EvoAir Holdings Inc. - Quarter Report: 2021 November (Form 10-Q)

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

Mark One

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2021

☐ 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

UNEX HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Unex 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. YES ☐ NO ☒

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:

UNEX HOLDINGS INC.

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

UNEX HOLDINGS INC.

UNAUDITED CONDENSED BALANCE SHEETS

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

AS OF NOVEMBER 30, 2021 AND AUGUST 31, 2021

The accompanying notes are an integral part of these unaudited condensed financial statements.

UNEX HOLDINGS INC.

UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

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

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020

The accompanying notes are an integral part of these unaudited condensed financial statements.

UNEX HOLDINGS INC.

UNAUDITED CONDENSED STATEMENT OF CHANGES IN EQUITY (DEFICIT)

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

FOR THE MONTHS ENDED   NOVEMBER 30, 2021 AND 2020

The accompanying notes are an integral part of these unaudited condensed financial statements.

UNEX HOLDINGS INC.

UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

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

FOR THE THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020

The accompanying notes are an integral part of these unaudited condensed financial statements.

UNEX HOLDINGS INC.

NOTES TO THE FINANCIAL STATEMENTS

FOR THREE MONTHS ENDED NOVEMBER 30, 2021 AND 2020

NOTE 1 – ORGANIZATION AND BUSINESS

UNEX HOLDINGS INC. (the “Company” or “Unex”) is a corporation established under the corporation laws in the State of Nevada on February 17, 2017. The Company has adopted August 31 fiscal year end.

The Company was formed to provide geodesy services, and we are still in the development stage. Upon completion of the Transactions (defined in Note 7), the Company will be principally involved in the research and development, manufacturing sale and marketing of heating, ventilation and air conditioning (“HVAC”) products.

NOTE 2 – GOING CONCERN

The Company’s financial statements as of November 30, 2021, is prepared using generally accepted accounting principles in the United States of America 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 an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company incurred net loss of $3,500 and $5,773 for three months ended November 30, 2021 and 2020, respectively. As of November 30, 2021 and August 31, 2021, the Company recorded net current liability of $57,134 and $53,634, respectively, and stockholders’ deficit of $57,134 and $53,634, respectively. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

With the injection of a viable business into the Company (“New Business”) contemplated under the Transaction (defined in Note 7), the Management believes that the actions to be taken by the new Management to further implement the business plans for the New Business including expansion in product offerings, geographical expansion, generate revenue through expansion of revenue streams and customer base (retail, commercial and industrial as well as private label and licensing clientele), improvement of profitability by achieving economies of scale provide the opportunity for the Company to continue as a going concern. In addition, the Company is also working on raising additional funding to finance the operations as well as business expansion.

Our ability to continue as a going concern is dependent upon our capability to further implement our business plan and generate revenues. These 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 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The accompanying unaudited condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) set forth in Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited condensed results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read along with the financial statements of the Company for the period ended August 31, 2021 and notes thereto contained in the Company’s Form 10-K.

Use of Estimates

Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. Actual results and outcomes may differ from management’s estimates and assumptions.

Income Taxes

The Company follows the liability method of accounting for income taxes. Under this method, deferred income tax assets and liabilities are recognized for the estimated tax consequences attributable to differences between the financial statement carrying values and their respective income tax basis (temporary differences). A valuation allowance related to a deferred tax asset is recorded when it is more likely than not that some portion of the deferred tax asset will not be realized. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Property and Equipment Depreciation Policy

Property and equipment are stated at cost and depreciated on the straight-line method over the estimated life of the asset, which is 3 years.

Recently issued Accounting Pronouncements

There were various accounting standards and interpretations issued recently, none of which are expected to a have a material impact on our financial position, operations or cash flows.

Fair Value Measurements

The Company adopted the provisions of ASC Topic 820, “Fair Value Measurements and Disclosures”, which defines fair value as used in numerous accounting pronouncements, establishes a framework for measuring fair value and expands disclosure of fair value measurements.

The estimated fair value of certain financial instruments, including cash and cash equivalents are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.

ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1 — quoted prices in active markets for identical assets or liabilities

Level 2 — quoted prices for similar assets and liabilities in active markets or inputs that are observable

Level 3 — inputs that are unobservable (for example cash flow modeling inputs based on assumptions)

The Company has no assets or liabilities valued at fair value on a recurring basis.

NOTE 4 – COMMON STOCK

On December 16, 2021, the Company has 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.

As of November 30, 2021 and August 31, 2021, the Company had 2,970,000 shares issued and outstanding.

