What changed in this filing

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Item 1. Financial Statements

2025-02-14 compared with 2024-11-14 · 386 added, 254 removed, 536 unchanged (54% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2024 AND JUNE 30, 2024

AS OF DECEMBER 31, 2024 AND JUNE 30, 2024

(US$, except share data, or otherwise noted)

September 30,

Current assets

5 unchanged sentences

Non-current assets

Restricted cash – non-current

Restricted cash

Long-term loan receivables

11 unchanged sentences

Accrued payroll liabilities

Commitment fee payable

Convertible notes

Operating lease liabilities – current

8 unchanged sentences

Stockholders’ equity

Common stock, US$ 0.00001 par value, 100,000,000 shares authorized, 41,634,000 issued and outstanding as of September 30, 2024 and June 30, 2024, respectively

Common stock, US$ 0.00001 par value, 100,000,000 shares authorized, 41,677,147 and 41,634,000 issued and outstanding as of December 31 and June 30, 2024, respectively

Additional paid-in capital

7 unchanged sentences

OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023

(US$, except share data, or otherwise noted)

September 30,

Costs of sales

6 unchanged sentences

( 2,176,164 )

( 9,451,779 )

Other (income) expenses:

1 unchanged sentence

( 1,770,321 )

Loss on disposal of assets

Finance costs

3 unchanged sentences

( 1,735,122 )

Current income tax expense (recovery)

Deferred income tax expense (recovery)

( 7,814,080 )

Total income tax expenses (recovery)

Current income tax expense

Deferred income tax (recovery) expense

( 1,506,969 )

Total income tax (recovery) expenses

( 1,506,969 )

Net income (loss)

( 1,659,240 )

Total comprehensive income (loss)

( 6,307,111 )

Basic & diluted net earnings per share

Weighted average number of shares of common stock-basic

Weighted average number of shares of common stock-diluted

Total comprehensive (loss) income

( 1,659,240 )

( 6,307,111 )

Basic & diluted net (loss) earnings per share

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

The accompanying notes form an integral part

1 unchanged sentence

HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’ EQUITY

FOR THE THREE AD SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023

(US$, except share data, or otherwise noted)

Three Months Ended

Six Months Ended

Balance as of June 30, 2023

Contribution from stockholders

Balance as of December 31, 2023 (unaudited)

Three Months ended

Balance as of September 30, 2023 (unaudited)

Contribution from stockholders

Balance as of December 31, 2023 (unaudited)

Six Months Ended

Balance as of June 30, 2024

2 unchanged sentences

( 6,307,111 )

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

Three Months ended

Balance as of September 30,2024 (unaudited)

Net income(loss)

( 1,659,240 )

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

The accompanying notes form an integral part

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023 (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023 (UNAUDITED)

(US$, except share data, or otherwise noted)

Three Months Ended

September 30,

Three Months Ended

September 30,

Cash Flows from Operating Activities:

1 unchanged sentence

( 6,307,111 )

Adjustments for items not affecting cash:

Net loss from disposal of fixed assets

Depreciation of property and equipment and right-of-use financial assets

Non-cash operating leases expense

Accretion of convertible note

Current estimated credit loss

Accretion of finance lease liabilities

Deferred income taxes

1 unchanged sentence

Interest income

Changes in operating assets and liabilities

Changes in working capital:

Accounts receivable and other receivables

( 5,967,431 )

( 7,651,253 )

Other current assets

7 unchanged sentences

Accrued payroll liabilities

Net changes in derecognized ROU and operating lease liabilities

Net cash (used in) provided from operating activities

8 unchanged sentences

Proceeds from loan repayments

Proceeds from sale of property and equipment

Net cash used in investing activities

2 unchanged sentences

Cash Flows from Financing Activities:

Net proceeds received from (repaid to) related parties

Proceeds (lend to) from related parties

Repayments of finance lease liabilities

Proceeds received from related parties

Deferred issuance costs for initial public offering

Repayment to related parties

Net proceeds from Standby Equity Purchase

Repayment of finance lease liabilities

Capital contributions from stockholders

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net increase (decrease) in cash and restricted cash

1 unchanged sentence

Cash and restricted cash, beginning of year

Cash and restricted cash, end of year

The following table provides a reconciliation

of cash and restricted cash reported within the Consolidated Balance Sheets that sum to the total of the same amounts shown in the Consolidated

Statements of Cash Flows:

Cash and restricted cash, end of six months periods

The following table provides a reconciliation of cash and restricted cash reported within the Consolidated Balance Sheets that equal the totals of the same amounts shown in the Consolidated Statements of Cash Flows:

Restricted cash – non-current

1 unchanged sentence

Supplemental Disclosure of Cash Flows Information:

Cash paid for income tax

Cash paid for interest

Non-cash Transactions:

Right-of-use assets acquired in exchange for operating lease liabilities

Decrease in right-of-use assets due to remeasurement of lease terms

Shares issued to settle commitment fee

The accompanying notes form an integral part

1 unchanged sentence

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL

STATEMENTS (UNAUDITED)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Organization and principal activities

11 unchanged sentences

Basis of presentation

The accompanying unaudited interim condensed consolidated financial

statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

The accompanying unaudited interim condensed consolidated

financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”)

for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC.

6 unchanged sentences

in our annual Report on Form 10-K for the year ended June 30, 2024.

In the opinion of the Company’s

management, the unaudited interim condensed consolidated financial statements include all adjustments, which are only of a normal

and recurring nature, necessary for a fair statement of the financial position of the Company as of September 30, 2024, and its

results of operations and cash flows for the three-month period then ended.

