Armlogi Holding Corp. 10-K

Item 1. Business. Overview We are a fast-growing U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment. With the boom of e-commerce and Internet technology, along with the development of global supply chains, a growing number of merchants are seeking to sell their products through international e-commerce platforms, such as Amazon and eBay. These merchants, however, are confronted with major logistical challenges because of the complexities involved in shipping goods across borders. Specifically, when a foreign consumer places an order online, it can take a long time for the goods to be delivered from one country to another (especially for bulky items), while facing high damage rates and congestion during peak seasons. One of the solutions to such problems is to set up overseas warehouses, which are local storage facilities established in a foreign country where the cross-border merchants intend to sell their goods. Cross-border e-commerce merchants can export goods in batches in advance to overseas warehouses, which can then be delivered to overseas consumers once orders are placed via e-commerce 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. market. We currently operate ten 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. warehouses; 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, 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 part 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. Our Competitive Strengths We believe the following competitive strengths are essential for our success and differentiate us from our competitors: Quality Warehousing and Logistics Services that Meet ISO 9001 Standards We provide our customers with quality warehousing and logistics services with high inventory accuracy and 24/7 customer support, which are especially suitable for the e-commerce of bulky items. Our operations span across the West Coast, Midwest, and East Coast of the U.S., with a total of ten warehouses under management, including one of the only 23 eBay-certified third-party warehouses in the country. Specifically, certain items, such as furniture or large home appliances, require special logistics facilities for storage, fulfillment, and shipping because of their size and weight. As a result, traditional warehousing and logistics service providers may find it difficult to offer integrated one-stop solutions. The ten warehouses we operate not only provide large storage space, but are also equipped with forklifts, pallets, and trays for processing bulky items. In addition, inventory accuracy is a metric that measures the difference between our records of warehouse stock and actual stock. Inventory accuracy is critical for preventing stockouts, shortages, shrinkage, controlling inventory quality, and maintaining a positive customer experience. In this regard, our operations achieved an average of 99.64% inventory accuracy during the fiscal year ended June 30, 2025. Moreover, our customer service team provides full support to our customers’ business throughout the entire process, from recommendations on e-commerce infrastructure to sharing experience in security and compliance practices and to optimizing warehousing and logistics costs for our customers. Leveraging our expertise in the warehousing and logistics industry as well as our 24/7 online customer support in over 30 languages, we are also able to respond quickly to special circumstances. 1 The warehousing and logistics services we provide meet ISO 9001 standards, which are a set of international standards for quality management systems. These standards are issued by the International Organization for Standardization (“ISO”), a non-governmental organization that develops and publishes standards across a wide range of industries, including warehousing and logistics services. ISO 9001 standards provide a framework for managing and improving quality in a systematic and structured manner. ISO 9001 standards are rooted in a set of fundamental principles, such as prioritizing customer needs, exhibiting strong leadership, pursuing continuous improvement, and making data-driven decisions. To ensure that our warehousing and logistics operations meet the highest quality standards, we have implemented ISO 9001 standards into our quality management system. To accomplish this, we have implemented ISO 9001-compliant policies and procedures, including procedures for managing inventory, handling and storing goods, and transporting goods, as well as procedures for continuous improvement and customer feedback mechanism. Incorporating ISO 9001 into our warehousing and logistics services may give us a competitive advantage by ensuring we meet the highest quality standards. Customers are increasingly seeking suppliers and service providers with quality management systems, so we believe that ISO 9001 certification can be a key differentiator for us in a competitive market. Reasonable Service Fees and Delivery Fees due to the Large Volume of Goods We Process Considering the large volume of merchandise we process, we are able to offer relatively inexpensive service fees and affordable delivery fees. We rely on third-party logistics providers, such as FedEx and United Parcel Service, Inc. (“UPS”), for end-to-end delivery, as we do not have our own in-house delivery team or vehicles. Despite this, we offer transportation rates based on a long-term agreement between our ten warehouses and third-party logistics service providers. The volume of packages we send often entitles us to large discounts from third-party logistics providers. As a result, we have been able to provide our customers with stable and reasonable transportation rates. Additionally, we are able to overcome the surge charges for oversized