What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-02-17 compared with 2025-11-13 · 657 added, 663 removed, 390 unchanged (77% of the section changed)

Financial Statements

HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2025 AND JUNE 30, 2025

AS OF DECEMBER 31, 2025 AND JUNE 30, 2025

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

September 30,

Current assets

6 unchanged sentences

Non-current assets

Restricted cash – non-current

Long-term loan receivables

Restricted cash

Property and equipment, net

18 unchanged sentences

Stockholders’ equity

Common stock, US$ 0.00001 par value, 100,000,000 shares authorized, 45,443,079 and 42,250,934 issued and outstanding as of September 30, 2025 and June 30, 2025, respectively

Common stock, US$ 0.00001 par value, 100,000,000 shares authorized, 45,443,079 and 42,250,934 issued and outstanding as of December 31, 2025 and June 30, 2025, respectively

Additional paid-in capital

Retained earnings

Retained earnings (Accumulated deficits)

( 1,947,577 )

Total stockholders’ equity

Total liabilities and stockholders’ equity

The accompanying notes form an integral part

of these condensed consolidated financial statements.

accompanying notes form an integral part of these condensed consolidated financial statements.

HOLDING CORP.

1 unchanged sentence

OF OPERATIONS AND COMPREHENSIVE LOSS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2025 AND 2024

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

September 30,

Costs of services

7 unchanged sentences

( 2,176,164 )

( 10,800,205 )

( 9,451,779 )

Other (income) expenses:

1 unchanged sentence

( 1,040,872 )

( 1,770,321 )

Loss on Disposal of Assets

Finance costs

Total other (income) expenses

Total other (income)

( 1,637,699 )

2 unchanged sentences

( 1,735,122 )

Current income tax recovery

Deferred income tax recovery

( 10,351,799 )

Total income tax recovery

( 7,814,080 )

Current income tax expense

Deferred income tax (recovery) expense

( 1,506,969 )

Total income tax (recovery) expenses

( 1,506,969 )

( 3,860,182 )

( 1,659,240 )

( 10,368,235 )

( 6,307,111 )

Total comprehensive loss

1 unchanged sentence

( 1,659,240 )

( 10,368,235 )

( 6,307,111 )

Basic & diluted net loss per share

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

The accompanying notes form an integral part

of these condensed consolidated financial statements.

accompanying notes form an integral part of these condensed consolidated financial statements.

HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’

EQUITY (DEFICIT)

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2025 AND 2024

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

stockholders’

Three Months Ended

Six Months Ended

Balance as of June 30, 2024

1 unchanged sentence

( 6,307,111 )

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

Three Months ended

Balance as of September 30,2024 (unaudited)

( 1,659,240 )

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

Six Months Ended

Balance as of June 30, 2025

1 unchanged sentence

( 10,368,235 )

Shares issued for Investor Notices pursuant to Standby Equity Purchase Agreement

Shares issued for Investor Notices pursuant to Standby Equity Purchase Agreement (SEPA)

Balance as of December 31, 2025 (unaudited)

( 1,947,577 )

Three Months ended

Balance as of September 30,2025 (unaudited)

The accompanying notes form an integral part

of these condensed consolidated financial statements.

( 3,860,182 )

Balance as of December 31, 2025 (unaudited)

( 1,947,577 )

accompanying notes form an integral part of these condensed consolidated financial statements.

HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED)

FOR THE SIX MONTHS ENDED DECEMBER 31, 2025 AND 2024 (UNAUDITED)

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

Three Months Ended

September 30,

Three Months Ended

September 30,

Six Months Ended

Cash Flows from Operating Activities:

2 unchanged sentences

Adjustments for items not affecting cash:

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

Net loss from disposal of fixed assets

Depreciation of property and equipment and right-of-use assets-finance leases

Non-cash operating leases expense

6 unchanged sentences

Accounts receivable and other receivables

( 5,967,431 )

Other current assets

3 unchanged sentences

( 1,969,214 )

( 1,927,718 )

Contract liabilities

1 unchanged sentence

Accrued payroll liabilities

Net changes in derecognized ROU and operating lease liabilities

Net cash used in operating activities

8 unchanged sentences

Proceeds from loan repayments

Proceeds from sale of property and equipment

Net cash provided by (used in) investing activities

1 unchanged sentence

Cash Flows from Financing Activities:

Repayment to related parties

Repayments of finance lease liabilities

Proceeds from convertible notes

Repayments of convertible notes

( 2,020,000 )

Net cash used in financing activities

Net cash (used in) provided by financing activities

( 2,299,717 )

4 unchanged sentences

Cash and cash equivalents and restricted cash, end of the period

The following table provides a reconciliation of cash

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

shown in the Consolidated Statements of Cash Flows:

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheets that sum to the total of the same amounts shown in the Condensed Consolidated Statements of Cash Flows:

Cash and cash equivalents

Restricted cash – non-current

Total cash and cash equivalents and restricted

cash shown in the Condensed Consolidated Balance Sheets

Total cash and cash equivalents and restricted cash shown in the Condensed Consolidated Balance Sheets

Supplemental Disclosure of Cash Flows Information:

Cash paid for income tax

Cash paid for interest

Non-cash Transactions:

Right-of-use assets acquired in exchange for finance lease

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

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

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

Shares issued for Investor Notices pursuant to SEPA by reducing the convertible notes

The accompanying notes form an integral part

of these condensed consolidated financial statements.

Shares issued to settle commitment fee

accompanying notes form an integral part of these condensed consolidated financial statements.

HOLDING CORP.

1 unchanged sentence

Organization and principal activities

Armlogi Holding Corp.

and its consolidated subsidiaries

(the “Company”) operate as a third-party logistics company, providing multi-model transportation and logistics services primarily

in the United States.

The Company’s primary transportation services

involve arranging shipments, on behalf of its customers, of materials that are generally larger than shipments handled by integrated

carriers of primarily small parcels, such as FedEx, and UPS, including arranging and monitoring all aspects of material flow activity

utilizing advanced information technology systems.

The Company also provides other value-added logistics services, including warehousing

services, materials management and distribution services, and customs house brokerage services, to complement its core transportation

service offering.

Holding Corp.

and its consolidated subsidiaries (the “Company”) operate as a third-party logistics company, providing multi-model

transportation and logistics services primarily in the United States.

Company’s primary transportation services involve arranging shipments, on behalf of its customers, of materials that are generally

larger than shipments handled by integrated carriers of primarily small parcels, such as FedEx, and UPS, including arranging and monitoring

all aspects of material flow activity utilizing advanced information technology systems.

The Company also provides other value-added

logistics services, including warehousing services, materials management and distribution services, and customs house brokerage services,

to complement its core transportation service offering.

Summary of significant accounting policies

Basis of presentation

The accompanying unaudited interim condensed

consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States

of America (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8

of Regulation S-X of the SEC.

Certain information or footnote disclosures normally included in financial statements prepared in accordance

with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting.

they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations,

or cash flows.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited

consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended June 30, 2025.

In the opinion of the Company’s management,

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

necessary for a fair statement of the financial position of the Company as of September 30, 2025, and its results of operations and cash

flows for the three-month period then ended.

Operating results for the three months ended September 30, 2025 are not necessarily indicative

of the results that may be expected for the fiscal year ended June 30, 2026.

Going Concern

These financial statements have been

prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities

in the normal course of business.

The Company incurred a net loss of $ 6.5 million during the three months ended September 30, 2025

and as of that date, had a net current liability of $ 11.1 million.

Without additional financing, the Company may not be able to fund

its ongoing operations.

The Company is expanding its service offerings to new customers, optimizing warehouse utilization, and

developing higher-margin logistics solutions to improve profitability and cash generation.

Management is executing a cost

optimization plan, including delaying certain non-essential capital expenditures, reducing third-party service costs, and improving

operational efficiency across warehouse operations to preserve cash flow.

In addition, the Company is in discussions with several

financial institutions and investors to secure additional credit facilities and other forms of financing to strengthen working

There is no assurance that the Company will be able to obtain financings or obtain them on favorable terms.

uncertainties may cast significant doubt on the Company’s ability to continue as a going concern.

The Company will need to

raise sufficient working capital to maintain operations.

