What changed in this filing

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Item 1. Financial Statements

2025-05-14 compared with 2025-02-14 · 268 added, 241 removed, 681 unchanged (43% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2024 AND JUNE 30, 2024

AS OF MARCH 31, 2025 AND JUNE 30, 2024

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

20 unchanged sentences

Accrued payroll liabilities

Commitment fee payable

Convertible notes

9 unchanged sentences

Stockholders’ equity

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

Common stock, US$ 0.00001 par value, 100,000,000 shares authorized, 42,112,026 and 41,634,000 issued and outstanding as of March 31, 2025 and June 30, 2024, respectively

Additional paid-in capital

7 unchanged sentences

OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

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

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2025 AND 2024

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

11 unchanged sentences

( 2,488,346 )

( 1,902,813 )

Loss on disposal of assets

2 unchanged sentences

( 2,077,339 )

( 1,865,034 )

Income (loss) before provision for income taxes

9 unchanged sentences

( 10,062,164 )

Total comprehensive (loss) income

Total comprehensive income (loss)

( 3,755,053 )

6 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’ EQUITY

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

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2025 AND 2024

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

Six Months Ended

Nine Months Ended

Balance as of June 30, 2023

Contribution from stockholders

Balance as of December 31, 2023 (unaudited)

Balance as of March 31, 2024 (unaudited)

Three Months ended

Balance as of September 30, 2023 (unaudited)

Contribution from stockholders

Balance as of December 31, 2023 (unaudited)

Six Months Ended

Contribution from stockholders

Balance as of March 31, 2024 (unaudited)

Nine Months Ended

Balance as of June 30, 2024

Net income(loss)

( 10,062,164 )

Shares issued pursuant to Standby Equity Purchase Agreement (SEPA)

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

Balance as of March 31, 2025 (unaudited)

Three Months ended

Balance as of September 30,2024 (unaudited)

Net income(loss)

Balance as of December 31, 2024 (unaudited)

( 3,755,053 )

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

Shares issued pursuant to SEPA

Balance as of March 31, 2025 (unaudited)

The accompanying notes form an integral part

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

FOR THE NINE MONTHS ENDED MARCH 31, 2025 AND 2024 (UNAUDITED)

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

Cash Flows from Operating Activities:

Net income (loss)

Net (loss) income

( 10,062,164 )

2 unchanged sentences

Non-cash operating leases expense

Gain from settlement of commitment payable

Accretion of convertible note

12 unchanged sentences

( 2,212,137 )

( 2,022,280 )

Contract liabilities

11 unchanged sentences

( 1,600,000 )

Proceeds from loan repayments

Proceeds from repayment of loan receivables

Proceeds from sale of property and equipment

6 unchanged sentences

Repayment to related parties

Net proceeds from Standby Equity Purchase

Net proceeds from SEPA

Repayment of commitment payable

Repayment of finance lease liabilities

Repayment of SEPA

Capital contributions from stockholders

Net cash provided by financing activities

Net increase (decrease) in cash and restricted cash

( 2,571,637 )

Net decrease in cash and restricted cash

Cash and restricted cash, beginning of year

Cash and restricted cash, end of six months periods

Cash and restricted cash, end of nine 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:

8 unchanged sentences

Shares issued to settle commitment fee

IPO expenses paid by stockholders

Shares issued pursuant to SEPA

The accompanying notes form an integral part

24 unchanged sentences

condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included

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

in the Company’s 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 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.

necessary for a fair statement of the financial position of the Company as of March 31, 2025, and its results of operations and cash flows

for the nine-month period then ended.

Operating results for the three and nine months ended March 31, 2025 are not necessarily indicative

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

Principal of consolidation

24 unchanged sentences

There were no critical

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

accounting estimates affecting the unaudited condensed consolidated financial statements for the three and nine months ended March

31, 2025 and 2024.

6 unchanged sentences

Restricted cash represents the cash restricted

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.

for five 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, December 27, 2024, January 14, 2025, and March 20, 2025, 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 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.

As of March 31, 2025 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.

Accounts receivable and other receivables

11 unchanged sentences

The estimated annual deprecation rates of these assets are generally as follows:

Depreciation method

Depreciation rate

Furniture and fixtures

Straight-line

Auto & trucks

Straight-line

Trailers & truck chassis

Straight-line

15 – 17 years

Machinery & equipment

Straight-line

Leasehold improvements

Straight-line

Shorter of lease term or 15 years

Category Depreciation method Depreciation rate

Furniture and fixtures Straight-line 7 years

Auto & trucks Straight-line 5 – 8 years

Trailers & truck chassis Straight-line 15 – 17 years

Machinery & equipment Straight-line 2 – 7 years

Leasehold improvements Straight-line Shorter of lease term or 15 years

Expenditures for maintenance and repairs are expensed

15 unchanged sentences

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

and six months ended December 31, 2024 and 2023.

and nine months ended March 31, 2025 and 2024.

