Quarterly Report for Quarter Ending August 31, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

Information included in this Quarterly Report on Form 10-Q (this "Report") contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are not statements of historical facts, but rather reflect our current expectations concerning future events and results. We generally use the words "believes," "expects," "intends," "plans," "anticipates," "likely," "will" and similar expressions to identify forward-looking statements. Such forward-looking statements, including those concerning our expectations, involve risks, uncertainties and other factors, some of which are beyond our control, which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and factors include, but are not limited to, those factors set forth in our Report for the period ended August 31, 2025 and the condensed consolidated financial statements included in this Report. Except as required by applicable law, including the securities laws of the United States, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented in this Report.

Results of Operations

The following table sets forth a summary of our consolidated results of operations and comprehensive loss for the periods presented, both in absolute amount and as a percentage of our revenues for the periods presented. This information should be read together with our audited consolidated financial statements and related notes as well as unaudited interim consolidated financial statements and related notes included elsewhere in this Form 10-Q. The results of operations in any period are not necessarily indicative of our future trends.

		For the Three Months Ended August 31,								Quarter to Quarter Comparison
		2025				2024				Increase/ (Decrease)
		$				$				$
			(unaudited)				(unaudited)
Revenue			91,005				114,382				(23,377	)
Cost of Revenue			(16,044	)			(19,373	)			3,329
Gross Profit			74,961				95,009				(20,048	)
Selling and Distribution Expenses			(43,066	)			(56,129	)			13,063
General and Administrative Expenses			(78,559	)			(82,547	)			3,988
Loss from Operation			(46,664	)			(43,667	)			(2,997	)
Interest Income			2				2				-
Other Expense			(114	)			(165	)			51
Loss before Income Taxes			(46,776	)			(43,830	)			(2,946	)
Income Taxes Credit			-				2,263				(2,263	)
Loss Attributable to Shareholders			(46,776	)			(41,567	)			(5,209	)

Revenues

For the three months period ended August 31, 2025, we generated total revenue of $91,005 that included brand name administrative fee $66,878, motor oil and auto parts $24,122 and others $5.

		For the Three Months Ended August 31,
		2025				% of Net				2024				% of Net				Change
		$				Sales				$				Sales				$
Administrative fee of brand name			66,878				73.5	%			85,018				74.3	%			(18,140	)
Motor oil and auto parts			24,122				26.5	%			29,297				25.6	%			(5,175	)
Others			5				0.0	%			67				0.1	%			(62	)
Total			91,005				100	%			114,382				100	%			(23,377	)

Total revenues for three months ended August 31, 2025 were $91,005 compared to $114,382 for the three months ended August 31, 2024, which decreased by $18,140. Due to the slow market activity, brand name administrative fee decreased by $18,140, motor oil and auto parts $5,175 and others $62.

The Company are engaging in trading of motor oil and auto parts to their third-party agents in China. Revenues from services consist of administrative of brand name and training fees. Payments of services are generally received before delivery the services.

Sales of Motor Oil and Auto Parts

Revenues related to sales of motor oil and auto parts are recognized in the consolidated statements of operations and comprehensive income/(loss) at the time when the goods are delivered and the ownership transfer to the customers.

Administrative Fee of Brand Name

We earned the brand name administrative fees from our customers, who pay one-time fixed fee RMB100,000, RMB200,000 and RMB300,000 for one year, RMB90,000 for one to three years and RMB200,000 for one to five years for exchange of (1) the right to use the brand name "Chejiangling / Teenage Hero Car" and "ECXJ", (2) the right to receive 10% of other new shops' brand name permission fee, (3) the right to receive 5% of other new shops' selling, and (4) the right to receive 20% of other new shops' administrative fee. The fee is not be refundable.

Cost of Revenue

Cost of revenue consist primarily of costs associated with the purchase of goods. For three months ended August 31, 2025 compared to three months ended August 31, 2024.

		For The Three Months Ended August 31,
		2025				2024				Change
		$				$				$
Motor oil and auto parts			16,038				18,708				(2,670	)
Others			6				665				(659	)
Total			16,044				19,373				(3,329	)

Cost of revenue for the three months ended August 31, 2025 were $16,044 compared to $19,373 as of ended August 31, 2024, a decrement of $3,329. Due to the slow market activity, motor oil and auto parts decreased by $2,670 and others $659 respectively.

Gross Profit

Gross profit for the three months ended August 31, 2025 is $74,961 compared to $95,009 as of August 31, 2024, a decrement of $20,048 is mainly due to the decrease of revenue from brand name administrative fee and sales of motor oil and auto parts.

Selling and Distribution Expenses

Selling and Distribution expenses include payroll costs, sales-related consultancy fee, travelling expenses, transportation costs, conference and function expenses and other operating expenses associated with sales and marketing.

For three months ended August 31, 2025 compared to three months ended August 31, 2024:

		For The Three Months Ended August 31,
		2025				% of Net				2024				% of Net				Change
		$				Sales				$				Sales				$
Selling and Distribution Expenses			43,066				47.3	%			56,129				49.1	%			(13,063	)

Selling and Distribution expenses for the three months ended August 31, 2025 were $43,066 compared to $56,129 as of August 31, 2024, a decrease of $13,063 is due to decrease in consultancy fees $10,617, office expenses $2,112, transportation expenses $1,857, entertainment expenses $688, and offset increase in payroll costs $1,486, travelling expenses $582 and others $143.The decrease in selling and distribution expenses is due to slow market activity.

