What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-14 compared with 2026-02-17 · 524 added, 454 removed, 593 unchanged (62% of the section changed)

Financial Statements

HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2025 AND JUNE 30, 2025

AS OF MARCH 31, 2026 AND JUNE 30, 2025

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

28 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 December 31, 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 March 31, 2026 and June 30, 2025, respectively

Additional paid-in capital

3 unchanged sentences

Total liabilities and stockholders’ equity

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

The 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 AND SIX MONTHS ENDED DECEMBER 31, 2025 AND 2024

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026 AND 2025

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

2 unchanged sentences

( 5,119,617 )

( 2,845,678 )

Operating costs and expenses:

35 unchanged sentences

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

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

The accompanying notes form an integral part

of these condensed consolidated financial statements.

HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’

EQUITY (DEFICIT)

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

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKOLDERS’ EQUITY (DEFICIT)

FOR THE THREE AND NINE MONTHS ENDED MARCH 31, 2026 AND 2025

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

Six Months Ended

Nine months Ended

Balance as of June 30, 2024

2 unchanged sentences

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

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

Balance as of March 31, 2025 (unaudited)

Three Months ended

Balance as of September 30,2024 (unaudited)

Balance as of December 31,2024 (unaudited)

( 3,755,053 )

Issuance of common stock for commitment fee

Balance as of December 31, 2024 (unaudited)

Six Months Ended

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

Balance as of March 31, 2025 (unaudited)

Nine months Ended

Balance as of June 30, 2025

2 unchanged sentences

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

Balance as of December 31, 2025 (unaudited)

Balance as of March 31, 2026 (unaudited)

( 7,015,054 )

Three Months ended

Balance as of September 30,2025 (unaudited)

Balance as of December 31, 2025 (unaudited)

( 1,947,577 )

( 5,067,477 )

Balance as of December 31, 2025 (unaudited)

( 5,067,477 )

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

Balance as of March 31, 2026 (unaudited)

( 7,015,054 )

The accompanying notes form an integral part

of these condensed consolidated financial statements.

HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

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

FOR THE NINE MONTHS ENDED MARCH 31, 2026 AND 2025 (UNAUDITED)

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

Six Months Ended

Nine months Ended

Cash Flows from Operating Activities:

10 unchanged sentences

Interest income

Gain from settlement of commitment payable

Changes in operating assets and liabilities:

25 unchanged sentences

Repayment to related parties

Repayment of commitment payable

Repayments of finance lease liabilities

6 unchanged sentences

( 6,511,111 )

( 2,571,637 )

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

13 unchanged sentences

Shares issued to settle commitment fee

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

The accompanying notes form an integral part

of these condensed consolidated financial statements.

HOLDING CORP.

1 unchanged sentence

Organization and principal activities

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.

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.

Summary of significant accounting policies

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.

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.

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.

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.

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 March 31, 2026, and its results of operations and cash flows

for the nine-month period then ended.

Operating results for the three and nine months ended March 31, 2026 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 $ 15.4 million and $ 5.5 million net cash used in operating activities during the

nine months ended March 31, 2026 and as of that date, had a net current liability of $ 20.9 million and accumulated deficits of $ 7.0 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

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.

adjustments could be material.

ARMLOGI HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies

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.

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.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Summary of significant accounting policies (cont.)

Use of Estimates

The preparation of financial statements and related

4 unchanged sentences

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.

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

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 terms of the

letters of credit started 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.

risks and concentration

Certain risks and concentration

The Company’s financial instruments that

1 unchanged sentence

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

As of December 31,

As of March 31,

2026 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 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.

As of March 31, 2026 and June 30, 2025, the largest

three accounts receivable balances from customers accounted for 37 % 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

The Company’s credit term generally ranges from 3 to 30 days, but may be extended up to 180 days with the approval

from the board of directors of the Company.

ARMLOGI HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Summary of significant accounting policies

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) .

Management estimates expected credit losses over

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

This includes:

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:

historical loss experience for similar loan portfolios;

current conditions, such as borrower financial performance and collateral values;

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:

Category Depreciation method Depreciation rate

4 unchanged sentences

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

for maintenance and repairs are expensed as incurred.

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

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

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.

Expenditures for maintenance and repairs are expensed

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

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

and nine months ended March 31, 2026 and 2025.

