What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-06-11 · 216 added, 205 removed, 130 unchanged (76% of the section changed)

34 unchanged sentences

financial statements and the notes included in this Quarterly Report, and the audited consolidated financial statements and notes and

Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our registration statement on

Form S-1 (File No.

Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our annual report on Form 10-K

001-42099), filed with the SEC on September 26, 2024.

We are a fast-growing U.S.-based warehousing and

logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment.

With the boom of e-commerce and Internet technology,

along with the development of global supply chains, a growing number of merchants are seeking to sell their products through international

e-commerce platforms, such as Amazon and eBay.

These merchants, however, are confronted with major logistical challenges because of the

complexities involved in shipping goods across borders.

Specifically, when a foreign consumer places an order online, it can

take a long time for the goods to be delivered from one country to another (especially for bulky items), while facing high damage rates

and congestion during peak seasons.

One of the solutions to such problems is to set up overseas warehouses, which are local storage facilities

established in a foreign country where the cross-border merchants intend to sell their goods.

Cross-border e-commerce merchants can export

goods in batches in advance to overseas warehouses, which can then be delivered to overseas consumers once orders are placed via e-commerce

As a result, the delivery time and the rate of damaged and lost packages may be reduced significantly, therefore enhancing

the shopping experience of consumers.

We provide one-stop warehousing and logistics

services to cross-border e-commerce merchants outside the U.S.

who seek to sell in the U.S.

We currently operate nine

warehouses across the country, with an aggregate gross floor area of approximately 2,765,667 square feet.

Aside from a nationwide footprint

and large storage space, our warehouses are equipped with automated sorting systems, heavy-duty forklifts, and pallets and trays that

are suitable for processing bulky items.

As a one-stop warehousing and logistics service provider, we offer a full spectrum of services,

including (i) customs brokerage services;

(ii) transportation of merchandise to U.S.

and (iii) warehouse

management and order fulfillment services, which further include (a) product storage and retrieval, (b) product packing and

labeling, (c) kitting and repackaging, (d) order assembly and load consolidation, (e) inventory management and sales forecasting,

(f) third-party distribution coordination, and (g) other value-added services.

We also provide warehousing and logistics

services to our U.S.-based commercial customers, who are typically domestic e-commerce merchants seeking efficient and reliable warehousing

and logistics solutions to support their operations.

In general, the warehousing and logistics services we provide to our domestic customers

are similar to those we provide to our overseas customers.

This allows us to provide integrated solutions for our customers, whether they

need domestic or international warehousing and logistics support.

As of September 30, 2024 and June 30, 2024 and 2023, we had an active

customer base of 156, 105, and 83, respectively, for our warehousing and logistics services.

the three months ended September 30, 2024 and 2023, we had total revenue of $42.5 million and $41.2 million, and net loss of $4.6 million

and net income of $2.8 million, respectively.

While we do not have any subsidiaries, assets, or employees in the PRC, we generate a significant

portion of our revenue from customers based in China.

During the three months ended September 30, 2024 and 2023, we generated approximately

85% and 95% of our revenue from PRC-based customers, respectively.

Results of Operations

The following table outlines our unaudited condensed

consolidated statements of income for the three and nine months ended March 31, 2024 and 2023:

The following table outlines our consolidated

statements of operations for the three months ended September 30, 2024 and 2023:

September 30,

Costs of sales

Gross profit (loss)

Operating costs and expenses:

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Total operating costs and expenses

Income from operations

Income (loss) from operations

Other (income) expenses:

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Total other (income) expenses

Income before provision for income taxes

Current income tax expense

Deferred income tax expense

Total income tax expenses

Total comprehensive income

Income (loss) before provision for income taxes

Current income tax expense (recovery)

Deferred income tax expense (recovery)

Total income tax expenses (recovery)

Net income (loss)

Total comprehensive income (loss)

Basic & diluted net earnings per share

Weighted average number of shares of common stock-basic and diluted

Weighted average number of shares of common stock-basic

Weighted average number of shares of common stock-diluted

Revenue, costs of sales, and gross profit

The following table sets forth our revenue for

the three and nine months ended March 31, 2024 and 2023:

the three months ended September 30, 2024 and 2023:

September 30,

Costs of sales

Gross profit margin %

Gross profit (loss)

Gross profit (loss) margin %

The following table outlines the compositions

of our revenue streams:

September 30,

Transportation services

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Other services

Three Months Ended March 31, 2024 and

Our revenue increased by $8.3 million, or 27.6%, to $38.4 million

during the three months ended March 31, 2024, from $30.1 million for the same period in 2023.

