SEC Info - Flywheel Advanced Technology, Inc.

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		Alternative Formats (Word, et al.) Consolidated Balance Sheets as of December 31, 2023 (unaudited) and September 30, 2023 Controls and Procedures Defaults Upon Senior Securities Exhibits Financial Information Financial Statements Legal Proceedings Management's Discussion and Analysis of Financial Condition and Results of Operations Mine Safety Disclosures Notes to Unaudited Condensed Consolidated Financial Statements Other Information Part I -- Financial Information Part Ii -- Other Information Quantitative and Qualitative Disclosures about Market Risk Risk Factors Signatures Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2023 and December 31, 2022 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended December 31, 2023 and December 31, 2022 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (loss) for th Three Months Ended December 31, 2023 and December 31, 2022 Unregistered Sales of Equity Securities and Use of Proceeds
1	1st Page – Filing Submission
"	Part I -- Financial Information
"	Financial Statements
"	Consolidated Balance Sheets as of December 31, 2023 (unaudited) and September 30, 2023
"	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (loss) for th Three Months Ended December 31, 2023 and December 31, 2022
"	Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity for the Three Months Ended December 31, 2023 and December 31, 2022
"	Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2023 and December 31, 2022
"	Notes to Unaudited Condensed Consolidated Financial Statements
"	Management's Discussion and Analysis of Financial Condition and Results of Operations
"	Quantitative and Qualitative Disclosures about Market Risk
"	Controls and Procedures
"	Part Ii -- Other Information
"	Legal Proceedings
"	Risk Factors
"	Unregistered Sales of Equity Securities and Use of Proceeds
"	Defaults Upon Senior Securities
"	Mine Safety Disclosures
"	Exhibits
"	Signatures

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

i ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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. ☒ i Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ i Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ☐ i No ☒

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

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

This quarterly report contains forward-looking statements. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “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 that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements 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, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited financial statements are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion should be read in conjunction with our financial statements and the related notes that appear elsewhere in this quarterly report. The following discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed below and elsewhere in this quarterly report.

In this quarterly report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the common shares in our capital stock.

As used in this quarterly report on Form 10-Q, “we”, “our”, “us” and “Company” refer to Flywheel Advanced Technology, Inc., a Nevada corporation unless the context requires otherwise.

Flywheel Advanced Technology, Inc. (“FWFW”) (formerly known as Pan Global Corp.) was incorporated in the state of Nevada on April 30, 2010. On November 30, 2022, FWFW incorporated Blue Print Global, Inc. (“Blue Print”) in the British Virgin Islands to establish an operation to source the supply and sale of warehouse patrol robots. FWFW holds 70% of Blue Print, and the balance is held by two individuals unrelated to the Company, with each party holding 15%. On March 22, 2023, FWFW acquired QBS System Limited (“QBS System”), a limited company incorporated under the laws of Hong Kong (the “QBS Acquisition”). FWFW and its subsidiaries (collectively, “we,” “us,” “our,” “FWFW” or the “Company,” unless context requires or indicates otherwise) were formed to provide Internet of Things (“IoT”) solutions and services to assist its clients to build applications using available IoT devices, sensors, frameworks, and platforms, integrate hardware and software solutions with clients existing landscape, or implement new IoT solutions for enterprises.

We provide a full range of IoT services comprising consulting, development and implementation, analytics, support, and evolution. QBS System has a business portfolio consisting of IoT integration solution services, IoT maintenance and support services, IoT projects and ventures, Business Process Outsourcing (“BPO”) services, and approximately twelve years of experience in Hong Kong providing IoT software and hardware engineering services. Its clientele ranges across various industries, such as logistics and supply chain management, food & beverage, automation, and smart buildings. The applications of QBS System’s IoT solutions include connected equipment in the enterprise (“Enterprise IoT”) and industrial assets such as machines and robots (“Industrial IoT”), the essential component of the fourth revolution of manufacturing or “Industry 4.0”

QBS System’s IoT Integration Solution Service helps clients to build applications using available IoT devices, sensors, framework and platform, to integrate the available hardware and software solution with clients existing landscape or to implement a new IoT solution for enterprises.

The applications of the QBS System’s IoT Integration Solution Service includes Enterprise IoT and Industrial IoT, the essential component of Industry 4.0.

QBS System provides full-range of services under its IoT Integration Solution Service program such as consulting, development and implementation, analytics, support, and evolution.