Operating results for the three months ended September

30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ended June 30, 2025.

In the opinion of the Company’s management,

the unaudited interim condensed consolidated financial statements include all adjustments, which are only of a normal and recurring nature,

necessary for a fair statement of the financial position of the Company as of December 31, 2024, and its results of operations and cash

flows for the six-month period then ended.

Operating results for the three and six months ended December 31, 2024 are not necessarily

indicative of the results that may be expected for the fiscal year ended June 30, 2025.

Principal of consolidation

unaudited interim condensed consolidated financial statements include the

financial statements of the Company and its subsidiaries.

All transactions and balances among the Company and its subsidiaries have been

eliminated upon consolidation.

The unaudited interim condensed consolidated financial

statements include the financial statements of the Company and its subsidiaries.

All transactions and balances among the Company

and its subsidiaries have been eliminated upon consolidation.

Principal activities Percentage of

3 unchanged sentences

Armlogi Holding Corp.

Holding company — September 27, 2022 Nevada, U.S.

Holding company —

September 27, 2022 Nevada, U.S.

Armstrong Logistic Inc.

6 unchanged sentences

Use of Estimates

preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United

States (‘U.S.

GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets

and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts

of revenue and expenses during the reporting period.

There were no critical accounting estimates affecting the unaudited condensed consolidated

financial statements for the three months ended September 30, 2024 and 2023.

The preparation of financial statements and related

disclosures in accordance with accounting principles generally accepted in the United States (‘U.S.

GAAP”) requires management

to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period.

There were no critical

accounting estimates affecting the unaudited condensed consolidated financial statements for the three and six months ended December

31, 2024 and 2023.

HOLDING CORP.

5 unchanged sentences

Restricted cash represents the cash restricted

for two standby letters of credit with Eastwest Bank as collateral for certain of the Company’s lease agreements.

The terms of the

letters of credit start from August 1, 2023 and November 7, 2023, respectively.

The letters of credit are renewable on an annual basis

until the termination thereof.

for three standby letters of credit with Eastwest Bank as collateral for certain of the Company’s lease agreements.

the letters of credit start from August 1, 2023, November 7, 2023 and December 27, 2024, respectively.

The letters of credit are renewable

on an annual basis until the termination thereof.

Certain risks and concentration

2 unchanged sentences

loan receivables and other current assets.

As of September 30, 2024 and June 30, 2024, substantially all of the Company’s cash and

As of December 31, 2024 and June 30, 2024, substantially all of the Company’s cash and

restricted cash were held in EastWest Bank located in the U.S., which management considers to be of high credit quality.

26 unchanged sentences

Shorter of lease term or 15 years

for maintenance and repairs are expensed as incurred.

Gains and losses on disposals are the differences between net sales proceeds

and carrying amounts of the relevant assets and are recognized in the unaudited condensed consolidated statements of operations and

comprehensive income (loss).

Expenditures for maintenance and repairs are expensed

Gains and losses on disposals are the differences between net sales proceeds and carrying amounts of the relevant assets

and are recognized in the unaudited condensed consolidated statements of operations and comprehensive income (loss).

Long-Lived Assets

assets, such as property and equipment, and definite-lived intangible assets, right-of-use assets (operating lease and finance lease)

are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable.

If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted

expected future cash flows to be generated by that asset or asset group to its carrying amount.

If the carrying amount of the long-lived

asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent the carrying

amount of the asset or asset group exceeds the fair value.

Fair values of long-lived assets are determined through various techniques,

such as applying probability weighted, expected present value calculations to the estimated future cash flows using assumptions a market

participant would utilize or through the use of a third-party independent appraiser or valuation specialist.

No impairment losses of

long-lived assets were recorded during the three months ended September 30, 2024 and 2023.

Long-lived assets, such as property and equipment,

and definite-lived intangible assets, right-of-use assets (operating lease and finance lease) are reviewed for impairment whenever events

or changes in circumstances indicate the carrying amount of the assets may not be recoverable.

If circumstances require a long-lived asset

or asset group to be tested for possible impairment, the Company compares the undiscounted expected future cash flows to be generated

by that asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable

on an undiscounted cash flow basis, an impairment charge is recognized to the extent the carrying amount of the asset or asset group exceeds

the fair value.

Fair values of long-lived assets are determined through various techniques, such as applying probability weighted, expected

present value calculations to the estimated future cash flows using assumptions a market participant would utilize or through the use

of a third-party independent appraiser or valuation specialist.

No impairment losses of long-lived assets were recorded during the three

and six months ended December 31, 2024 and 2023.

Intangible assets consist of software and security

56 unchanged sentences

agent on behalf of the customers are excluded from revenue.

The Company uses independent contractors and

third-party carriers in the performance of its transportation services.

The Company evaluates who controls the transportation

services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be

provided by another party.

The Company determined it acts as the principal for its transportation services performance obligation,

since it is in control of establishing the prices for the specified services, managing all aspects of the shipment process, and

assuming the risk of loss for delivery and collection.

Such transportation services revenue is presented on a gross basis in the

unaudited condensed consolidated statements of operations and comprehensive income (loss).

The Company uses independent contractors and third-party

carriers in the performance of its transportation services.

The Company evaluates who controls the transportation services to determine

whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party.

The Company determined it acts as the principal for its transportation services performance obligation, since it is in control of establishing

the prices for the specified services, managing all aspects of the shipment process, and assuming the risk of loss for delivery and collection.