The increase was due to the effect

of following factors:

Revenue from our transportation services increased by $3.9 million, or 18.2%, due to the rapid expansion of our business in 2023, as we expanded our warehouse operational capacities in California and New Jersey.

2) Revenue from our warehousing services increased by $4.5 million,

As an integrated part of our one-stop warehousing and logistics services, our warehousing services also increased as a result

of the growth in our transportation services.

Revenue from other services decreased by $0.04 million.

Other revenue mainly consisted of revenue from our customs brokerage services.

Our costs of sales mainly represented the costs

incurred for the use of third-party direct freight service carriers, such as FedEx and UPS, warehouse rental expenses, costs of labor,

and trucking expenses.

Costs of sales increased by $11.3 million, or 47.2%, during the three months ended March 31, 2024, compared

with the same period in 2023.

The increase was in line with the increase of our revenue.

Nine Months Ended March 31, 2024 and

Our revenue increased by $1.2 million, or

39.9%, to $121.7 million during the nine months ended March 31, 2024, compared to $87.0 million for the same period in 2023.

3.0%, to $42.5 million during the three months ended September 30, 2024, compared to $41.2 million for the same period

The increase was due to the following factors:

1) Revenue from our transportation services increased by $22.7 million,

or 36.6%, due to the rapid expansion of our business in 2023, as we expanded our warehouse operational capacities in California and New

2) Revenue from our warehousing services increased by $12.1 million,

As an integrated part of our one-stop warehousing and logistics services, our warehousing services also increased as a result

of the growth in our transportation services.

3) Revenue from other services decreased by $0.01 million.

1) Revenue from our transportation services decreased by $1.2 million,

or 4.2%, due to decreases in customer order volumes.

Several major customers have significantly decreased serviced volume for the three months ended September 30, 2024.

2) Revenue from our

warehousing services increased by $2.7 million, or 23.8%, driven by the addition of new warehouses acquired in the last fiscal

from other services decreased by $0.2 million, or 92%.

Other revenue mainly consisted of revenue from our customs brokerage services.

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and trucking expenses.

Costs of sales increased by $37.5 million, or 55.2%, during the nine months ended March 31, 2024, compared

with the same period in 2023.

The increase was in line with the significant increase of our revenue.

Costs of sales increased by $10.1 million, or 28.0%, during the three months ended September 30,

2024, compared with the same period in 2023.

The increase was driven by two main factors.

First , there was a rise in freight expenses

due to higher UPS shipping charges.

Second , lease expenses, employee salary and benefits, and temporary labor costs increased

as we expanded our warehouse and operations team to support growth.

The following table sets forth a breakdown of

our costs of sales for the three and nine months ended March 31, 2024 and 2023:

Rental expenses

our costs of sales for the three months ended September 30, 2024 and

September 30,

Lease expenses

Freight expenses

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Other expenses

Three Months Ended March 31, 2024 and

Our freight expenses, rental expenses (primarily warehouse operating

lease expenses), temporary labor expenses, and salary and benefits increased significantly by $3.0 million, $3.8 million, $1.5 million,

and $1.3 million, respectively, during the three months ended March 31, 2024, compared to the same period in 2023.

Our lease expenses (primarily warehouse operating

lease expenses), freight expenses, temporary labor expenses, and salary and benefits increased significantly by $2.3 million, $3.2 million,

$2.8 million, and $1.0 million, respectively, during the three months ended September 30, 2024 compared to the same period

The increases in lease expenses are due to the additional operating leases acquired in the last fiscal quarter.

The increases

in these expenses were all due to the growth of our revenue in transportation services and warehouse services.

Our overall gross profit margin decreased from 20.8% for the three

months ended March 31, 2023 to 8.6% for the same period in 2024, primarily due to our expansion into the Fontana, California warehouse

and the temporary disruption of operations in California as inventory was relocated to a new facility.

Although the profit margins of

our transportation services (e.g.