QBS System’s IoT Integration Solution Service focuses on researching and developing technologies to improve and enhance the quality of life for clients and find a faster, more economical, and easier ways to solve problems. The list below shows certain of the technologies developed and utilized by QBS System’s IoT Integration Solution Services in the following industries:

Following the completion of a QBS System’s IoT Integration Solution Service for a client, QBS System can provide ongoing maintenance and support services, as well as maintenance and support services on consumable hardware and software (license) purchased by the client. QBS System’s maintenance and support services are in high demand by their clients to facilitate long-term usage of QBS System’s products and help them be competitive in their respective fields, such as real estate, leisure, and entertainment industries.

Maintenance and support services entail ad-hoc technical services, IoT system administration, maintenance, secondment, and corrective services. QBS System also offers license renewal subscriptions for individual IoT systems, hardware, and software provided by the IoT products vendors.

QBS System provides BPO services to IoT projects, which is an end-to-end technology service, outsourcing services to assist enterprises in launching IoT projects or ventures, creating a new technology solution, upscaling an existing IoT application, or reliably and cost-effectively integrating any IoT solution with a legacy system while addressing business challenges.

In addition to the IoT BPO services, QBS System offers technical consultants on flexible client assignments. This service assists clients in recruiting, training, and managing teams of consultants and related administrative staff. It is also involved with all technical aspects of clients’ IoT by deeply analyzing clients’ vision and creating IoT technology solutions enabling clients to build new IoT-based products and establish a new business model. The IoT BPO service helps with hardware and software that can adequately address the complexity and fragmentation in clients’ IoT projects, including hardware integration, software integration, system architecture, sensor monitoring, device management and connectivity, data analysis, etc.

Smart buildings are equipped with energy-saving equipment for the efficient functioning of all the components and systems of a building, including lighting; monitoring; safety and security; emergency systems; heating, ventilation, and air conditioning systems; and car parking. The concept of smart buildings has gained pace due to the increasing adoption of IoT solutions and services, and the growing deployment of IoT sensors.

With the growing numbers of IoT network devices, the critical need for reliable IoT integration services, such as system design and architecture services, advisory services, and testing services, has emerged for the smooth integration, interconnectivity, and functioning of connected devices. IoT-enabled smart buildings have enhanced features, such as personalization of operations, device mobility inside buildings, comfort to occupants, enhanced productivity, and automation of indoor activities. IoT home automation systems utilize control systems and smart devices to automatically control and manage the basic home functions over the Internet, irrespective of the user location.

During 2020, one of the leading utility service companies in Hong Kong collaborated with QBS System to build an IoT factory in order to cross-integrate multiple brands of IoT Gateway as a single management platform, catering to different user scenarios in office or campus energy management in a more innovative way, such as sensory data of room occupancy capturing for electricity control purpose.

In 2016, QBS System collaborated with the Hong Kong government is to design and build the Waste Electrical and Electronic Equipment Treatment and Recycling Facility (WEEE·PARK), which provides a collection service and operates the facility. The facility uses state-of-the-art technology to process refrigerators, TVs, computers, washing machines, and air conditioners into valuable secondary raw materials while controlling the management of the hazardous materials that are contained in this equipment.

In 2012, QBS System delivered a smart building application for the first zero-carbon building in Hong Kong developed by the Construction Industry Council in collaboration with the HKSAR Government. Our application utilizes the Building Automation and Controls Network (BACnet), a communication protocol standard explicitly designed to provide a way to integrate building control products made by different manufacturers. The BACnet enables a vast volume of data to be analyzed automatically and visualizes carbon footprint benchmarking data to the Low Carbon property management dashboard.

QBS System’s IoT home growing device is a technology solution designed to enable individuals to grow plants and crops in their homes using IoT technology. The device is typically equipped with sensors, cameras, and other tools that allow for remote monitoring and management of the plant growth process.

A home growing device enables sensing technologies, such as humidity, temperature, etc., to monitor dynamic planting requirements for plans and crops. For example, as an intelligent virtual assistant the growing device can propose watering schedules based on the dynamic environmental data captured and a plant’s specific characteristics and needs.

The IoT growing device can be used to grow a variety of plants, including herbs, vegetables, and flowers, and can be configured to meet the specific needs of each plant. The device is typically connected to a mobile app or web platform, allowing users to monitor the progress of their plants, receive alerts and notifications, and adjust settings as needed.