Intangible assets consist of software and security

26 unchanged sentences

offset by customer deposits recognized as revenue during the period.

We expect to recognize revenue for any performance obligations within

a twelve-month period and have elected not to provide disclosures regarding remaining performance obligations for contracts with a term

of one year or less.

The Company expects to recognize revenue for any performance obligations

within a twelve-month period and have elected not to provide disclosures regarding remaining performance obligations for contracts with

a term of one year or less.

The Company also provides warehousing services

44 unchanged sentences

Contract liabilities represent payments received

from customers in excess of revenue recognized.

The contract liabilities are reported in a net position on a customer-by-customer basis

at the end of each reporting year.

We classify these customer deposits as short-term contract liabilities, as we expect to satisfy these

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

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.

from customers in excess of the revenue recognized.

The contract liabilities are reported in a net position on a customer-by-customer

basis at the end of each reporting year.

The Company classifies these customer deposits as short-term contract liabilities, as the Company

expects to satisfy these obligations within its normal operating cycle, which is generally one year.

For the nine months ended March 31,

2025 and 2024, the amounts transferred from contract liabilities at the beginning of the fiscal year to revenue were US$ 276,463 and US$ 424,182 ,

respectively.

Practical Expedients

95 unchanged sentences

The Company did not

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

have any unrecognized tax benefits as of March 31, 2025 and June 30, 2024.

Earnings per share

15 unchanged sentences

All the Company’s business activities

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

for the three and nine months ended March 31, 2025 and 2024 were conducted in the U.S.

HOLDING CORP.

16 unchanged sentences

The Company’s financial instruments include

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

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

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

1 unchanged sentence

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.

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 December 31, 2024 and June 30, 2024.

basis as of March 31, 2025 and June 30, 2024.

Costs of sales

21 unchanged sentences

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:

The movement of allowance for credit loss for

the nine months ended March 31, 2025 and the fiscal year ended June 30, 2024:

Balance as of beginning

16 unchanged sentences

The Company recorded depreciation expenses of US$ 658,260 and US$ 525,167 during the three

months ended December 31, 2024 and 2023, respectively.

months ended March 31, 2025 and 2024, respectively.

Specifically, US$ 609,189 and US$ 436,084 of the depreciation expenses were recorded

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 December 31, 2024 and 2023, respectively.

in costs of sales for the three months ended March 31, 2025 and 2024, respectively.

US$ 49,071 and US$ 89,083 of the depreciation expenses

were recorded in general and administrative expenses for the three months ended March 31, 2025 and 2024, 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.

US$ 1,874,681 and US$ 1,313,684 during the nine months ended March 31, 2025 and 2024, respectively.

Specifically, US$ 1,717,363 and US$ 1,091,795

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,

of the depreciation expenses were recorded in costs of sales for the nine months ended March 31, 2025 and 2024, respectively, US$ 157,318

and US$ 221,889 of the depreciation expenses were recorded in general and administrative expenses for the nine months ended March 31, 2025

and 2024, respectively.

5 unchanged sentences

The Company recorded amortization of US$ 26,706

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

and US$ 26,488 , which were included in costs of sales, for the nine months ended March 31, 2025 and 2024, 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.

amortization of US$ 8,829 and US$ 8,829 , which were included in costs of sales, for the three months ended March 31, 2025 and 2024, respectively.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Loan Receivable

Loan Receivables

The Company’s loan receivables were consisted

of the following:

i) 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 in the principal amount 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 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 .

ii) On January 24, 2024, the Company entered into a loan agreement with Athena Home Inc.in the principal amount of US$ 600,000 .

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 maturity date of the loan was extended to July 24, 2025 on April 18, 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 .

in the principal amount of US$ 400,000 .

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

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.

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

in the principal amount 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

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 Company expects the loan to be repaid upon maturity.

A partial payment of US$ 1 million was repaid by Pundarika LLC on November 14, 2024.

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

in the principal amount 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

the loan to be repaid upon maturity.

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 .

in the principal amount of US$ 250,000 .

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

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.

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

in the principal amount 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.

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 .

The Company expects the loan to be repaid upon maturity.

As of March 31, 2025, the Company recorded a loan

receivable balance of US$ 3,845,402 , including accrued interest income of US$ 95,402 .

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

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 November 2034 with options

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

The Company has 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.

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

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.

As of March 31, 2025, the Company had operating

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

Lease terms expire at various dates from September 2025 through November

2034 with options to renew for varying terms at the Company’s sole discretion.

The Company has 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.

The Company had certain sublease contracts and recognized US$ 1,093,104 and US$ 2,133,436

lease income, recorded in other income, during the nine months ended March 31, 2025 and 2024, respectively.