FedEx, ocean freight, and truck deliveries) for the three months ended March 31, 2024, remained stable

or slightly higher compared to the previous year, the profit margins for our warehousing services experienced a decrease during the same

This decline is attributable to increases in the rental expenses, salary and benefits, temporary labor expenses, and warehouse

expenses of approximately 101%, 159%, 93%, and 565%, respectively, despite a relatively modest increase in warehousing services revenue

of approximately 50.5%.

Nine Months Ended March 31, 2024 and

Our freight expenses, rental expenses (primarily warehouse operating

lease expenses), temporary labor expenses, and salary and benefits increased significantly by $14.4 million, $10.9 million, $4 million,

and $3.2 million, respectively, during the nine months ended March 31, 2024 compared to the same period in 2023.

The increases in

these expenses were all due to the growth of our revenue in transportation services and warehouse services.

Our overall gross profit margin decreased from

21.9% for the nine months ended March 31, 2023 to 13.3% for the same period in 2024, primarily due to our expansion into the Fontana,

California warehouse and the temporary disruption of operations in California, as inventory was relocated to a new facility.

the profit margins of our transportation services (e.g.

FedEx, ocean freight, and truck deliveries) for the nine months ended March 31,

2024, remained stable or slightly higher compared to the previous year, the profit margins for our warehousing services experienced a

significant decrease during the same period.

This decline is attributable to increases in the rental expenses, salary and benefits, temporary

labor expenses, and warehouse expenses of approximately 110%, 138%, 75%, and 569%, respectively, despite a relatively modest increase

in warehousing services revenue of approximately 49.2%.

in freight expenses are due to the increase of the surcharge by FedEx.

The increase in temporary labor expenses and salary and benefits

is due to the expansion of the warehouse operations.

Our overall gross profit (loss) margin

decreased from 12.7% for the for the three months ended September 30, 2023 to (8.5%) for the same period in 2024,

primarily due to the increase of the surcharge by UPS and the decreases in customer order volume, as well as some of the recently

leased warehouses that are not fully utilized.

Operating expenses

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and administrative expenses.

The following table sets forth a breakdown of our general and administrative expenses for the three and nine

months ended March 31, 2024 and 2023:

The following table sets forth a breakdown of our general and administrative expenses for the three months

ended September 30, 2024 and 2023:

September 30,

Office expenses

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Other expenses

Credit loss expenses

Three Months Ended March 31, 2024 and

Our general and administrative expenses increased by $0.2 million,

from $3.1 million for the three months ended March 31, 2023, to $3.3 million for the same period in 2024, representing an increase

The increase was due to increased administrative activities primarily related to office supplies, and repairs and maintenance,

to accommodate our business expansion.

Nine Months Ended March 31, 2024 and

Credit loss expenses (recovery)

Our general and administrative expenses increased

by $1.1 million, from $7.0 million for the nine months ended March 31, 2023 to $8.1 million for the same period in 2024,

representing an increase of 16%.

The increase was due to increased administrative activities primarily related to office supplies, and

repairs and maintenance, to accommodate our business expansion.

Our income tax expense decreased by $1.0 million for the three months

ended March 31, 2024 compared to the same period in 2023, mainly due to the decrease in profit before tax by $2.5 million during the three

months ended March 31, 2024.

by $1.8 million, from $1.9 million for the three months ended September 30, 2023 to $3.7 million for the same

period in 2024, representing an increase of 92%.

The increase was due to the following factors:

expenses increased by $0.6 million, or 106%, mainly due to an increase in general insurance

by $0.5 million associated with the rapid expansion of our business.

Repairs and maintenance expenses increased by $0.2 million, or 109%, as a result of the growth in our transportation services.

Professional fees increased by $0.3 million, or 485%, mainly due to

increase of audit fees.

Our income tax expense decreased by $2.5 million

for the nine months ended March 31, 2024 compared to the same period in 2023, mainly due to the decrease in profit before tax by $2.9

million during the nine months ended March 31, 2024.

As a result of the foregoing, our net income for

the three months ended March 31, 2024 was $0.7 million, compared with the net income of $2.2 million for the same period in 2023, representing

a decrease by $1.5 million.