The IoT home growing device can be used to grow a variety of plants, including herbs, vegetables, and flowers, and can be configured to meet the specific needs of each plant. The device is typically connected to a mobile app or web platform, allowing users to monitor the progress of their plants, receive alerts and notifications, and adjust settings as needed

The use of IoT technology in home growing devices allows for greater precision and control over the plant growth process. Sensors can monitor factors such as temperature, humidity, and light levels, and automatically adjust settings to ensure optimal growing conditions. This can result in faster growth, higher yields, and healthier plants.

IoT home growing devices are gaining popularity among consumers who are interested in sustainable and healthy living, as well as those who have limited outdoor space or live in areas with harsh climates. They are also used in commercial settings such as restaurants and grocery stores to provide fresh produce on site.

Overall, IoT home growing devices offer a convenient and efficient way for individuals to grow plants and crops in their homes, while leveraging the benefits of IoT technology to optimize the plant growth process.

QBS System has co-developed with another innovator the Smart Bench, a modern, multifunctional bench designed for use in outdoor spaces. It has various features, such as wireless charging for mobile devices, Wi-Fi connectivity, and sensors that track environmental data like temperature, air quality, and noise levels. While powered by solar panels, the Smart Bench stores energy with a built-in battery for use at night. QBS System led the team in IoT Device Integration and System Implementation of the Smart Bench. The Smart Bench aims to enhance the user experience of public spaces by providing a convenient and comfortable place to sit while offering helpful technology features. Additionally, environmental sensors can help city planners gather data on how people use outdoor spaces and make informed decisions about improving urban infrastructure. QBS System’s believes that the Smart Bench is an innovative and practical solution for modern urban living.

The global digital twin industry was valued at US$6.5 billion in 2021 and is projected to reach US$125.7 million by 2030. The Company has been working deeply in various of industries, especially the supply chain and complex building sectors. With the domain knowledge adoption from our customers in these two industries, the Company currently allocates its research and development resources strategically in the digital twin implementation by extending the IoT technologies to the predictive analysis over the data lake built from food and beverage and smart building use cases. Through the launch of digital twin, the Company expects that, in the future, its major revenue model will migrate from project-based to subscription base in long run.

According to a report published by Market Data Forecast in March 2023, the global IoT market is expected to continue its growth trajectory in the period from 2023 through 2028, driven by technological advancements and increasing adoption across various industries. The IoT market size is projected to reach $875 billion by 2028, growing at a CAGR of 26.9% from 2023 to 2028. We believe that several factors are driving the market expansion of the IoT industry:

The emergence of new use cases and applications: IoT technology is being applied to new use cases and applications, such as smart cities, connected cars, and industrial IoT, which drive demand for IoT solutions.

We believe that the promise of IoT will be realized through the development of cloud-enabled intelligent devices and systems that contribute critical data, facilitate distributed control and decision-making, and operate securely at scale.

The opportunity to help clients transform their businesses and operations through these intelligent systems is enormous. We believe that the Company, through our subsidiary QBS System, offers a combination of expertise in device-level solutions, embedded operating systems, and IoT software and services. Since its founding in 2011, QBS System has sought to design products which operate at the intersection of hardware and software. Today, we believe that intersection is the “edge” where cloud-enabled devices connect to create intelligent systems that share data, facilitate distributed control and machine learning, and operate securely at scale.

In addition, we believe environmental, social, and governance (“ESG”) considerations have become increasingly important in recent years, as companies are expected to focus on financial performance and their impact on society and the environment. Through our subsidiary QBS System, we can provide solutions that are particularly relevant to ESG:

Furthermore, the convergence of IoT and Artificial Intelligence (“AI”) is a significant trend that can potentially transform many industries. Combining these two technologies can enable more intelligent and autonomous systems, leading to greater efficiencies and improved decision-making. Below are some examples of QBS System’s performance history:

We believe that the convergence of IoT and AI has the potential to drive innovation and transform many industries, enabling more intelligent and connected systems that can learn and adapt to changing environments and user behavior.

Increased efficiency and productivity - QBS System enables companies to optimize operations and automate processes to increase efficiency and productivity. For example, we use IoT sensors to monitor equipment performance, predict maintenance needs, and reduce downtime.

Cost savings - QBS System helps companies save costs by improving operational efficiency, reducing waste, and optimizing resource utilization. For example, IoT sensors monitor energy consumption and optimize usage, leading to cost savings.