Such transportation services revenue is presented on a gross basis in the unaudited condensed consolidated statements of operations and

comprehensive income (loss).

HOLDING CORP.

4 unchanged sentences

by major service lines is as follows:

September 30,

Transportation services

8 unchanged sentences

obligations within our normal operating cycle, which is generally one year.

For the three months ended September 30, 2024 and 2023, the

amounts transferred from contract liabilities at the beginning of the fiscal year to revenue were $ 276,463 and nil , respectively.

For the six months ended December 31, 2024 and 2023, the amounts

transferred from contract liabilities at the beginning of the fiscal year to revenue were US$ 245,716 and US$ 423,932 , respectively.

Practical Expedients

5 unchanged sentences

as this amount corresponds directly with the value provided to the customer for the Company’s performance completed to date.

Company also applies the practical expedient that permits the recognition of employee sales commissions related to transportation services

as an expense when incurred, since the amortization period of such costs is less than one year.

These costs are included in the unaudited

condensed consolidated statements of operations and comprehensive income (loss).

The Company also applies the practical expedient

that permits the recognition of employee sales commissions related to transportation services as an expense when incurred, since the amortization

period of such costs is less than one year.

These costs are included in the unaudited condensed consolidated statements of operations

and comprehensive income (loss).

The Company determines if an arrangement is a

22 unchanged sentences

ii) Finance leases

lease ROU assets are included in ROU and current lease liabilities, and other non-current lease liabilities in the unaudited condensed

consolidated balance sheets.

Finance lease ROU assets and liabilities are

recognized at the commencement date based on the present value of lease payments over the lease term.

As most of the Company’s

leases do not provide an implicit rate, management uses the incremental borrowing rate based on the information available at the commencement

date in determining the present value of lease payments.

Finance lease ROU assets are included in ROU and

current lease liabilities, and other non-current lease liabilities in the unaudited condensed consolidated balance sheets.

Finance lease ROU assets and liabilities are recognized

at the commencement date based on the present value of lease payments over the lease term.

As most of the Company’s leases do not

provide an implicit rate, management uses the incremental borrowing rate based on the information available at the commencement date in

determining the present value of lease payments.

Management uses the implicit rate when readily determinable.

Finance lease ROU

assets are generally amortized over the lease term and are included in depreciation expenses.

The interest on the finance lease liabilities

is included in interest expense.

Finance lease ROU assets

are generally amortized over the lease term and are included in depreciation expenses.

The interest on the finance lease liabilities is

included in interest expense.

The Company has elected the accounting policy

3 unchanged sentences

expenses on a straight-line basis over the lease term.

income taxes are provided on the basis of net profit or loss for financial reporting purposes, adjusted for income and expense items

which are not assessable or deductible for income tax purposes, in accordance with the regulations of the relevant tax

jurisdictions.

Current income taxes are provided on the basis

of net profit or loss for financial reporting purposes, adjusted for income and expense items which are not assessable or deductible for

income tax purposes, in accordance with the regulations of the relevant tax jurisdictions.

Deferred income taxes are recognized for temporary

25 unchanged sentences

within the industry.

Company recognizes a tax benefit associated with an uncertain tax position when, in its judgment, it is more likely than not that the

position will be sustained upon examination by a taxing authority.

For a tax position that meets the more-likely-than-not recognition

threshold, the Company initially and subsequently measures the tax benefit as the largest amount that the Company judges to have a greater

than 50% likelihood of being realized upon ultimate settlement with a taxing authority.

The Company’s liability associated with

unrecognized tax benefits is adjusted periodically due to changing circumstances, such as the progress of tax audits, case law developments

and new or emerging legislation.

Such adjustments are recognized entirely in the period in which they are identified.

The Company’s

effective tax rate includes the net impact of changes in the liability for unrecognized tax benefits and subsequent adjustments as considered

appropriate by management.

The Company classifies interest and penalties recognized on the liability for unrecognized tax benefits as

income tax expense.

The Company did not have any unrecognized tax benefits as of September 30, 2024 and June 30, 2024.

The Company recognizes a tax benefit associated

with an uncertain tax position when, in its judgment, it is more likely than not that the position will be sustained upon examination

by a taxing authority.

For a tax position that meets the more-likely-than-not recognition threshold, the Company initially and subsequently

measures the tax benefit as the largest amount that the Company judges to have a greater than 50% likelihood of being realized upon ultimate

settlement with a taxing authority.

The Company’s liability associated with unrecognized tax benefits is adjusted periodically due

to changing circumstances, such as the progress of tax audits, case law developments and new or emerging legislation.

Such adjustments

are recognized entirely in the period in which they are identified.

The Company’s effective tax rate includes the net impact of

changes in the liability for unrecognized tax benefits and subsequent adjustments as considered appropriate by management.

classifies interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense.

The Company did not

have any unrecognized tax benefits as of December 31, 2024 and June 30, 2024.

Earnings per share

15 unchanged sentences

All the Company’s business activities

for the three months ended September 30, 2024 and 2023 were conducted in the U.S.

for the three and six months ended December 31, 2024 and 2023 were conducted in the U.S.

HOLDING CORP.

15 unchanged sentences

Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The Company’s financial instruments

include cash and restricted cash, accounts receivable and other receivables, loan receivables, long-term loan receivable, other

current assets, accounts payable and accrued liabilities, income tax payable, due to related parties, and lease liabilities.

carrying amounts of cash and restricted cash, accounts receivable and other receivables, loan receivables, other current assets,

accounts payable and accrued liabilities and income tax payable, due to related parties, and short-term lease liabilities

approximate their fair values due to the short-term nature of these instruments.