Intangible 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 (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

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.

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

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

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 has 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.

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.

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.

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.

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.

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.

These five steps include:

4 unchanged sentences

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.

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.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

Summary of significant accounting policies

Revenue recognition (cont.)

A summary of the Company’s revenue disaggregated

by major service lines is as follows:

Transportation services

1 unchanged sentence

Other services

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.

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 nine months ended March 31,

2026 and 2025, the amounts transferred from contract liabilities at the beginning of the fiscal year to revenue were $ 939,097 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.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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.

Summary of significant accounting policies

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.

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.

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.

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.

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.

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.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

computed by dividing net income allocable to common stockholders by the weighted average number of shares of common stock outstanding.

Diluted earnings per share is computed by dividing net income allocable to common stockholders by the weighted average number of shares

outstanding, plus the number of additional shares that would have been outstanding if the potential shares, such as restricted stock

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

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.

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 March 31, 2026 and June 30, 2025.

Earnings per share

Basic earnings per share of common stock are computed

by dividing net income allocable to common stockholders by the weighted average number of shares of common stock outstanding.

earnings per share is computed by dividing net income allocable to common stockholders by the weighted average number of shares outstanding,

plus the number of additional shares that would have been outstanding if the potential shares, such as restricted stock awards and stock

options, had been issued and were considered dilutive.

As the Company incurred a net loss for the period, all potentially dilutive instruments

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

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 and nine months ended March 31, 2026 and 2025 were conducted in the U.S.

Therefore, revenue for the three and nine

months ended March 31, 2026 and 2025 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 March 31, 2026 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 (cont.)

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.

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

value measurement.

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 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 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

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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

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 March 31, 2026 and June 30, 2026.

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

In November 2023, the FASB issued ASU No.

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Company’s CODM.

The new standard is effective for the Company for its annual periods beginning January 1, 2024 and for interim

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

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

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

The new standard is effective for the Company for its annual periods beginning January 1, 2024 and for interim periods

beginning January 1, 2025, with early adoption permitted.

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

impact on the Company’s consolidated financial statements.

In November 2024, FASB issued ASU 2024-03 Income

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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.

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.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Accounts Receivable and Other Receivables,

Accounts receivable and other receivables, net

receivable and other receivables, net consisted of the following:

consisted of the following:

Accounts receivable – third parties

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allowance for credit loss

* 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 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 nine

months ended March 31, 2026 and the fiscal year ended June 30, 2025 consisted of the following:

Balance as of beginning

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Property and Equipment, Net

and equipment, net consisted of the following:

Property and equipment, net consisted of the following:

Furniture and fixtures

9 unchanged sentences

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,

Depreciation expenses are recorded in costs of

services and general and administrative expenses.

The Company recorded depreciation expenses of US$ 751,168 and US$ 658,260 during the three

months ended March 31, 2026 and 2025, respectively.

Specifically, US$ 702,727 and US$ 609,189 of the depreciation expenses were recorded

in costs of services for the three months ended March 31, 2026 and 2025, respectively.

US$ 48,441 and US$ 49,071 of the depreciation

expenses were recorded in general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively.

The Company recorded depreciation expenses of

US$ 2,094,104 and US$ 1,874,681 during the nine months ended March 31, 2026 and 2025, respectively.

Specifically, US$ 1,947,519 and US$ 1,717,363

of the depreciation expenses were recorded in costs of services for the nine months ended March 31, 2026 and 2025, respectively, US$ 146,585

and US$ 157,318 of the depreciation expenses were recorded in general and administrative expenses for the nine months ended March 31, 2026

and 2025, 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

assets, net consisted of the following:

Intangible assets, net consisted of the following:

Security Systems

Accumulated depreciation

Accumulated amortization

Intangible assets, net

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.

The Company recorded amortization of US$ 32,368 and

US$ 26,706 , which were included in costs of services, for the nine months ended March 31, 2026 and 2025, respectively.

The Company recorded

amortization of US$ 9,111 and US$ 8,829 , which were included in costs of services, for the three months ended March 31, 2026 and 2025, respectively.

Loan Receivables

Company’s loan receivables consisted of the following:

The Company’s loan receivables consisted

of the following:

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

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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

A partial payment of US$ 40,000 was received on March 23, 2026.