Competitive advantage - Companies that adopt IoT can gain a competitive advantage by differentiating themselves from competitors, improving their products and services, and providing better customer experiences. For example, IoT can enable companies to offer personalized services, such as customized product recommendations and targeted marketing.

New revenue streams - QBS System can enable companies to create new revenue streams by developing innovative products and services that leverage IoT technology. For example, IoT can enable companies to offer subscription-based services, such as predictive maintenance and remote monitoring.

Improved Customer Experiences - QBS System can enable companies to improve customer experiences by providing personalized, real-time services and support. For example, IoT sensors monitor customer usage patterns and provide customized recommendations.

IoT has become commonplace in all walks of life, from homes and industries to enterprises. IoT connects everything, making the world smarter and better than ever. IoT encompasses a set of advanced equipment (sensors and meters), network connectivity architecture, smart devices, and software that helps to interchange information between machines and devices. IoT technology holds significant potential in developing countries’ overall IT and communication industry.

Small and medium enterprises are adopting IoT solutions to maintain cost efficiency, productivity, and operation enhancements. Also, the rapid adoption of cloud-based solutions in the IT industry is the critical driver for the growth of the IoT market during the forecast period.

In conclusion, the impact that IoT has had, and will increasingly continue to have, upon all facets of modern society: (i) in the public sector in applications as varied as healthcare delivery, public safety, traffic management, and the eventual construction of smart cities; (ii) in the consumer space for lifestyle enhancement, entertainment, connected cars, smart homes; and, possibly most valuable; and (iii) in the industrial space for location tracking, demand and supply synchronization, dynamic routing and scheduling, predictive maintenance, inspection technology and so on.

Revenue from services increased from $0 to $625,809 for the three months ended December 31, 2023, compared to same period in 2022. This is due to the acquisition of QBS System.

Revenue from the QBS System segment relates to the provision of IT maintenance and support services, IoT projects and ventures BPO services and IoT software and hardware engineering services and is summarized as follows:

Gross profit increased from $0 to $211,431 for the three months ended December 31, 2023, compared to same period in 2022. This is due to the acquisition of QBS System.

General and administrative expenses increased by $363,920 to $389,752 from $25,832 for the three months ended December 31, 2023, compared to the same period in 2022. This is largely due to the consolidation of operations of QBS System in the current period.

As the Company’s operating activities increase, we expect its general and administrative costs will include additional costs in overhead contribution, consultancy, as well as an increase in employee related costs associated with a higher headcount.

Depreciation and amortization increased from $0 to $$31,387 for the three months ended December 31, 2023, compared to same period in 2022. This is due to the acquisition of QBS System.

Other income increased from $0 to $103,801 for the three months ended December 31, 2023, compared to same period in 2022. This is due to the acquisition of QBS System and reversal of allowance for credit loss on trade receivable of $85,373 was provided during the current quarter.

Interest expense, net increased by $5,186 from $0 for the three months ended December 31, 2023 compared to the same period in 2022. This is also due to the acquisition of QBS System.

Income tax expenses increased from $0 to $8,604 for the three months ended December 31, 2023, compared to same period in 2022. This is due to the acquisition of QBS System and deferred tax expenses on allowance for expected credit losses was recorded during the current quarter.

Foreign currency translation gain increased from $0 to $8,543 for the three months ended December 31, 2023, compared to the same period in 2022. It is incurred on translation of assets and liabilities of foreign subsidiaries in reporting currency adopted by the subsidiaries to the reporting currency of the Company.

Net loss increased by $53,935 to $79,767 from $25,832 for the three months ended December 31, 2023, compared to the same period in 2022. This increase is primarily driven by allowance for expected credit losses and operating expenses incurred after the acquisition of QBS System.

Our use of cash was primarily related to operating activities. We have historically financed our operations primarily through our cash flow generated from our operations and bank borrowings. As of December 31, 2023, we had $316,367 in cash and cash equivalents.

Cash flows from operating activities generally reflect net loss adjusted for certain non-cash items including depreciation and amortization, changes in deferred taxes, and changes in allowance of expected credit losses. Cash used in operating activities was $355,940 for the three months ended December 31, 2023 compared to cash used in operating activities of $32,552 for the three month ended December 31, 2022. The primary driver of decreased operating cash flow during the three months ended December 31, 2023 was increased in cash used in business operating after the acquisition of QBS system.