Our net income for the nine months ended March

31, 2024 was $7.2 million, compared with the net income of $9.0 million for the same period in 2023, representing a decrease

by $1.8 million.

for the three months ended September 30, 2024 compared to the same period in 2023, mainly due to the decrease in profit before

tax by $10 million during the three months ended September 30, 2024.

Net income (loss)

As a result of the foregoing, our net income (loss)

for the three months ended September 30, 2024 was $(4.6) million, compared with the net income of $2.8 million for

the same period in 2023, representing a decrease by $7.4 million.

Liquidity and Capital Resources

assessing our liquidity, management monitors and analyzes our cash on-hand, our ability to generate sufficient revenue sources in the

future, and our operating and capital expenditure commitments.

As of the date of this Quarterly Report ,

we have financed our operations primarily through cash generated by operating activities and capital contributions from stockholders.

As of March 31, 2024 and June 30, 2023, we had cash (including restricted cash) of $6.0 million and $6.6 million, respectively, which

primarily consisted of cash deposited in banks.

Our working capital requirements mainly consist

of costs of sales and general and administrative expenses.

We expect that our capital requirements will be met by cash generated from

our operating activities and financing activities from our principal stockholders.

We believe that our current cash and cash generated

from our operating activities will be sufficient to meet our current and anticipated working capital requirements and capital expenditures

for at least the next 12 months.

We may, however, need additional cash resources in the future if we experience changes in our business

conditions or other developments.

Cash Flows for the Nine Months Ended

March 31, 2024 and 2023

Net cash provided by operating activities

In assessing our liquidity, management monitors

and analyzes our cash on-hand, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure

As of the date of this Quarterly Report, we have financed our operations primarily through cash generated by operating activities

and capital contributions from stockholders.

As of September 30, 2024 and June 30, 2024, we had cash and restricted cash of $5.0 million

and $10.0 million, respectively, which primarily consisted of cash deposited in banks.

working capital requirements mainly consist of costs of sales and general and administrative expenses.

We expect that our capital requirements

will be met by cash generated from our operating activities and financing activities.

believe that our current cash and cash generated from our operating activities will be sufficient to meet our current and anticipated

working capital requirements and capital expenditures for at least the next 12 months.

We may, however, need additional cash resources

in the future if we experience changes in our business conditions or other developments.

Cash Flows for the three months Ended

September 30, 2024 and 2023

September 30,

Net cash provided by (used in) operating activities

Net cash used in investing activities

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Net increase (decrease) in cash

Cash at beginning of period

Cash and restricted cash at end of period

We had a balance of cash and restricted cash of

$6.0 million as of March 31, 2024, compared with a balance of $6.6 million as of June 30, 2023.

During the nine months

ended March 31, 2024, we mainly derived our cash inflow from operating activities.

Operating Activities

Net cash provided by operating activities

was $4.0 million for the nine months ended March 31, 2024, compared to net cash provided in operating activities of

$10.5 million for the same period in 2023, representing a $6.5 million decrease in the net cash inflow provided by

Cash and restricted cash at beginning of year

Cash and restricted cash at end of year

had a balance of cash and restricted cash of $5.0 million as of September 30, 2024, compared with a balance of

$10.0 million as of June 30, 2024.

During the three months ended September 30, 2024, changes in our cashflow were mainly

due to the following activities:

Operating Activities

The decrease was primarily due to the following:

(i) We had net income of $7.2 million for the nine months

ended March 31, 2024.

For the same period in 2023, we had net income of $9.0 million, which led to a $1.8 million decrease

Net cash used in operating activities was $3.6

million for the three months ended September 30, 2024, compared to net cash provided by operating activities of $3.1 million

for the same period in 2023, representing a $6.7 million decrease in the net cash inflow provided by operating activities.

was primarily due to the following:

had net loss of $4.6 million for the three months ended September 30, 2024.

For the three months ended September 30, 2023,

we had net income of $2.8 million, which led to a $7.4 million decrease in net cash inflow from operating activities.

in accounts receivable and other receivables were $0.2 million cash inflow for the three months ended September 30, 2024.

the three months ended September 30, 2023, changes in accounts receivable and other receivables were $0.6 million cash inflow,

which led to a $0.4 million decrease in net cash outflow from operating activities.