The carrying value of the Company’s long-term

loan receivables and long-term lease liabilities would not differ significantly from fair value (based on Level 2 inputs) if

recalculated based on current interest rates.

The Company’s financial instruments include

cash and restricted cash, accounts receivable and other receivables, loan receivables, long-term loan receivable, other current assets,

accounts payable and accrued liabilities, income tax payable, due to related parties, accrued payroll liabilities, commitment fee payable,

convertible notes and lease liabilities.

The carrying amounts of cash and restricted cash, accounts receivable and other receivables,

loan receivables, other current assets, accounts payable and accrued liabilities, due to related parties, accrued

payroll liabilities, commitment fee payable, convertible notes, and short-term lease liabilities approximate their fair values due to

the short-term nature of these instruments.

The carrying value of the Company’s long-term loan receivables and long-term lease liabilities

would not differ significantly from fair value (based on Level 2 inputs) if recalculated based on current interest rates.

The Company noted no transfers between levels

1 unchanged sentence

The Company did not have any instruments that were measured at fair value on a recurring or non-recurring

basis as of September 30, 2024 and June 30, 2024.

basis as of December 31, 2024 and June 30, 2024.

Costs of sales

15 unchanged sentences

consisted of the following:

September 30,

Accounts receivable – third parties

3 unchanged sentences

allowance for credit loss

* The balance is comprised primarily of accounts receivable associated with service arrangements that are not within the scope of ASC 606.

The movement of allowance for credit loss for the three months

ended September 30, 2024 and the fiscal year ended June 30, 2024:

September 30,

balance is comprised primarily of accounts receivable associated with service arrangements that are not within the scope of ASC 606.

The movement of allowance for credit loss for the six months ended

December 31, 2024 and the fiscal year ended June 30, 2024:

Balance as of beginning

5 unchanged sentences

Property and equipment, net consisted of the following:

September 30,

Furniture and fixtures

9 unchanged sentences

The Company recorded depreciation expenses of US$ 637,990 and US$ 485,906 during the three

months ended September 30, 2024 and 2023, respectively.

months ended December 31, 2024 and 2023, respectively.

Specifically, US$ 582,182 and US$ 417,180 of the depreciation expenses were recorded

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

in costs of sales for the three months ended December 31, 2024 and 2023, respectively.

US$ 55,808 and US$ 68,726 of the depreciation

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

expenses were recorded in general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively.

The Company recorded depreciation expenses of

US$ 1,216,422 and US$ 919,272 during the six months ended December 31, 2024 and 2023, respectively.

Specifically, US$ 1,108,175 and US$ 786,466

of the depreciation expenses were recorded in costs of sales for the six months ended December 31, 2024 and 2023, respectively, US$ 108,247

and US$ 132,806 of the depreciation expenses were recorded in general and administrative expenses for the six months ended December 31,

2024 and 2023, respectively.

Intangible Assets, Net

Intangible assets, net consisted of the following:

September 30,

Security Systems

2 unchanged sentences

The Company recorded amortization of US$ 17,659

and US$ 8,829 , which were included in costs of sales, for the three months ended September 30, 2024 and 2023, respectively.

and US$ 17,659 , which were included in costs of sales, for the six months ended December 31, 2024 and 2023, respectively.

The Company recorded

amortization of US$ 8,829 and US$ 8,829 , which were included in costs of sales, for the three months ended December 31, 2024 and 2023, respectively.

HOLDING CORP.

3 unchanged sentences

of the following:

i) On February 8, 2023, the Company entered into a loan agreement with Pundarika LLC for a principal of US$ 500,000 .

The loan matured on February 15, 2024 and bore interest at an annual rate of 3.2 %.

The loan was fully paid on May 29, 2024.

ii) On February 27, 2023, the Company entered into a loan agreement with Pundarika LLC for a principal of US$ 1,000,000 .

The loan matured on March 25, 2024 and bore interest at an annual rate of 3.2 %.

The loan was fully paid on May 29, 2024.

iii) On March 24, 2023, the Company entered into a loan agreement with

Pundarika LLC for a principal of US$ 925,000 .

The loan matured on April 30, 2024 and bore interest at an annual rate of 3.2 %.

loan was fully paid on June 6, 2024.

iv) On July 10, 2023, the Company entered into a loan agreement with

Pundarika LLC for a principal of US$ 1,000,000 .

i) On July 10, 2023, the Company entered into a loan agreement with Pundarika LLC for a principal of US$ 1,000,000 .

The loan matured on August 31, 2024 and bore interest at a rate of 3.2 % annually.

The loan was fully paid on August 30, 2024

v) On January 24, 2024, the Company entered into a loan agreement with

Paul Tam for a principal of US$ 150,000 .

The loan matures on January 24, 2025 and bears interest at a rate of 3.2 % annually.

fully paid on February 13, 2024.

vi) On January 24, 2024, the Company entered into a loan agreement with

Athena Home Inc.

The loan was fully repaid on August 30, 2024.

ii) On January 24, 2024, the Company entered into a loan agreement with Athena Home Inc.

for a principal of US$ 600,000 .

The loan matures on January 24, 2025 and bears interest at a rate of 3.2 % annually.

Company expects to repay the loan upon maturity.

vii) On May 22, 2024, the Company entered into a loan agreement with MYJW LLC.

The loan originally matured on January 24, 2025 and bears interest at a rate of 3.2 % annually.

The maturity date of the loan was extended to April 24, 2025 on January 20, 2025.