Cash flows from investing activities reflect capital expenditure for the purchase of Company’s assets. Cash used in investing activities during the three month ended December 31, 2023 was $5,176 compared to cash used in investing activities of $0 for the three months ended December 31, 2022.

Cash flows used in financing activities generally reflect changes in the Company’s stock and debt activity during the period. Net cash provided by financing activities was $54,066 for the three months ended December 31, 2023 compared to net cash provided by financing activities of $32,552 for the three month ended December 31, 2022. Net cash provided by financing activities for the three months ended December 31, 2023 was primarily attributable to proceeds from bank overdraft. Net cash provided by financing activities for the three months ended December 31, 2022 was primarily attributable to advance from related party.

Management believes the cash on hand combined with net cash provided by operations will be sufficient to fund operations for the next 12 months and beyond.

The preparation of our consolidated financial statements in conformity with GAAP requires management to make judgments, estimates and assumptions that impact the amounts reported in our consolidated financial statements and accompanying notes that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

For the impact of recently issued accounting pronouncements on the Company’s consolidated financial statements, see Note 2 (W) to the unaudited condensed consolidated financial statements included in “Part I, Item 1 — Financial Statements” of this Quarterly Report on Form 10-Q and incorporated herein by reference.

As a smaller reporting company, we are not required to provide the information called for by this Item.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (who is the same person), to allow for timely decisions regarding required disclosure.

As of the end of the quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive and Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, he concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this quarterly report.

The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee, (2) lack of a majority of outside directors on our board of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (3) inadequate segregation of duties consistent with control objectives; and (4) management dominated by a single individual without adequate compensating controls. The aforementioned material weaknesses were identified by our Chief Executive and Financial Officer in connection with the review of our financial statements as of December 31, 2023.

Management believes that the material weaknesses set forth above did not have an effect on our financial results. However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.

There have been no changes in our internal controls over financial reporting that occurred during the period ended December 31, 2023, that have materially or are reasonably likely to materially affect, our internal controls over financial reporting.

From time to time, we may become involved in litigation relating to claims arising out of its operations in the normal course of business. We are not involved in any pending legal proceeding or litigation and, to the best of our knowledge, no governmental authority is contemplating any proceeding to which we are a party or to which any of our properties is subject, which would reasonably be likely to have a material adverse effect on us.

As a “smaller reporting company”, we are not required to provide the information required by this Item.

The exhibits listed on the Exhibit Index below are provided as part of this report.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

i Nevada		i 27-2473958
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of exchange on which registered
N/A		N/A		N/A

PART I – FINANCIAL INFORMATION		3

Item 1.	Financial Statements.	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	31

Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	39

Item 4.	Controls and Procedures.	39

PART II – OTHER INFORMATION		40

Item 1.	Legal Proceedings.	40

Item 1A.	Risk Factors.	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	40

Item 3.	Defaults Upon Senior Securities.	40

Item 4.	Mine Safety Disclosures.	40

Item 5.	Other Information.	40

Item 6.	Exhibits.	40

SIGNATURES		41

	December 31,			September 30,
	2023			2023
	(Unaudited)				(Audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	i 316,367		$	i 621,001
Accounts receivable, net of allowances		i 1,731,588			i 1,431,201
Due from related parties		i 121,415			i 116,419
Prepaid expenses and other current assets		i 392,081			i 392,742
Deferred tax assets		i 18,818			i 22,481
Total Current Assets		i 2,580,269			i 2,583,844

PROPERTY, PLANT AND EQUIPMENT, NET		i 9,763			i 6,783
GOODWILL		i 1,840,202			i 1,840,202
ACQUISITION-RELATED INTANGIBLES		i 142,263			i 159,481
RIGHT-OF-USE ASSETS		i 19,053			i 33,481

TOTAL ASSETS	$	i 4,591,550		$	i 4,623,791

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Bank overdraft	$	i 127,983		$	-
Bank loans - current portion		i 109,983			i 104,608
Accounts payable		i 30,482			i 78,064
Accrued expenses and other current liabilities		i 220,028			i 170,089
Due to related parties		i 776,004			i 822,027
Operating lease liabilities		i 22,466			i 37,789
Income tax payable		i 53,556			i 46,699
Total current liabilities		i 1,340,502			i 1,259,276