(iii) Changes

in accounts payable and accrued liabilities used $1.9 million net cash outflow for the three months ended September 30, 2024.

the three months ended September 30, 2023, changes in accounts payable and accrued liabilities provided net cash outflow of $2.1 million,

which led to a $0.2 million decrease in net cash outflow from operating activities.

in tax payable provided $0.1 million net cash outflow for the three months ended September 30, 2024.

For the three months

ended September 30, 2023, changes in tax payable provided net cash inflow of $0.6 million, which led to a $0.7 million decreased

in net cash inflow from operating activities.

(ii) Changes in accounts receivable and other receivables were

$7.7 million cash outflow for the nine months ended March 31, 2024.

For the same period in 2023, changes in accounts receivable

and other receivables were $2.6 million cash outflow, which led to a $5.1 million increase in net cash outflow from operating

(iii) Changes in accounts payable and accrued liabilities used $2.2 million

net cash outflow for the nine months ended March 31, 2024.

For the same period in 2023, changes in accounts payable and accrued liabilities

provided net cash inflow of $0.6 million, which led to a $2.8 million increase in net cash outflow from operating activities.

(iv) Changes in tax payable provided $1.9 million net cash

inflow for the nine months ended March 31, 2024.

For the same period in 2023, changes in tax payable provided net cash inflow of $2.9 million,

which led to a $0.9 million decreased in net cash inflow from operating activities.

(v) Changes in payroll liabilities provided $0.2 million

net cash inflow for the nine months ended March 31, 2024.

For the same period in 2023, changes in payroll liabilities provided net cash

inflow of $0.3 million, which led to a $0.1 million decrease in net cash inflow from operating activities.

(vi) Changes in non-cash items provided $5.6 million net cash inflow

for the nine months ended March 31, 2024.

For the same period in 2023, changes in non-cash items provided net cash inflow of $1.7 million,

which led to a $3.9 million increase in net cash inflow from operating activities.

in non-cash items provided $2.0 million net cash inflow for the three months ended September 30, 2024.

For the three months

ended September 30, 2023, changes in non-cash items provided net cash inflow of $1.0 million, which led to a $1.0 million increase

in net cash inflow from operating activities.

Investing Activities

Net cash used in investing activities was $1.3 million

for the nine months ended March 31, 2024, primarily attributable to $3.1 million cash used for the purchase of property and equipment

and $1.6 million used for loans extended to a customer for the nine months ended March 31, 2024.

For the same period in 2023, net cash used in

investing activities was $4.3 million, primarily attributable to $1.8 million cash used for the purchase of property and equipment

and $2.4 million used for loans extended to a customer.

for the three months ended September 30, 2024, primarily attributable to $1.4 million cash used for the purchase of property

and equipment, $1.0 million cash used for loans extended to others, and $1.0 million proceeds received from loan repayments.

For the three months ended September 30,

2023, net cash used in investing activities was $2.2 million, primarily attributable to $1.1 million cash used for the purchase of property

and equipment and $1.0 million used for loans extended to others.

Financing Activities

For the nine months ended March 31, 2024, we had

net cash provided by financing activities of $0.2 million, which was primarily attributable to the net effects of:

(i) $0.5 million

collected from related parties for the repayment of loans we previously advanced to them;

(ii) $0.6 million used for expenses

relating to the initial public offering;

(iii) $0.2 million used to repay finance lease liabilities;

and (iv) $0.5 million

in capital contributions from stockholders.

For the nine months ended March 31, 2023, we had

net cash used in financing activities of $3.0 million, which was primarily attributable to the net effects of:

(i) $2.5 million

used to repay related parties;

(ii) $0.5 million advanced to related parties;

iii) $0.2 million used for expenses relating to the initial

public offering;

For the three months ended September 30,

2024, we had net cash used in financing activities of $0.05 million, which was primarily attributable to the net effects of $0.05 million

used to repay finance lease liabilities.

the three months ended September 30, 2023, we had net cash provided from financing activities of $1.0 million, which was primarily

attributable to the net effects of:

(i) $0.5 million collected from related parties for the repayments of loans the Company

previously advanced to them;

(ii) $0.5 million lent from related parties;

(iii) $0.1 million used for expenses relating to

the initial public offering;

(iv) $0.05 million used to repay finance lease liabilities;

and (v) $0.4 million in capital contributions from stockholders.

and (v) $0.1 million in

capital contributions from stockholders.