items and peak season fees by leveraging our logistics management tools to achieve lower freight charges. As such, we believe our service fees are reasonable and affordable. Capability of Providing Efficient and Low-error Warehousing Services by Leveraging Warehouse and Order Management Technology We have developed a platform, primarily including our Armlogi order management system (“OMS”), which provides a comprehensive and integrated solution for warehouse and logistics management. See “— Technology and Intellectual Property.” Our platform is built on the Amazon Web Services cloud computing infrastructure, which provides high security, reliability, and scalability. This allows us to easily deploy and manage virtual servers, and to quickly add or remove resources, as needed. The platform is also accessible through a web-based interface, so that our customers and staff can access the platform from anywhere with an Internet connection. Our platform enables us to manage all incoming shipments from the moment they are received at the warehouse until they are delivered to the customer. This includes tracking the status of each shipment and providing real-time updates to our customers. The platform also allows our truck drivers to upload real-time images of their trucks for verification, ensuring that only authorized vehicles are used for deliveries. In addition, our platform includes tools for data input, log tracking, translations, and customer support. This allows us to quickly and accurately process orders and to provide our customers with the information they need to manage their supply chain. By leveraging our platform, rather than traditional software, we believe we have reduced our operating costs and user workload, and have increased our efficiency and control over workflows, which, in turn, has enabled us to deliver a higher level of service to our customers while reducing the risk of human error. We have also been able to add new features and modules to the platform as needed, without incurring high upfront costs and long implementation times associated with traditional software. An Experienced Management Team with Strong Financial and Operational Expertise Our management team consists of executives with decades of supply chain, warehousing, and logistics industry as well as other corporate functions experience. As a co-founder of Armstrong Logistic Inc. (“Armstrong Logistic”) and our Chief Executive Officer, Mr. Aidy Chou, is responsible for high-level strategizing and business planning, as well as the overall financial management and investment management of our Company. From September 2003 to May 2023, Mr. Chou served as the chief executive officer and chief financial officer at Advance Tuner Warehouse Inc. (“Advance Tuner”), a major automobile accessories company. Mr. Tong Wu, our Secretary, Treasurer, and director, is also a co-founder and serves as the chief administrative officer of Armstrong Logistic, and is responsible for the management of day-to-day operations and overseeing specific departments, such as sales, marketing, and human resources. Mr. Wu has extensive experience in the warehousing and logistics industry. 2 Our Growth Strategies We intend to develop our business and strengthen brand loyalty by implementing the following strategies: Expand and Diversify Our Customer Base and Geographic Coverage We are dedicated to growing and diversifying our existing customer base. For the fiscal years ended June 30, 2025 and 2024, we had 505 and 105 customers, respectively, with 86% and 59% of them based in mainland China. We are looking to continue to grow our customer base in China and also expand into Southeast Asia including Vietnam, Thailand, Indonesia, and the Philippines, and Mexico. Moreover, our success is largely based on our warehouse management capabilities enabled by our warehousing network, which covers the West Coast, Midwest, and East Coast of the United States. As of the date of this annual report, we operate ten warehouses in the U.S., and plan to continue expanding our geographic footprint in key markets. We plan to build out additional infrastructure in key markets in the U.S., including California, Georgia, Tennessee, Florida, Illinois, and Arizona. A variety of funding sources could be utilized to lease additional warehouse space, including cash reserves, loans from financial institutions, and investor fundraising. Before choosing the right funding source, we will carefully consider our financial position, creditworthiness, and other factors. A complex process of leasing additional warehouse space requires careful planning and execution, involving the identification of suitable locations, negotiation of lease terms, and logistics management for moving equipment and inventory. In addition, the recruitment and training of personnel for the new warehouses may also be challenging. All of these endeavors involve risks and will require significant management, financial, and human resources. We cannot assure you that we will be able to effectively manage our growth or to implement our strategies successfully. Enhance Our Customers’ Supply Chain Efficiency by Expanding the Breadth and Depth of Our Solutions and Services In order to provide our customers with even greater value, we endeavor to continually expand our solutions and services. We launched our international ocean freight services in January 2023 and are actively expanding and refining these offerings, which have enabled us to further improve supply chain efficiency for our customers. With this new addition, we can now offer our manufacturer customers a comprehensive one-stop logistics solution, covering the entire journey from their overseas factory door to the doorstep of the end consumer in the United States. These overseas manufacturers need a comprehensive solution that streamlines their supply chain and simplifies logistics. By integrating ocean freight into our existing services, we can offer a broader range of options to meet the diverse needs of our customers. All aspects of the shipping process will be handled by our professional team, including coordination with the factory, arranging for transportation, customs clearance, and final delivery. Our customers can focus on manufacturing quality products for consumers by delegating their logistics to us. With our new international ocean freight services, we look forward to expanding our business and building lasting relationships with manufacturers worldwide. We plan to refine and optimize these services over the next two years, with an estimated cost of $3 to $4 million. To finance the expansion of our services, we are exploring a range of funding options, which may include utilizing our existing cash reserves, seeking loans from financial institutions, or securing investor capital. The actual funding source chosen will be determined by our current financial position, creditworthiness, and other factors. Building up our expertise and capabilities in this area may require significant resources. Additionally, shipping goods across international borders may present regulatory and legal challenges, complicating the expansion process. In addition, we plan to continue to develop comprehensive and sophisticated solutions and services that span the entire supply chain, from ocean freight to distribution and delivery. This will enable us to offer a full range of value-added services to our customers, including sales forecasts and inventory planning. We also plan to develop modular solutions and services that can be easily adopted by our customers, which are expected to improve their experience and allow us to expand more rapidly and cost-effectively. Further Invest in Supply Chain Technologies to Drive Sustainable Growth We plan to further invest in supply chain technologies to facilitate the adoption and implementation of advanced technologies to improve the efficiency, transparency, and sustainability of our supply chain solutions. Our focus will be on fundamental technologies, including artificial intelligence, data analytics, and supply chain planning and optimization algorithms, as well as smart systems, such as ocean freight tracking and management, automated sales forecasting and inventory management, and real-time data analysis. We anticipate that investing in supply chain technologies will not only enhance our ability to provide smart supply chain solutions and offer valuable data insights to customers across diverse industries, but will also bring a multitude of benefits, such as improved inventory management, faster delivery times, reduced operational costs, increased supply chain transparency, enhanced sustainability, and improved overall customer satisfaction. In addition, we plan to further open up our technology platforms to our customers and partners to accelerate the digitization and streamlining of their supply chains. We believe this will enhance collaboration, innovation, and efficiency across the supply chain ecosystem. Some challenges can arise when implementing supply chain technologies, including high costs, a shortage of skilled workers, and data security concerns. Overall, we believe that further investing in supply chain technologies to drive sustainable growth can help us sustain our competitive advantage and contribute to our long-term success while also advancing sustainable practices. 3 Pursue Additional Strategic and Financially Attractive Acquisitions We endeavor to identify, acquire, and integrate businesses that will expand our supply-chain-related warehousing and logistics business, while achieving synergies and generating attractive returns that exceed our cost of capital. Using our disciplined approach to screening and evaluating potential opportunities, we intend to seek strategically and financially attractive acquisition targets that provide us with new capabilities. We have significant internal resources dedicated to tracking potential acquisition prospects which are formally reviewed by senior management on a regular basis. Since we are a fast-growing warehousing and logistics solution provider with a wide network of contacts, we believe we will be an acquirer of choice in our industry and will be able to transact with smaller players at attractive valuations. Organizational Structure Armstrong Logistic was incorporated on April 16, 2020 under the laws of the State of California, which holds 100% of the equity interests in the following entities: (i) Armlogi Truck Dispatching LLC (“Truck Dispatching”), a limited liability company wholly owned by Armstrong Logistic, which was organized on February 26, 2021 under the laws of the State of California; (ii) AndTech Trucking LLC (“Andtech Trucking”), a limited liability company wholly owned by Armstrong Logistic, which was organized on May 7, 2021 under the laws of the State of California; (iii) Amlogi Trucking LLC (“Armlogi Trucking”), a limited liability company wholly owned by Armstrong Logistic, which was organized on March 25, 2021 under the laws of the State of California; (iv) Armlogi Group LLC (“Armlogi Group”), a limited liability company wholly owned by Armstrong Logistic, which was organized on October 19, 2021 under the laws of the State of California; and (v) AndTech Customs Broker LLC (“Andtech Customs Broker”), a limited liability company wholly owned by Armstrong Logistic, which was organized on June 8, 2021 under the laws of the State of California. In connection with our initial public offering (“IPO”), we have undertaken a reorganization of our corporate structure in the following steps: ● on September 27, 2022, we incorporated Armlogi Holding under the laws of the State of Nevada; and ● on October 7, 2022, Armstrong Logistic was acquired by Armstrong Holding from the original stockholders of Armstrong Logistic through a share exchange agreement entered into by and among Armstrong Holding, Armstrong Logistic, and the original stockholders of Armstrong Logistic. On May 15, 2024, we closed our IPO of 1,600,000 shares of common stock at a price of $5.00 per share. In connection with the IPO, the shares of common stock began trading on the Nasdaq Global Market under the symbol “BTOC” on May 14, 2024. Our Business Model We provide our customers, comprising both international cross-border e-commerce merchants (primarily from the PRC) and domestic customers, with a package of warehousing and logistics services to select from, including (i) facilitating overseas transportation of goods to the U.S.; (ii) customs brokerage services; (iii) transportation of goods to U.S. warehouses; and (iv) warehouse management and order fulfillment services. While our one-stop warehousing and logistics services cover a broad range of offerings, we recognize revenue from the following three sources for accounting purposes: ● Transportation Services. We generate our transportation service revenue by purchasing transportation services from third-party carriers and reselling those services to our customers. We receive service fees, typically ranging from $5 to $75 for each service, depending on various factors, such as the load type, weight, volume, and delivery distance. 4 ● Warehousing Services. Our revenue from warehousing services is generated via our warehouse management offerings, including inventory management and storage services. We receive warehousing service fees, typically ranging from $3 to $500 for each service, based on the specific services that our customers choose and subject to a variety of factors that may affect the cost of those services, such as the total number of stock keeping units (“SKUs”), weight, volume, and storage time. ● Other Services. Other services primarily include customs brokerage services, where we collaborate with customers to file the necessary documentation and pay the appropriate taxes and duties to relevant authorities. We receive brokerage service fees from customers, typically ranging from $70 to $100 per each service, depending on the number of items to be declared. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.” Our Customers We primarily serve two types of customers: (i) overseas customers and (ii) U.S. domestic customers. Our overseas customers consist of cross-border e-commerce merchants outside the U.S. (primarily from the PRC) who intend to sell in the U.S. market via a variety of e-commerce platforms, such as Amazon, eBay, Wish, Walmart, and Wayfair. Those customers typically operate their e-commerce stores seeking to sell in the U.S. market but typically lack access to the warehousing and logistics resources in the U.S. Through our expertise and liaison with the PRC, we are primarily targeting cross-border e-commerce merchants in the PRC, but we are also developing a growing international customer base in other countries, such as South Korea and Mexico. Our U.S. domestic customers are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations. Our overseas and domestic customers generated approximately 84% and 16% of our revenue, respectively, during the fiscal year ended June 30, 2025 and approximately 96% and 4% of our revenue, respectively, during the fiscal year ended June 30, 2024. As of June 30, 2025 and 2024, we had an active base of 505 and 105 customers, respectively, for our warehousing and logistics services. During the fiscal year ended June 30, 2025, our two largest customers were Goldensee Ltd. and Kimberly Tenneco Inc, representing 22.0% and 10.8% of our total revenue, respectively. For the fiscal year ended June 30, 2024, our top four customers were Aukey International Ltd., Western Post (HK) Ltd., Goldensee Ltd., and Union Grand Imp. & Exp. Co., Ltd., representing approximately 11.7%, 11.7%, 10.9%, and 10.0% of our total revenue, respectively. No other customers represented 10% or more of our total revenue for the years ended June 30, 2025 and 2024. As an example of a typical transaction, under a warehousing and logistics service agreement entered into by and between Armstrong Logistic, one of our subsidiaries, and a warehousing and logistics service customer (the “Customer”), Armstrong Logistic is obligated to provide, or cause to be provided from third parties at no cost to the Customer, the following services, including (i) receiving and processing product shipments from the Customer for fulfillment of the Customer’s end-user orders; (ii) storing inventory in warehousing facilities; (iii) picking and packing the Customer’s products from the inventory and shipping such products directly to end users upon notification by the Customer, utilizing appropriate packaging materials at Armstrong Logistic’s discretion, unless otherwise specified by the Customer; (iv) maintaining monthly ledger summaries of all orders shipped and received, available upon request by the Customer; (v) facilitating any product returns from end users to the Customer; and (vi) additional value-added services that the Customer desires Armstrong Logistic to provide. Pursuant to the agreement, the Customer is required to (i) maintain all certifications, credentials, licenses, and permits necessary to conduct its business relating to the sale of its products in the U.S. and not engage in any activities or transactions involving its products that violate U.S. laws or regulations; and (ii) pay Armstrong Logistic service fees in accordance with an agreed-upon pricing schedule, unless modified by written agreement of both parties. The agreement lasts for one month and automatically renews for additional successive one-month terms, unless it is earlier terminated by either party. The agreement may be terminated by either party without cause upon delivery to the other party of a written notice of termination, which becomes effective as of the last day of the following month, unless earlier termination by written agreement of both parties. 