Company: FWFW
Filing Date: 2025-05-09
Form Type: 10-Q
Source: 0001641172-25-009382
Chunk: 6

Company: FLYWHEEL ADVANCED TECHNOLOGY, INC.
Filing Date: 2025-05-09
Form: 10-Q
Item: Part II, Item 8
Chunk 6
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 average number of shares outstanding during the period. Diluted
income per share is computed like basic income per share except that the denominator is increased to include the number of additional
shares that would have been outstanding if the potential shares had been issued and if the additional shares were diluted. There were
no potentially dilutive securities for 2025 and 2024.

(H)
Commitments and contingencies

Liabilities for loss contingencies
arising from claims, assessments, litigation, fines and penalties, and other sources 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