due to shareholders of $325,463, and increase in other payables of $62,246.

 

Cash used in financing activity resulted in payments of hire purchase amounting to $2,346 during the three months ended November 30, 2024.

 

The Company continues to actively manage its cash flow, with a focus on improving liquidity, optimizing working capital, and exploring strategic financing options to support ongoing operations and growth initiatives. These efforts will help ensure the Company’s financial stability and support long-term value creation.

 

25 | Page
 

 

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.

 

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.

 

26 | Page
 

 

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. Actual results could differ materially from these estimates.

 

Going concern

 

The Company’s financial statements as of November 30, 2024, 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 November 30, 2024, and August 31, 2024, the Company had an accumulated deficit of $43,957,258 and $39,401,857 respectively. The Company incurred net loss of $4,640,904 and $1,524,321 for the three months ended November 30, 2024, and November 30, 2023, respectively. The cash used in operating activities was $41,533 for the three months ended November 30, 2024, and $103,466 for the three months ended November 30, 2023, 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 November 30, 2024.

 

Recent accounting pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures. This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses. The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts. This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This standard will be effective for the Company in Fiscal Year 2026 and should be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by Management to have a material impact on the Company’s present or future financial statements.

 

27 | 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 November 30, 2024. 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 November 30, 2024:

 

■ 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 months 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.

 

28 | 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 three-month period ended November 30, 2024

 

ITEM 4. MINE SAFETY DISCLOSURES

 

Not applicable to our Company.

 

ITEM 5. OTHER INFORMATION

 

None.

 

29 | 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*
10.18 OEM Supply Agreement dated December 12, 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

 

30 | 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: January 17, 2025 By: /s/ Low Wai Koon
   

Low Wai Koon

Chairman and Chief Executive Officer

     
Dated: January 17, 2025 By: /s/ Ong Bee Chen
   

Ong Bee Chen

Chief Financial Officer

 

31 | Page

 

Exhibit 31.1

 

Certification of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

 

I, Low Wai Koon, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of EvoAir Holdings Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

  EvoAir Holdings Inc.
     

January 17, 2025

 By: /s/ Low Wai Koon
  Name: Low Wai Koon
  Title: Chairman and Chief Executive Officer

 

 

 

Exhibit 31.2

 

Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).

 

I, Ong Bee Chen, certify that:

 

1. I have reviewed this Quarterly Report on Form 10-Q of EvoAir Holdings Inc.;

 

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

 

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

 

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

 

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

 

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

 

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

 

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

 

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

 

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

 

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

  EvoAir Holdings Inc.
     

January 17, 2025

 By: /s/ Ong Bee Chen
  Name: Ong Bee Chen
  Title: Chief Financial Officer

 

 

 

Exhibit 32.1

 

CERTIFICATION PURSUANT TO

 

18 U.S.C. SECTION 1350,

 

AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of EvoAir Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Low Wai Koon, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

January 17, 2025

 By: /s/ Low Wai Koon
  Name: Low Wai Koon
  Title: President and Chief Executive Officer

 

 

 

 

Exhibit 32.2

 

CERTIFICATION PURSUANT TO

 

18 U.S.C. SECTION 1350,

 

AS ADOPTED PURSUANT TO

 

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

 

In connection with the Quarterly Report of EvoAir Holdings Inc. (the “Company”) on Form 10-Q for the quarter ended November 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ong Bee Chen, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

 

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

 

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

 

January 17, 2025

 By: /s/ Ong Bee Chen
  Name: Ong Bee Chen
  Title: Chief Financial Officer

 

 