The Company expects the loan to be repaid upon maturity.

iii) On May 22, 2024, the Company entered into a loan agreement with MYJW LLC.

for a principal of US$ 400,000 .

The loan matures on December 31, 2025 and bears interest at a rate of 3.2 % annually.

The Company expects to repay the loan upon maturity.

viii) On May 28, 2024, the Company entered into a loan agreement with Pundarika LLC.

The Company expects the loan to be repaid upon maturity.

iv) On May 28, 2024, the Company entered into a loan agreement with Pundarika

for a principal of US$ 1.5 million.

As security for loan repayment, Pundarika LLC has pledged its inventory currently held in the

Company’s warehouse as collateral.

The value of the collateralized inventory is equivalent to the outstanding loan amount, ensuring

a 1:1 collateral coverage ratio.

The loan matures on December 31, 2025 and bears interest at a rate of 3.2 % annually.

The Company expects to repay the loan upon maturity.

ix) On June 6, 2024, the Company entered into a loan agreement with Pundarika LLC.

The Company expects

the loan to be repaid upon maturity.

A partial payment of US$ 1 million has been received on November 14, 2024

v) On June 6, 2024, the Company entered into a loan agreement with Pundarika

for a principal of US$ 1.0 million.

As security for loan repayment, Pundarika LLC has pledged its inventory currently held in the

Company’s warehouse as collateral.

The value of the collateralized inventory is equivalent to the outstanding loan amount, ensuring

a 1:1 collateral coverage ratio.

The loan matures on December 31, 2025 and bears interest at a rate of 3.2 % annually.

The Company expects to repay the loan upon maturity.

x) On June 13, 2024, the Company entered into a loan agreement with Bacalar Enterprise Freight Inc.

The Company expects

the loan to be repaid upon maturity.

vi) On June 13, 2024, the Company entered into a loan agreement with Bacalar Enterprise Freight Inc.

for a principal of US$ 250,000 .

The loan matures on June 13, 2025 and bears interest at a rate of 3.2 % annually.

The Company expects to repay the loan upon maturity.

xi) On August 29, 2024, the Company entered into a loan agreement with Pundarika LLC.

The Company expects the loan to be repaid upon maturity.

vii) On August 29, 2024, the Company entered into a loan agreement with

Pundarika LLC.

for a principal of US$ 1.0 million.

As security for loan repayment, Pundarika LLC has pledged its inventory currently held

in the Company’s warehouse as collateral.

The value of the collateralized inventory is equivalent to the outstanding loan amount,

ensuring a 1:1 collateral coverage ratio.

The loan matures on December 31, 2025 and bears interest at a rate of 3.2 % annually.

The Company expects to repay the loan upon maturity.

As of September 30, 2024, the Company recorded

a loan receivable balance of US$ 861,554 and long-term loan receivable of US$ 3,921,243 , including accrued interest income of US$ 32,797 .

expects the loan to be repaid upon maturity.

As of December 31, 2024, the Company recorded

a loan receivable balance of US$ 3,812,293 , including accrued interest income of US$ 62,293 .

As of June 30, 2024, the Company recorded a loan

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of September 30, 2024, the Company had operating and finance leases

As of December 31, 2024, the Company had operating and finance leases

for office space, warehouse space, and forklifts.

Lease terms expire at various dates from February 2025 through July 2034 with options

Lease terms expire at various dates from February 2025 through November 2034 with options

to renew for varying terms at the Company’s sole discretion.

3 unchanged sentences

The Company had certain sublease contracts and recognized US$ 916,184 and US$ 1,162,538 lease income, recorded

in other income, during the three months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, the Company does not

recognize any additional operating lease liabilities.

in other income, during the six months ended December 31, 2024 and 2023, respectively.

During the six months ended December 31, 2024, the

Company recognized additional operating lease liabilities of US$ 6,184,333 , as a result of entering into a new operating lease

The ROU assets were recognized at the discount rate range from 9.50 % to 9.75 %, resulting in US$ 6,184,333 on the

commencement dates.

During the six months ended December 31, 2024, the Company terminated

certain operating lease agreements prior to the original expiration dates.

As a result, the ROU assets and lease liabilities were derecognized

of US$ 1,861,834 and US$ 1,925,708 , respectively.

The components of lease expenses were as follows:

September 30,

Operating lease expenses

Amortization – included in costs of sales

The Company recorded operating lease expenses

of US$ 8,111,425 and US$ 5,218,558 during the three months ended September 30, 2024 and 2023, respectively.

Specifically, US$ 7,621,771 and

US$ 5,119,738 of operating lease expenses were recorded in costs of sales for the three months ended September 30, 2024 and 2023, respectively.

US$ 93,000 and US$ 98,820 of operating lease expenses were recorded in general and administrative expenses for the three months ended September

The Company recorded operating lease expenses of US$ 7,746,884 and US$ 6,027,177

in the three months ended December 31, 2024 and 2023, respectively.

Specifically, US$ 7,654,268 and US$ 5,107,579 of operating lease expenses

were recorded in costs of sales for the three months ended December 31, 2024 and 2023, respectively.

US$ 92,616 and US$ 66,707 of operating

lease expenses were recorded in general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively.

nil and US$ 852,891 of operating lease expenses were recorded in other expenses for the three months ended December 31, 2024 and 2023,

respectively.

The Company recorded operating lease expenses of US$ 15,858,308 and

US$ 11,245,735 during the six months ended December 31, 2024 and 2023, respectively.