5 Our Suppliers The suppliers of our one-stop warehousing and logistics services primarily consist of (i) our warehouse landlords and (ii) third-party logistics service providers, including FedEx and UPS, who assist us in transporting customers’ goods from foreign countries to the U.S., and/or delivering goods from our warehouses to end consumers. We have established procedures for selecting independent third-party logistics service providers that we engage in, including a thorough review of their service prices and quality, their operating history, fleet condition, reliability, and availability. Among our suppliers, FedEx accounted for approximately 9% and 50% of our total purchases, during the fiscal years ended June 30, 2025 and 2024, respectively. During the fiscal year ended June 30, 2025, UPS accounted for approximately 15.2% and MEGA CORP LOGISTIC LLC, a third-party vendor providing shipping services via FedEx, accounted for approximately 10%, respectively. On April 10, 2020, Armstrong Logistic, one of our subsidiaries, entered into a service agreement with FedEx for its delivery service. Pursuant to the agreement, which has a term from April 10, 2020 until terminated by either party, FedEx is required to provide certain transportation services, including FedEx Express, FedEx Ground, and FedEx Freight, as indicated in the FedEx service guide in effect at the time of shipment, at the price and on the terms as set forth in the FedEx transportation service agreement, and Armstrong Logistic is required to make payment within 15 days of the invoice date unless otherwise provided in a FedEx credit term attachment. Pursuant to the agreement, Armstrong Logistic may receive the earned discount at the percentages specified in each pricing attachment based upon Armstrong Logistic’s actual shipping activity. Either party may terminate the service agreement immediately upon notice due to the other party’s noncompliance with its terms. Either party may terminate the agreement at any time without cause and without penalties, unless otherwise stated in the agreement, upon 30 days’ prior written notice to the other party. Our Warehousing Network We have set up our local warehousing infrastructure in the U.S. strategically such that we are close to ports and customers across the country, shortening delivery time to the end customers. As of the date of this annual report, we operate ten warehouses in five states, covering three U.S. ports of destination, including the Port of Los Angeles/Long Beach in California, the Port of Savannah in Georgia, the Port of Houston in Texas, the Port of Newark in New Jersey and the Port of Edwardsville in Illinois. Specifically, we have (i) four warehouses in California, one in the City of Industry, one in Walnut, one in Ontario and one in Fontana; (ii) one warehouse in Georgia, (iii) two warehouses in Texas, (iv) two warehouses in New Jersey, and (v) one warehouse in Illinois. Our current warehousing facilities are leased to us and have an aggregate gross floor area of 3,905,020 square feet. Aside from the large storage space, our warehouses are equipped with automated sorting systems, forklifts, pallets, and trays that are suitable for processing bulky items. Our warehouses are also equipped with advanced security systems and real-time scanning systems, to ensure the safe storage of a wide variety of products. We utilize data analytics to determine the optimal distribution of inventory among our warehouses and provide customers with SKU-level real-time monitoring, live shipments tracking, and historical data analytics and sales forecasting services, to allow them to more efficiently manage inventory and reduce costs. In addition, our warehouses are equipped with advanced automated storage and retrieval systems for parcels and freight. Services and Operational Flow Transportation of Merchandise to the U.S (Ocean Freight Services) We launched our international ocean freight services in January 2023 and are actively expanding and refining these offerings, which have enabled us to further improve supply chain efficiency for our customers. See “— Our Growth Strategies — Enhance Our Customers’ Supply Chain Efficiency by Expanding the Breadth and Depth of Our Solutions and Services.” Our current one-stop warehousing and logistic services begin with facilitating overseas transportation of our customers’ merchandise to the U.S., primarily through ocean freight services arranged by us with third parties, such as Cosco Shipping Lines, Evergreen Line, and Ocean Network Express. Since we do not operate any international shipping business, we recommend global logistics services (primarily ocean freight services) to our customers based on our robust international network with our third-party global carriers. 