What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-09-25 compared with 2024-09-26 · 244 added, 200 removed, 172 unchanged (72% of the section changed)

6 unchanged sentences

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

the boom of e-commerce and Internet technology, along with the development of global supply chains, a growing number of merchants are

seeking to sell their products through international e-commerce platforms, such as Amazon and eBay.

These merchants, however, are confronted

with major logistical challenges because of the complexities involved in shipping goods across borders.

Specifically, when a foreign

consumer places an order online, it can take a long time for the goods to be

delivered from one country to another (especially for bulky items), while facing high damage rates and congestion during peak seasons.

One of the solutions to such problems is to set up overseas warehouses, which are local storage facilities established in a foreign country

where the cross-border merchants intend to sell their goods.

Cross-border e-commerce merchants can export goods in batches in advance

to overseas warehouses, which can then be delivered to overseas consumers once orders are placed via e-commerce platforms.

the delivery time and the rate of damaged and lost packages may be reduced significantly, therefore enhancing the shopping experience

of consumers.

provide one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S.

who seek to sell in the

We currently operate nine warehouses across the country, with an aggregate gross floor area of approximately 2,765,667

Aside from a nationwide footprint and large storage space, our warehouses are equipped with automated sorting systems, heavy-duty

forklifts, and pallets and trays that are suitable for processing bulky items.

As a one-stop warehousing and logistics service provider,

we offer a full spectrum of services, including (i) customs brokerage services;

With the boom of e-commerce and Internet technology,

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

e-commerce platforms, such as Amazon and eBay.

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

complexities involved in shipping goods across borders.

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

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

during peak seasons.

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

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

Cross-border e-commerce merchants can export goods in

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

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

experience of consumers.

We provide one-stop warehousing and logistics

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

who seek to sell in the U.S.

We currently operate 10

warehouses across the country, with an aggregate gross floor area of approximately 3,905,020 square feet.

Aside from a nationwide footprint

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

are suitable for processing bulky items.

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

including (i) customs brokerage services;

(ii) transportation of merchandise to U.S.

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

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

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

also provide warehousing and logistics services to our U.S.-based commercial customers, who are typically domestic e-commerce merchants

seeking efficient and reliable warehousing and logistics solutions to support their operations.

In general, the warehousing and logistics

services we provide to our domestic customers are similar to those we provide to our overseas customers.

This allows us to provide integrated

solutions for our customers, whether they need domestic or international warehousing and logistics support.

As of June 30, 2024 and 2023,

we had an active customer base of 105 and 83, respectively, for our warehousing and logistics services.

and (iii) warehouse

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

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

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

We also provide warehousing and logistics services

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

logistics solutions to support their operations.

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

are similar to those we provide to our overseas customers.

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

need domestic or international warehousing and logistics support.

As of June 30, 2025 and 2024, we had an active base of 505

and 105 customers, respectively, for our warehousing and logistics services.

We have experienced rapid growth since our inception.

For the fiscal years ended June 30, 2024 and 2023, we had total revenue of $167.0 million, and $135.0 million respectively, and net income

of $7.4 million, and $13.9 million respectively.

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

significant portion of our revenue from customers based in China.

During the fiscal years ended June 30, 2024 and 2023, we generated approximately

96% and 96% of our revenue from PRC-based customers, respectively.

For the fiscal years ended June 30, 2025 and 2024, we had total revenue of $190.4 million, and $167.0 million, respectively, and net loss

of $15.3 million, and net income of $7.4 million, respectively.

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

we generate a significant portion of our revenue from customers based in China.

During the fiscal years ended June 30, 2025 and 2024,

we generated approximately 84% and 96% of our revenue from PRC-based customers, respectively.

See “Item 1A.

Risk Factors — Economic, Political,

and Market Risks — China’s economic, political, and social conditions, as well as governmental policies, could affect the

business environment and economic conditions in China, which may result in an adverse impact on the demand for our services, potentially

harming our financial condition and operating results.”

Risk Factors — Economic,

Political, and Market Risks — China’s economic, political, and social conditions, as well as governmental policies, could

affect the business environment and economic conditions in China, which may result in an adverse impact on the demand for our services,

potentially harming our financial condition and operating results.”

Key Factors Affecting Our Results of Operations

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Environment and Platform Policies that Facilitate Sales by PRC E-Commerce Merchants into the U.S.

The majority of our customers consist of PRC e-commerce

merchants who sell their merchandise into the U.S.

market through e-commerce platforms.