Commitments and Contractual Obligations

of March 31, 2024, we had operating and finance leases for office space, warehouse space, and forklifts.

Lease terms expire at various

dates through April 2026 to November 2034 with options to renew for varying terms at our sole discretion.

We have not included these

options to extend or terminate in the calculation of right-of-use assets or lease liabilities, as there is no reasonable certainty, as

of the date of this Quarterly Report , that these options will be exercised.

As of March 31, 2024, maturities of lease liabilities

for each of the following fiscal years ending June 30 and thereafter were as follows:

As of September 30, 2024, we had operating and

finance leases for office space, warehouse space, and forklifts.

Lease terms expire at various dates through February 2025 to July 2034

with options to renew for varying terms at our sole discretion.

We have not included these options to extend or terminate in the calculation

of ROU assets or lease liabilities, as there is no reasonable certainty, as of the date of this Quarterly Report, that these options will

be exercised.

As of September 30, 2024, maturities of lease

liabilities for each of the following fiscal years ending June 30 and thereafter were as follows:

2029 and beyond

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Other than the above leases, we did not have significant

commitments, long-term obligations, or guarantees as of March 31, 2024.

commitments, long-term obligations, or guarantees as of September 30, 2024.

Off-balance Sheet Commitments and Arrangements

Other than two one-year term standby letters of

credit with Eastwest Bank in the aggregate amount of $2,061,673, we did not have during the period presented, and we do not currently

have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated

entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were

established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Other than two standby letters of credit with

Eastwest Bank in the aggregate amount of $2,061,673, we did not have during the period presented, and we do not currently have, any off-balance

sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities

or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established

for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As of September 30,

2024, we still have unused credit of $2,061,673 with Eastwest Bank.

Critical Accounting Policies and Estimates

preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America

The preparation of consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,

contingent assets and liabilities, each as of the date of this Quarterly Report ,

and revenue and expenses during the periods presented.

On an ongoing basis, management evaluates their estimates and assumptions, and

the effects of any such revisions are reflected in the financial statements in the period in which they are determined to be necessary.

Management bases their estimates on historical experience and on various other factors that they believe are reasonable under the circumstances,

the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent

from other sources.

Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our

consolidated financial statements.

contingent assets and liabilities, each as of the date of this Quarterly Report, and revenue and expenses during the periods presented.

On an ongoing basis, management evaluates their estimates and assumptions, and the effects of any such revisions are reflected in the

financial statements in the period in which they are determined to be necessary.

Management bases their estimates on historical experience

and on various other factors that they believe are reasonable under the circumstances, the results of which form the basis for making

judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.

Actual outcomes could differ

materially from those estimates in a manner that could have a material effect on our consolidated financial statements.

Despite that management determines that there

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Shorter of lease term or 15 years

As of March 31, 2024 and June 30, 2023, the historical

cost of property and equipment was $13,503,962 and $9,566,675, respectively.

We recorded depreciation expenses of $1,313,684 and $788,699 during

the nine months ended March 31, 2024 and 2023, respectively.

For the nine months ended March 31, 2024 and 2023, we recorded depreciation

expenses of $1,091,795 and $641,222 in costs of sales, respectively, and $221,889 and $147,477 in general and administrative expenses,

As of September 30, 2024 and June 30, 2024, the

historical cost of property and equipment was $16,127,139 and $14,773,842, respectively.

We recorded depreciation expenses of $578,432

and $388,929 during the three months ended September 30, 2024 and 2023, respectively.

Specifically, $436,368 and $324,849 of the depreciation

expenses were recorded in costs of sales for the three months ended September 30, 2024 and 2023, respectively.

$142,064 and $64,080 of

the depreciation expenses were recorded in general and administrative expenses for the three months ended September 30, 2024 and 2023,

respectively.

our significant accounting policies are more fully described in “Note 2 — Summary of Significant Accounting Policies”

in the notes to our unaudited financial statements , we believe that there

were no critical accounting policies that affect the preparation of financial statements.

Our significant accounting policies are more fully

described in Note 2 — Summary of Significant Accounting Policies” in the notes to our unaudited consolidated financial

We believe that there were no critical accounting policies that affected the preparation of such financial statements.

Quantitative and Qualitative Disclosures

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis