Company: FWFW
Filing Date: 2025-08-12
Form Type: 10-Q
Source: 0001641172-25-023125
Chunk: 35

Company: FLYWHEEL ADVANCED TECHNOLOGY, INC.
Filing Date: 2025-08-12
Form: 10-Q
Item: Part I, Item 1
Chunk 35
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 are recorded when it is probable
that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Legal costs incurred
in connection with such liabilities are expensed as incurred.

    (I)
    Recently
    Issued Accounting Standards

There
are no recent accounting pronouncements that impact the Company’s operations.

NOTE
3 – DISCONTINUED OPERATIONS

On
July 5, 2024, the Company and Mega Fortune Company Limited, its wholly-owned subsidiary, completed the sale (the “Mega Fortune
Disposition”) to Mericorn Company Limited (the “Buyer”), of all of the equity associated with the Company ‘ s
Mega Fortune Company Limited, which is composed of the Company ‘ s subsidiaries, Pontes Fides Company Limited, QBS System Limited
and QBS System Pty Ltd, pursuant to a Share Purchase Agreement, dated as of July 5, 2024. The Mega Fortune Company Limited and its subsidiaries
are engaged in the business of provision of IoT maintenance and support services, IoT BPO services and IoT development services in Hong
Kong and Australia. Under the terms of the Share Purchase Agreement, the Buyer paid HK$56,360,000 (or approximately

$7,230,000)
by the transfer of 938 shares of the Buyer’ s wholly owned subsidiary, Elison Virtus Company Limited ( “ Elison “ )
from the Buyer to the Company for the Mega Fortune Disposition. As of July 5, 2024, the Company determined that the estimated fair value
of 938 shares of Elison was $5,422,500 and the share transfer had been completed. The Company recognized a pre-tax gain on such sale
of $2,452,638. The activities of the three reportable segments, provision of IT maintenance and support services, IoT BPO services and
IoT development services in Hong Kong and Australia have been segregated and reported as discontinued operations for all periods presented.

    12

Summarized
results of discontinued operations for the three reportable segments
    are as follows:

 SCHEDULE
OF DISCONTINUED OPERATIONS

    For the three months ended  
    For the Nine months ended  

    June 30, 2024  
    June 30, 2024 
  
    Revenue, net 
    $885,644  
    $2,855,898 
  
    Cost of revenue 
     (454,259