As such, our ability to acquire and maintain

new or existing customers for our warehousing and logistics services is heavily reliant on their continued willingness to conduct cross-border

e-commerce businesses, which may be significantly impacted by policies set by e-commerce platforms.

For example, in early 2021, Amazon,

the world’s largest e-commerce platform, claimed that it had suspended the accounts of over 50,000 Chinese sellers for improper

use of review functions.

Specifically, instead of earning great reviews through high-quality products, those PRC sellers manipulated reviews

by paying for positive product reviews or by giving away gift cards, which violates Amazon’s terms of service.

It is estimated that

the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which

has discouraged a growing number of PRC e-commerce sellers from selling their merchandise to the U.S.

There is no guarantee

that our current or future international customers are fully compliant with the terms of service of all the international e-commerce platforms

they use, including Amazon, or that those e-commerce platforms will not from time to time initiate such a widespread suspension of PRC

sellers in the future.

Such a crackdown on PRC sellers may significantly reduce the number of Chinese e-commerce sellers who intend to

sell in the U.S., who are our primary customers.

The loss of our PRC customer base due to the widespread suspension of PRC sellers in

the cross-border e-commerce industry could be detrimental to our ongoing operations.

majority of our customers consist of PRC e-commerce merchants who sell their merchandise into the U.S.

market through e-commerce

As such, our ability to acquire and maintain new or existing customers for our warehousing and logistics services is heavily

reliant on their continued willingness to conduct cross-border e-commerce businesses, which may be significantly impacted by policies

set by e-commerce platforms.

For example, in early 2021, Amazon, the world’s largest e-commerce platform, claimed that it had suspended

the accounts of over 50,000 Chinese sellers for improper use of review functions.

Specifically, instead of earning favorable reviews through

high-quality products, those PRC sellers manipulated reviews by paying for positive product reviews or by giving away gift cards, which

violated Amazon’s terms of service.

It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in

losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling

their merchandise in the U.S.

There is no guarantee that our current or future international customers are fully compliant

with the terms of service of all the international e-commerce platforms they use, including Amazon, or that those e-commerce platforms

will not from time to time initiate such a widespread suspension of PRC sellers in the future.

Such a crackdown on PRC sellers may significantly

reduce the number of Chinese e-commerce sellers who intend to sell in the U.S., who are our primary customers.

The loss of our PRC customer

base due to the widespread suspension of PRC sellers in the cross-border e-commerce industry could be detrimental to our ongoing operations.

See “ Item 1A.

Risk factors — Operational

Risks — The suspension of PRC sellers on using international e-commerce platforms, such as the crackdown on PRC sellers

by Amazon in early 2021, has discouraged and may continue to discourage a growing number of PRC e-commerce sellers from selling their

merchandise to the United States, thus adversely affecting our business, financial condition, and results of operations”

Risk factors — Operational Risks — The

suspension of PRC sellers on using international e-commerce platforms, such as the crackdown on PRC sellers by Amazon in early 2021, has

discouraged and may continue to discourage a growing number of PRC e-commerce sellers from selling their merchandise to the United States,

thus adversely affecting our business, financial condition, and results of operations.”

Our Ability to Maintain Our Major Customers

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and 2024, our five largest customers accounted for approximately 55.1% and 53.0% of our total revenue, respectively.

While we strive to

maintain our competitive strengths, such as our quality warehousing and logistics services, competitive pricing, and quality customer

While we strive

to maintain our competitive strengths, such as our quality warehousing and logistics services, competitive pricing, and quality customer

services (see “Item 1.

Business — Our Competitive Strengths”) to maintain our customer base, there is no guarantee

that we will continue to maintain our business relationships with these major customers at the same level, or at all.

In the event that

a significant customer terminates its relationship with us, we cannot assure that we will be able to secure an alternative arrangement

with another comparable customer in a timely manner, or at all.

Losing one or more of these major customers could adversely affect our

revenue and profitability.

Business — Our Competitive Strengths”) to maintain our customer base, there is no

guarantee that we will continue to maintain our business relationships with these major customers at the same level, or at all.

event that a significant customer terminates its relationship with us, there is no assurance that we will be able to secure an alternative

arrangement with another comparable customer in a timely manner, or at all.

Losing one or more of these major customers could adversely

affect our revenue and profitability.

See “Item 1A.