NOTE 5 – RELATED PARTY TRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by officers, directors, or shareholders. Amounts represent advances or amounts paid in satisfaction of liabilities. The advances are considered temporary in nature and have not been formalized by a promissory note.

As of November 30, 2021 and August 31, 2021, amount due to a related party amounting $45,134 and $44,134 respectively, which is mainly an advance from a company related to the Company’s major stockholder, officer and director, Dr. Low Wai Koon (“Dr. Low”) to pay for operating expenses. The amount is non-interest bearing, due upon demand and unsecured.

NOTE 6 – CHANGE OF CONTROL

Pursuant to the terms of the Securities Purchase Agreement dated February 26, 2021, by and among Veniamin Minkov, the former sole officer, director, and majority stockholder of the Company and Dr. Low (the “Unex Agreement”), effective February 26, 2021 (the “Effective Time”), Veniamin Minkov, the then sole executive officer and director of the Company and the owner of 2,000,000 restricted shares of the Company’s common stock representing 67.34% of the Company’s issued and outstanding common stock (“Unex Shares”), sold the Unex Shares to Dr. Low for an aggregate consideration of $340,000, or approximately $0.17 per share. In addition, certain stockholders purchased 966,000 shares of the Company’s common stock in a series of private transactions for $0.05176 a share from non-affiliates of the Company (the “Non-Affiliate Shares”). Upon completion of the purchase of the Unex Shares, Dr. Low owned 2,000,000 shares, or approximately 67.34% of the issued and outstanding common stock of the Company, which resulted in a change of control of the Company. Upon completion of the Non-Affiliate Shares, certain stockholders owned 966,000 shares or approximately 32.53% of the issued and outstanding common stock of the Company. The balance 4,000 shares are held by public stockholders.

In connection with the Unex Agreement, on February 26, 2021, Veniamin Minkov resigned as the President, Treasurer, and Secretary of the Company and Chairman of the Board of the “Company. Mr. Minkov’s resignation as President, Treasurer, and Secretary of the Company and Chairman of the Board is effective immediately. Mr. Minkov’s resignation as a director will become effective ten (10) days following the filing by the Company of the Information Statement on Schedule 14f-1 with the United States Securities and Exchange Commission. Prior to Mr. Minkov’s resignation, he appointed Dr. Low as the Company’s director and Chairman of the Board, Chief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer, of the Company.

In accordance with the terms of the Agreement, Veniamin Minkov warranted that on the Effective Date the Company will have no assets and no debt of any kind including no outstanding tax liabilities and that all existing contracts entered into by the Company shall be cancelled without liability.

NOTE 7 - SUBSEQUENT EVENTS

In accordance with FASB ASC 855-10 Subsequent Events, the Company has analyzed its operations subsequent to November 30, 2021 to the date these consolidated financial statements were issued, and has determined that it does not have any material subsequent events to disclose in these consolidated financial statements, except as follows:

On December 20, 2021, the Company and Dr. Low entered into a share transfer agreement, dated December 20, 2021 (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 the consideration of US$100. EvoAir International, through its subsidiaries upon completion of the Transactions (defined hereunder), is engaged in the sale of heating, ventilation and air conditioning (“HVAC”) products in Asia. The closing of this transaction (the “Closing”) occurred on December 20, 2021 (the “Closing Date”).

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 Limited (“WKL Global”) for an aggregate consideration of $100. The board of directors and majority shareholders of the Company and WKL Global have approved the Share Transfer Agreement and the transactions contemplated thereunder (the “Change of Control Transaction”). Upon completion of the Transaction, WKL Global Limited 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.

Subsequently, several transactions took place (together, the “Transactions”) whereby the Company issued and allotted in aggregate 98,809,323 ordinary shares of common stock to certain parties. On completion of the Transactions, the total number of issued and outstanding shares of common stock of the Company were 101,779,323:

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical or current facts are “forward-looking statements” made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933 (the “Act”) and Section 21E of the Securities Exchange Act of 1934. These statements often can be identified by the use of terms such as “may,” “will,” “expect,” “believe,” “anticipate,” “estimate,” “approximate” or “continue,” or the negative thereof. We intend that such forward-looking statements be subject to the safe harbors for such statements. We wish to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. Any forward-looking statements represent management’s best judgment as to what may occur in the future. However, forward-looking statements are subject to risks, uncertainties and important factors beyond our control that could cause actual results and events to differ materially from historical results of operations and events and those presently anticipated or projected. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.