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Nov. 30, 2024
Jan. 13, 2025
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Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --08-31  
Entity File Number 333-228161  
Entity Registrant Name EvoAir Holdings Inc.  
Entity Central Index Key 0001700844  
Entity Tax Identification Number 98-1353613  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 31-A2, Jalan 5/32A  
Entity Address, Address Line Two 6 ½ Miles  
Entity Address, Address Line Three Off Jalan  
Entity Address, City or Town Kepong  
Entity Address, Country MY  
Entity Address, Postal Zip Code 52000  
City Area Code +603  
Local Phone Number 6243 3379  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Elected Not To Use the Extended Transition Period false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   27,180,631
v3.24.4
Condensed Consolidated Balance Sheets - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Current assets    
Cash and cash equivalents $ 149,732 $ 152,985
Accounts receivable 77,585 62,914
Inventories 409,185 460,047
Deposit, prepayments and other receivables 100,632 114,806
Total current assets 737,134 790,752
Non-current assets    
Property, plant and equipment, net 306,756 357,778
Operating lease right-of-use assets 172,672 199,647
Deferred offering cost 3,167,640 449,576
Technology-related intangible assets, net 50,578,939 51,481,358
Total non-current assets 54,226,007 52,488,359
TOTAL ASSETS 54,963,141 53,279,111
Current liabilities    
Accounts payable and accruals 226,516 267,900
Other payables 158,077 95,831
Deferred revenue 20,643 10,012
Hire purchase creditor 8,512 8,758
Amounts due to shareholders 1,528,155 1,202,692
Operating lease liability - current 100,478 99,445
Total current liabilities 2,042,381 1,684,638
Non-current liabilities    
Hire purchase creditor 2,220 4,320
Operating lease liabilities 79,672 108,891
Total non-current liabilities 81,892 113,211
TOTAL LIABILITIES 2,124,273 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 November 30, 2024 and August 31, 2024 [1] 27,181 25,686
Additional paid in capital 97,492,063 91,513,818
Accumulated other comprehensive loss (40,990) (48,827)
Accumulated deficit (43,957,258) (39,401,857)
Non-controlling interest (682,128) (607,558)
Total shareholders’ equity 52,838,868 51,481,262
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 54,963,141 $ 53,279,111
[1] Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024.
v3.24.4
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
 3 Months Ended
Sep. 11, 2024
Sep. 09, 2024
Nov. 30, 2024
Aug. 31, 2024
Apr. 12, 2024
Dec. 20, 2021
Dec. 16, 2021
Statement of Financial Position [Abstract]              
Common Stock, Shares Authorized       250,000,000     75,000,000
Common Stock, Par or Stated Value Per Share       $ 0.001 $ 0.001   $ 0.001
Common Stock, Shares, Outstanding     27,180,631 25,685,591   101,779,323  
Reverse stock split 1-for-4 share 1:4 Reverse Stock Split 1:4 Reverse Stock Split, each 4 pre-split        
v3.24.4
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Income Statement [Abstract]    
Revenue $ 51,929 $ 91,318
Cost of revenue 90,110 100,326
Gross loss (38,181) (9,008)
Operating expenses:    
Selling and marketing expenses 9,743 33,003
General and administrative expenses 4,593,133 1,483,989
Total operating expenses 4,602,876 1,516,992
Loss from operation (4,641,057) (1,526,000)
Other income    
Interest income 88 40
Other income 65 1,639
Total other income 153 1,679
Loss from operation before income taxes (4,640,904) (1,524,321)
Income tax expenses
Net loss (4,640,904) (1,524,321)
Less: Net loss attributable to non-controlling interests (85,503) (79,998)
Net loss attributable to equity holders of the Company (4,555,401) (1,444,323)
Other comprehensive income/(loss):    
Foreign currency translation adjustment 18,770 (88,001)
Total comprehensive loss (4,536,631) (1,532,324)
Less: net comprehensive income/(loss) attributable to non-controlling interests 10,933 (2,793)
Net comprehensive loss attributable to equity holders of the Company $ (4,547,564) $ (1,529,531)
Net loss attributable to equity holders of the Company per common share:    
Net loss attributable to equity holders of the Company per common share - Basic $ (0.18) $ (0.06)
Net loss attributable to equity holders of the Company per common share - Diluted $ (0.18) $ (0.06)
Weighted average number of common stock outstanding:    
Weighted average number of common stock outstanding - Basic [1] 25,766,929 25,654,769
Weighted average number of common stock outstanding - Diluted [1] 25,766,929 25,654,769
[1] Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024.
v3.24.4
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical)
 3 Months Ended
Sep. 11, 2024
Sep. 09, 2024
Nov. 30, 2024
Income Statement [Abstract]      
Reverse stock split 1-for-4 share 1:4 Reverse Stock Split 1:4 Reverse Stock Split, each 4 pre-split
v3.24.4
Condensed Consolidated Statement of Changes in Equity (Deficit) (Unaudited) - USD ($)
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
AOCI Attributable to Parent [Member]
Shares to be Issued [Member]
Noncontrolling Interest [Member]
Total
Balance at Aug. 31, 2023 $ 25,578 $ 90,447,874 $ (13,523,266) $ (17,036) $ 1,066,052 $ (148,180) $ 77,851,022
Balance, shares at Aug. 31, 2023 [1] 25,577,734            
Issuance of common stock for cash $ 94 934,504 (934,598)
Issuance of common stock for cash, shares [1] 93,455            
Issuance of common stock for service $ 14 131,440 (131,454)
Issuance of common stock for service, shares [1] 14,402            
Foreign currency translation adjustment (85,208) (2,793) (88,001)
Net loss (1,444,323) (79,998) (1,524,321)
Balance at Nov. 30, 2023 $ 25,686 91,513,818 (14,967,589) (102,244) (230,971) 76,238,700
Balance, shares at Nov. 30, 2023 [1] 25,685,591            
Balance at Aug. 31, 2024 $ 25,686 91,513,818 (39,401,857) (48,827)   (607,558) 51,481,262
Balance, shares at Aug. 31, 2024 25,685,591            
Foreign currency translation adjustment 7,837   10,933 18,770
Net loss (4,555,401)   (85,503) (4,640,904)
Issuance of common stock for service $ 1,495 5,978,245   5,979,740
Issuance of common stock for service, shares 1,494,935            
Fraction shares issued due to reverse stock split  
Fraction shares issued due to reverse stock split, shares 105            
Balance at Nov. 30, 2024 $ 27,181 $ 97,492,063 $ (43,957,258) $ (40,990)   $ (682,128) $ 52,838,868
Balance, shares at Nov. 30, 2024 27,180,631            
[1] Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024
v3.24.4
Condensed Consolidated Statement of Changes in Equity (Deficit) (Unaudited) (Parenthetical)
 3 Months Ended
Sep. 11, 2024
Sep. 09, 2024
Nov. 30, 2024
Statement of Stockholders' Equity [Abstract]      
Reverse stock split 1-for-4 share 1:4 Reverse Stock Split 1:4 Reverse Stock Split, each 4 pre-split
v3.24.4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Cash flows from operating activities    
Net loss $ (4,640,904) $ (1,524,321)
Adjustments for non-cash income and expenses:    
Depreciation 29,166 95,369
Amortization 902,419 1,039,347
Stock based expense 3,261,676
Changes in operating assets and liabilities:    
Increase in accounts receivables (14,671) (7,490)
Decrease/(increase) in inventories 50,862 (54,528)
Decrease in deposits, prepayments, and advances to suppliers 14,174 122,057
Decrease in operating lease right-of-use assets 26,975 17,590
(Decrease) /increase in accounts payable and accruals (41,384) 118,749
Increase/(decrease) in deferred revenue 10,631 (49,986)
Decrease in operating lease liabilities (28,186) (18,518)
Increase/(decrease) in other payables 62,246 (8,387)
Increase in amounts due to shareholders 325,463 166,652
Net cash used in operations (41,533) (103,466)
Cash flows from investing activity    
Purchase of property, plant and equipment (107,725)
Net cash used in investing activity (107,725)
Cash flows from financing activity    
Payments of hire purchase (2,346) (1,972)
Net cash used in financing activity (2,346) (1,972)
Net decrease in cash and cash equivalents (43,879) (213,163)
Effect of exchange rate changes 40,626 (88,001)
Cash and cash equivalents at start of period 152,985 779,049
Cash and cash equivalents at end of period 149,732 477,885
Supplemental disclosure of non-cash investing and financing information :    
Common stock issued for service in relation to Initial public offering $ 2,718,064
v3.24.4
ORGANIZATION AND BUSINESS OPERATIONS
 3 Months Ended
Nov. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
ORGANIZATION AND BUSINESS OPERATIONS