Risk Factors — Operational Risks — Our largest customers

generate a significant portion of our revenue and our business may rely on one or more suppliers that account for more than 10% of our

total purchases, and interruption in operations of such significant customers or supplier may have an adverse effect on our business,

Risk Factors — Operational Risks — Our largest

customers generate a significant portion of our revenue and our business may rely on two suppliers that account for more than 10% of

our total purchases, and interruption in operations of such significant customers or supplier may have an adverse effect on our business,

financial condition, and results of operations.”

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statements of operations for the fiscal years ended June 30, 2025 and 2024:

Costs of sales

Costs of service

Gross (loss) profit

Operating costs and expenses:

1 unchanged sentence

Total operating costs and expenses

Income from operations

(Loss) Income from operations

(17,676,112 )

Other (income) expenses:

Other income, net

Loss on debt extinguishment

Loss on disposal of assets

Finance costs

Total other (income) expenses

Income before provision for income taxes

Current income tax expense

Deferred income tax expense

Total income tax expenses

Total comprehensive income

(Loss) Income before provision for income taxes

(16,912,176 )

Current income tax expense (recovery)

Deferred income tax expense (recovery)

Total income tax expenses (recovery)

Net (loss) income

(15,348,767 )

Total comprehensive (loss) income

(15,348,767 )

Basic & diluted net earnings per share

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Weighted average number of shares of common stock-diluted

Revenue, costs of sales, and gross profit

The following table sets forth our revenue for

the fiscal years ended June 30, 2025 and 2024:

Costs of sales

Gross profit margin %

Cost of service

Gross profit (loss)

Gross profit (loss) margin %

The following table outlines the compositions

6 unchanged sentences

The increase was due to the following factors:

1) Revenue from our transportation services increased by $18.3

million, or 18.8%, due to the rapid expansion of our business in 2024, as we expanded our warehouse operational capacities in California

and New Jersey.

1) Revenue from our transportation services increased by $11.7 million,

or 10.1%, due to due to the addition of new warehouse locations, which resulted in an increase in shipment volume in the fiscal year

ended June 30, 2025 compared to the fiscal year ended June 30, 2024.

2) Revenue from our warehousing services increased by $11.8 million,

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

of the growth in our transportation services.

3) Revenue from other services decreased by $0.5 million,

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

Our costs of sales mainly represented the costs

or 22.9% in the fiscal year ended June 30 2025, compared to the fiscal year ended June 30, 2024.

As an integrated part of our one-stop

warehousing and logistics services, revenue increase from our warehousing services was driven by the growth in our transportation services

and the addition of new warehouses acquired in 2025.

3) Revenue from other services decreased by $0.04 million, or

27.3% in the fiscal year ended June 30 2025, compared to the fiscal year ended June 30, 2024.

Other revenue mainly consisted of revenue

from our customs brokerage services.

Our cost of service mainly represented the costs

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

and trucking expenses.

Costs of sales increased by $39.6 million, or 36.2%, during the fiscal year ended June 30, 2024, compared

Cost of service increased by $44.5 million, or 29.9%, during the fiscal year ended June 30, 2025, compared

with the fiscal year ended June 30, 2024.

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

The increase was primarily driven by the following two factors:

In the fiscal year ended June 30, 2025, the Company expanded its operations

with the opening of two new warehouses, in addition to a new warehouse in the State of Illinois which was launched at the end of the fiscal

Unlike prior expansions, which benefited from shifting personnel from nearby existing locations, these new facilities required

incremental labor hiring.

Furthermore, the type of orders fulfilled at the two new warehouses are not the traditional drop-shipping model

and typically carry lower profit margins.

These dynamics resulted in a notable increase in warehouse labor, rental, and other related

operating expenses.

Freight costs rose significantly due to changes in carrier economics.

The Company’s gross profit

margin on FedEx shipments declined from 23% in fiscal 2024 to 7% in fiscal 2025, largely driven by FedEx rate increases tied to tariffs

and broader economic conditions.

To mitigate this impact, management transitioned part of the freight volume to UPS.

While UPS has provided

a more stable cost structure, its current gross margin of 6% remains well below the 23% margin previously achieved with FedEx.

has partially cushioned the impact but continues to place downward pressure on freight profitability in the near term.

The following table sets forth a breakdown of

our costs of sales for the fiscal years ended June 30, 2024 and 2023:

our cost of service for the fiscal years ended June 30, 2025 and 2024:

Rental expenses

7 unchanged sentences

lease expenses), freight expenses, temporary labor expenses, and salary and benefits increased significantly by $7.9 million, $23.7

million, $4.3 million, and $3.1 million, respectively, during the fiscal year ended June 30, 2024 compared to 2023.