GENERAL INFORMATION

Unex Holdings Inc. was incorporated in the State of Nevada on February 17, 2017 and established the fiscal year end of August 31. We have no revenues, have minimal assets and have incurred losses since inception. We were formed to provide geodesy services, and we are still in the development stage. Upon completion of the Transactions (defined in Note 7), the Company will be principally involved in the sale of HVAC products. Our business office is located at 31-A2, Jalan 5/23A, 6 ½ Miles off Jalan Kepong, 52000 Kuala Lumpur, Malaysia. Our telephone number is +603 6243 3379.

RESULTS OF OPERATIONS

Our financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include adjustments relating to the recoverability and realization of assets and classification of liabilities that might be necessary should we be unable to continue in operation.

We expect we will require additional capital to meet our long-term operating requirements. We expect to raise additional capital through, among other things, the issuance of equity or debt securities.

Our total assets were zero as of November 30,2021 and August 31, 2021 respectively. The accrued expenses reported at $12,000 and $9,500 as of November 30, 2021 and August 31,2021 respectively. The accrued expenses mainly were independent auditor fees for financial year ended August 31, 2021 and financial period ended November 30, 2021.

As of November 30, 2021 and August 31,2021 amounts due to a related party amounting $45,134 and $44,134 were advances from a company related to the Company’s majority stockholder, officer and director, Dr. Low to pay for operating expenses. Those expenses were professional fee, filling fee and audit fee.

Stockholders’ deficit stood at $57,134 as of November 30, 2021, compared to $53,634 as of August 31, 2021.

Three months ended November 30, 2021 compared to three months November, 2020.

The Company did not generate revenue for the three months ended November 30, 2021 and three months ended November 30, 2020.

The Company registered net loss of $3,500 for the three months ended November 30, 2021 compared to $5,773 for the three months ended November 30, 2020.

Cash Flows used by Operating Activities

Net cash flows used in operating activities for the three months ended November 30, 2021 and 2020 were zero and $5,927 respectively.

Cash Flows used by Investing and Financing Activities

There were no investing and financing activities during three months ended November 30, 2021 and 2020

PLAN OF OPERATION AND FUNDING

With the injection of a the New Business contemplated under the Transaction (defined in Note 7), the New Management will implement the business plans for the HVAC business including expansion in product offerings, geographical expansion, generate revenue through expansion of revenue streams and customer base (retail, commercial and industrial as well as private label and licensing clientele), improvement of profitability by achieving economies of scale provide the opportunity for the Company to continue as a going concern.

We expect that working capital requirements will continue to be funded through a combination of our existing funds and further issuances of securities. Our working capital requirements are expected to increase in line with the growth of our business.

Existing working capital, further advances and debt instruments, 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 the proceeds of the private placement of equity and debt instruments. In connection with our business plan, management anticipates additional increases in operating expenses and capital expenditures relating to: (i) working capital; (ii) research and development expenditure for new invention and improvement of existing product range; and (iii) marketing expenses; business expansion. We intend to finance these expenses with existing funding, internally generated funds, issuances of equity and debt securities. Additional issuances of equity or convertible debt securities will result in dilution to our current stockholders. 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.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this Quarterly Report, 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, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

GOING CONCERN

The Company’s financial statements as of November 30, 2021, is prepared using generally accepted accounting principles in the United States of America 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 an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The Company incurred net loss of $3,500 and $5,773 for three months ended November 30, 2021 and 2020, respectively. As of November 30, 2021 and August 31, 2021, the company recorded net current liability and deficit on total equity of 57,134 and $53,634, respectively and stockholders’ deficit of $57,134 and $53,634, respectively These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

With the injection of the New Business contemplated under the Transaction (defined in Note 7), the Management believes that the actions to be taken by the new Management to further implement the business plans for the New Business including expansion in product offerings, geographical expansion, generate revenue through expansion of revenue streams and customer base (retail, commercial and industrial as well as private label and licensing clientele), improvement of profitability by achieving economies of scale provide the opportunity for the Company to continue as a going concern. In addition, the Company is also working on raising additional funding to finance the operations as well as business expansion.

Our ability to continue as a going concern is dependent upon our capability to further implement our business plan and generate revenues. These 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.

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 disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Our principal executive officer and principal financial and accounting officer have reviewed the effectiveness of our “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13(a)-15(e) and 15(d)-15(e)) within the end of the period covered by this Quarterly Report on Form 10-Q and have concluded that the disclosure controls and procedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner.

Changes in Internal Controls over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the three-month period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this Quarterly Report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

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, 2021.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable to our Company.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits:

*Previously filed

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.