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 vaue 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), evoairTM 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 EVOTM 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.

 

 

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.

 

 

  ● 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.

 

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:

 

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.

 
v3.24.4
CHANGE OF CONTROL
 3 Months Ended
Nov. 30, 2024
Change Of Control  
CHANGE OF CONTROL

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.

 

 
v3.24.4
GOING CONCERN
 3 Months Ended
Nov. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
GOING CONCERN

NOTE 3 – GOING CONCERN

 

The Company’s financial statements as of November 30, 2024, 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 November 30, 2024, and August 31, 2024, the Company had an accumulated deficit of $43,957,258 and $39,401,857 respectively. The Company incurred net loss of $4,640,904 and $1,524,321 for the three months ended November 30, 2024, and November 30, 2023, respectively. The cash used in operating activities was $41,533 for the three months ended November 30, 2024, and $103,466 for the three months ended November 30, 2023, 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.

 
v3.24.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 3 Months Ended
Nov. 30, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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 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. Actual results could differ materially from these estimates.

 

Fiscal Year End

 

The Company operates on a fiscal yearly 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 a high credit quality financial institution.

 

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.

 

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 November 30, 2024, 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 expected credit loss 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 November 30, 2024 and August 31, 2024, our accounts receivable amounted to $77,585 and $62,914, respectively, with no allowance for expected credit loss.

 

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. 

 

    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.

 

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 $9,293 recognized as revenue for three months ended November 30, 2024. The Company recorded $20,643 deferred revenue as of November 30, 2024.

 

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 November 30, 2024, 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 November 30, 2024.

 

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.

 

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 November 30, 2024, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures. This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses. The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts. This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This standard will be effective for the Company in Fiscal Year 2026 and should be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by Management to have a material impact on the Company’s present or future financial statements.

 
v3.24.4
INVENTORIES
 3 Months Ended
Nov. 30, 2024
Inventory Disclosure [Abstract]  
INVENTORIES

NOTE 5 INVENTORIES

 

Inventories consist of the following:

 

   November 30, 2024   August 31, 2024 
         
Finished goods  $259,919   $334,917 
Raw materials and supplies   149,266    125,130 
           
Total  $409,185   $460,047 

 
v3.24.4
DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES
 3 Months Ended
Nov. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES

NOTE 6 DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES

 

Deposit, prepayments, and other receivables consists of the following:

 

   November 30, 2024   August 31, 2024 
         
Deposits and Prepayments  $16,925   $33,406 
Other receivables (Advances to suppliers)   83,707    81,400 
           
Total  $100,632   $114,806 

 
v3.24.4
PROPERTY, PLANT AND EQUIPMENT, NET
 3 Months Ended
Nov. 30, 2024
Property, Plant and Equipment [Abstract]  
PROPERTY, PLANT AND EQUIPMENT, NET

NOTE 7 PROPERTY, PLANT AND EQUIPMENT, NET

 

Property, plant, and equipment consist of the following:

 

   November 30, 2024   August 31, 2024 
Plant and machineries  $587,273   $601,405 
Office equipment   59,836    61,143 
Vehicles   80,905    83,239 
Furniture and equipment   23,265    23,936 
Renovation   118,288    121,700 
Property, plant and equipment gross   869,567    891,423 
Less: Accumulated depreciation   (562,811)   (533,645)
Property, plant and equipment, net  $306,756   $357,778 

 

Depreciation expense for the three months ended November 30, 2024, was $29,166. Depreciation expense for the three months ended November 30, 2023, was $95,369.