The increases

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

Our overall gross profit margin decreased from

19.1% for the fiscal year ended June 30, 2023 to 10.8% for the year ended June 30, 2024, primarily due to our expansion into the Fontana,

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

profit margins of our transportation services (e.g.

FedEx, ocean freight, and truck deliveries) for the fiscal year ended June 30, 2024,

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

decrease during the same period.

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

expenses, and warehouse expenses of approximately 106%, 68%, 51%, and 83%, respectively, despite a relatively modest increase in warehousing

services revenue of approximately 38.1%.

million, $4.8 million, and $2.7 million, respectively, in the fiscal year ended June 30, 2025 compared to the fiscal year ended

June 30, 2024.

The increases in lease expenses were due to the additional operating leases acquired during the year.

The increases in

freight expenses were due to the increase in UPS expenses.

The increases in temporary labor expenses, warehouse expenses, and salary and

benefits were due to the expansion of the warehouse operations.

Our overall gross profit margin decreased

from 10.8% for the fiscal year ended June 30, 2024 to -1.6% for the fiscal year ended June 30, 2025, primarily due to the increase

in lease expenses, temporary labor expenses for new warehouses, and UPS expenses.

This decline is attributable to increases in the

rental expenses, freight expenses, salary and benefits, temporary labor expenses, and warehouse expenses of approximately 25.9%,

26.4%, 35.2%, 37.9%, and 66.4%, respectively, despite a relatively modest increase in warehousing services revenue of approximately

Operating expenses

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Our general and administrative expenses increased

by $2.2 million, from $7.8 million for the fiscal year ended June 30, 2023 to $10.0 million for the fiscal year ended June

30, 2024, representing an increase of 28%.

by $4.7 million, from $10.0 million for the fiscal year ended June 30, 2024 to $14.7 million for the fiscal year ended

June 30, 2025, representing an increase of 47.2%.

The increase was due to the following factors:

1) Office expenses increased by $1.3 million, or 112%, mainly

due to an increase of insurance by $1.0 million associated with the rapid expansion of our warehouses and the growth in our transportation

2) Repairs and maintenance expenses increased by $0.4 million,

or 64%, as a result of the growth in our transportation services.

1) Office expenses increased by $0.8 million, or 31.9%, mainly due to an increase in truck insurance and

general office expense associated with the rapid expansion of our business.

2) Rental expenses increased by $2.2 million, or 519.8%, mainly due to additional warehouses rented in 2025

and a higher amount of lease expense was allocated to 2025.

3) Professional fees increased by $2.0 million, or 439.9%, mainly due to the fees for the consulting services

of two investment financial advisors and audit fees.

Our California subsidiaries are subject to the current California state

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The following table sets forth a breakdown of our income tax expense:

Current income tax expense

Deferred income tax expense

Total income tax expenses

Current income tax (recovery) expense

Deferred income tax (recovery) expense

Total income tax (recovery) expenses

Our income tax expense decreased by $4.5 million

in 2024, mainly due to the decrease in profit before tax by $8.9 million during the year.

As a result of the foregoing, our net income for

in the fiscal year ended June 30, 2025, mainly due to the decrease in profit before tax by $27.3 million in the fiscal year 2025,

compared to the fiscal year 2024.

As a result of the foregoing, our net loss for

the fiscal year ended June 30, 2025 was $15.3 million, compared with the net income of $7.4 million for the fiscal year ended

1 unchanged sentence

Liquidity and Capital Resources

In assessing our liquidity, management monitors

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

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

and capital contributions from stockholders.

As of June 30, 2024 and 2023, we had cash and restricted cash of $10 million and $6.6 million,

respectively, which primarily consisted of cash deposited in banks.

Our working capital requirements mainly consist

of costs of sales and general and administrative expenses.

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

our operating activities and financing activities from our principal stockholders.

We believe that our current cash and cash generated

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

for at least the next 12 months.

In assessing our liquidity, management monitors and analyzes our cash

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

the date of this annual report, we have financed our operations primarily through cash generated by operating activities, equity financing,

debt financing from third parties and capital contributions from stockholders.

As of June 30, 2025 and 2024, we had cash and cash equivalents

and restricted cash of $13.6 million and $10.0 million, respectively, which primarily consisted of cash deposited in banks.