These financial statements do not include any adjustments related to the

recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a

going concern.

of presentation

accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles

generally accepted in the United States of America (“GAAP”) for interim financial information and in accordance with the

instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC.

Certain information or footnote disclosures normally included in

financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC

for interim financial reporting.

Accordingly, they do not include all the information and footnotes necessary for a complete presentation

of financial position, results of operations, or cash flows.

The accompanying unaudited condensed consolidated financial statements should

be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K

for the year ended June 30, 2025.

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, 2025, 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, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ended June 30, 2026.

financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and

discharge its liabilities in the normal course of business.

The Company incurred a net loss of $ 10.4 million during the six months ended

December 31, 2025 and as of that date, had a net current liability of $ 15.8 million.

Without additional financing, the Company may not

be able to fund its ongoing operations.

The Company is expanding its service offerings to new customers, optimizing warehouse utilization,

and developing higher-margin logistics solutions to improve profitability and cash generation.

Management is executing a cost optimization

plan, including delaying certain non-essential capital expenditures, reducing third-party service costs, and improving operational efficiency

across warehouse operations to preserve cash flow.

In addition, the Company is in discussions with several financial institutions and

investors to secure additional credit facilities and other forms of financing to strengthen working capital.

There is no assurance that

the Company will be able to obtain financings or obtain them on favorable terms.

These uncertainties may cast significant doubt on the

Company’s ability to continue as a going concern.

The Company will need to raise sufficient working capital to maintain operations.

These financial statements do not include any adjustments related to the recoverability of assets and classification of liabilities that

might be necessary should the Company be unable to continue as a going concern.

Such adjustments could be material.

Principal of consolidation

The unaudited interim condensed consolidated

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

All transactions and balances among

the Company and its subsidiaries have been eliminated upon consolidation.

of consolidation

unaudited interim condensed consolidated financial statements include the financial statements of the Company and its subsidiaries.

All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.

Principal activities Percentage of

3 unchanged sentences

Armlogi Holding Corp.

Holding company —

September 27, 2022 Nevada, U.S.

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

Armstrong Logistic Inc.

5 unchanged sentences

Armlogi Group LLC Leasing services 100 % October 19, 2021 California, U.S.

ARMLOGI HOLDING CORP.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Use of Estimates

The preparation of financial statements and

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

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

contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during

the reporting period.

Significant accounting estimates required to be made by management include useful lives of property and

equipment, allowance for credit losses for accounts receivable and other receivables, and loan receivables.

Cash and cash equivalents

Cash and cash equivalents consists of petty cash

on hand and cash held in banks and other financial institutions, which is highly liquid and has original maturities of three months

or less and is unrestricted as to withdrawal or use.

Restricted Cash

Restricted cash represents the cash restricted

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

the letters of credit start from April 26, 2023, August 1, 2023, November 7, 2023, December 27, 2024, January 14, 2025, and March 20,

2025, respectively.

Summary of significant accounting policies (cont.)

The preparation of financial statements and related

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

GAAP”) requires management

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

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

Significant accounting

estimates required to be made by management include useful lives of property and equipment,

allowance for credit losses for accounts receivable and other receivables, and loan receivables, and discount rates used in the lease

accounting for both operating lease and finance lease.

and cash equivalents

and cash equivalents consists of petty cash on hand and cash held in banks and other financial institutions, which is highly liquid and

has original maturities of three months or less and is unrestricted as to withdrawal or use.

cash represents the cash restricted for six standby letters of credit with Eastwest Bank as collateral for certain of the Company’s

lease agreements.

The terms of the letters of credit start from August 4, 2023, May 4, 2023, November 15, 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

The Company’s financial instruments

that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and restricted cash,

receivables, loan receivables, other current assets, and other non-current assets.

As of September 30, 2025 and June 30, 2025,

substantially all of the Company’s cash and cash equivalents and restricted cash were held in EastWest Bank located in

the U.S., which management considers to be of high credit quality.

As of September 30, 2025 and June 30, 2025, the

largest three accounts receivable balances from customers accounted for 44 % and 66 % of the total balance of accounts receivable, respectively.

Accounts receivable and other receivables

The Company’s receivables are recorded

when billed and represent amounts owed by third-party customers.

The carrying value of the Company’s receivables, net of the expected

credit loss, represents their estimated net realizable value.

The Company evaluates the expected credit loss of accounts receivable and

other receivables on a loss rate method based on historical information adjusted for current conditions and future estimated economic

risks and concentration

The Company’s financial instruments that

potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and restricted

cash, accounts receivable and other receivable, loan receivables, other current assets, and other non-current assets.

As of December 31,

2025 and June 30, 2025, substantially all of the Company’s cash and cash equivalents and restricted cash were held in EastWest Bank located

in the U.S., which management considers to be of high credit quality.

of December 31, 2025 and June 30, 2025, the largest three accounts receivable balances from customers accounted for 45 % and 66 % of the

total balance of accounts receivable, respectively.

receivable and other receivables

Company’s receivables are recorded when billed and represent amounts owed by third-party customers.

The carrying value of the Company’s

receivables, net of the expected credit loss, represents their estimated net realizable value.

The Company evaluates the expected credit

loss of accounts receivable and other receivables on a loss rate method based on historical information adjusted for current conditions

and future estimated economic performance.

The Company’s credit term generally ranges from 3 to 30 days.

If there is an approval from the board of the Company,

the credit term can extend to 180 days.

Loans receivables

Loan receivables are carried at amortized cost,

net of an allowance for credit losses, in accordance with ASC 326, Financial Instruments – Credit Losses (CECL) .

ARMLOGI HOLDING CORP.

If there is an approval

from the board of directors of the Company, the credit term can extend to 180 days.

receivables are carried at amortized cost, net of an allowance for credit losses, in accordance with ASC 326, Financial Instruments

– Credit Losses (CECL) .

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Loans receivables (cont.)

Management estimates expected credit losses over

the contractual term of the loans, adjusted for expected prepayments, using relevant available information.

Summary of significant accounting policies (cont.)

receivables (cont.)

estimates expected credit losses over the contractual term of the loans, adjusted for expected prepayments, using relevant available

This includes:

historical loss experience for similar loan portfolios;

current conditions, such as borrower financial performance and collateral

reasonable and supportable forecasts about future economic conditions

(e.g., industry trends, customer sector risks, interest rates, and market trends).

The estimate of expected credit losses is measured

on a collective (pool) basis when loans share similar risk characteristics (e.g., credit rating, or collateral).

Loans that do not share

risk characteristics with others are evaluated individually.

Property and equipment

Property and equipment are recorded at cost,

less accumulated depreciation and impairment.

Depreciation of property and equipment is calculated on a straight-line basis, after consideration

of expected useful lives and estimated residual values.

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

loss experience for similar loan portfolios;

conditions, such as borrower financial performance and collateral values;

and supportable forecasts about future economic conditions (e.g., industry trends, customer

sector risks, interest rates, and market trends).

estimate of expected credit losses is measured on a collective (pool) basis when loans share similar risk characteristics (e.g., credit

rating, or collateral).

Loans that do not share risk characteristics with others are evaluated individually.

and equipment

and equipment are recorded at cost, less accumulated depreciation and impairment.

Depreciation of property and equipment is calculated

on a straight-line basis, after consideration of expected useful lives and estimated residual values.

The estimated annual deprecation

rates of these assets are generally as follows:

Category Depreciation method Depreciation rate

4 unchanged sentences

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

Expenditures for maintenance and repairs are

expensed as incurred.

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

assets and are recognized in the unaudited condensed consolidated statements of operations and comprehensive loss.

Long-Lived Assets

Long-lived assets, such as property and equipment,

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

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

If circumstances require a long-lived

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

by that asset or asset group to its carrying amount.

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

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

exceeds the fair value.

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

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

the use of a third-party independent appraiser or valuation specialist.

No impairment losses of long-lived assets were recorded during

the three months ended September 30, 2025 and 2024.

Intangible assets consist of software and security

systems, which are amortized using the straight-line method over five to seven years.

for maintenance and repairs are expensed as incurred.

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

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

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

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

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

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

If the carrying amount of the long-lived

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

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

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

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

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

No impairment losses of

long-lived assets were recorded during the three and six months ended December 31, 2025 and 2024.

assets consist of software and security systems, which are amortized using the straight-line method over five to seven years.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Revenue recognition

The Company provides one-stop logistic services.

