Quarterly Report for Quarter Ending August 31, 2026 (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, 2026 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.

Revenues

For the three months period ended August 31, 2026, we generated total revenue of $222,612, which comprised $222,054 from automotive products (motor oil and auto parts) and $558 from others.

Total revenues for the three months ended August 31, 2026 were $222,612, compared to $91,005 for the three months ended August 31, 2025, representing an increase of $131,607. The increase was mainly attributable to an increase of $198,485 in automotive products and others, partially offset by a decrease of $66,878 in brand name management fees and services.

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

Sales of Automotive Products and Others

Revenues related to sales of automotive products and others are recognized in the consolidated statements of operations and comprehensive income/(loss) when the goods are delivered and ownership transfer to the customers.

Brand Name Management Fees and Services

We earn brand name management fees and services 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 non-refundable.

Cost of Revenue

Cost of revenue consists primarily of costs associated with the purchase of goods. For three months ended August 31, 2026, compared with the three months ended August 31, 2025.

Cost of revenue for the three months ended August 31, 2026 was $94,052 compared to $16,044 for the three months ended August 31, 2025, an increase of $78,008. The increase of $78,008 was attributable to motor oil and auto parts.

Gross Profit

Gross profit for the three months ended August 31, 2026 was $128,560 compared to $74,961 for the three months ended August 31, 2025, an increase of $53,599 is mainly attributable to the increase of automotive products and others of $120,477 and partially offset by the decrease in brand name administrative fees of $66,878.

Selling and Distribution Expenses

Selling and Distribution expenses consist primarily of payroll costs, travelling expenses, transportation costs and other operating expenses associated with sales and marketing.

For the three months ended August 31, 2026 compared to three months ended August 31, 2025:

Selling and Distribution expenses for the three months ended August 31, 2026 were $48,395 compared to $43,066 for the three months ended August 31, 2025, representing an increase of $5,329. The increase of $5,329 was attributable to the increase in transportation expenses of $4,648, payroll costs of $2,432 and entertainment expenses of $619, and partially offset by the decrease in travelling expenses $1,153, sale commission $927 and others $290. The movement in selling expenses was driven by increase sales of automotive products.

General and Administrative Expenses

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

For the three months ended August 31, 2026 compared to three months ended August 31, 2025:

General and administrative expenses for the three months ended August 31, 2026 were $82,330 compared to $78,559 for the three months ended August 31, 2025, representing an increase of $3,771. The increase of $3,771 was attributable to the increase in consultancy fees of $5,947, R&D expenses of $321and other expenses of $1,349, and was partially offset by the decrease in rental of $1,328, payroll costs of $1,191, travelling expenses of $808, office expenses of $504 and entertainment expenses of $15.

Taxation

We recorded no income tax expense for the three months ended August 31, 2026 and 2025.

The Company, incorporated in the PRC, is 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 services (brand name administrative 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 Profit/(Loss)

A net profit of $27,757 and a net loss of $46,776 were recorded for the three months ended August 31, 2026 and 2025, respectively, due to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

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

Our business is subject to financial risks, 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 over the next 12 months primarily with our cash and cash equivalents and 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 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.

Operating Activities

For the three months ended August 31, 2026, cash flows used in operating activities was $108,145, and cash flow provided by operating activities for the three months ended August 31, 2025 was $34,787, respectively, reflecting a decrease in cash flows of $142,932. The decrease in cash flows provided by operating activities of $142,932 was attributable to a decrease in cash flow of contract liabilities of $268,812 counts receivable of $373, depreciation and amortization of $330 and inventory written back $24, and was partially offset by the increase in cash flow of net profit of $74,533, accrued liabilities and other payables of $19,666, prepayments, deposits and other receivables of $14,678, accounts payable of $10,430, inventories of $7,053, amortization of right-of-use assets of $130 and operating lease liabilities $390

Investing Activities

For the three months ended August 31, 2026 and 2025, net cash used in investing activities were $51,997 and $0, respectively, reflecting a decreased in cash flows of $51,997. The decreased was attributable to advances to Hangzhou Xieli Internet Technology Co., Ltd. of $51,997.

Financing Activities

Cash flows provided by financing activities were $142,565 and $3,849 for the three months ended August 31, 2026 and 2025, respectively, reflecting an increase of $138,716. The increase in net cash flows provided by financing activities was due to an increase in advances from Cuiyoa Luo of $138,216 and Lixin Cai of $500, respectively.

The majority of the Company's revenues and expenses were denominated 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.

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 shareholders' equity or that are not reflected in our consolidated financial statements.