Our working capital requirements mainly consist of cost of service

and general and administrative expenses.

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

On November 25, 2024, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd.

(the “Investor”),

pursuant to which we have the right to sell to the Investor up to $50.0 million (the “Commitment Amount”) of our shares

of common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA.

connection with the SEPA, and subject to the conditions set forth therein, the Investor agreed 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.

We believe that our current cash and cash generated from our operating and

financing activities will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for

at least the next 12 months.

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

4 unchanged sentences

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net increase in cash

Cash at beginning of year

Cash and restricted cash at end of year

We had a balance of cash and restricted cash of

$10.0 million as of June 30, 2024, compared with a balance of $6.6 million as of June 30, 2023.

During the fiscal years

ended June 30, 2024 and 2023, we mainly derived our cash inflow from operating activities.

Net cash provided by financing activities

Net increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of year

Cash and cash equivalents and restricted cash at end of year

We had a balance of cash and cash equivalents

and restricted cash of $13.6 million as of June 30, 2025, compared with a balance of $10.0 million as of June 30, 2024.

the fiscal years ended June 30, 2025 and 2024, we mainly derived our cash inflow from operating and financing activities.

Operating Activities

Net cash provided by operating activities was

$3.0 million for the fiscal year ended June 30, 2024, compared to net cash provided in operating activities of $11.8 million

$1.5 million for the fiscal year ended June 30, 2025, compared to net cash provided by operating activities of $3.0 million

for the fiscal year ended June 30, 2024, representing a $1.5 million decrease in the net cash inflow provided by operating activities.

The decrease was primarily due to the following:

(i) We had net income of $7.4 million for the fiscal year

ended June 30, 2024.

For the fiscal year ended June 30, 2023, we had net income of $13.9 million, which led to a $6.5 million

decrease in net cash inflow from operating activities.

(ii) Changes in accounts receivable and other receivables were

$8.2 million cash outflow for the fiscal year ended June 30, 2024.

For the fiscal year ended June 30, 2023, changes in accounts

receivable and other receivables were $8.5 million cash outflow, which led to a $0.3 million decrease in net cash outflow from

operating activities.

in accounts payable and accrued liabilities used $0.7 million

net cash outflow for the fiscal year ended June 30, 2024.

For the fiscal year ended June 30, 2023, changes in accounts payable and

accrued liabilities provided net cash inflow of $2.5 million, which led to a $3.2 million

increase in net cash outflow from operating activities.

(iv) Changes in tax payable provided $2.6 million net cash

outflow for the fiscal year ended June 30, 2024.

For the fiscal year ended June 30, 2023, changes in tax payable provided net cash inflow

of $2.3 million, which led to a $4.9 million decreased in net cash inflow from operating activities.

(v) Changes in non-cash items provided $8.1 million net

(i) We had net loss of $15.3 million for the fiscal year ended

June 30, 2025.

For the fiscal year ended June 30, 2024, we had net income of $7.4 million, which led to a $22.8 million decrease

in net cash inflow from operating activities.

(ii) Changes in accounts receivable and other receivables were $3.0 million

cash inflow for the fiscal year ended June 30, 2025.

For the fiscal year ended June 30, 2023, changes in non-cash items provided net

cash inflow of $2.8 million, which led to a $5.3 million increase in net cash inflow from operating activities.

For the fiscal year ended June 30, 2024, changes in accounts receivable and other

receivables were $8.2 million cash outflow, which led to a $11.1 million decrease in net cash outflow from operating activities.

(iii) Changes in accounts payable and accrued liabilities were $2.1 million

net cash inflow for the fiscal year ended June 30, 2025.

For the fiscal year ended June 30, 2024, changes in accounts payable and accrued

liabilities were net cash outflow of $0.7 million, which led to a $2.8 million decrease in net cash outflow from operating activities.

(iv) Changes in tax payable were $0.1 million net cash outflow

for the fiscal year ended June 30, 2025.

For the fiscal year ended June 30, 2024, changes in tax payable were net cash outflow of $2.6 million,

which led to a $2.5 million decrease in net cash outflow from operating activities.

(v) Changes in non-cash items provided $11.0 million net cash

inflow for the fiscal year ended June 30, 2025.

For the fiscal year ended June 30, 2024, changes in non-cash items provided net cash

inflow of $8.0 million, which led to a $2.9 million increase in net cash inflow from operating activities.