Specifically, US$ 15,276,038 and US$ 10,227,316 of operating

lease expenses were recorded in costs of sales for the six months ended December 31, 2024 and 2023, respectively.

US$ 185,616 and US$ 165,528

of operating lease expenses were recorded in general and administrative expenses for the six months ended December 31, 2024 and 2023,

respectively.

US$ 396,654 and US$ 852,891 of operating lease expenses were recorded in other expenses for the six months ended December

31, 2024 and 2023, respectively.

US$ 396,654 and nil of operating lease expenses were recorded in other expenses for the three months ended

September 30, 2024 and 2023, respectively.

As of September 30, 2024, maturities of lease

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

As of December 31, 2024, maturities of lease liabilities

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

2029 and beyond

18 unchanged sentences

of the following:

September 30,

Accounts payable

1 unchanged sentence

Other liabilities

Other liabilities as of September 30, 2024 and

Other liabilities as of December 31, 2024 and

June 30, 2024 mainly consisted of tenant’s deposit.

Convertible notes

On November 25, 2024, the Company entered

into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd.

(the “Investor”), pursuant to

which the Company has the right to sell to the Investor up to $ 50.0 million (the “Commitment Amount”) of the

Company’s common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term

In connection with the SEPA, and subject to the conditions set forth therein, the Investor has agreed to advance to the

Company in the form of convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of up to

$ 21.0 million (the “Pre-Paid Advance”), subject to a 10 % original issue discount, to be disbursed to the Company in

three tranches:

first Pre-Paid Advance was disbursed on November 25, 2024, in the amount of $ 5.0 million and the Company received $ 4.5 million in cash,

net of the 10 % original issue discount.

● The second Pre-Paid Advance was disbursed on

December 17, 2024, in the amount of $ 5.0 million and the Company received $ 4.5 million in cash, net of the 10 % original issue discount.

● The third Pre-Paid Advance is expected to be

advanced in the principal amount of $ 11.0 million on the second trading day after the initial Registration Statement (as defined in the

SEPA) first becomes effective.

As of December 31, 2024, the third Pre-Paid Advance has not been disbursed.

According to the SEPA, the Company, at its sole

discretion, has the right, but not the obligation, to issue and sell to the Investor, and the Investor will subscribe for and purchase

the Company’s common stock by the delivery to the Investor of Advance Notices (as defined in the SEPA).

In addition, the Investor,

at its sole discretion has the right, but not the obligation, by the delivery to the Company of Investor Notices, to cause an Advance

Notice to be deemed delivered to the Investor and the issuance and sale of the Company’s common stock to the Investor as long as

there is a balance outstanding under a Convertible Note.

The Company shall pay a commitment fee of $ 500,000 , representing 1 % of the Commitment Amount (the “Commitment Fee”).

The Commitment

Fee shall be satisfied as follows:

(a) Initial Payment:

One-half of the Commitment Fee, amounting to $ 250,000 ,

was paid on December 13, 2024, through the issuance of 43,147 shares of common stock to the Investor.

The number of shares of common stock

was determined by dividing one-half of the Commitment Fee by the average of the daily volume-weighted average price (“VWAP”)

of the Company’s common shares during the three trading days immediately preceding November 25, 2024.

The remaining one-half of

the Commitment Fee, amounting to $ 250,000 (the “Deferred Fee”) is expected to be paid on the three-month anniversary of the

date of the SEPA The Deferred Fee shall be payable in cash or, at the Company’s election, by way of a Pre-paid Advance.

Unless earlier terminated as provided thereunder,

the SEPA shall terminate automatically on the earliest of (i) November 25, 2026, provided that if any Convertible Notes are then outstanding,

such termination shall be delayed until such date that all Convertible Notes that were outstanding have been repaid, or (ii) the date

on which the Investor has made payment of Pre-paid Advances pursuant to SEPA for common shares equal to the $ 50,000,000 .

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Advance Notice

If the Company requests a purchase of common stock

from the Investor by the delivery of an Advance Notice to the Investor, the purchase price therefor shall be the price per share of common

stock obtained by multiplying the market price by (i) 95 % in respect of an Advance Notice within an Option 1 Pricing Period (as defined

below) or (ii) 97 % in respect of an Advance Notice with an Option 2 Pricing Period (as defined below).

The “Option 1 Pricing Period” means

the period on the applicable advance notice date with respect to an Advance Notice selecting an Option 1 Pricing Period commencing (i)

if submitted to Investor prior to 9:00 a.m.

Eastern Time on a trading day, the open of trading on such day or (ii) if submitted to Investor

after 9:00 a.m.

Eastern Time on a trading day, upon receipt by the Company of written confirmation (which may be by e-mail) of acceptance

of such Advance Notice by the Investor (or the open of regular trading hours, if later), and which confirmation shall specify such commencement

time, and, in either case, ending on 4:00 p.m.

New York City time on the applicable Advance Notice date, or such other time as maybe agreed

by the parties.

The “Option 1 market price” means the VWAP of the common stock during the Option 1 Pricing Period.

The “Option 2 Pricing Period” means

the three consecutive trading days commencing on the Advance Notice Date.

The Option 2 market price shall mean the VWAP of the common

stock during the Option 1 Pricing Period.

Investor Notice

If the Investor requests a sale from the Company

by the delivery an Investor Notice to the Company, the purchase price, as of any conversion date or other date of determination, will

be the lower of (i) $ 7.5937 per share of common stock, or (ii) 94 % of the lowest daily VWAP during the 5 consecutive trading days immediately

preceding the conversion date or other date of determination (the “Variable Price”), which Variable Price shall not be lower

than the floor price ($ 1.1880 ) then in effect.