6 Customs Brokerage Services Andtech Customs Broker, one of our wholly owned subsidiaries, is a licensed U.S. customs broker who can assist our customers in complying with all regulatory requirements. Our services help customers clear cargo with the U.S. Customs and Border Protection (“CBP”), including documentation collection, valuation review, product classification, electronic submission to customs, and the collection and payment of duties, tariffs, and fees. We collaborate with our customers to ensure that all necessary documentation is complete and accurate, and that all fees and taxes are paid in a timely manner. We also work with our customers to develop a compliant program, including developing product databases and compliance manuals, and conducting periodic internal audits. The development of product databases has become critical in the current economic environment in light of rising trade tensions and various tariffs imposed as a result. In addition, we offer our customers training seminars and trade consulting to improve efficiency. Port Trucking Services and Delivery of Merchandise to U.S. Warehouses We offer port trucking services (or drayage trucking services) to assist customers with the transportation of shipping containers from ports to storage or transportation facilities. Such services involve transporting containers within a metropolitan area for short distances, where we are responsible for picking up containers from ports and delivering the containers to their destination. As a vital part of the supply chain, port trucking ensures that goods are transported efficiently and quickly from ports to distribution centers and other locations. Our fleet of trucks is regularly maintained and equipped with the latest GPS tracking technology, allowing us to provide reliable and efficient transportation services. Our port trucking services facilitate the transportation of customs-cleared goods to the U.S. warehouses, including Amazon’s FBA warehouses and our self-operated warehouses. (a) Amazon’s FBA Warehouses Amazon’s FBA is a service provided by Amazon that provides storage, packaging, and shipping assistance to sellers. Any merchant who sells on their website can use the FBA service, which takes the burden off of sellers and grants them more flexibility in their selling practices. Some of our customers intend to sell on Amazon and request that all or part of their merchandise be delivered to Amazon warehouses. Nevertheless, Amazon has guidelines regarding how goods delivered through their FBA services must be prepared, which are usually unfamiliar to our customers. Through our expertise and experience in these preparations, we help our customers streamline their logistics work by taking care of such preparation work. We provide customers with the service of receiving packed shipping containers and repacking them in order to meet Amazon’s FBA requirements, as well as shipping those goods to Amazon’s FBA warehouses. (b) Our Self-operated Warehouses In many cases, our customers may only intend to send a portion of their merchandise to Amazon’s warehouses to be sold via FBA, while the remainder needs to be stored and sold via other online e-commerce platforms. As a result, we provide services for delivering these goods to one of our ten warehouses in the U.S. for further services, such as warehousing, storage, and e-commerce order fulfillment. Warehouse Management and Order Fulfillment Services Generally, our warehouse management and order fulfillment services are designed to help our customers store and transport their products, and are provided at competitive rates based on the specific needs of each customer. We have a team of experienced professionals who are trained to handle these tasks efficiently and effectively to ensure that our customers’ products are stored, handled, and delivered efficiently. We record all inventory information when customers’ goods arrive at our warehouses. We are able to manage our warehousing network and the goods stored therein efficiently, due to our high level of warehouse automation and strong technology capabilities. Our warehouses are equipped with advanced automated storage and retrieval systems for parcels and freight. See “— Our Warehousing Network.” 7 We offer a variety of warehouse management and order fulfillment services, primarily including (i) product storage and retrieval, (ii) product packing and labeling, (iii) kitting and repackaging, (iv) order assembly and load consolidation, (v) inventory management and sales forecasting, (vi) third-party distribution coordination, and (vii) other value-added services. Our customers, consisting primarily of e-commerce merchants, outsource warehouse management and order fulfillment to us so that they can focus on running their business via online platforms such as eBay. Specifically, when a U.S. consumer places an order online via such online platforms, the order information will be transmitted to an e-commerce resource planning system (the “ERP system”) used by the customer, which is capable of gathering and consolidating order information from various e-commerce platforms. With our customers’ authorization, such order information is subsequently transmitted to our Armlogi OMS, which is compatible with most of the ERP systems used by our customers, and then to our Armlogi warehouse management system for further processing. In accordance with the order information, we pick, pack, and arrange for third-party logistics service providers to distribute the merchandise ordered online. See “— Our Suppliers.” As of the date of this annual report, we only provide warehousing services and logistics management services and do not provide distribution services ourselves, as we do not have our own delivery team or networks; rather, deliveries are all handled by third-party logistics service providers, such as FedEx and UPS. For each parcel delivered, these third-party logistics service providers provide tracking numbers, which are transferred to our customers’ ERP systems, so that both our customers and end consumers can track its location at any time. Below is a graphic that illustrates the primary operational workflow of our warehouse