The Company’s revenue is primarily from transportation services, which include the arrangement of freight services.

generates its transportation services revenue by purchasing transportation from direct carriers and reselling those services to its customers.

In general, each shipment transaction or

service order constitutes a separate contract with the customer.

A performance obligation is created once a customer agreement with

an agreed-upon transaction price exists.

The transaction price is typically fixed and not contingent upon the occurrence or

non-occurrence of any other event.

The Company’s transportation transactions provide for the arrangement of the movement of

freight to a customer’s destination.

Summary of significant accounting policies (cont.)

Company provides one-stop logistic services.

The Company’s revenue is primarily from transportation services, which include the

arrangement of freight services.

The Company generates its transportation services revenue by purchasing transportation from direct carriers

and reselling those services to its customers.

general, each shipment transaction or service order constitutes a separate contract with the customer.

A performance obligation is created

once a customer agreement with an agreed-upon transaction price exists.

The transaction price is typically fixed and not contingent upon

the occurrence or non-occurrence of any other event.

The Company’s transportation transactions provide for the arrangement of the

movement of freight to a customer’s destination.

The transportation services that are provided to the customer, including certain

ancillary services, such as loading/unloading, freight insurance, and customs clearance, represent a single performance obligation,

as these promises are not distinct in the context of the contract.

This performance obligation is satisfied over time and recognized

in revenue upon the transfer of control of the services over the requisite transit period as the customer’s goods move from

origin to destination.

The Company determines the period to recognize revenue in transit based on the departure date and the

delivery date.

Determination of the transit period and the percentage of completion of the shipment as of the reporting date will

affect the timing of revenue recognition.

The Company has determined that revenue recognition based on the time in transit provides a reasonable estimate of the transfer of services to its customers as it depicts the pattern of the Company’s

performance under the contracts with its customers.

The change in contract liabilities is due to the timing of customer deposits for

orders, offset by customer deposits recognized as revenue during the period.

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

for its customers.

ancillary services, such as loading/unloading, freight insurance, and customs clearance, represent a single performance obligation, as

these promises are not distinct in the context of the contract.

This performance obligation is satisfied over time and recognized in

revenue upon the transfer of control of the services over the requisite transit period as the customer’s goods move from origin

to destination.

The Company determines the period to recognize revenue in transit based on the departure date and the delivery date.

Determination of the transit period and the percentage of completion of the shipment as of the reporting date will affect the timing

of revenue recognition.

The Company has determined that revenue recognition based on the time in transit provides a reasonable estimate

of the transfer of services to its customers as it depicts the pattern of the Company’s performance under the contracts with its

The change in contract liabilities is due to the timing of customer deposits for orders, offset by customer deposits recognized

as revenue during the period.

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.

Company also provides warehousing services for its customers.

These warehousing service contracts include two performance obligations:

i) inventory management and order fulfilment

and ii) storage services.

The Company’s performance obligation for inventory management and order fulfilment is satisfied at a

point in time as services are generally priced based on the number of items processed and handled.

The benefits are consumed by the customers

at the point in time when such specific services are performed by the Company.

Performance of such services generally takes less than

one day to process.

The performance obligation for storage services is satisfied over time as the storage service is based on a

term period and the customers simultaneously receive and consume the services provided by the Company as they are performed.

The transaction

price for the warehousing services is based on the consideration specified in the contract with the customer and contains fixed and variable

consideration.

In general, the fixed consideration component of a contract represents reimbursement for facility and equipment costs

incurred to satisfy the performance obligation and is recognized on a straight-line basis over the term of the contract.

consideration component is comprised of cost reimbursement per unit pricing for time and pricing for materials used and is determined

based on cost plus a mark-up for hours of services provided and materials used and is recognized based on the level of activity

Other services include primarily customs house

brokerage services sold on a stand-alone basis as a single performance obligation.

The Company recognizes revenue from this performance

obligation at a point in time, which is the completion of the services.

Duties and taxes collected from the customer and paid to the

customs agent on behalf of the customers are excluded from revenue.

ASC 606, Revenue from Contracts with Customers,

provides for a five-step model for recognizing revenue from contracts with customers.

i) inventory management and order fulfilment and ii) storage services.

The Company’s performance obligation for inventory management

and order fulfilment is satisfied at a point in time as services are generally priced based on the number of items processed and handled.

The benefits are consumed by the customers at the point in time when such specific services are performed by the Company.

of such services generally takes less than one day to process.

The performance obligation for storage services is satisfied over

time as the storage service is based on a term period and the customers simultaneously receive and consume the services provided by the

Company as they are performed.

The transaction price for the warehousing services is based on the consideration specified in the contract

with the customer and contains fixed and variable consideration.

In general, the fixed consideration component of a contract represents

reimbursement for facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis

over the term of the contract.

The variable consideration component is comprised of cost reimbursement per unit pricing for time and

pricing for materials used and is determined based on cost plus a mark-up for hours of services provided and materials used and

is recognized based on the level of activity volume.

services include primarily customs house brokerage services sold on a stand-alone basis as a single performance obligation.

recognizes revenue from this performance obligation at a point in time, which is the completion of the services.

Duties and taxes collected

from the customer and paid to the customs agent on behalf of the customers are excluded from revenue.

606, Revenue from Contracts with Customers, provides for a five-step model for recognizing revenue from contracts with customers.

These five steps include:

2 unchanged sentences

Determine the transaction price

Allocate the transaction price to the performance obligations

in the contract

Recognize revenue when the Company satisfies a performance

Under ASC 606, revenue is recognized when the

customer obtains control of a good or service.

The Company uses independent contractors and third-party carriers in the performance of

its transportation services.

The Company evaluates who controls the transportation services to determine whether its performance obligation

is to transfer services to the customer or to arrange for services to be provided by another party.

The Company determined it acts as

the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified

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

Such transportation

services revenue is presented on a gross basis in the unaudited condensed consolidated statements of operations and comprehensive loss.

Allocate the transaction price to the performance obligations in the contract

Recognize revenue when the Company satisfies a performance obligation

ASC 606, revenue is recognized when the customer obtains control of a good or service.

The Company uses independent contractors and third-party

carriers in the performance of its transportation services.

The Company evaluates who controls the transportation services to determine

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

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

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

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

comprehensive loss.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Revenue recognition (cont.)

A summary of the Company’s revenue disaggregated

by major service lines is as follows:

Three Months Ended

September 30,

Three Months Ended

September 30,

Summary of significant accounting policies (cont.)

recognition (cont.)

summary of the Company’s revenue disaggregated by major service lines is as follows:

Six Months Ended

Transportation services

1 unchanged sentence

Other services

Contract liabilities

Contract liabilities represent payments received

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 three months ended September

30, 2025 and 2024, the amounts transferred from contract liabilities at the beginning of the fiscal year to revenue were $ 862,145 and

$ 276,463 , respectively.

Practical Expedients

The Company has elected to not disclose the aggregate

amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period, as the Company’s

contracts with its transportation customers have an expected duration of one year or less.

For the performance obligation to transfer warehousing

services in contracts with customers, revenue is recognized in the amount for which the Company has the right to invoice the customer,

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

The Company also applies the practical expedient

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

amortization period of such costs is less than one year.

These costs are included in the unaudited condensed consolidated statements

of operations and comprehensive loss.

The Company determines if an arrangement is a

lease at inception.

Leases are classified as either operating leases or finance leases pursuant to ASC 842.

liabilities represent payments received 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 six months ended December 31, 2025 and 2024, the amounts transferred from contract liabilities at the beginning of the fiscal

year to revenue were $ 939,097 and $ 245,716 , respectively.

Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied

as of the end of the period, as the Company’s contracts with its transportation customers have an expected duration of one year

the performance obligation to transfer warehousing services in contracts with customers, revenue is recognized in the amount for which

the Company has the right to invoice the customer, as this amount corresponds directly with the value provided to the customer for the

Company’s performance completed to date.

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

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

These costs are included in the unaudited

condensed consolidated statements of operations and comprehensive loss.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Leases (cont.)

i) Operating leases

Operating leases are recognized as right-of-use

(“ROU”) assets in non-current assets and lease liabilities in current and non-current liabilities in the consolidated balance

sheets if the initial lease term is greater than 12 months.

