What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2026-02-17 · 149 added, 169 removed, 226 unchanged (58% of the section changed)

56 unchanged sentences

who seek to sell in the U.S.

We currently operate ten

We currently operate twelve

warehouses across the country, with an aggregate gross floor area of approximately 3,946,620 square feet.

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need domestic or international warehousing and logistics support.

As of December 31, 2025 and June 30, 2025, we had an active customer

base of 588, and 505, respectively, for our warehousing and logistics services.

For the six months ended December 31, 2025 and

As of March 31, 2026 and June 30, 2025, we had an active customer base

of 601, and 505, respectively, for our warehousing and logistics services.

For the nine months ended March 31, 2026 and 2025,

we had total revenue of $142.7 million and $139.5 million, and net loss of $15.4 million and $10.1 million, respectively.

do not have any subsidiaries, assets, or employees in the PRC, we generate a significant portion of our revenue from customers based in

During the six months ended December 31, 2025 and 2024, we generated approximately 83% and 86% of our revenue from PRC-based customers,

not have any subsidiaries, assets, or employees in the PRC, we generate a significant portion of our revenue from customers based in China.

During the nine months ended March 31, 2026 and 2025, we generated approximately 76% and 87% of our revenue from PRC-based customers,

respectively.

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The following table outlines our consolidated

statements of operations for the three and six months ended December 31, 2025 and 2024:

statements of operations for the three and nine months ended March 31, 2026 and 2025:

For Three Months

For Six Months

For Nine months

Costs of services

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(15,990,912 )

(13,646,472 )

Other (income) expenses:

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(15,419,276 )

(11,569,133 )

Current income tax expense

2 unchanged sentences

(15,435,712 )

(10,062,164 )

Total comprehensive loss

(15,435,712 )

(10,062,164 )

Basic & diluted net earnings per share

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The following table sets forth our revenue for

the three and six months ended December 31, 2025 and 2024:

the three and nine months ended March 31, 2026 and 2025:

Costs of services

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Other services

Three Months Ended December 31, 2025

Our revenue slightly increased by $0.4 million,

or 0.8%, to $51.5 million during the three months ended December 31, 2025, compared to $51.1 million for the same period

Three Months Ended March 31, 2026 and

Our revenue decreased by $4.2 million, or

9.1%, to $41.7 million during the three months ended March 31, 2026, compared to $45.8 million for the same period in 2025.

The decrease was mainly due to the following factors:

Revenue from our transportation services decreased by $5.4 million, or 19.1%, for the three months ended March 31, 2026, compared with the same period in 2025, due to a decreased proportion of traditional customer order volume and an increased proportion of Temu and TikTok order volume for the three months ended March 31, 2026.

Aggressive market pushes by e-commerce platforms have incentivized sellers to ship orders through the platforms rather than directly to consumers.

For example, more of our traditional customers are transferring orders in bulk to Amazon warehouses to sell through their Fullfillment by Amazon program instead of shipping individual items to buyers.

More customers are opting to arrange their own order delivery services, rather than using one of our service options, resulting in a decrease in transportation service volume and revenue.

Additionally, Temu and TikTok orders typically already have their order delivery services provided by the e-commerce platform, so the growth in those customer segments did not translate to an increase in transportation service revenue.

Nine months Ended March 31, 2026 and

Our revenue increased by $3.2 million, or

2.3%, to $142.7 million during the nine months ended March 31, 2026, compared to $139.5 million for the same period in 2025.

The increase was due to the following factors:

1) Revenue from our transportation services decreased by $4.1

million, or 11.5%, for the three months ended December 31, 2025, compared with the same period in 2024, due to a decreased proportion

of traditional customer order volume and an increased proportion of Temu and TikTok order volume for the three months ended December

Aggressive market pushes by e-commerce platforms have incentivized sellers to ship orders through the platforms rather than

directly to consumers.

For example, more of our traditional customers are transferring orders in bulk to Amazon warehouses to sell through

their Fullfillment by Amazon program instead of shipping individual items to buyers.