General and Administrative Expenses

General and Administrative (G&A) expenses consist primarily of payroll costs, audit fee, consultancy fee, rental fee and other related expenses.

For three months ended August 31, 2025 compared to three months ended August 31, 2024:

		For The Three Months Ended August 31,
		2025				% of Net				2024				% of Net				Change
		$				Sales				$				Sales				$
General and Administrative Expenses			78,559				86.3	%			82,547				72.2	%			(3,988	)

G&A expenses for the three months ended August 31, 2025 were $78,559 compared to $82,547 as of August 31, 2024, a decrease of $3,988 was primarily due to the decrease of impairment of development costs $1,588, rental $1,472, travelling expenses $768, payroll costs $703, others $1,131 and offset with increase in R&D expenses $1,674. The decrease in general and administrative expenses is due to slow market activity.

Taxation

We recorded an income tax of $0 and tax refund $2,263 for the period ended August 31, 2025 and August 31, 2024, respectively.

The Company, incorporated in the PRC, was governed by the income tax law of the PRC, and is subject to PRC enterprise income tax ("EIT"), The EIT rate of PRC is 25%.

Generally, our PRC subsidiaries, VIEs and their subsidiaries are subject to enterprise income tax on their taxable income in China at a statutory rate of 25%. The enterprise income tax is calculated based on the entity's global income as determined under PRC tax laws and accounting standards.

We are subject to value-added tax at a rate of 13% on sales of motor oil and auto parts and 6% on the services (brand name management services), in each case less any deductible value-added tax we have already paid or borne. We are also subject to surcharges on value-added tax payments in accordance with PRC law.

Net Loss

Net loss $46,776 and $41,567 occurred for the three months ended August 31, 2025 and 2024 respectively, due to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

Since commencing operations, our primary uses of cash have been to finance working capital needs for have financed these requirements primarily from cash generated from operations and related party advances.

We are in start-up stage operations and have generated limited revenues. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources and possible cost overruns due to price and cost increases in services and products.

We expect that we will be able to meet our needs to fund operations, capital expenditures and other commitments in the next 12 months primarily with our cash and cash equivalents, operating cash flows.

We may, however, require additional cash resources due to changes in business conditions or other future developments. If these sources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could contractually result in additional dilution to stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financial covenants that would restrict operations. Financing may not be available in amounts or on terms acceptable to us, or at all.

The following table sets forth a summary of our cash flows for the periods indicated.

		For The Three Months Ended August 31,								Quarter to Quarter
		2025				2024				Comparison
		$				$				$
Cash Flows provided by operating activities			34,787				75,876				(41,089	)
Cash Flows used in investing activities			-				(1,617	)			1,617
Cash Flows provided by/(used in) financing activities.			3,849				(5,540	)			9,389
Effects on change in foreign exchange rate			573				814				(241	)
Net Change in cash during period			39,209				69,533				(30,324	)

Operating Activities

Cash flow provided by operating activities for the three months ended August 31, 2025 and 2024 is $34,787 and $75,876 respectively, reflecting a decrease of cash flow $41,089. The decrease in net cash provided by operating activities is mainly due to decrease cash flow of accrued liabilities and other payables $123,879, prepayment, deposit and other receivable $11,470, net loss increased by $5,209, amortization of right-use of assets $4,306, impairment of intangible assets $1,588, depreciation $17, offset increased cash flow of advance received $74,961, inventory $18,612, operating lease liabilities $4,906, accounts payable $4,634 and accounts receivable $2,267.

Investing Activities

Cash flow used in investing activities is $0 for the three months ended August 31, 2025, as compared to $1,617 for the three months ended August 31, 2023, reflecting an increase of cash flow $1,617. The increase is due to decrease of investment in development costs $1,617 .

Financing Activities

Cash flow provided by financing activities is $3,849 for the three months ended August 31, 2025, compared to used in financing activities $5,540 for the three months ended August 31, 2024, reflecting an increase of $9,389. The increase in net cash provided by financing activities was mainly due to increase in advance from related party $9,389.

The majority of the Company's revenues and expenses were denominated primarily in Renminbi ("RMB"), the currency of the People's Republic of China. There is no assurance that exchange rates between the RMB and the U.S. Dollar will remain stable. Inflation has not had a material impact on the Company's business.

COMMITMENTS AND CONTINGENCIES

Contractual Obligations

Our contractual obligations as of August 31, 2025 are as follows:

Payments due by period

Operating leases

Total

Less than 1 year

1-3 years

More than 3 years

Total

12,275

12,275

-

-

A provision of $84,151 is provided, where the Company has a business dispute with a customer, and no legal action is taken against us.

Other than as shown above, we did not have any significant capital and other commitments, long-term obligations or guarantees as of August 31, 2025.

Off-Balance Sheet Commitments and Arrangements

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholder's equity or that are not reflected in our consolidated financial statements.