For leases with an initial term of 12 months or less, the Company

recognizes those lease payments on a straight-line basis over the lease term.

ROU assets represent the right to use an underlying asset for the lease

term and lease liabilities represent the obligation to make lease payments arising from the lease.

Operating lease ROU assets and liabilities

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

As most of the Company’s

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

date in determining the present value of lease payments.

Management uses the implicit rate when readily determinable.

Lease expenses for

lease payments are recognized on a straight-line basis over the lease term and are included in general and administrative expenses, costs

of services and other expenses.

ii) Finance leases

Finance lease ROU assets are included in ROU

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

Finance lease ROU assets and liabilities are

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

As most of the Company’s

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

date in determining the present value of lease payments.

Summary of significant accounting policies (cont.)

Company determines if an arrangement is a lease at inception.

Leases are classified as either operating leases or finance leases pursuant

Operating leases

leases are recognized as right-of-use (“ROU”) assets in non-current assets and lease liabilities in current and non-current

liabilities in the consolidated balance sheets if the initial lease term is greater than 12 months.

For leases with an initial term

of 12 months or less, the Company recognizes those lease payments on a straight-line basis over the lease term.

assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease

payments arising from the lease.

Operating lease ROU assets and liabilities are recognized at the commencement date based on the present

value of lease payments over the lease term.

As most of the Company’s leases do not provide an implicit rate, management uses the

incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

Management uses the implicit rate when readily determinable.

Finance lease ROU

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

The interest on the finance lease liabilities

is included in interest expense.

The Company has elected the accounting policy

to account for leases with both lease and non-lease components as a single lease component.

For leases with an initial term of 12 months

or less, the Company elected the exemption from recording ROU assets and lease liabilities for all leases that qualify, and records rent

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

Current income taxes are provided on the basis

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

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

Deferred income taxes are recognized for temporary

differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net

operating loss carry forwards and credits.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management,

it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Current income taxes are provided

in accordance with the laws of the relevant taxing authorities.

Deferred tax assets and liabilities are measured using enacted rates

expected to apply to taxable income in which temporary differences are expected to be reversed or settled.

The effect on deferred tax

assets and liabilities of changes in tax rates is recognized in the statement of operations in the period of the enactment of the change.

Lease expenses for lease payments are recognized on a straight-line basis

over the lease term and are included in general and administrative expenses, costs of services and other expenses.

Finance leases

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

consolidated balance sheets.

lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease

As most of the Company’s leases do not provide an implicit rate, management uses the incremental borrowing rate based on

the information available at the commencement date in determining the present value of lease payments.

Management uses the implicit rate

when readily determinable.

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

The interest on the finance lease liabilities is included in interest expense.

Company has elected the accounting policy to account for leases with both lease and non-lease components as a single lease component.

For leases with an initial term of 12 months or less, the Company elected the exemption from recording ROU assets and lease liabilities

for all leases that qualify, and records rent expenses on a straight-line basis over the lease term.

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

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

income taxes are recognized for temporary differences between the tax bases of assets and liabilities and their reported amounts in the

consolidated financial statements, net operating loss carry forwards and credits.

Deferred tax assets are reduced by a valuation allowance

when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

Current income taxes are provided in accordance with the laws of the relevant taxing authorities.

Deferred tax assets and liabilities

are measured using enacted rates expected to apply to taxable income in which temporary differences are expected to be reversed or settled.

The effect on deferred tax assets and liabilities of changes in tax rates is recognized in the statement of operations in the period

of the enactment of the change.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Taxation (cont.)

The Company considers positive and negative evidence

when determining whether a portion or all of its deferred tax assets will more likely than not be realized.

This assessment considers,

among other matters, the nature, frequency, and severity of current and cumulative losses, forecasts of future profitability, the duration

of statutory carry-forward periods, its experience with tax attributes expiring unused, and its tax planning strategies.

realization of deferred tax assets is dependent upon its ability to generate sufficient future taxable income within the carry-forward

periods provided for in the tax law and during the periods in which the temporary differences become deductible.

When assessing the realization

of deferred tax assets, the Company has considered possible sources of taxable income, including (i) future reversals of existing

taxable temporary differences, (ii) future taxable income exclusive of reversing temporary differences and carry-forwards, (iii) future

taxable income arising from implementing tax planning strategies, and (iv) specific known trend of profits expected to be reflected

within the industry.

The Company recognizes a tax benefit associated

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

by a taxing authority.

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

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

settlement with a taxing authority.

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

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

Such adjustments

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

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

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

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

The Company did not

have any unrecognized tax benefits as of September 30, 2025 and June 30, 2025.

Earnings per share

Summary of significant accounting policies (cont.)

Company considers positive and negative evidence when determining whether a portion or all of its deferred tax assets will more likely

than not be realized.

This assessment considers, among other matters, the nature, frequency, and severity of current and cumulative losses,

forecasts of future profitability, the duration of statutory carry-forward periods, its experience with tax attributes expiring unused,

and its tax planning strategies.

The ultimate realization of deferred tax assets is dependent upon its ability to generate sufficient

future taxable income within the carry-forward periods provided for in the tax law and during the periods in which the temporary differences

become deductible.

When assessing the realization of deferred tax assets, the Company has considered possible sources of taxable income,

including (i) future reversals of existing taxable temporary differences, (ii) future taxable income exclusive of reversing

temporary differences and carry-forwards, (iii) future taxable income arising from implementing tax planning strategies, and (iv) specific

known trend of profits expected to be reflected within the industry.

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

position will be sustained upon examination by a taxing authority.

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

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

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

The Company’s liability associated with

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

and new or emerging legislation.

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

The Company’s

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

appropriate by management.

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

income tax expense.

The Company did not have any unrecognized tax benefits as of December 31, 2025 and June 30, 2025.

Basic earnings per share of common stock are

3 unchanged sentences

awards and stock options, had been issued and were considered dilutive.

Segment Reporting

FASB ASC 280, Segment Reporting (“ASC 280”),

establishes standards for reporting information about operating segments.

Operating segments are defined as components of an enterprise

about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making

group, in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker (“CODM”),

the Chief Executive Officer, manages the Company’s business activities as a single operating and reportable segment at the consolidated

Accordingly, the CODM uses consolidated net income to measure segment profit or loss, allocate resources and assess performance.

Further, the CODM reviews and utilizes functional expenses (cost of services and general and administrative) at the consolidated level

to manage the Company’s operations.

Other segment items included in consolidated net income are other income, finance costs, income

taxes, and infrequent items such as loss on debt extinguishment and loss on disposal of assets, which are reflected in the consolidated

statements of operations.

All the Company’s business activities for

the three months ended September 30, 2025 and 2024 were conducted in the U.S.

Therefore, revenue for the three months ended

September 30, 2025 and 2024 were all from the U.S.

The Company’s long-lived assets consist

primarily of property and equipment, right-of-use assets and restricted cash.

As of September 30, 2025 and June 30, 2025, all of the

Company’s long-lived assets were in the U.S.

As the Company incurred a net loss for the year, all potentially

dilutive instruments are anti-dilutive and, accordingly, basic and diluted loss per share are the same.

ASC 280, Segment Reporting (“ASC 280”), establishes standards for reporting information about operating segments.

segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly

by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker (“CODM”), the Chief Executive Officer, manages the Company’s business

activities as a single operating and reportable segment at the consolidated level.

Accordingly, the CODM uses consolidated net income

to measure segment profit or loss, allocate resources and assess performance.

Further, the CODM reviews and utilizes functional expenses

(cost of services and general and administrative) at the consolidated level to manage the Company’s operations.

Other segment items

included in consolidated net income are other income, finance costs, income taxes, and infrequent items such as loss on debt extinguishment

and loss on disposal of assets, which are reflected in the consolidated statements of operations.

the Company’s business activities for the three and six months ended December 31, 2025 and 2024 were conducted in the U.S.

Therefore, revenue for the three and six months ended December 31, 2025 and 2024 were all from the U.S.

Company’s long-lived assets consist primarily of property and equipment, right-of-use assets and restricted cash.