 

 
v3.24.4
INTANGIBLE ASSETS
 3 Months Ended
Nov. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
INTANGIBLE ASSETS

NOTE 8 – INTANGIBLE ASSETS

 

The below table summarizes the identifiable intangible assets as of November 30, 2024, and August 31, 2023: 

 

   November 30, 2024   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   (11,988,788)   (11,086,369)
Intangible assets, net  $50,578,939   $51,481,358 

 

Amortization expenses for intangible assets for the three months ended November 30, 2024 was $902,419. Amortization expenses for intangible assets for the three months ended November 30, 2023 was $1,039,347.

 
v3.24.4
ACCOUNTS PAYABLE, ACCRUALS, AND OTHER PAYABLES
 3 Months Ended
Nov. 30, 2024
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE, ACCRUALS, AND OTHER PAYABLES

NOTE 9 ACCOUNTS PAYABLE, ACCRUALS, AND OTHER PAYABLES

 

Accounts payable, accruals, and other payables consist of the following:

 

   November 30, 2024   August 31, 2024 
         
Accounts payable  $113,521   $154,854 
Accruals   112,995    113,046 
Other payables   158,077    95,831 
Total  $384,593   $363,731 

 

As of November 30, 2024, accruals and other payables primarily consist of professional fees and staff claims.

 
v3.24.4
AMOUNTS DUE TO SHAREHOLDERS
 3 Months Ended
Nov. 30, 2024
Related Party Transactions [Abstract]  
AMOUNTS DUE TO SHAREHOLDERS

NOTE 10 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 $1,528,155 and $1,202,692 as of November 30, 2024, and August 31, 2024, respectively.

 
v3.24.4
STOCKHOLDERS’ EQUITY
 3 Months Ended
Nov. 30, 2024
Equity [Abstract]  
STOCKHOLDERS’ EQUITY

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 three months period ended November 30, 2023, 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 three months period ended November 30, 2023, 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 November 30, 2024, and August 31, 2024, the Company had 27,180,631 and 25,685,591 shares of its common stock issued and outstanding, respectively.

 
v3.24.4
INCOME TAXES
 3 Months Ended
Nov. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

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:

 

   2024   2023 
   Three Months Ended November 30, 
   2024   2023 
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:

 

   November 30, 2024   August 31, 2024 
Net operating loss carry-forward  $44,000,000   $39,400,000 
Less: valuation allowance   (44,000,000)   (39,400,000)
Net deferred tax asset   -    - 

 

The Company had net operating loss carry forwards for tax purposes of approximately $44,000,000 on November 30, 2024, and approximately $39,400,000 on 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.

 
v3.24.4
ROU ASSET AND LEASES
 3 Months Ended
Nov. 30, 2024
Rou Asset And Leases  
ROU ASSET AND LEASES

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:

 

   November 30, 2024   August 31, 2024 
Assets:          
ROU asset  $172,672   $199,647 
           
Liabilities:          
Current:          
Operating lease liabilities current  $100,478   $99,445 
Non-current          
Operating lease liabilities non current   79,672    108,891 
Total lease liabilities  $180,150   $208,336 

 

As of November 30, 2024, remaining maturities of lease liabilities were as follows:

 

    Operating lease 
2025  $100,478 
2026   62,873 
2027   16,799 
2028   - 
2029 and thereafter   - 
Total  $180,150 

 
v3.24.4
COMMITMENTS AND CONTINGENCIES
 3 Months Ended
Nov. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

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 November 30, 2024, 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-K.

 
v3.24.4
SUBSEQUENT EVENTS
 3 Months Ended
Nov. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

NOTE 15 SUBSEQUENT EVENTS

 

In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to November 30, 2024, to the date these condensed consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these condensed consolidated financial statements.
v3.24.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 3 Months Ended
Nov. 30, 2024
Accounting Policies [Abstract]  
Basis of presentation and principles of consolidation:

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

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 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. Actual results could differ materially from these estimates.

 
Fiscal Year End

Fiscal Year End

 

The Company operates on a fiscal yearly basis with the fiscal year ending on August 31.

 
Cash and Cash Equivalents

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 a high credit quality financial institution.

 

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.

 
Comprehensive Gain or Loss

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 November 30, 2024, 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

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

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 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 expected credit loss 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 November 30, 2024 and August 31, 2024, our accounts receivable amounted to $77,585 and $62,914, respectively, with no allowance for expected credit loss.

 
Inventories

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

 

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

 

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. 

 

    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

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 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.

 

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

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 $9,293 recognized as revenue for three months ended November 30, 2024. The Company recorded $20,643 deferred revenue as of November 30, 2024.

 
Deferred Offering Costs

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 November 30, 2024, 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

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 November 30, 2024.

 

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

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.

 

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

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

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 November 30, 2024, the Company has no potentially dilutive securities, such as options or warrants, currently issued and outstanding.

 
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

In November 2023, the FASB issued ASU 2023-07, Improvement to Reportable Segment Disclosures. This ASU aims to improve segment disclosures through enhanced disclosures about significant segment expenses. The standard requires disclosure of significant expense categories and amounts for such expenses, including those segment expenses that are regularly provided to the chief operating decision maker, easily computable from information that is regularly provided, or significant expenses that are expressed in a form other than actual amounts. This standard will be effective for the Company in Fiscal Year 2025 and is required to be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, a final standard on improvements to income tax disclosures which applies to all entities subject to income taxes. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid. The standard is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. This standard will be effective for the Company in Fiscal Year 2026 and should be applied prospectively. The Company is currently evaluating the impact of the additional disclosure requirements on the Company’s consolidated financial statements.