During the nine months ended March 31, 2025, the

Company recognized additional operating lease liabilities of US$ 28,685,914 , as a result of entering into a new operating lease agreement.

The ROU assets were recognized at the discount rate range from 9.50 % to 10.00 %, resulting in US$ 28,685,914 on the commencement dates.

During the nine months ended March 31, 2025, 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:

1 unchanged sentence

Amortization – included in costs of sales

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

Cash paid for amounts included in the measurement of liabilities:

Operating cash flows from operating leases

Financing cash flows from finance leases

Right-of-use assets obtained in exchange for lease liabilities:

Operating leases

Finance leases

The Company recorded operating lease expenses

of US$ 9,421,215 and US$ 7,892,313 in the three months ended March 31, 2025 and 2024, respectively.

Specifically, US$ 8,337,256 and US$ 7,282,718

of operating lease expenses were recorded in costs of sales for the three months ended March 31, 2025 and 2024, respectively.

US$ 1,083,959

and US$ 85,838 of operating lease expenses were recorded in general and administrative expenses for the three months ended March 31, 2025

and 2024, respectively.

As of December 31, 2024, maturities of lease liabilities

Nil and US$ 523,757 of operating lease expenses were recorded in other expenses for the three months ended March

31, 2025 and 2024, respectively.

The Company recorded operating lease expenses

of US$ 25,279,522 and US$ 19,011,330 during the nine months ended March 31, 2025 and 2024, respectively.

Specifically, US$ 23,539,448 and

US$ 16,527,288 operating lease expenses were recorded in costs of sales for the nine months ended March 31, 2025 and 2024, respectively.

US$ 1,343,420 and US$ 1, 087,471 of operating lease expenses were recorded in general and administrative expenses for the nine months ended

March 31, 2025 and 2024, respectively.

US$ 396,654 and US$ 1,396,571 of operating lease expenses were recorded in other expenses for the

nine months ended March 31, 2025 and 2024, respectively.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Leases (cont.)

As of March 31, 2025, maturities of lease liabilities

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

7 unchanged sentences

Non-current portion

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Leases (cont.)

Weighted average remaining lease term:

10 unchanged sentences

Other liabilities

Other liabilities as of December 31, 2024 and

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

Other liabilities as of March 31, 2025 and June

30, 2024 mainly consisted of tenant’s deposit.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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:

SEPA and Modification Agreement

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 of the SEPA.

In connection

with the SEPA, and subject to the conditions set forth therein, the Investor agre ed

to advance to the Company pursuant to certain 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:

● The 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, originally 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 became effective, is no longer expected to be disbursed, since the initial Registration Statement did not become effective within 75 calendar days of the date of the registration rights agreement entered into between the Company and the Investor in connection with the SEPA, which was a condition precedent to such advance.

to th e 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 agreed to pay a commitment fee of

$ 500,000 , representing 1 % of the Commitment Amount (the “Commitment Fee”).

The Commitment Fee was to 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.

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”) was initially expected to be paid on the three-month anniversary of the date of the SEPA, either in cash or, at the Company’s

election, by way of a Pre-paid Advance.

Pursuant to a modification agreement (the “Modification Agreement”) entered into by

and between the Company and the Investor, the Company agreed to pay to the Investor a reduced amount of $ 150,000 in cash on March 24,

2025, and the Investor agreed to accept such reduced amount in full satisfaction of the Deferred Fee.

Pursuant to the Modification Agreement, the Company

also agreed to make, cash payments on the dates and in the minimum amounts under the promissory notes in the aggregate, as set forth below.

The Company may, at its option, make cash payments in excess of the minimum amounts set forth below.

Such payments shall be applied to

the reduction of the original principal amount of the convertible promissory note dated November 25, 2025 first.

March 24, 2025 (paid)

During the week of March 31, 2025 (paid)

During the week of April 7, 2025 (paid)

During the week of April 14, 2025 (paid)

During the week of April 21, 2025 (paid)

During the week of April 28, 2025 (paid)

During the week of May 5, 2025 (paid)

During the week of May 12, 2025

During the week of May 19, 2025

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Convertible notes (cont.)

As of March 31, 2025, the Company had paid the

minimum payment of $ 850,000 and the remaining commitment fee payable of $ 250,000 , resulting in a gain in settlement amounting to $ 100,000 .

Unless earlier terminated as provided thereunder,

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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

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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

by the delivery of 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.

than the floor price ($ 1.1880 ) (the “Floor Price”) then in effect.

In March 2025, the Company issued 434,879 shares

of common stock, par value of US$ 0.00001 per share, at a price of US$ 1.73 per share, for an aggregate amount of US$ 750,000 , representing

the conversion of the SEPA loan for Investor Notices pursuant to the SEPA.