As of December

31, 2025 and June 30, 2025, all of the Company’s long-lived assets were in the U.S.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

Fair value measurement

Fair value is the price that would be received

from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company

considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants

would use when pricing the asset or liability.

The established fair value hierarchy requires

an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

instrument’s categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair

Summary of significant accounting policies (cont.)

value measurement

The three levels of inputs that may be used to measure fair value are as follows:

Quoted prices (unadjusted) in active markets for identical assets or

Observable, market-based inputs, other than quoted prices, in active

markets for identical assets or liabilities.

Unobservable inputs to the valuation methodology that are significant

to the measurement of the fair value of the assets or liabilities.

value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date.

When determining the fair value measurements for assets and liabilities required or permitted to

be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers

assumptions that market participants would use when pricing the asset or liability.

established fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs

when measuring fair value.

A financial instrument’s categorization within the fair value hierarchy is based on the lowest level

of input that is significant to the fair value measurement.

The three levels of inputs that may be used to measure fair value are as

Quoted prices (unadjusted)

in active markets for identical assets or liabilities.

Observable, market-based

inputs, other than quoted prices, in active markets for identical assets or liabilities.

Unobservable inputs to

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

The Company’s financial instruments include

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

accounts payable and accrued liabilities, accrued payroll liabilities, and lease liabilities.

The carrying amounts of

cash and restricted cash, accounts receivable and other receivables, loan receivables, other current assets, accounts payable and accrued

liabilities, accrued payroll liabilities, 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

during any of the periods presented.

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

basis as of September 30, 2025 and June 30, 2025.

Costs of services

Costs of services primarily consist of amortization and depreciation,

equipment lease and warehouse lease expenses, freight expenses, port handling and customs fees, salary and benefits, temporary labor expenses,

warehouse expenses, utilities and other expenses.

General and administrative expenses

General and administrative expenses primarily

consist of office expenses, professional fees, rental expenses, repairs and maintenance,

and salary and benefits

Recently issued accounting standards

cash and cash equivalents and restricted cash, accounts receivable and other receivables, loan receivables, other current assets, other

non-current assets, accounts payable and accrued liabilities, accrued payroll liabilities, and lease liabilities.

The carrying amounts

of cash and restricted cash, accounts receivable and other receivables, loan receivables, other current assets, accounts payable and accrued

liabilities, accrued payroll liabilities, 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 other non-current assets and long-term lease liabilities would not differ

significantly from fair value (based on Level 2 inputs) if recalculated based on current interest rates.

Company noted no transfers between levels during any of the periods presented.

The Company did not have any instruments that were measured

at fair value on a recurring or non-recurring basis as of December 31, 2025 and June 30, 2026.

of services primarily consist of amortization and depreciation, equipment lease and warehouse lease expenses, freight expenses, port

handling and customs fees, salary and benefits, temporary labor expenses, warehouse expenses, utilities and other expenses.

and administrative expenses

and administrative expenses primarily consist of office expenses, professional fees, rental expenses, repairs and maintenance, and salary

issued accounting standards

In November 2023, the FASB issued ASU No.

6 unchanged sentences

periods beginning January 1, 2025, with early adoption permitted.

The Company adopted ASU 2023-07 on January 1, 2024, which did not have

The Company adopted ASU 2023-07 on July 1, 2024, which did not have

a material impact on the Company’s consolidated financial statements.

Management does not believe that any other recently

issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated

financial statements.

In November 2024, FASB issued ASU 2024-03 Income

Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement

Expenses (“ASU 2024-03”).

Under ASU 2024-03, a public entity would be required to disclose information about purchases of

inventory, employee compensation, depreciation, intangible asset amortization, and depletion for each income statement line item that

contains those expenses.

ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting

periods beginning after December 15, 2027.

ASU 2024-03 allows for early adoption and requires either prospective adoption to financial

statements issued for reporting periods after the effective date of ASU 2024-03 or retrospectively to any or all prior periods presented

in the financial statements.

The Company is currently evaluating the new disclosure requirements.

does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material

effect on the Company’s consolidated financial statements.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Accounts Receivable and Other Receivables,

Accounts Receivable and Other Receivables, Net

consisted of the following:

September 30,

receivable and other receivables, net consisted of the following:

Accounts receivable – third parties

1 unchanged sentence

Other receivables – third parties*

Other receivables – a related party*

allowance for credit loss

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

The allowance for credit loss for the three months ended September 30,

2025 and the fiscal year ended June 30, 2025 consisted of the following:

September 30,

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

The allowance

for credit loss for the six months ended December 31, 2025 and the fiscal year ended June 30, 2025 consisted of the following:

Balance as of beginning

1 unchanged sentence

Ending balance

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Property and Equipment, Net

Property and equipment, net consisted of the

September 30,

and equipment, net consisted of the following:

Furniture and fixtures

6 unchanged sentences

Property and equipment, net

Depreciation expenses are recorded in costs of services and general

and administrative expenses.

The Company recorded depreciation expenses of US$ 682,244 and US$ 578,432 during the three months ended

September 30, 2025 and 2024, respectively.

Specifically, US$ 633,172 and US$ 436,368 of the depreciation expenses were recorded in costs

of services for the three months ended September 30, 2025 and 2024, respectively.

US$ 49,072 and US$ 142,064 of the depreciation expenses

were recorded in general and administrative expenses for the three months ended September 30, 2025 and 2024, respectively.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Property and Equipment, Net (cont.)

expenses are recorded in costs of services and general and administrative expenses.

The Company recorded depreciation expenses of US$ 660,693

and US$ 637,990 during the three months ended December 31, 2025 and 2024, respectively.

Specifically, US$ 611,621 and US$ 582,182 of the

depreciation expenses were recorded in costs of services for the three months ended December 31, 2025 and 2024, respectively.

and US$ 55,808 of the depreciation expenses were recorded in general and administrative expenses for the three months ended December 31,

2025 and 2024, respectively.

Company recorded depreciation expenses of US$ 1,342,936 and US$ 1,216,422 during the six months ended December 31, 2025 and 2024, respectively.

Specifically, US$ 1,244,792 and US$ 1,108,175 of the depreciation expenses were recorded in costs of services for the six months ended

December 31, 2025 and 2024, respectively, US$ 98,144 and US$ 108,247 of the depreciation expenses were recorded in general and administrative

expenses for the six months ended December 31, 2025 and 2024, respectively

Intangible Assets, Net

Intangible assets, net consisted of the following:

September 30,

assets, net consisted of the following:

Security Systems

1 unchanged sentence

Intangible assets, net

The Company recorded amortization of US$ 11,595 and US$ 8,829 , which

were included in costs of services, for the three months ended September 30, 2025 and 2024, respectively.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company recorded amortization of US$ 23,257

and US$ 17,659 , which were included in costs of services, for the six months ended December

31, 2025 and 2024, respectively.

The Company recorded amortization of US$ 11,662 and US$ 8,829 ,

which were included in costs of services, for the three months ended December 31, 2025 and 2024, respectively.

Loan Receivables

The Company’s loan receivables consisted

of the following:

Company’s loan receivables consisted of the following:

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

1 unchanged sentence

The loan originally matured on January 24, 2025 and bore an interest rate of 3.2 % annually.

The maturity date of the loan was extended to April 24, 2025 on January 20, 2025, further extended to July 24, 2025 on April 18, 2025, and was further extended to January 24, 2026 on July 18, 2025.

After several extensions, the maturity date of the loan was extended to July 24, 2026 on January 20, 2026.

ii) On May 21, 2024, the Company entered into a loan agreement with MYJW

1 unchanged sentence

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

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

in the principal amount of US$ 1.5 million.

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

The loan was fully repaid on November 14, 2024, and September 19, 2025

with US$ 1.0 million and US$ 0.5 million, respectively.

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

in the principal amount of US$ 1.0 million.

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

The loan was fully repaid during the three months ended September 30, 2025.

v) On June 13, 2024, the Company entered into a loan agreement with Bacalar

Enterprise Freight Inc.

date of the loan was extended to December 31, 2026 on December 31, 2025.

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

in the principal amount of US$ 250,000 .

The loan originally matured on June 13, 2025 and bears interest at a rate

of 3.2 % annually.

The maturity date of the loan was extended to December 13, 2025 on June 10, 2025.