 

 

Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by Management to have a material impact on the Company’s present or future financial statements.
v3.24.4
ORGANIZATION AND BUSINESS OPERATIONS (Tables)
 3 Months Ended
Nov. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
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%
v3.24.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 3 Months Ended
Nov. 30, 2024
Accounting Policies [Abstract]  
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  
v3.24.4
INVENTORIES (Tables)
 3 Months Ended
Nov. 30, 2024
Inventory Disclosure [Abstract]  
SCHEDULE OF INVENTORIES

Inventories consist of the following:

 

   November 30, 2024   August 31, 2024 
         
Finished goods  $259,919   $334,917 
Raw materials and supplies   149,266    125,130 
           
Total  $409,185   $460,047 
v3.24.4
DEPOSIT, PREPAYMENTS AND OTHER RECEIVABLES (Tables)
 3 Months Ended
Nov. 30, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
SCHEDULE OF DEPOSIT PREPAYMENTS AND OTHER RECEIVABLES

Deposit, prepayments, and other receivables consists of the following:

 

   November 30, 2024   August 31, 2024 
         
Deposits and Prepayments  $16,925   $33,406 
Other receivables (Advances to suppliers)   83,707    81,400 
           
Total  $100,632   $114,806 
v3.24.4
PROPERTY, PLANT AND EQUIPMENT, NET (Tables)
 3 Months Ended
Nov. 30, 2024
Property, Plant and Equipment [Abstract]  
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

Property, plant, and equipment consist of the following:

 

   November 30, 2024   August 31, 2024 
Plant and machineries  $587,273   $601,405 
Office equipment   59,836    61,143 
Vehicles   80,905    83,239 
Furniture and equipment   23,265    23,936 
Renovation   118,288    121,700 
Property, plant and equipment gross   869,567    891,423 
Less: Accumulated depreciation   (562,811)   (533,645)
Property, plant and equipment, net  $306,756   $357,778 
v3.24.4
INTANGIBLE ASSETS (Tables)
 3 Months Ended
Nov. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]  
SUMMARY OF INTANGIBLE ASSETS

The below table summarizes the identifiable intangible assets as of November 30, 2024, and August 31, 2023: 

 

   November 30, 2024   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   (11,988,788)   (11,086,369)
Intangible assets, net  $50,578,939   $51,481,358 
v3.24.4
ACCOUNTS PAYABLE, ACCRUALS, AND OTHER PAYABLES (Tables)
 3 Months Ended
Nov. 30, 2024
Payables and Accruals [Abstract]  
SCHEDULE OF ACCOUNTS PAYABLES ACCRUALS AND OTHER PAYABLE

Accounts payable, accruals, and other payables consist of the following:

 

   November 30, 2024   August 31, 2024 
         
Accounts payable  $113,521   $154,854 
Accruals   112,995    113,046 
Other payables   158,077    95,831 
Total  $384,593   $363,731 
v3.24.4
INCOME TAXES (Tables)
 3 Months Ended
Nov. 30, 2024
Income Tax Disclosure [Abstract]  
SCHEDULE OF RECONCILIATION BETWEEN THE STATUTORY TAX RATE AND THE ACTUAL PROVISION

Reconciliation between the statutory tax rate to income before income taxes and the actual provision for income taxes is as follows:

 

   2024   2023 
   Three Months Ended November 30, 
   2024   2023 
US Statutory rate   21%   21%
Effect of reconciling items for tax purposes   (21)%   (21)%
           
Effective income tax rate   -%   -%
SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS

The components of net deferred tax assets are as follows:

 

   November 30, 2024   August 31, 2024 
Net operating loss carry-forward  $44,000,000   $39,400,000 
Less: valuation allowance   (44,000,000)   (39,400,000)
Net deferred tax asset   -    - 
v3.24.4
ROU ASSET AND LEASES (Tables)
 3 Months Ended
Nov. 30, 2024
Rou Asset And Leases  
SUMMARY OF ROU ASSET AND OPERATING LEASE LIABILITIES

The following is a summary of ROU asset and operating lease liabilities:

 

   November 30, 2024   August 31, 2024 
Assets:          
ROU asset  $172,672   $199,647 
           
Liabilities:          
Current:          
Operating lease liabilities current  $100,478   $99,445 
Non-current          
Operating lease liabilities non current   79,672    108,891 
Total lease liabilities  $180,150   $208,336 
SCHEDULE OF MATURITIES OF LEASE LIABILITIES

As of November 30, 2024, remaining maturities of lease liabilities were as follows:

 