management and order fulfillment services: Further, we provide value-added logistics services, which primarily include after-sales reverse logistics and specialized packaging. As a result of our comprehensive value-added services, we are able to attract new business and strengthen our relationships with existing customers. Specifically, for after-sales reverse logistics services, we provide exchange and return management services, as well as product inspection and refurbishment. With our specialized packaging services, we offer custom or rigid packaging services using premium folding cartons, inserts, and labels. We utilize a wide variety of materials, including paper and paperboard, pressure-sensitive labels, plastic, and foil. Additionally, we provide facility rental services, allowing customers (primarily our domestic customers) to rent space within our warehouses or other facilities on a short or long-term basis. We provide a cost-effective solution for customers who need additional storage or production space but do not want to invest in their own facilities. We generate revenue by charging service fees, typically ranging from $3 to $500 for each service, for our warehousing and logistics services, which vary depending on the specific types of services selected by our customers, and are subject to various factors such as the load type, the total number SKUs, weight, volume, storage time, and delivery distance. In addition to the service fees, we also charge our customs delivery fees for services provided by third-party logistics service providers such as FedEx and UPS. Due to our long-term partnerships with third-party logistics service providers, we believe we offer our customers reasonable and affordable transportation rates — due to the size and volume of packages we send to our collaborative third-party logistics service providers, we are able to consolidate small shipments of goods to achieve lower transportation rates for our customers. We strive to provide our customers with transparency in pricing and a clear understanding of the fees they will be charged for our services, typically (i) ranging from $50 to $1,500 for a package of services selected by each overseas customer, and (ii) ranging from $50 to $1,500 for a package of services selected by each domestic customer. 8 Technology and Intellectual Property We have developed a platform that provides a solution for warehouse and logistics management. The platform primarily includes our Armlogi OMS, which allows our customers to place and track orders, manage their inventory, and receive real-time updates on the status of their shipments. We developed our Armlogi OMS following a process primarily consisting of the following steps. First, we defined the system’s purpose and features based on our user needs and business objectives, with which we developed a blueprint that included system architecture, data models, and user interfaces. We then wrote codes to develop software components and tested the system for functionality, performance, and security, to ensure compliance with user requirements. We launched our OMS for users in June 2022 and have since been providing ongoing support and maintenance as needed. To protect our Armlogi OMS, we have implemented several security measures, including (i) encrypting sensitive data both in transit and at rest, (ii) controlling user access using role-based access control, (iii) following secure coding practices to avoid common security vulnerabilities, (iv) conducting regular security audits to identify potential vulnerabilities and ensure compliance with security standards, (v) regularly updating the system, and (vi) implementing robust mechanisms for verifying user identities and granting access to system resources. We regard our trademark, domain names, trade secrets, and similar intellectual property as critical to our success. We rely on a combination of copyright and trademark law, and confidentiality and non-disclosure agreements to protect our intellectual property rights. We also regularly monitor any infringement or misappropriation of our intellectual property rights. As of the date of this annual report, we have the following intellectual property rights in the U.S.: ● one trademark (namely, the trademark “ARMLOGI,” registered with the U.S. Patent and Trademark Office on January 17, 2023); ● five domain names, including (i) armlogi.com, (ii) armlogi.net, (iii) armlg.com, (iv) armtk.com, and (v) tkarm.co; and ● four software copyrights for our mobile apps, including Armlogi Trucking, Armlogi WMS, Armlogi OMS, and Armstrong Logistic Security (website), respectively. We have implemented certain measures to protect our intellectual property, including: (i) hiring outside legal counsel to assist in the protection of our intellectual property; and (ii) timely registration and filing with relevant authorities and application of intellectual property rights for our significant technologies and self-developed mobile apps. Employees As of June 30, 2025, we had 210 full-time employees. The following table sets forth the number of our full-time employees as of June 30, 2025: Function: Number Warehousing and Logistics 168 Operations 17 Customer Services 17 Technology 1 Accounting 7 Total 210 9 We enter into employment contracts, non-disclosure agreements, and confidential information agreements with our full-time employees to establish clear terms and expectations of employment and protect our sensitive and confidential information. In addition to our full-time employees, we also hired approximately nine independent contractors as of June 30, 2025. These contract workers serve as our supplemental workforce, primarily responsible for warehouse labor, security, and cleaning. We believe that we