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

in the principal amount of US$ 400,000 .

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

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

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

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

A partial payment of US$ 20,000 was received on March 30, 2026.

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

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

A partial payment of US$ 15,000 was received on March 31, 2026.

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

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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

As of March 31, 2026, the Company recorded a loan

receivable balance of US$ 1,681,245 and long-term loan receivable of US$ Nil , including accrued interest income of US$ 55,992 .

As 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 March 31, 2026, the Company had operating

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

4 unchanged sentences

The Company had certain sublease contracts and recognized US$ 272,500 and US$ 1,093,104 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.

nine months ended March 31, 2026 and 2025, respectively.

During the nine months ended March 31, 2026, the

Company recognized additional operating lease liabilities of US$ 4,605,476 , as a result of entering into two new operating lease agreements.

The ROU assets were recognized at the discount rate of 10.35 %, resulting in US$ 4,605,476 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.

During the nine months ended March 31, 2026, the

Company recognized additional finance lease liabilities of US$ 1,137,192 .

The ROU assets were recognized at the discount rate of 9.0 %,

resulting in US$ 1,137,192 on the commencement date.

HOLDING CORP.

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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

of US$ 9,315,783 and US$ 9,421,215 during the three months ended March 31, 2026 and 2025, respectively.

Specifically, US$ 9,122,572 and US$ 8,337,256

of operating lease expenses were recorded in costs of services for the three months ended March 31, 2026 and 2025, respectively.

and US$ 1,083,959 of operating lease expenses were recorded in general and administrative expenses for the three months ended March 31,

2026 and 2025, respectively.

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.

of US$ 27,721,236 and US$ 25,279,522 during the nine months ended March 31, 2026 and 2025, respectively.

Specifically, US$ 26,715,880 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

US$ 23,539,448 of operating lease expenses were recorded in costs of services for the nine months ended March 31, 2026 and 2025, respectively.

US$ 1,005,356 and US$ 1,343,420 of operating lease expenses were recorded in general and administrative expenses for the nine months ended

March 31, 2026 and 2025, respectively.

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

months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, maturities of lease liabilities

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

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Other liabilities

Other liabilities as of December 31, 2025 and

June 30, 2025 mainly consisted of tenant deposits.

Other liabilities as of March 31, 2026 and June

30, 2025 mainly consisted of tenant deposits.

Convertible notes

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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.

● 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

141 unchanged sentences

Other income and expenses consisted of the following:

six months ended

Rental income

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Credit card rebate income

Gain on lease settlement and modification

HOLDING CORP.

2 unchanged sentences

The Company is authorized to issue 100,000,000

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

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 March 31, 2026

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.

As of March 31, 2026 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

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Earnings per Share

Basic and diluted net loss per share for the six

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

six months ended

Basic and diluted net loss per share for the nine

months ended March 31, 2026 and 2025 were as follows:

Net loss attributable to stockholders

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( 3,755,053 )

( 15,435,712 )

( 10,062,164 )

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

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

For the three and six months ended December 31,

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.

For the three and nine months ended March 31, 2026

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

warrants and the convertible debt, due to its loss position for the three and nine months ended March 31, 2026 and 2025.

HOLDING CORP.

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Eastwest Bank in the aggregate amount of $ 4,398,412 (see Note 2) and the operating and finance leases (See Note 7), the Company did not

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

have other significant commitments, long-term obligations, or guarantees as of March 31, 2026 and June 30, 2025.

Contingencies

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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.

As of March 31, 2026 and June 30, 2025, the Company was not a party to any

material legal or administrative proceedings.

Notice of Delisting or Failure to Satisfy

a Continued Listing Rule or Standard;

Transfer of Listing

As previously disclosed on a Current Report on

Form 8-K filed by the Company, on November 7, 2025, the Company received a written notice from the Listing Qualifications Department (the

“Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, for the 30 consecutive business

days preceding the receipt of the notice, the bid price for the Company’s common stock had closed below the minimum $1.00 per share

requirement set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on The Nasdaq Global Market (the “Minimum Bid Price

Requirement”).

The Company was provided an initial period of 180 calendar days, or until May 6, 2026, to regain compliance with

the Minimum Bid Price Requirement.