    Operating lease 
2025  $100,478 
2026   62,873 
2027   16,799 
2028   - 
2029 and thereafter   - 
Total  $180,150 
v3.24.4
SUMMARY OF CONSOLIDATED SUBSIDIARIES (Details)
Nov. 30, 2024
EvoAir International Limited (British Virgin Islands) [Member]  
Ownership percentage 100.00%
WKL Eco Earth Holdings Pte Ltd (Singapore) [Member] | EvoAir International Limited [Member]  
Ownership percentage 100.00%
WKL Eco Earth Sdn Bhd (Malaysia) [Member] | WKL Eco Earth Holdings Pte Ltd [Member]  
Ownership percentage 100.00%
WKL Green Energy Sdn Bhd (Malaysia) [Member] | WKL Eco Earth Holdings Pte Ltd [Member]  
Ownership percentage 100.00%
EvoAir Manufacturing (M) Sdn Bhd (Malaysia) [Member] | WKL Eco Earth Holdings Pte Ltd [Member]  
Ownership percentage 67.50%
WKL EcoEarth Indochina Co Ltd (Cambodia) [Member] | WKL Eco Earth Holdings Pte Ltd [Member]  
Ownership percentage 55.00%
WKL Guanzhe Green Technology Guangzhou Co Ltd (China) [Member] | WKL Eco Earth Holdings Pte Ltd [Member]  
Ownership percentage 62.50% [1]
Evo Air Marketing (M) Sdn Bhd (Malaysia) [Member] | EvoAir Manufacturing (M) Sdn Bhd [Member]  
Ownership percentage 100.00%
[1] Shareholding of WKL Guanzhe Green Technology Guangzhou Co Ltd (China) has increased from 55% to 62.5% on August 14, 2024.
v3.24.4
SUMMARY OF CONSOLIDATED SUBSIDIARIES (Details) (Parenthetical) - WKL Guanzhe Green Technology Guangzhou Co Ltd (China) [Member]
Aug. 14, 2024
Minimum [Member]  
Shareholding percentage 55.00%
Maximum [Member]  
Shareholding percentage 62.50%
v3.24.4
ORGANIZATION AND BUSINESS OPERATIONS (Details Narrative) - USD ($)
 3 Months Ended
Nov. 25, 2024
Sep. 11, 2024
Sep. 09, 2024
Nov. 21, 2023
Sep. 07, 2023
Jul. 13, 2023
Feb. 20, 2023
Oct. 25, 2022
Jun. 03, 2022
Feb. 15, 2022
Dec. 20, 2021
Nov. 30, 2024
Nov. 30, 2023
Aug. 31, 2024
Apr. 12, 2024
Dec. 16, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Common stock, par value                           $ 0.001 $ 0.001 $ 0.001
Common stock, shares issued     25,685,591               101,779,323 27,180,631   25,685,591    
Common stock, shares outstanding                     101,779,323 27,180,631   25,685,591    
Reverse stock split description   1-for-4 share 1:4 Reverse Stock Split                 1:4 Reverse Stock Split, each 4 pre-split        
Consulting Services [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares 815,419                              
Percentage of consideration for services 3.00%                              
Ms. Ang Lee Kim Jane [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares                   74,074            
Purchase price                   $ 2.50            
Gross proceeds                   $ 185,185            
Ms. Ang Lee Kim Jane [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares                   6,000,000            
Mr. Wong Hon Wai [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares                 5,000              
Purchase price                 $ 2.50              
Gross proceeds                 $ 12,500              
Mr. Wong Hon Wai [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares                 6,000,000              
Regulation S Investors [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares       8,658 365,164 250,132 57,783                  
Purchase price       $ 2.50 $ 2.50 $ 2.50 $ 2.50                  
Eleven Investors [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Purchase price             $ 2.50                  
Gross proceeds             $ 144,443                  
Eleven Investors [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares             6,000,000                  
31 Investors [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Purchase price           $ 2.50                    
Gross proceeds           $ 625,330                    
31 Investors [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares           6,000,000                    
71 Investors [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Purchase price         $ 2.50                      
Gross proceeds         $ 912,889                      
71 Investors [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares         6,000,000                      
Wong Chun Shoong [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Purchase price       $ 2.50                        
Gross proceeds       $ 21,645                        
Wong Chun Shoong [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares       6,000,000                        
Common Stock [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Shares service issued [1]                         14,402      
Common stock, shares issued                           102,742,362    
Issuance of shares [1]                         93,455      
Investor [Member] | Common Stock [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares       52,107                        
Artisan Creative Studio [Member] | Common Stock [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Shares service issued       5,500                        
Allotment Transactions [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Common stock, shares issued                     98,809,323          
Round 2 Stockholders Offerings [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares                       6,000,000        
Purchase price                       $ 2.50        
IPO [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares 679,516                              
Percentage of consideration for services 2.50%                              
WKL Global Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     67.34%          
Shares service issued                     2,000,000          
Share Transfer Agreement [Member] | Low Wai Koon [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Restricted stock award shares                     2,000,000          
Ownership percentage                     67.34%          
Sale of stock price per share                     $ 100          
Securities Purchase Agreement [Member] | Low Wai Koon [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Restricted stock award shares                     2,000,000          
Common stock, par value                     $ 0.001          
Ownership percentage                     67.34%          
Sale of stock price per share                     $ 100          
Share Exchange Agreement [Member] | Chan Kok Wei [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     0.02%          