Repayments of Convertible Notes

Interest shall accrue on the outstanding principal

balance of the Convertible Notes at an annual rate equal to 0 % (“Interest Rate”), which Interest Rate shall increase to an

annual rate of 18 % upon the occurrence of an event of default (for so long as such event remains uncured).

If, any time after the issuance date of a Convertible

Note, and from time to time thereafter, an Amortization Event (as defined below) has occurred, then the Company shall make monthly payments

beginning on the 7th trading day after the Amortization Event Date and continuing on the same day of each successive calendar month until

the entire outstanding principal amount shall have been repaid.

Each monthly payment shall be in an amount equal to the sum of (i) $ 5,000,000

of the principal in the aggregate (or the outstanding principal if less than such amount) (the “Amortization Principal Amount”),

plus (ii) 10 % of the Amortization Principal Amount, and (iii) the accrued and unpaid interest under the Convertible Note as of each payment

An “Amortization Event” means (i)

the daily VWAP is less than the floor price then in effect for five trading days during a period of seven consecutive trading days, (ii)

the Company has issued to the Investor, pursuant to the transactions contemplated in a convertible note, the other notes and the SEPA,

in excess of 99 % of the common stock available under the exchange cap of 8,322,636 shares of common stock, which represent 19.99 % of the

aggregate number of shares common stock issued and outstanding as of the effective date of the SEPA, or (iii) any time after the effectiveness

deadline of February 8, 2025, the Investor is unable to utilize a registration statement to resell underlying common stock for a period

of ten (10) consecutive trading days (the last day of each such occurrence, an “Amortization Event Date”).

The Convertible Notes are accounted for as a single liability measured

at amortized costs.

The original issue discount and all the transaction costs related to issuance of the convertible notes are capitalized

to the carrying amount of the convertible notes and presented as a direct deduction from the debt liability.

The discount and transaction

costs are amortized into expenses based on the effective interest rate method.

The effective interest rate related to the convertible

notes is 13.85 %.

Other Income (Expenses)

Other income and expenses consisted of the following:

September 30,

Rental income

6 unchanged sentences

The Company is authorized to issue 100,000,000

shares of common stock, par value US$ 0.00001 per share, 41,634,000 shares were issued and outstanding as of September 30, 2024 and June

30, 2024, respectively.

On May 15, 2024, the Company closed its initial

public offering (the “IPO”) of 1,600,000 shares of common stock, par value of US$ 0.00001 per share, for a price of US$ 5.00

per share for aggregate gross proceeds of $ 8 million from the offering.

The total net proceeds to the Company from the IPO, less certain

underwriting discounts and expenses, were approximately $ 5.2 million.

In connection with the IPO, the Company entered into an underwriting

agreement (the “Underwriting Agreement”) with EF Hutton LLC, and granted a 45 -day option to purchase up to 240,000 additional

shares of common stock from the Company at the offering price of US$ 5.00 per share.

As of June 30, 2024, the underwriter had exercised

the option to purchase 34,000 additional shares of common stock from the Company.

The remaining options have expired as of the date of

this Quarterly Report.

On May 15, 2024, the Company issued to the Representative

and its affiliates warrants, exercisable during the five-year period from the commencement of sales of this offering, entitling the Representative

to purchase an aggregate of up to 80,000 shares of common stock at a per share price equal to 125.0 % of the public offering price per

share in the IPO, or US$ 6.25 (the “Representative’s Warrants”).

The fair value of US$ 268,430 of the Representative’s

Warrants, using the Black Scholes Model with the following weighted-average assumptions:

market value of underlying share of $ 4.62 , risk

free rate of 4.46 %, expected term of five years ;

exercise price of the warrants of $ 6.25 , volatility of 100 %;

and expected future dividends

of nil , was recorded in the Additional Paid-in Capital.

shares of common stock, par value US$ 0.00001 per share, 41,677,147 and 41,634,000 shares were issued and outstanding as of December 31,

2024 and June 30, 2024, respectively.

On May 15, 2024, the Company issued to EF

Hutton LLC (now known as D.

Boral Capital LLC ;

hereinafter, the “Representative”)

, as representative of the several underwriters with respect to the Company’s initial public offering (the “IPO”)

and its affiliates warrants, exercisable during the five-year period from the commencement of sales of the shares of common stock offered

in the IPO , entitling the Representative to purchase an aggregate of up to 80,000 shares of common stock at a per share price equal to

125.0 % of the public offering price per share in the IPO, or US$ 6.25 (the “Representative’s Warrants”).

The fair value

of US$ 268,430 of the Representative’s Warrants, using the Black Scholes Model with the following weighted-average assumptions:

value of underlying share of US$ 4.62 , risk free rate of 4.46 %, expected term of five years ;

exercise price of the warrants of US$ 6.25 ,

volatility of 100 %;

and expected future dividends of nil , was recorded in the Additional Paid-in Capital.

On December 13, 2024, the Company issued 43,147 shares of common stock,

par value of US$ 0.00001 per share, for a price of US$ 5.79 per share for aggregate of US$ 250,000 as 50 % of the commitment fee

to an investor.

The remainder of the commitment fee will be paid on the three-month anniversary of such issuance date in cash.