LONG-TERM LIABILITIES
Bank loans		i 453,091			i 483,950
Deferred tax liabilities – arise from fair value gain		i 23,474			i 26,315
Total long-term liabilities		i 476,565			i 510,265
Total Liabilities		i 1,817,067			i 1,769,541

COMMITMENTS AND CONTINGENCIES		-			-

STOCKHOLDERS’ EQUITY
Common stock, $ i i 0.0001 / par value i i 550,000,000 / , shares authorized, i i i i 29,662,164 / / / shares issued and outstanding as of December 31, 2023 and September 30, 2023		i 2,966			i 2,966
Paid in Capital		i 6,677,222			i 6,677,222
Accumulated other comprehensive income/(loss)		i 5,852			( i 2,691	)
Accumulated deficit		( i 3,911,557	)		( i 3,823,247	)
Total Stockholders’ Equity		i 2,774,483			i 2,854,250

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	i 4,591,550		$	i 4,623,791

	2023			2022
	For the three months ended December 31,
	2023			2022

REVENUE, NET	$	i 625,809		$	-
COST OF REVENUE		( i 414,378	)		-

GROSS RPOFIT		i 211,431			-

OPERATING EXPENSES
Sales and marketing		i 22,278			-
General and administrative		i 336,087			i 25,832
Depreciation and amortization		i 31,387			-

Total Operating Expenses		i 389,752			i 25,832

OPERATING LOSS		( i 178,321	)		( i 25,832	)
OTHER INCOME (EXPENSES)
Other income		i 103,801			-
Interest expenses, net		( i 5,186	)		-

Total Other Income		i 98,615			-

LOSS BEFORE INCOME TAXES		( i 79,706	)		( i 25,832	)
Income taxes		( i 8,604	)		-
NET LOSS		( i 88,310	)		( i 25,832	)
OTHER COMPREHENSIVE LOSS
Foreign currency translation gain		i 8,543			-
COMPREHENSIVE INCOME	$	( i 79,767	)	$	( i 25,832	)

Net loss per share - basic and diluted:	$	( i i 0.00 /	)	$	( i i 0.00 /	)
Weighted average number of shares outstanding		i i 29,662,164 /			i i 17,822,564 /

Flywheel Advanced Technology, Inc. – ‘10-Q’ for 12/31/23

On: Wednesday, 2/14/24, at 4:11pm ET · For: 12/31/23 · Accession #: 1493152-24-6537 · File #: 333-167130

Previous ‘10-Q’: ‘10-Q’ on 8/14/23 for 6/30/23 · Latest ‘10-Q’: This Filing

Quarterly Report — Form 10-Q

Filing Table of Contents

‘10-Q’ — Quarterly Report

Document Table of Contents

This is an HTML Document rendered as filed. [ Alternative Formats ]

Dates Referenced Herein and Documents Incorporated by Reference

Large accelerated filer	☐	Accelerated filer	☐
i Non-accelerated Filer	☒	Smaller reporting company	i ☒
		Emerging growth company	i ☐

	Pages
Consolidated Balance Sheets as of December 31, 2023 (unaudited) and September 30, 2023	5

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (loss) for th Three Months Ended December 31, 2023 and December 31, 2022	6

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended December 31, 2023 and December 31, 2022	7

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2023 and December 31, 2022	8

Notes to Unaudited Condensed Consolidated Financial Statements	9 - 30

	December 31,2023		September 30, 2023

Balance sheet items, except for common stock, additional paid-in capital and retained earnings, as of period end		US$1=HK$ i 7.80985		US$1=HK$ i 7.82996
		US$1=AUD i 1.49213		US$1=AUD i 1.55615

Amounts included in the statements of operations and cash flows for the period	For the three months ended December 31,
	2023	2022
	US$1=HK$ i 7.81401	Not applicable
	US$1=AUD i 1.53488	Not applicable

	December 31, 2023		September 30, 2023
Cash at bank	$	i 314,685	$	i 619,323
Cash on hand		i 1,682		i 1,678

Total	$	i 316,367	$	i 621,001

	2023			2022
	For the three months December 31,
	2023			2022
Balance at beginning of period	$	i 219,528		$	-
Reversal of allowance of expected credit losses		( i 85,373	)		-
Provision during the period		i 59,250			-
Translation adjustment		i 3,662			-

Balance at end of period	$	i 197,067		$	-

Period Ending December 31 2024	$	i 22,653
Total operating lease payments		i 22,653
Less: Imputed interest		i 187
Total operating lease liabilities	$	i 22,466

Year Ending September 30 2024	$	i 38,341
Total operating lease payments		i 38,341
Less: Imputed interest		i 552
Total operating lease liabilities	$	i 37,789

A summary of the Company’s loans payable is as follows	December 31,		September 30,
	2023		2023
Bank loans
HK$ i 3,550,000 8 years loan (note a) ^(a)	$	i 310,880	$	i 326,202
HK$ i 1,450,000 8 years loan (note b) ^(b)		i 146,274		i 152,526
HK$ i 1,000,000 8 years loan (note c) ^(c)		i 105,920		i 109,830

Total	$	i 563,074	$	i 588,558

Current portion	$	i 109,983	$	i 104,608
Non-current portion		i 453,091		i 483,950

Total	$	i 563,074	$	i 588,558

	(a)	On April 27, 2020, the Company was granted a bank loan from the Bank of China (Hong Kong) Limited in the amount of HK$ i 3,550,000. The loan has interest of i 2.5% (per annum ), which is below the Hong Kong Dollars Prime Rate quoted by The Hong Kong Mortgage Corporation Limited from time to time. The loan is secured by the personal guarantees of each of the Company’s Director, Mr. Wong Chi Fung and shareholder, Mr. Kwan Ping Yuen and a guarantee from the HKMC Insurance Limited under the SME Financing Guarantee Scheme. The Hong Kong Dollars Prime Rate quoted by The Hong Kong Mortgage Corporation Limited as of December 31, 2023 was i 6.125%. The outstanding principal and interest accrued is payable by 53 equal monthly instalments, commencing 13 months after the date of drawdown.

	(b)	On October 10, 2020, the Company was granted a bank loan from The Bank of China (Hong Kong) Limited in the amount of HK$ i 1,450,000. The loan has interest of i 2.5% (per annum ) below the Hong Kong Dollars Prime Rate quoted by The Hong Kong Mortgage Corporation Limited from time to time and is secured by the personal guarantees of the each of the Company’s Director, Mr. Wong Chi Fung and shareholder, Mr. Kwan Ping Yuen and a guarantee from the HKMC Insurance Limited under the SME Financing Guarantee Scheme. The Hong Kong Dollars Prime Rate quoted by The Hong Kong Mortgage Corporation Limited as of December 31, 2023 was i 6.125%. The outstanding principal and interest accrued is payable by 60 equal monthly instalments, commencing on 13 months after the date of drawdown.

	(c)	On June 28, 2021, the Company was granted a bank loan from the Bank of China (Hong Kong) Limited in the amount of HK i 1,000,000. The loan has interest of i 2.5% below the Hong Kong Dollars Prime Rate quoted by The Hong Kong Mortgage Corporation Limited from time to time and is secured by the personal guarantees of the each of the Company’s Director, Mr. Wong Chi Fung and shareholder, Mr. Kwan Ping Yuen and a guarantee from the HKMC Insurance Limited under the SME Financing Guarantee Scheme. The Hong Kong Dollars Prime Rate quoted by The Hong Kong Mortgage Corporation Limited as of December 31, 2023 was i 6.125%. The outstanding principal and interest accrued is payable by 68 equal monthly instalments, commencing on 13 months after the date of drawdown.

	December 31, 2023		September 30, 2023
Accrued expenses	$	i 98,391	$	i 78,050
Accrued employee cost		i 86,744		i 76,841
Sales tax payable		i 15,850		i 15,198
Other payable		i 19,043		-

Total accrued expenses and other current liabilities	$	i 220,028	$	i 170,089

	Fair value of net assets acquired

At September 30, 2023	$	( i 26,315	)
Deferred taxation credited to statement of operations		i 2,841
At December 31, 2023	$	( i 23,474	)

	2023		2022
	For the three months December 31,
	2023		2022
Hong Kong	$	i 625,809	$	-
Australia		-		-
Total	$	i 625,809	$	-

●	Low Carbon Property Management – carbon management involves understanding the carbon footprint of an entity or an individual by collecting and analyzing a massive volume of data. Carbon footprint benchmarking assesses and manages carbon emissions. This technology saves operating costs, reduces carbon emissions, slows climate change, improves air quality, and benefits human health.