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

in the principal amount of US$ 1.0 million.

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

The loan was fully repaid during the three months ended September 30, 2025.

vii) On August 7, 2025, the Company entered into a loan agreement with Leopard

Transnational Inc.

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

The maturity date of the loan was further extended to December 13, 2026 on December 13, 2025.

iv) On August 7, 2025, the Company entered into a loan agreement with Leopard Transnational Inc.

in the principal amount of US$ 200,000 .

2 unchanged sentences

on August 21, 2025.

The Company expects the loan to be repaid

upon maturity.

viii) On September 8, 2025, the Company entered into a loan agreement with Leopard Transnational Inc.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Loan Receivables (cont.)

v) On September 8, 2025, the Company entered into a loan agreement with Leopard Transnational Inc.

in the principal amount of US$ 250,000 .

The loan matures on September 8, 2026 and bears interest at a rate of 3.6 % annually.

ix) On September 9, 2025, the Company entered into a loan agreement with

Kimberly Tenneco Inc.

vi) On September 9, 2025, the Company entered into a loan agreement with Kimberly Tenneco Inc.

in the principal amount of US$ 820,000 .

As security for loan repayment, Kimberly Tenneco Inc.

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, 2026 and bears interest at a rate of 5.0 % annually.

As of September 30, 2025, the Company recorded

a loan receivable balance of US$ 1,713,324 and long-term loan receivable of US$ 822,305 , including accrued interest income of US$ 65,629 .

As of June 30, 2025, the Company recorded a loan

receivable balance of US$ 3,893,563 and long-term loan receivable of US$ Nil , including accrued interest income of US$ 143,563 .

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

As of September 30, 2025, the Company had operating

The loan was fully repaid on December 3, 2025.

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

in the principal amount of US$ 1.5 million.

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

The loan was fully repaid on November 14, 2024, and September 19, 2025 with US$ 1.0 million and US$ 0.5 million, respectively.

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

in the principal amount of US$ 1.0 million.

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

The loan was fully repaid by September 30, 2025.

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

in the principal amount of US$ 1.0 million.

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

The loan was fully repaid by September 30, 2025.

of December 31, 2025, the Company recorded a loan receivable balance of US$ 1,739,787 and long-term loan receivable of US$ Nil , including

accrued interest income of US$ 89,787 .

of June 30, 2025, the Company recorded a loan receivable balance of US$ 3,893,563 , including accrued interest income of US$ 143,563 .

As of December 31, 2025, the Company had operating

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

Lease terms expire at various dates from October 2025 through November

Lease terms expire at various dates from June 2026 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$ 81,900 and US$ 727,498 lease

income, recorded in other income, during the three months ended September 30, 2025 and 2024, respectively.

During the three months ended September 30, 2025, the Company did not recognize any additional

operating lease liabilities.

or terminate in the calculation of ROU assets or lease liabilities, as there is no reasonable certainty, that these options will be exercised.

The Company had certain sublease contracts and recognized US$ 196,600 and US$ 916,184 lease income, recorded in other income, during the

six months ended December 31, 2025 and 2024, respectively.

During the six months ended December 31, 2025,

the Company recognized additional operating lease liabilities of US$ 2,861,346 , as a result of entering into a new operating lease agreement.

The ROU assets were recognized at the discount rate of 10.25 %, resulting in US$ 2,861,346 on the commencement date.

During the six months ended December 31, 2025, the Company recognized

additional finance lease liabilities of US$ 1,061,426 .

The ROU assets were recognized at the discount rate of 9.00 %, resulting in US$ 1,061,426

on the commencement date.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Leases (cont.)

The components of lease expenses were as follows:

three months ended

September 30,

three months ended

September 30,

Operating lease expenses

7 unchanged sentences

Finance leases

The Company recorded operating lease expenses of US$ 9,177,790 and US$ 8,111,425

during the three months ended September 30, 2025 and 2024, respectively.

Specifically, US$ 8,564,132 and US$ 7,621,771 of operating lease

expenses were recorded in costs of services for the three months ended September 30, 2025 and 2024, respectively.

US$ 613,658 and US$ 93,000

of operating lease expenses were recorded in general and administrative expenses for the three months ended September 30, 2025 and 2024,

respectively.

US$ Nil and US$ 396,654 of operating lease expenses were recorded in other expenses for the three months ended September 30,

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

The Company recorded operating lease expenses

of US$ 9,227,662 and US$ 7,746,884 during the three months ended December 31, 2025 and 2024, respectively.

Specifically, US$ 9,029,176 and

US$ 7,654,268 of operating lease expenses were recorded in costs of services for the three months ended December 31, 2025 and 2024, respectively.

US$ 198,486 and US$ 92,616 of operating lease expenses were recorded in general and administrative expenses for the three months ended December

31, 2025 and 2024, respectively.

As of September 30, 2025, maturities of lease

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

The Company recorded operating lease expenses

of US$ 18,405,452 and US$ 15,858,308 during the six months ended December 31, 2025 and 2024, respectively.

Specifically, US$ 17,593,308 and

US$ 15,276,038 of operating lease expenses were recorded in costs of services for the six months ended December 31, 2025 and 2024, respectively.

US$ 812,144 and US$ 185,616 of operating lease expenses were recorded in general and administrative expenses for the six months ended December

31, 2025 and 2024, respectively.

US$ Nil and US$ 396,654 of operating lease expenses were recorded in other expenses for the six months

ended December 31, 2025 and 2024, respectively.

As of December 31, 2025, maturities of lease liabilities

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

2030 and beyond

18 unchanged sentences

of the following:

September 30,

Accounts payable

1 unchanged sentence

Other liabilities

Other liabilities as of September 30, 2025 and

Other liabilities as of December 31, 2025 and

June 30, 2025 mainly consisted of tenant deposits.

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 had the right to sell

to the Investor up to $ 50.0 million (the “Commitment Amount”) of shares 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 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, to be disbursed to the Company in three tranches:

● The first Pre-Paid Advance was disbursed on November 25, 2024 (Promissory Note 1), 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 (Promissory Note 2), 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, may no longer 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.

According to the SEPA, the Company, at its sole discretion, had the right, but not the obligation,

to issue and sell to the Investor, and the Investor was bound to 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 shares of the Company’s common stock to the Investor as long as a balance was outstanding under a Convertible

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

had the right to sell to the Investor up to $ 50.0 million (the “Commitment Amount”) of shares 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 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, to be disbursed to the Company in three tranches:

first Pre-Paid Advance was disbursed on November 25, 2024 (Promissory Note 1), in the amount of $ 5.0 million and the Company received

$ 4.5 million in cash, net of the 10 % original issue discount.

second Pre-Paid Advance was disbursed on December 17, 2024 (Promissory Note 2), in the amount of $ 5.0 million and the Company received

$ 4.5 million in cash, net of the 10 % original issue discount.

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, may no longer 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.

According to the SEPA, the Company, at its sole

discretion, had the right, but not the obligation, to issue and sell to the Investor, and the Investor was bound to 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 shares of the Company’s common stock to the

Investor as long as a balance was outstanding under a Convertible Note.

ARMLOGI HOLDING CORP.

8 unchanged sentences

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.

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

1 unchanged sentence

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

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.

Unless earlier terminated as provided thereunder, the SEPA was automatically

terminable on the earliest of (i) November 25, 2026, provided that if any Convertible Notes then outstanding, such termination shall be

delayed until such date that all Convertible Notes that were outstanding have been repaid, or (ii) the date on which the Investor has

made payment of Pre-paid Advances pursuant to SEPA for shares of common stock equal to $ 50,000,000 .

Unless earlier terminated as provided thereunder,

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

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

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

Advance Notice

If the Company requested a purchase of shares of common stock from

the Investor by the delivery of an Advance Notice to the Investor, the purchase price therefor was the price per share of common stock

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

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

The “Option 1 Pricing Period” means the period on the applicable

advance notice date with respect to an Advance Notice selecting an Option 1 Pricing Period commencing (i) if submitted to Investor prior

Eastern Time on a trading day, the open of trading on such day or (ii) if submitted to Investor after 9:00 a.m.

on a trading day, upon receipt by the Company of written confirmation of acceptance of such Advance Notice by the Investor (or the open

of regular trading hours, if later), and which confirmation specified such commencement time, and, in either case, ending on 4:00 p.m.