Issuance of shares                     24,000          
Share Exchange Agreement [Member] | Chan Kok Wei [Member] | WKL Global Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     50.00%          
Share Exchange Agreement [Member] | Ong Bee Chen [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     0.01%          
Issuance of shares                     6,000          
Share Exchange Agreement [Member] | Ong Bee Chen [Member] | WKL Global Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     50.00%          
Share Exchange Agreement One [Member] | WKL Eco Earth Holdings[Member] | WKL Global Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     0.05%          
Issuance of shares                     49,320          
Share Exchange Agreement One [Member] | WKL Eco Earth Holdings[Member] | Allegro Investment Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     0.009%          
Issuance of shares                     8,280          
Share Exchange Agreement One [Member] | WKL Eco Earth Holdings[Member] | WKLEE Sellers [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     0.014%          
Issuance of shares                     14,400          
Investment Exchange Agreement [Member] | Evo Air Group [Member] | Tan Soon Hock [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     6.91%          
Issuance of shares                     7,037,762          
Investment Exchange Agreement [Member] | Evo Air Group [Member] | Ivan Oh Joon Wern [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     2.48%          
Issuance of shares                     2,520,000          
Investment Exchange Agreement [Member] | Evo Air Group [Member] | Relevant Interest Holders [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     5.90%          
Issuance of shares                     6,001,794          
IP Assignment [Member] | WKL Eco Earth Holdings[Member] | WKL Global Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     62.25%          
Issuance of shares                     63,362,756          
IP Assignment [Member] | WKL Eco Earth Holdings[Member] | Allegro Investment Limited [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     14.05%          
Issuance of shares                     14,297,259          
IP Assignment [Member] | WKL Edo Earth Holdindings [Member] | Certain Nominees [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Ownership percentage                     5.39%          
Issuance of shares                     5,487,752          
Share Subscription Agreement [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Purchase price               $ 2.50                
Gross proceeds               $ 361,553                
Share Subscription Agreement [Member] | Maximum [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares               6,000,000                
Share Subscription Agreement [Member] | Regulation S Investors [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares               129,621                
Purchase price               $ 2.50                
Share Subscription Agreement [Member] | Regulation D Investors [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Issuance of shares               15,000                
Purchase price               $ 2.50                
EvoAir International Limited [Member] | Share Transfer Agreement [Member]                                
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]                                
Consideration price                     $ 100          
[1] Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024
v3.24.4
CHANGE OF CONTROL (Details Narrative)
Dec. 20, 2021
$ / shares
shares
WKL Global Limited [Member]  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Ownership percentage 67.34%
Shares issued for services 2,000,000
Share Transfer Agreement [Member] | Low Wai Koon [Member]  
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]  
Number of shares restricted 2,000,000
Ownership percentage 67.34%
Sale of stock price per share | $ / shares $ 100
v3.24.4
GOING CONCERN (Details Narrative) - USD ($)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Aug. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]      
Retained Earnings (Accumulated Deficit) $ 43,957,258   $ 39,401,857
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest 4,640,904 $ 1,524,321  
Net Cash Provided by (Used in) Operating Activities $ 41,533 $ 103,466  
v3.24.4
SUMMARY OF ESTIMATED USEFUL LIVES OF ASSETS (Details)
Nov. 30, 2024
Property, Plant and Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Office Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Vehicles [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 5 years
Furniture and Fixtures [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 10 years
Renovation [Member]  
Property, Plant and Equipment [Line Items]  
Estimated useful life 10 years
v3.24.4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 3 Months Ended
Nov. 30, 2024
Aug. 31, 2024
Property, Plant and Equipment [Line Items]    
Accounts receivable $ 77,585 $ 62,914
Deferred revenue 20,643 10,012
Revenue 9,293  
Deferred offering costs $ 3,167,640 $ 449,576
Trademarks [Member]    
Property, Plant and Equipment [Line Items]    
Estimated useful life 20 years  
Property, Plant and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Useful life 5 years  
Property, Plant and Equipment [Member] | Minimum [Member]    
Property, Plant and Equipment [Line Items]    
Useful life 5 years  
Property, Plant and Equipment [Member] | Maximum [Member]    
Property, Plant and Equipment [Line Items]    
Useful life 10 years  
EvoAir Manufacturing (M) Sdn Bhd [Member]    
Property, Plant and Equipment [Line Items]    
Ownership percentage 67.50%  
EvoAir Marketing Sdn Bhd [Member]    
Property, Plant and Equipment [Line Items]    
Ownership percentage 100.00%  
WKL EcoEarth Indochina Co Ltd [Member]    
Property, Plant and Equipment [Line Items]    
Ownership percentage 55.00%  
WKL Guanzhe Green Technology Guangzhou Co Ltd [Member]    
Property, Plant and Equipment [Line Items]    
Ownership percentage 62.50%  
v3.24.4
SCHEDULE OF INVENTORIES (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Inventory Disclosure [Abstract]    
Finished goods $ 259,919 $ 334,917
Raw materials and supplies 149,266 125,130
Total $ 409,185 $ 460,047
v3.24.4
SCHEDULE OF DEPOSIT PREPAYMENTS AND OTHER RECEIVABLES (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Deposits and Prepayments $ 16,925 $ 33,406
