Item 1.01 Entry into a Material Definitive Agreement.
On December 15, 2022, Flywheel Advanced Technology, Inc., a Nevada corporation
(the "Company"), entered into a share exchange agreement (the "Share Exchange
Agreement") with QBS System Limited, a limited company incorporated under the
laws of Hong Kong ("QBS System"), and QBS Flywheel Limited, a company
incorporated under the laws of Australia (the "Shareholder"). Subject to the
closing conditions set forth in the Share Exchange Agreement, at the closing the
Shareholder will transfer and assign to the Company all of the issued and
outstanding shares of QBS System in exchange for 8,939,600 newly issued shares
of the Company's common stock, par value $0.0001 per share (the "Common Stock").
Following the closing of the share exchange, there will be no change in the
officers and directors of the Company, and QBS System will continue its business
as a wholly owned subsidiary of the Company.
Based on information provided to the Company, QBS System provides IoT solutions
and services to assist its clients build applications using available IoT
devices, sensors, frameworks, and platforms, to integrate hardware and software
solutions with clients existing landscape or implement new IoT solutions for
enterprises. QBS system, which was founded in 2011, provides full-range IoT
services comprising consulting, development and implementation, analytics,
support, and evolution. It has a business portfolio providing IoT integration
solution services, IoT maintenance, support services, IoT projects and ventures
BPO services, and approximately nine years of experience in Hong Kong providing
IoT software and hardware engineering services. Clients range across various
industries, such as logistics and supply chain management, food & beverage,
automation and smart building.
The closing of the share exchange will not occur until QBS System delivers to
the Company (i) audited consolidated balance sheets of QBS System and its
subsidiaries as of March 31, 2021, and 2022, and the related audited
consolidated statements of operations, comprehensive income (loss),
stockholders' equity and cash flows for the fiscal year ended March 31, 2021 and
2022, together with the notes to such statements and the opinion of Paris Kreit
& Chui CPA LLP, and (ii) unaudited consolidated balance sheets of QBS System and
its subsidiaries as of October 31, 2022, and the related unaudited consolidated
statements of operations, comprehensive income (loss), stockholders' equity and
cash flows for the period from April 1, 2022, to October 31, 2022. In addition
to the delivery of the financial statements required by the Securities and
Exchange Commission, the consummation of the share exchange is subject to other
closing conditions, including, among other matters the accuracy of the parties'
respective representations and warranties in the Share Exchange Agreement,
subject to specified materiality qualifications and the absence of any material
adverse conditions of QBS System.
The Share Exchange Agreement contains representations, warranties, covenants,
and indemnities customary for transactions of this type and provides for
customary termination rights of parties. In the event of termination of the
Share Exchange Agreement, each party will be relieved of their duties and
obligations under the Share Exchange Agreement after the termination date
without liability to the other parties thereto. However, the obligations of the
parties regarding notices to a governmental authority, confidentiality and
public announcements, all as provided for in the Share Exchange Agreement shall
survive after the termination date.
The preceding summary of the Share Exchange Agreement does not purport to be
complete and is qualified in its entirety by reference to the Share Exchange
Agreement, a copy of which is filed as Exhibit 10.3 hereto and is incorporated
herein by reference.
Item 9.01 Financial Statements and Exhibits
10.3 Share Exchange Agreement dated December 15, 2022, by and among Flywheel
Advance Technology, Inc., QBS System Limited, and QBS Flywheel Limited.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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