If the Company requested a purchase of shares

of common stock from the Investor by the delivery of an Advance Notice to the Investor, the purchase price therefor was the price per

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

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

The “Option 1 Pricing Period” means

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

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

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

after 9:00 a.m.

Eastern Time on a trading day, upon receipt by the Company of written confirmation of acceptance of such Advance Notice

by the Investor (or the open of regular trading hours, if later), and which confirmation specified such commencement time, and, in either

case, ending on 4:00 p.m.

New York City time on the applicable Advance Notice date, or such other time as agreed to by the parties.

The “Option 1 market price”

means the VWAP of the common stock during the Option 1 Pricing Period.

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

The “Option 2 Pricing Period” means

3 unchanged sentences

Investor Notice

If the Investor requested a sale from the Company by the delivery of

an Investor Notice to the Company, the purchase price, as of any conversion date or other date of determination, was 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 was no lower than the floor

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

If the Investor requested a sale from the Company

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

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

was no lower than the floor price ($ 1.1880 ) (the “Floor Price”) then in effect.

In March 2025, the Company issued 434,879 shares

4 unchanged sentences

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

In September 2025, the Company issued 77,669

and 3,114,476 shares of common stock, par value of US$ 0.00001 per share, at a price of US$ 1.29 and US$ 1.19 per share, respectively, for

an aggregate amount of US$ 3,800,000 , for Investor Notices pursuant to the SEPA.

In September 2025, the Company issued 77,669 and

3,114,476 shares of common stock, par value of US$ 0.00001 per share, at a price of US$ 1.29 and US$ 1.19 per share, respectively, for an

aggregate amount of US$ 3,800,000 , for Investor Notices pursuant to the SEPA.

HOLDING CORP.

2 unchanged sentences

Repayments of Convertible Notes

Interest accrued on the outstanding principal balance of the Convertible

Notes at an annual rate equal to 0 % (“Interest Rate”), which Interest Rate would increase to an annual rate of 18 %

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

Interest accrued on the outstanding principal

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

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

If, any time after the issuance date of a Convertible

13 unchanged sentences

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

The Convertible Notes are accounted for as a

single liability measured at amortized costs.

The 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

4 unchanged sentences

First Modification

Pursuant to the Modification Agreement signed with the Investor on

March 21, 2025 (the “First Modification”), the Company confirmed, acknowledged, and agreed that an event described in Section

1(c) of the Convertible Notes occurred (the “Floor Price Event”) and is continuing, because the VWAP was less than the Floor

Price for five consecutive Trading Days.

The Company acknowledges that the occurrence of the Floor Price Event constitutes an Amortization

Event under the Convertible Notes, requiring the Company to make monthly cash payments in accordance with Section 1(c) of the Convertible

In connection with this obligation, the Company agreed to make cash payments on specified dates and in minimum amounts.

Pursuant to the Modification Agreement signed

with the Investor on March 21, 2025 (the “First Modification”), the Company confirmed, acknowledged, and agreed that an event

described in Section 1(c) of the Convertible Notes occurred (the “Floor Price Event”) and is continuing, because the VWAP

was less than the Floor Price for five consecutive Trading Days.

The Company acknowledges that the occurrence of the Floor Price Event

constitutes an Amortization Event under the Convertible Notes, requiring the Company to make monthly cash payments in accordance with

Section 1(c) of the Convertible Notes.

In connection with this obligation, the Company agreed to make cash payments on specified dates

and in minimum amounts.

The payment schedule began with an initial payment

2 unchanged sentences

In total, the Company was obligated to make minimum payments of $ 2,450,000 under this

The Company fully settled these minimum payments in accordance with

the payment schedule.

The Company also retains the option to make payments in excess of the stated minimums, and any such additional amounts

are applied first to reduce the original principal balance of the Convertible Note dated November 25, 2025.

In consideration of the covenants and agreements set forth in the Modification

Agreement dated March 21, 2025, the Investor agreed, from the date thereof until May 20, 2025, to:

(A) defer the Company’s obligation

to make monthly payments as a result of the Floor Price Event or otherwise pursuant to Section 1(c) of the Convertible Notes, (B) not

to submit any Conversion Notices or Investor Notices unless the stock traded at a price per share greater than $ 1.80 at the time any such

notice was delivered, and (C) waived the application of the Payment Premium in respect of Company payments made in accordance with Section

in each case provided that (i) the Company strictly complied with the terms of the Modification Agreement and (ii) there was

no occurrence or existence of any Event of Default or any breach of any term of any of the Financing Documents.

Since the change of the modified debt instrument was not substantially

different from those of the old debt, the First Modification is accounted for as a modification.

The Company fully settled these minimum payments

in accordance with the payment schedule.

The Company also retains the option to make payments in excess of the stated minimums, and any

such additional amounts are applied first to reduce the original principal balance of the Convertible Note dated November 25, 2024.

In consideration of the covenants and agreements

set forth in the Modification Agreement dated March 21, 2025, the Investor agreed, from the date thereof until May 20, 2025, to:

the Company’s obligation to make monthly payments as a result of the Floor Price Event or otherwise pursuant to Section 1(c) of

the Convertible Notes, (B) not to submit any Conversion Notices or Investor Notices unless the stock traded at a price per share greater

than $ 1.80 at the time any such notice was delivered, and (C) waived the application of the Payment Premium in respect of Company payments

made in accordance with Section 2 above;

in each case provided that (i) the Company strictly complied with the terms of the Modification

Agreement and (ii) there was no occurrence or existence of any Event of Default or any breach of any term of any of the Financing Documents.

Since the change of the modified debt instrument

was not substantially different from those of the old debt, the First Modification is accounted for as a modification.

HOLDING CORP.

3 unchanged sentences

Second Modification

Pursuant to the Modification Agreement signed with the Investor on

June 6, 2025 (the “Second Modification”), 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.

Payment made pursuant to the Modification Agreement was applied first to Promissory Note 2, then to Promissory

Note 1, unless otherwise agreed by the parties.

Pursuant to the Modification Agreement signed

with the Investor on June 6, 2025 (the “Second Modification”), 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.

Payment made pursuant to the Modification Agreement was applied first to Promissory

Note 2, then to Promissory Note 1, unless otherwise agreed by the parties.

July 16, 2025

5 unchanged sentences

of the original debt, the Second Modification is accounted for as an extinguishment.

The Company has fully settled the repayments

pursuant to the First Modification and Second Modification, and upon the conversion in September 2025, all outstanding convertible

notes were fully settled

The Company has fully settled the repayments pursuant

to the First Modification and Second Modification, and upon the conversion in September 2025, all outstanding convertible notes were fully

Other Income (Expenses)

Other income and expenses consisted of the following:

three months ended

September 30,

three months ended

September 30,

six months ended

Rental income

6 unchanged sentences

The Company is authorized to issue 100,000,000

shares of common stock, par value US$ 0.00001 per share, with 45,443,079 and 42,250,934 shares issued and outstanding as of September

shares of common stock, par value US$ 0.00001 per share, with 45,443,079 and 42,250,934 shares issued and outstanding as of December 31,

2025 and June 30, 2025, respectively.

As of December 31, 2025 and June 30, 2025, the Company had 81,700 warrants outstanding and exercisable to purchase an aggregate of 81,700

shares of common stock.

On May 15, 2024, the Company issued to EF

1 unchanged sentence

Boral Capital LLC;

hereinafter, the “Representative”), as representative of the several

underwriters with respect to the Company’s initial public offering (the “IPO”), and its affiliates, certain warrants,

exercisable during the five-year period from the commencement of sales of the shares of common stock offered in the IPO, entitling the

Representative to purchase an aggregate of up to 81,700 shares of common stock at a per share price equal to 125.0 % of

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

The fair value of

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

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

exercise price of the warrants

of US$ 6.25 , volatility of 100 %;

hereinafter, the “Representative”), as representative of the several underwriters with

respect to the Company’s initial public offering (the “IPO”), and its affiliates, certain warrants, exercisable during

the five-year period from the commencement of sales of the shares of common stock offered in the IPO, entitling the Representative to

purchase an aggregate of up to 81,700 shares of common stock at a per share price equal to 125.0 % of the public offering

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

The fair value of US$ 268,430 of

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

market value of underlying

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

exercise price of the warrants of US$ 6.25 , volatility

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

8 unchanged sentences

Notices pursuant to the SEPA.