Earnings per Share

Basic and diluted net earnings per share for the

three months ended September 30, 2024 and 2023 were as follows:

September 30,

six months ended December 31, 2024 and 2023 were as follows:

Net income (loss) attributable to stockholders – basic and diluted

1 unchanged sentence

Weighted average number of shares of common stock outstanding – basic

Earnings per share attributable to stockholders – basic

(Loss) Earnings per share attributable to stockholders – basic

Weighted average number of shares of common stock outstanding – diluted

Earnings per share attributable to stockholders – diluted

(Loss) Earnings per share attributable to stockholders – diluted

Basic earnings per share is computed using the

2 unchanged sentences

average number of shares and dilutive share equivalents outstanding during the period.

For the three and six months ended December 31,

2024, the computation of diluted loss per share does not assume the impacts from the exercise of the Company’s outstanding unexercised

warrants and the convertible debt, due to its loss position for the three months and six months ended December 31, 2024.

HOLDING CORP.

3 unchanged sentences

Other than the standby letters of credit with

Eastwest Bank in the aggregate amount of $ 2,061,673 (see Note 2) and the operating and finance leases (See Note 7), the Company did not

have other significant commitments, long-term obligations, or guarantees as of September 30, 2024 and June 30, 2024.

Eastwest Bank in the aggregate amount of US$ 2,259,932 (see Note 2) and the operating and finance leases (See Note 7), the Company did

not have other significant commitments, long-term obligations, or guarantees as of December 31, 2024 and June 30, 2024.

Contingencies

4 unchanged sentences

financial position, cash flows or results of operations taken as a whole.

As of September 30, 2024 and 2023, the Company was not a party

As of December 31, 2024 and 2023, the Company was not a party

to any material legal or administrative proceedings.

11 unchanged sentences

The Company had the following related party transactions:

(i) During the three months ended September 30, 2024, the Company’s related parties, Jacky Chen, Aidy Chou and Tong Wu, together advanced $ nil (2023:

the six months ended December 31, 2024, the Company’s related parties, Jacky Chen, Aidy Chou and Tong Wu, together advanced nil

US$ 501,000 ) to support the Company’s working capital needs.

(ii) DNA Motor Inc.

The Company made the repayment of US$ 352,909 (2023:

its related parties.

During the six months ended December 31, 2023, Junchu Inc., a company wholly owned by Tong Wu, repaid the loan

with a principal of US$ 500,000 and interest expense of US$ 11,353 .

(“DNA”), the landlord of five of the Company’s operating leases, is owned by Jacky Chen.

During the three months ended September 30, 2024, for these operating leases, US$ 94,829 (2023:

US$ 116,988 ) lease expense was recorded in general and administrative expenses, US$ 2,989,368 (2023:

During the six

months ended December 31, 2024, for these operating leases, US$ 189,466 (2023:

US$ 201,805 ) lease expense was recorded in general and administrative

expenses, US$ 5,923,494 (2023:

US$ 5,840,554 ) was recorded in costs of sales and US$ 408,098 (2023:

nil ) was recorded in other expenses.

The aggregate lease liability associated with these operating leases as of September 30, 2024 and June 30, 2024 was US$ 31,063,361 and US$ 32,853,612 , respectively.

(iii) During the three months ended September 30, 2024, the Company generated revenue of US$ 553 (2023:

US$ 140,959 ) for providing logistic services to DNA.

During the three months ended September 30, 2024, the Company generated revenue of US$ 884,700 (2023:

US$ 125,813 ) for providing warehouse services to DNA.

During the three months ended September 30, 2024, the Company paid expenses in the total amount of US$ 716,789 on behalf of DNA.

The amount due from DNA is included in accounts receivable and other receivables from a related party as disclosed in Note 3.

US$ 551,261 ) was recorded in other expenses.

The aggregate lease liability associated with these operating leases as of December 31, 2024 and June 30, 2024 was US$ 27,513,398 and

US$ 37,409,782 , respectively.

(iii) During the six months ended

December 31, 2024, the Company generated revenue of US$ 553 (2023:

US$ 291,465 ) for providing freight services to DNA.

During the six months

ended December 31, 2024, the Company generated revenue of US$ 884,700 (2023:

nil ) for providing warehouse services to DNA.

six months ended December 31, 2024, the Company paid expenses in the total amount of US$ 52,802 on behalf of DNA.

The amount due from

DNA is included in accounts receivable and other receivables from a related party as disclosed in Note 3.

HOLDING CORP.

2 unchanged sentences

Related Party transactions (cont.)

the three months ended September 30, 2024, the Company incurred general and administrative expenses of US$ 607 for outside services, warehouse

supplies, freight expenses and operating expenses provided by DNA.

During the three months ended September 30, 2023, the Company

incurred operating expenses that totaled US$ 15,000 for outside service provided by DNA.

the six months ended December 31, 2024, the Company incurred general and administrative expenses of US$ 1,526 (2023:

US$ 15,000 ) for services

and other expenses provided by DNA.

Due to related party balance

The Company’s balances due to related parties

as of September 30, 2024 and June 30, 2024 were as follows:

September 30,

The due to related party balances as of September

as of December 31, 2024 and June 30, 2024 were as follows:

The due to related party balances as of December

31, 2024 and June 2024 are unsecured, interest-free, and are due on demand.

Subsequent Events

Company has evaluated the impact of events that have occurred subsequent to September 30, 2024, through the date the consolidated financial

statements were available to issue, and concluded that no subsequent events have occurred that would require recognition in the consolidated

financial statements or disclosure in the notes to the unaudited interim condensed consolidated financial statements.

The Company has evaluated the impact of events

that have occurred subsequent to December 31, 2024, through the date the consolidated financial statements were available to issue, and

concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure

in the notes to the unaudited interim condensed consolidated financial statements.

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 1. Financial Statements