Other receivables (Advances to suppliers) 83,707 81,400
Total $ 100,632 $ 114,806
v3.24.4
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Property, Plant and Equipment [Line Items]    
Property, plant and equipment gross $ 869,567 $ 891,423
Less: Accumulated depreciation (562,811) (533,645)
Property, plant and equipment, net 306,756 357,778
Property, Plant and Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment gross 587,273 601,405
Office Equipment [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment gross 59,836 61,143
Vehicles [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment gross 80,905 83,239
Furniture and Fixtures [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment gross 23,265 23,936
Renovation [Member]    
Property, Plant and Equipment [Line Items]    
Property, plant and equipment gross $ 118,288 $ 121,700
v3.24.4
PROPERTY, PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Property, Plant and Equipment [Abstract]    
Depreciation $ 29,166 $ 95,369
v3.24.4
SUMMARY OF INTANGIBLE ASSETS (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Finite-Lived Intangible Assets [Line Items]    
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 (11,988,788) (11,086,369)
Intangible assets, net 50,578,939 51,481,358
Portable Air Cooler [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite- lived intangible assets, gross 27,438,763 27,438,763
Condensing Unit [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite- lived intangible assets, gross $ 55,709,004 $ 55,709,004
v3.24.4
INTANGIBLE ASSETS (Details Narrative) - USD ($)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]    
Amortization expense $ 902,419 $ 1,039,347
v3.24.4
SCHEDULE OF ACCOUNTS PAYABLES ACCRUALS AND OTHER PAYABLE (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Payables and Accruals [Abstract]    
Accounts payable $ 113,521 $ 154,854
Accruals 112,995 113,046
Other payables 158,077 95,831
Total $ 384,593 $ 363,731
v3.24.4
AMOUNTS DUE TO SHAREHOLDERS (Details Narrative) - USD ($)
 3 Months Ended
Nov. 30, 2024
Aug. 31, 2024
Related Party Transactions [Abstract]    
Amount 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  
Due to related parties $ 1,528,155 $ 1,202,692
v3.24.4
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($)
 3 Months Ended 12 Months Ended
Nov. 25, 2024
Sep. 11, 2024
Sep. 09, 2024
Nov. 21, 2023
Nov. 30, 2024
Nov. 30, 2023
Aug. 31, 2023
Aug. 31, 2024
Apr. 12, 2024
Dec. 20, 2021
Dec. 16, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Common stock, shares authorized               250,000,000     75,000,000
Common stock, par value               $ 0.001 $ 0.001   $ 0.001
Reverse stock split description   1-for-4 share 1:4 Reverse Stock Split   1:4 Reverse Stock Split, each 4 pre-split            
Common stock, shares issued     25,685,591   27,180,631     25,685,591   101,779,323  
Common stock, shares outstanding         27,180,631     25,685,591   101,779,323  
Consulting Services [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Issuance of shares 815,419                    
Percentage of consideration for services 3.00%                    
Fifteen Referral Agents [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Issuance of shares           52,107          
Two Individuals [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Issuance of common stock for service, shares       5,500              
IPO [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Issuance of shares 679,516                    
Percentage of consideration for services 2.50%                    
Common Stock [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Common stock, shares authorized                     1,000,000,000
Issuance of shares [1]           93,455          
Issuance of common stock for service, shares [1]           14,402          
Common stock, shares issued               102,742,362      
Common Stock [Member] | Series of Offerings [Member]                      
Accumulated Other Comprehensive Income (Loss) [Line Items]                      
Issuance of shares           373,822          
Shares issued price per share         $ 2.50            
Gross proceeds from common stock             $ 934,534        
[1] Retroactively restated to reflect 1-for-4 share consolidation effective on September 11, 2024
v3.24.4
SCHEDULE OF RECONCILIATION BETWEEN THE STATUTORY TAX RATE AND THE ACTUAL PROVISION (Details)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Income Tax Disclosure [Abstract]    
US Statutory rate 21.00% 21.00%
Effect of reconciling items for tax purposes (21.00%) (21.00%)
Effective income tax rate
v3.24.4
SCHEDULE OF COMPONENTS OF NET DEFERRED TAX ASSETS (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Income Tax Disclosure [Abstract]    
Net operating loss carry-forward $ 44,000,000 $ 39,400,000
Less: valuation allowance (44,000,000) (39,400,000)
Net deferred tax asset
v3.24.4
INCOME TAXES (Details Narrative) - USD ($)
 3 Months Ended
Nov. 30, 2024
Nov. 30, 2023
Aug. 31, 2024
Income tax rate percentage 21.00% 21.00%  
Operating Loss Carryforwards $ 44,000,000   $ 39,400,000
SINGAPORE      
Income tax rate percentage 17.00%    
MALAYSIA      
Income tax rate percentage 24.00%    
MALAYSIA | Evo Air Marketing (M) Sdn Bhd (Malaysia) [Member]      
Equity method investment, ownership percentage 100.00%    
CAMBODIA      
Income tax rate percentage 20.00%    
CHINA | WKL Guanzhe Green Technology Guangzhou Co Ltd (China) [Member]      
Income tax rate percentage 25.00%    
v3.24.4
SUMMARY OF ROU ASSET AND OPERATING LEASE LIABILITIES (Details) - USD ($)
Nov. 30, 2024
Aug. 31, 2024
Assets:    
ROU asset $ 172,672 $ 199,647
Liabilities:    
Operating lease liabilities current 100,478 99,445
Operating lease liabilities non current 79,672 108,891
Total lease liabilities $ 180,150 $ 208,336
v3.24.4
SCHEDULE OF MATURITIES OF LEASE LIABILITIES (Details)
Aug. 31, 2024
USD ($)
Rou Asset And Leases  
2025 $ 100,478
2026 62,873
2027 16,799
2028
2029 and thereafter
Total $ 180,150
v3.24.4
ROU ASSET AND LEASES (Details Narrative) - USD ($)
 12 Months Ended
Aug. 31, 2023
Nov. 30, 2024
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]    
Estimated incremental borrowing rate   10.00%
Lease Termination Agreement [Member]    
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]    
Gain on lease $ 14,890  
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