In September 2025, the Company issued 77,669

and 3,114,476 shares of common stock, par value of US$ 0.00001 per share, at a price of US$ 1.29 and US$ 1.19 per share, respectively, for

an aggregate amount of US$ 3,800,000 , for Investor Notices pursuant to the SEPA.

In September 2025, the Company issued 77,669 and

3,114,476 shares of common stock, par value of US$ 0.00001 per share, at a price of US$ 1.29 and US$ 1.19 per share, respectively, for an

aggregate amount of US$ 3,800,000 , for Investor Notices pursuant to the SEPA.

Earnings per Share

Basic and diluted net earnings per share for

the three months ended September 30, 2025 and 2024 were as follows:

three months ended

September 30,

three months ended

September 30,

Basic and diluted net loss per share for the six

months ended December 31, 2025 and 2024 were as follows:

six months ended

Net loss attributable to stockholders

2 unchanged sentences

Weighted average number of shares of common stock outstanding – basic and diluted

Earnings per share attributable to stockholders – basic and diluted

Basic earnings per share is computed using

the weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is computed using

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

For the three months ended

September 30, 2025 and 2024, the computation of diluted loss per share does not assume the impacts from the exercise of the Company’s

outstanding unexercised warrants and the convertible debt, due to its loss position for the three months ended September 30,

2025 and 2024.

Loss per share attributable to stockholders – basic and diluted

Basic earnings per share is computed using the

weighted average number of shares of common stock outstanding during the period.

Diluted earnings per share is computed using the weighted

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

For the three and six months ended December 31,

2025 and 2024, the computation of diluted loss per share does not assume the impacts from the exercise of the Company’s outstanding

unexercised warrants and the convertible debt, due to its loss position for the three and six months ended December 31, 2025 and 2024.

HOLDING CORP.

4 unchanged sentences

Eastwest Bank in the aggregate amount of $ 4,394,812 (see Note 2) and the operating and finance leases (See Note 7), the Company did not

have other significant commitments, long-term obligations, or guarantees as of September 30, 2025 and June 30, 2025.

have other significant commitments, long-term obligations, or guarantees as of December 31, 2025 and June 30, 2025.

Contingencies

The Company is subject to legal proceedings

and regulatory actions in the ordinary course of business.

The results of such proceedings cannot be predicted with certainty, but

the Company does not anticipate that the final outcome arising out of any such matter will have a material adverse effect on the

Company’s consolidated financial position, cash flows or results of operations taken as a whole.

As of September 30, 2025 and

June 30, 2025, the Company was not a party to any material legal or administrative proceedings.

The Company is subject to legal proceedings and

regulatory actions in the ordinary course of business.

As of December 31, 2025 and June 30,

2025, the Company was not a party to any material legal or administrative proceedings.

Noncompliance with Nasdaq Listing Rules

On November 7, 2025, the Company received a notice from the Listing Qualifications Department of

The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that the listing of its common stock was not in compliance with

Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Market, as the closing bid price of the Company’s common

stock was less than $1.00 per share for the previous 30 consecutive business days.

The notice has no present impact on the listing of

the Company’s securities, and the Company’s common stock continues to trade on the Nasdaq Global Market under the symbol “BTOC.”

Under Nasdaq Listing Rule 5810(c)(3)(A), the Company has a period of 180 calendar days, or until May 6, 2026, to regain compliance.

regain compliance, during this 180-day compliance period, the closing bid price of the Company’s common stock must close at $ 1.00

per share or more for a minimum of 10 consecutive business days.

Related Party Transactions and Balances

1 unchanged sentence

Name of related parties Relationship with the Company

Jacky Chen Former CEO of the Company’s significant operating subsidiary, Armstrong Logistic Inc.

(from January 1, 2021 to December 31, 2021)

Jacky Chen Former CEO of the Company’s significant operating subsidiary,

Armstrong Logistic Inc.

Aidy Chou Founder, CEO, and substantial stockholder

3 unchanged sentences

The Company had the following related party transactions:

(i) DNA Motor Inc.

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

During the three months ended September 30, 2025, for these operating leases, US$ 75,714 (2024:

US$ 94,829 ) lease expense was recorded in general and administrative expenses, US$ 2,248,835 (2024:

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

During the six months

ended December 31, 2025, for these operating leases, US$ 150,048 (2024:

US$ 189,466 ) lease expense was recorded in general and administrative

expenses, US$ 4,053,573 (2024:

US$ 5,923,494 ) was recorded in costs of services and US$ Nil (2024:

US$ 408,098 ) was recorded in other expenses.

The aggregate lease liability associated with these operating leases as of September 30, 2025 and June 30, 2025 was US$ 22,412,152 and US$ 24,092,384 , respectively.

The aggregate right-of-use assets related to these operating leases as of September 30, 2025 and June 30, 2025

US$ 408,098 ) was recorded in other

The aggregate lease liability associated with these operating leases as of December 31, 2025 and June 30, 2025 was US$ 22,770,708

and US$ 24,092,384 , respectively.

The aggregate right-of-use assets related to these operating leases as of December 31, 2025 and June

30, 2025 was US$ 22,090,863 and US$ 23,410,085 , respectively.

(ii) During the three months ended September 30, 2025, the Company generated revenue of US$ Nil (2024:

During the six months ended December 31, 2025, the Company generated

revenue of US$ 9,700 (2024:

US$ 553 ) for providing logistic services to DNA.

During the three months ended September 30, 2025, the Company generated revenue of US$ Nil (2024:

During the six months ended December 31, 2025, the Company

generated revenue of US$ Nil (2024:

US$ 884,700 ) for providing warehouse services to DNA.

During the three months ended September 30, 2025, the Company paid expenses in the total amount of US$ 3,287 (2024:

During the six months ended December 31, 2025,

the Company paid expenses in the total amount of US$ 6,030 (2024:

US$ 52,802 ) on behalf of DNA.

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

The amount due from DNA of $ 10,260 and $ 912

as of December 31, 2025 and June 30, 2025 are included in accounts receivable from as related party as disclosed in Note 3.

HOLDING CORP.

2 unchanged sentences

Related Party Transactions (cont.)

(iii) During the three months ended September 30, 2025, the Company incurred general and administrative expenses of US$ 1,068,596 for outside services, warehouse supplies, freight expenses and operating expenses provided by DNA.

During the three months ended September 30, 2024, the Company incurred general and administrative expenses of US$ 607 for outside services, warehouse supplies, freight expenses and operating expenses provided by DNA.

During the six months ended December 31, 2025, the Company incurred

cost of services of US$ 2,329,571 for outside services, warehouse supplies, freight expenses and operating expenses provided by DNA.

the six months ended December 31, 2024, the Company incurred general and administrative expenses of US$ 1,526 for service and other expenses

provided by DNA.

The amount due from DNA of $ 482,649 and $ nil as of December 31, 2025 and June 30, 2025 are included in other

receivables from a related party as disclosed in Note 3.

Subsequent Events

The Company has evaluated the impact of events

that have occurred subsequent to September 30, 2025, through the date the condensed 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 other than the below one.

On March 6, 2025, the Company entered into a

non-binding Letter of Intent to acquire 100 % of the issued and outstanding capital stock of Leopard Transnational Inc., a California-based

logistics provider with approximately 360,000 square feet of U.S.

that have occurred subsequent to December 31, 2025, through the date the condensed 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 other than the below one.

On March 6, 2025, the Company entered into a non-binding

Letter of Intent to acquire 100 % of the issued and outstanding capital stock of Leopard Transnational Inc., a California-based logistics

provider with approximately 360,000 square feet of U.S.

warehouse space.

The proposed consideration includes common stock and

potential earn-out payments.

The transaction remains subject to due diligence, negotiation of a definitive agreement, and necessary approvals,

and had not been completed as of the date the financial statements were available to be issued.

The proposed consideration includes common stock and potential

earn-out payments.

The transaction remains subject to negotiation of a definitive agreement, and necessary approvals, and

had not been completed as of the date the financial statements were available to be issued.

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