maintain a good working relationship with our employees, and we have not experienced material labor disputes in the past. None of our employees are represented by labor unions. Competition The warehousing and logistics industry in the U.S. is relatively competitive and rapidly evolving, with many new companies joining the competition in recent years and few leading companies. We believe that our ability to compete effectively for customers depends upon many factors, including the quality and variety of services offered in our one-stop overseas warehousing and logistics business, our strong relationships with PRC customers, our excellent 24/7 customer support, the efficiency and agility of our Armlogi OMS, and our ability to recruit and retain talents with industry expertise. We believe that we are well-positioned to effectively compete in the warehousing and logistics industry based on the factors listed above. Some of our current or future competitors, however, may have longer operating histories, greater brand recognition, or greater financial, technical, or marketing resources than we do. Governmental Regulations Our industry is subject to regulation and supervision by several governmental authorities. Operations We do not believe that current U.S. governmental regulations impose significant economic restraint upon our business operations. A number of U.S. federal, state, and local laws and regulations affect our business, including those relating to our sales, operations, transportation of goods, warehouse maintenance, financing, insurance, and employment practices. The regulatory bodies that regulate our business include, but not limited to, the Federal Maritime Commission (“FMC”), the CBP, the U.S. Department of Homeland Security (the “DHS”), the Occupational Safety and Health Administration (the “OSHA”), the Consumer Financial Protection Bureau, the U.S. Department of Transportation (the “DOT”). For example, the shipping of goods by sea is regulated by the FMC. Our Company is licensed by the FMC to operate as an ocean transportation intermediary (“OTI”). As a licensed OTI, we are required to comply with several regulations, including the filing of our tariffs. Further, the DHS regulations applicable to our customers that import goods into the U.S. and our contracted ocean carriers may impact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations. We are also licensed as a customs broker by the CBP, nationally and in each U.S. customs district in which we do business. All U.S. customs brokers are required to maintain prescribed records and are subject to periodic audits by CBP. Moreover, the OSHA implements and enforces safety and health regulations in the workplace, which provide standards applicable to both general industry and specific to the warehousing industry, such as standards for, among other things, proper storage of materials, use of material handling equipment, and employee training. Furthermore, as we are involved in the transportation of goods, we must comply with the DOT regulations regarding driver qualifications, vehicle maintenance, and hours of service. Additionally, as with other warehousing and logistics companies, we are required to follow federal and state employment laws, which cover important aspects such as minimum wage, overtime pay, and anti-discrimination policies, among other things. We are also required to comply with local zoning ordinances and building codes, which may specify the permissible locations for our facilities and the safety standards that must be adhered to. We confirm that, as of the date of this annual report, each of our subsidiaries has obtained a valid business license or permit required for its operations. To the best of our knowledge, we are not obliged to obtain any other approvals, licenses, or permits from any federal, state, or local authorities to conduct our business, nor have we received any notice requesting such approvals, licenses, or permits from these authorities. However, it is uncertain whether we will be required to obtain additional approvals, licenses, or permits in connection with our business operations pursuant to evolving federal or state laws and regulations, and whether we will be able to obtain such approvals, licenses, or permits on a timely basis. Failure to do may results in a material change in our operations, and the value of our common stock could deprecate significantly or become worthless. 10 Environmental We are subject to federal, state, and local environmental laws and regulations, such as the National Environmental Policy Act, the Resource Conservation and Recovery Act, the California Environmental Quality Act, and the California Integrated Waste Management Act. These laws and regulations cover a variety of processes, including proper storage, handling and disposal of waste materials, appropriately managing wastewater and stormwater, and communicating the presence of reportable quantities of hazardous materials to local responders. Compliance with these laws and regulations has minimal impact on our business, since our warehouse inventory does not contain reportable quantities of toxic or hazardous materials or liquid waste. We have complied with regulation requirements by properly disposing of foam, plastic, and cardboard packing material, and working with our local waste management services. Moreover, we regularly communicate with our customers to ensure that we are aware of the contents of their goods stored in our warehouses, especially for inventory that is to be disposed of. As of the date of this annual report, we have not received any inquiry, notice, or sanction regarding non-compliance with any environmental laws or regulations from any federal, state, or local regulatory authority.