●	Energy Management - energy management is the key to conserving energy and saving money. It provides an opportunity to optimize energy costs by understanding energy flow, procurement, and economics of energy and reducing its harmful impact on our environment. This technology monitors energy consumption resulting in savings and reduction in carbon emissions for greater corporate social responsibility;

●	Stock Management – stock management enables real-time stock information and facilitates warehouse and retail operation activities, a critical supply chain element. Stock management aims to have the right product in the right place at the right time without creating excess inventory. This technology offers a timely, efficient, and cost savings solution, especially for retail businesses;

●	GreenTech Management – GreenTech management monitors, for example, planting requirements based on dynamic environmental data captured. This technology helps those growing houseplants or vegetation to reduce sound level and carbon footprint in the house, improve indoor air quality, and use resources more efficiently; and
●	Enhanced Lifestyle Management – Enhanced Lifestyle Management facilitates the hospitality industry to be more efficient and reduce operating costs. This technology also improves the wellness, comfort, and safety of individuals.

	●	New Product Launch Success
	●	Product Transitions & Life Cycle Management
	●	Roadmap & Technology Reviews
	●	Business Planning
	●	Target Operational Model
	●	Forecast Management

	●	Increasing adoption of smart devices: The increasing adoption of smart devices, such as smartphones, smartwatches, and smart home devices, drives the demand for IoT solutions because these devices rely on IoT technology to connect and communicate.

	●	Growing demand for automation and digitization: Companies are increasingly adopting automation and digitization to improve efficiency, reduce costs, and provide better customer experiences. IoT technology can enable automation and digitization by providing real-time data and insights.

	●	Increasing focus on sustainability: Companies increasingly focus on sustainability and environmental responsibility, driving demand for IoT solutions that can help reduce energy consumption, minimize waste, and optimize resource utilization.

	●	Advancements in technology: Advancements in technology, such as 5G networks, artificial intelligence, and machine learning, enable the development of more sophisticated IoT solutions that can provide more value to customers.

●	Environmental Sustainability: we believe that we can contribute to environmental sustainability by developing products and services that reduce energy consumption and minimize waste. For example, IoT sensors are intended to optimize energy usage in buildings, reducing the carbon footprint and improving efficiency.

●	Social Responsibility: we believe that we can demonstrate social responsibility by ensuring that our products and services are accessible to all, including marginalized communities. Additionally, we believe that they can address issues such as data privacy, security, and ethical concerns related to the use of customer data.

●	Governance: Good governance practices are crucial for QBS System to build trust with customers, investors, and regulators. Governance includes transparent reporting on ESG performance, accountability for actions, and responsible management of risks.

●	Predictive maintenance: IoT sensors can collect data from machines and equipment, which can be analyzed using AI algorithms to predict when maintenance is required. Predictive maintenance help prevents equipment failures and reduces downtime.

●	Smart buildings: IoT devices such as lighting systems, lift systems, and security cameras can be integrated with AI algorithms to create more intelligent and automated systems that can learn and adapt to user behavior and preferences.

●	Agriculture: IoT sensors can collect data from crops and soil, which can be analyzed using AI algorithms to optimize irrigation, fertilization, and other agricultural practices, leading to more efficient and sustainable farming.

	For the Three Months Ended December 31,
	2023			2022

Revenue, net	$	625,809		$	-
Cost of revenue		(414,378	)		-
GROSS PROFIT		211,431			-
Operating expenses		(389,752	)		(25,832	)
LOSS FROM OPERATIONS		(178,321	)		(25,832	)
Other income		103,801			-
Interest expenses, net		(5,186	)		-
LOSS BEFORE INCOME TAXES		(79,706	)		(25,832	)
Income taxes		(8,604	)		-
NET LOSS		(88,310	)		(25,832	)
Foreign currency translation gain		8,543			-
COMPREHENSIVE LOSS	$	(79,767	)	$	(25,832	)

	For the Three Months Ended December 31,
			% of Net					% of Net
	2023		Revenue			2022		Revenue

IoT BPO services	$	417,135		67	%	$	-		-
IoT development services		140,722		22	%		-		-
IoT maintenance and support services		67,952		11	%		-		-
	$	625,809		100	%	$	-		-

Exhibit No.		Description
31.1*		Certification of principal executive and financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, as amended.
32.1*		Certification of principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, as amended.
101*		Inline XBRL Document Set for the condensed financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104*		Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set.