Repayments of Convertible Notes

Interest shall accrue on the outstanding principal

Interest accrues 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

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

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Convertible notes (cont.)

An “Amortization Event” means (i)

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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 %.

Pursuant to the Modification Agreement, the Company acknowledged, and

agreed that an event described in Section 1(c) of the Convertible Notes had occurred (the “Floor Price Event”) and was continuing

pursuant to the Convertible Notes, because the VWAP was less than the Floor Price for five consecutive Trading Days.

The Company acknowledged

and agreed that the Floor Price Event constituted an Amortization Event under the Convertible Notes which thereupon required the Company

to make monthly cash payments in accordance with Section 1(c) of the Convertible Notes.

The Company also agreed to make, cash payments

on the dates and in the minimum amounts under the promissory notes in the aggregate, as set forth in the table referenced above under

the “SEPA and Modification Agreement” section.

The Company may, at its option, make cash payments in excess of the specified

minimum amounts.

Such payments shall be applied to the reduction of the original principal amount of the convertible promissory note dated

November 25, 2025 first.

of March 31, 2025, the Company had paid the minimum payment of $ 850,000 as a result of the above-mentioned amortization event.

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.

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 19.95 %.

Other Income (Expenses)

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Rental expense

( 1,403,129 )

Interest income

Credit card rebate income

Gain on lease settlement and modification

HOLDING CORP.

2 unchanged sentences

The Company is authorized to issue 100,000,000

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,

shares of common stock, par value US$ 0.00001 per share, 42,112,026 and 41,634,000 shares were issued and outstanding as of March 31, 2025

and June 30, 2024, respectively.

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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.

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 an aggregate amount of US$ 250,000 as

50 % of the commitment fee to an investor.

In March 2025, the Company issued 434,879 shares

of common stock, par value of US$ 0.00001 per share, at a price of US$ 1.73 per share, for an aggregate amount of US$ 750,000 , for Investor

Notices pursuant to the SEPA.

Earnings per Share

Basic and diluted net earnings per share for the

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

nine months ended March 31, 2025 and 2024 were as follows:

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

( 6,307,111 )

Weighted average number of shares of common stock outstanding – basic

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

For the three and six months ended December 31,

For the three and nine months ended March 31, 2025,

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.

warrants and the convertible debt, due to its loss position for the three months and nine months ended March 31, 2025.

HOLDING CORP.

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Eastwest Bank in the aggregate amount of US$ 3,779,572 (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.

not have other significant commitments, long-term obligations, or guarantees as of March 31, 2025 and June 30, 2024.

Contingencies

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

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

to any material legal or administrative proceedings.

As of March 31, 2025 and 2024, the Company was not a party to

any material legal or administrative proceedings.

Related Party Transactions and Balances

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The Company had the following related party transactions:

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

the nine months ended March 31, 2025, the Company’s related parties, Jacky Chen, Aidy Chou and Tong Wu, together advanced nil (2024:

US$ 1,000 ) to support the Company’s working capital needs.

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 six

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

During the nine

months ended March 31, 2025, for these operating leases, US$ 283,339 (2024:

US$ 302,537 ) lease expense was recorded in general and administrative

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US$ 829,563 ) 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.

The aggregate lease liability associated with these operating leases as of March 31, 2025 and June 30, 2024 was US$ 25,827,810 and US$ 34,714,898 ,

respectively.

the nine months ended March 31, 2025, the Company generated revenue of US$ 553 (2024:

US$ 1,362,898 ) for providing freight services to

During the nine months ended March 31, 2025, the Company generated revenue of US$ 884,700 (2024:

nil ) for providing warehousing services

During the nine months ended March 31, 2025, the Company paid expenses in the total amount of US$ 470,912 (2024:

US$ 3,030,583 )

on behalf of DNA.

HOLDING CORP.

2 unchanged sentences

Related party transactions (cont.)

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.

(v) During the nine months ended March 31, 2025,

the Company incurred cost of sales of US$ 1,603,146 (2024:

US$ 52,000 ) for services and other expenses provided by DNA.

(vi) On January 22, 2024, the Company entered into a loan agreement with Tong Wu in the principal amount of US$ 700,000 .

The loan matured on January 24, 2025 , bearing interest at an annual rate of 3.2 %.

On March 6, 2024, the loan was repaid by Tong Wu in full, including the principal and interest expense of US$ 2,700 .

Due to related party balance

The Company’s balances due to related parties

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

The due to related party balances as of December

as of March 31, 2025 and June 30, 2024 were as follows:

The due to related party balances as of March

31, 2025 and June 2024 are unsecured, interest-free, and are due on demand.

1 unchanged sentence

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.

that have occurred subsequent to March 31, 2025, 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