On March 26, 2026, the Company submitted an application

to Nasdaq to transfer the listing of its common stock from The Nasdaq Global Market to The Nasdaq Capital Market, along with a written

notification of its intent to regain compliance with the Minimum Bid Price Requirement, including by effecting a reverse stock split,

if necessary.

The Staff notified the Company in a letter dated May 7, 2026 (the “Second Nasdaq Notice”), that Nasdaq has approved

the Company’s application to list its common stock on The Nasdaq Capital Market.

Nasdaq’s approval is in part based upon the

Company meeting the applicable market value of publicly held shares requirement for continued listing and all other applicable requirements

for initial listing on The Nasdaq Capital Market (except for the bid price requirement), the Company’s written notice of its intention

to cure the deficiency by effecting a reverse stock split, if necessary, its agreement to the conditions outlined in the Nasdaq Listing

Agreement, and additional supporting information provided in its application.

The Company’s common stock has been transferred

to The Nasdaq Capital Market at the opening of business on May 8, 2026, and the Staff has determined that the Company were eligible for

an additional 180 calendar day period, or until November 2, 2026, to regain compliance (the “Second Compliance Period”).

at any time during this period the bid price of the Company’s common stock closes at or above $ 1.00 per share for a minimum of ten,

and generally not more than 20, consecutive business days, the Staff will provide the Company with written confirmation of compliance

and the matter will be closed.

In addition, as previously disclosed on a Current

Report on Form 8-K filed by the Company, on April 17, 2026, the Company received a notice from Nasdaq notifying the Company that the listing

of its common stock was not in compliance with Nasdaq Listing Rule 5450(b)(1)(C) for continued listing on The Nasdaq Global Market, as

the Company’s Market Value of Publicly Held Shares (MVPHS) was below $ 5,000,000 for the previous 30 consecutive business days (the

“MVPHS Deficiency”).

Upon transfer to The Nasdaq Capital Market, the Company automatically regains compliance with the MVPHS

The Company intends to continue actively monitoring

the bid price for its shares of common stock between now and the expiration of the Second Compliance Period and will consider all available

options to resolve the deficiency including a reverse stock split, if necessary.

However, there can be no assurance that the Company will

be able to regain or maintain compliance with the Nasdaq listing criteria or continue to meet the continued listing requirements of The

Nasdaq Capital Market.

HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Related Party Transactions and Balances

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Name of related parties Relationship with the Company

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

Armstrong Logistic Inc.

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

Aidy Chou Founder, CEO, and substantial stockholder

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The Company had the following related party transactions:

(i) DNA Motor Inc.

(“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:

During the nine months ended March 31, 2026, for these operating leases, US$ 227,898 (2025:

US$ 283,339 ) lease expense was recorded in general and administrative expenses, US$ 6,102,386 (2025:

US$ 8,815,346 ) was recorded in costs of services and US$ Nil (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.

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

revenue of US$ 9,700 (2024:

US$ 422,521 ) was recorded in other expenses.

The aggregate lease liability associated with these operating leases as of March 31, 2026 and June 30, 2025 was US$ 21,156,272 and US$ 24,092,384 , respectively.

The aggregate right-of-use assets related to these operating leases as of March 31, 2026 and June 30, 2025 was US$ 20,501,156 and US$ 23,410,085 , respectively.

(ii) During the nine months ended March 31, 2026, the Company generated revenue of US$ 9,700 (2025:

US$ 553 ) for providing logistic services to DNA.

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

generated revenue of US$ Nil (2024:

During the nine months ended March 31, 2026, the Company generated revenue of US$ Nil (2025:

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

During the six months ended December 31, 2025,

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

During the nine months ended March 31, 2026, the Company paid expenses in the total amount of US$ 9,066 (2025:

US$ 470,912 ) on behalf of DNA.

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.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Related Party Transactions and Balances

Related Party Transactions (cont.)

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.

The amount due from DNA of $ 300 and $ 912 as of March 31, 2026 and June 30, 2025 are included in accounts receivable from as related party as disclosed in Note 3.

(iii) During the nine months ended March 31, 2026, the Company incurred cost of services of US$ 4,647,700 (2025:

US$ 1,603,146 ) for outside services, warehouse supplies, freight expenses and operating expenses provided by DNA.

The amount due from DNA of $ 444,876 and $ nil as of March 31, 2026 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 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.

that have occurred subsequent to March 31, 2026, 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

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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