Investing Activities

Net cash used in investing activities was $7.4 million

for the fiscal year ended June 30, 2024, primarily attributable to $5.2 million cash used for the purchase of property and equipment,

and $2.2 million used for loans extended to others.

Net cash used in investing activities was

$1.8 million for the fiscal year ended June 30, 2025, primarily attributable to $2.9 million cash used for the purchase of

property and equipment, and net of $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan

For the fiscal year ended June 30, 2024, net cash

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

used in investing activities was $7.4 million, primarily attributable to $5.2 million cash used for purchase of property and equipment

and $2.2 million used for loans extended to others.

Financing Activities

the fiscal year ended June 30, 2024, we had net cash provided by financing activities of $7.8 million,

which was primarily attributable to the net effects of:

(i) $7.5 million collected from our initial public offering;

$0.5 million collected from related parties for the repayment of loans we previously advanced to them;

For the fiscal year ended June 30, 2025, we had net cash provided by

financing activities of $4.0 million, which was primarily attributable to the net effects of:

(i) $8.1 million of net proceeds

convertible notes;

(ii) $0.4 million of loans advanced to related parties;

(iii) $3.4 million used for the repayment of

convertible notes and commitment fees payable;

and (iv) $0.4 million used to repay finance lease liabilities.

For the fiscal year ended June 30, 2024, we had

net cash provided by financing activities of $7.8 million, which was primarily attributable to the net effects of:

million collected from our initial public offering;

(ii) $0.5 million collected from related parties for the repayment of loans we

previously advanced to them;

(iii) $1.0 million used for expenses relating to the initial public offering;

(iv) $0.2 million used to repay

finance lease liabilities;

(iv) $0.2 million

used to repay finance lease liabilities;

and (v) $1.0 million in capital contributions from stockholders.

For the fiscal year ended June 30, 2023,

we had net cash used in financing activities of $3.2 million, which was primarily attributable to the net effects of:

(i) $2.5 million

used to repay to related parties;

(ii) $0.5 million used for loans extended to related parties;

(iii) $0.4 million

used for expenses relating to the initial public offering;

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

and (v) $0.5 million

in capital contributions from shareholders.

Commitments and Contractual Obligations

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leases for office space, warehouse space, and forklifts.

Lease terms expire at various dates through August 2024 to July 2034 with options

Lease terms expire at various dates through July 2025 to November 2034 with options

to renew for varying terms at our sole discretion.

1 unchanged sentence

assets or lease liabilities, as there is no reasonable certainty, as of the date of this annual report, that these options will be exercised.

As of June 30, 2024, maturities of lease liabilities

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

As of June 30, 2025, aggregate annual lease obligations for each of the following fiscal years ending June 30 and thereafter were as follows:

2030 and beyond

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Non-current portion

Other than the above leases, we did not have significant

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

Sheet Commitments and Arrangements

Other than two standby letters of credit with

As of June 30, 2025, our significant contractual obligations also include

Convertible Notes arising from the SEPA entered into by the Company in November 2024 with a principal balance of $10.0 million.

to the SEPA, the Company has the right to sell to the Investor up to the Commitment Amount of the Company’s shares of common stock,

subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA.

Unless converted into our shares of common stock

prior to their maturity, we are obligated to repay Convertible Notes in cash.

The following table summarizes our future contractual

obligations related to the Convertible Notes as of June 30, 2025:

Less than 1 year

Other than the above leases and the Convertible

Notes, we did not have significant commitments, long-term obligations, or guarantees as of June 30, 2025.

Off-balance Sheet Commitments and Arrangements

Other than six standby letters of credit with

Eastwest Bank in the aggregate amount of $4,387,550, we did not have during the period presented, and we do not currently have, any off-balance

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As of June 30, 2025,

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

Accounting Policies and Estimates

we still had unused credit of $4,387,550 with Eastwest Bank.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements

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Straight-line

15 – 17 years

Machinery & equipment

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Specifically, $2,349,234 and $1,513,947 of the depreciation

expenses were recorded in costs of sales for the fiscal years ended June 30, 2024 and 2023, respectively.

expenses were recorded in cost of service for the fiscal years ended June 30, 2025 and 2024, respectively.

$206,391 and $313,284 of the

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Quantitative and Qualitative Disclosures About Market Risk.

As a smaller report company,

we are not required to provide the information required by this item.

As a smaller report company, we are not required to provide the information

required by this item.

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-K

Item 7. Management’s Discussion and Analysis