Additionally, because Temu and TikTok orders typically

only generate warehouse service revenue due to transportation services already being provided by the e-commerce platforms, the decrease

in the volume of traditional orders and subsequent decrease in transportation services revenue is not offset by the general increase

in order volume.

While overall order volume has increased, the number of orders using our transportation services has decreased, resulting

in a decrease in transportation service volume and revenue.

2) Revenue from our warehousing services increased by $4.5 million,

or 30.2%, for the three months ended December 31, 2025, compared with the same period in 2024.

As an integrated part of our one-stop

warehousing and logistics services, revenue increase from our warehousing services was driven by the optimizations of warehouse space

usage and streamlining of workflow, and the Temu and TikTok customer bases have increased and contribute to a more significant portion

of warehouse service volume.

Six Months Ended December 31, 2025 and

Our revenue increased by $7.4 million, or 7.9%, to $101.0 million

during the six months ended December 31, 2025, compared to $93.6 million for the same period in 2024.

The increase was due to

the following factors:

Revenue from our transportation services slightly decreased by $0.6 million, or 0.9%, for the six months ended December 31, 2025, compared with the same period in 2024, due to a decreased proportion of traditional customer order volume and an increased proportion of Temu and TikTok order volume for the six months ended December 31, 2025.

Revenue from our transportation services decreased by $6.0 million, or 6.4%, for the nine months ended March 31, 2026, compared with the same period in 2025, due to a decreased proportion of traditional customer order volume and an increased proportion of Temu and TikTok order volume for the nine months ended March 31, 2026.

Aggressive market pushes by e-commerce platforms have incentivized sellers to ship orders through the platforms rather than directly to consumers.

Additionally, because Temu and TikTok orders typically only generate warehouse service revenue due to transportation services already being provided by the e-commerce platforms, the decrease in the volume of traditional orders and subsequent decrease in transportation services revenue is not offset by the general increase in order volume.

While overall order volume has increased, the number of orders using our transportation services has decreased, resulting in a decrease in transportation service volume and revenue..

from our warehousing services increased by $8.0 million, or 27.4%, for the six months ended December 31, 2025, compared with the same

period in 2024.

As an integrated part of our one-stop warehousing and logistics services, revenue increase from our warehousing services

was driven by optimizations of warehouse space usage and streamlining of workflow.

More customers are opting to arrange their own order delivery services, rather than using one of our service options, resulting in a decrease in transportation service volume and revenue.

Revenue from our warehousing services increased by $9.2 million, or 19.9%, for the nine months ended March 31, 2026, compared with the same period in 2025.

Between the two time periods, warehouse operations were significantly increased in Georgia and Illinois, market segments that were newly added shortly before or during the nine months ended March 31, 2025.

A warehouse location in Ontario, California, was also expanded to during the nine months ended March 31, 2025, becoming the second highest revenue generating warehouse in California as of March 31, 2026.

The Temu and TikTok customer segments were also expanded upon between the nine months ended March 31, 2025 and the same period in 2026.

These customers typically have higher than average warehousing service charges per order compared to traditional customers.

The following table sets forth a breakdown of

our costs of services for the three and six months ended December 31, 2025 and 2024:

our costs of services for the three and nine months ended March 31, 2026 and 2025:

Lease expenses

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Other expenses

Three Months Ended December 31,

2025 and 2024

Three Months Ended March 31, 2026 and

Our costs of services mainly represented the costs

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and trucking expenses.

Costs of services increased by $1.7 million, or 3.3%, during the three months ended December 31, 2025,

compared with the same period in 2024.

The increase was primarily driven by the following two factors:

Between December 31, 2024 and December 31, 2025, the Company expanded its operations through opening three new warehouses, including a new warehouse in the State of Illinois.

These new facilities focused less on the traditional drop-shipping model, instead operating as hubs for lower profit margin services such as transfers or returns.

These dynamics resulted in a notable increase in temporary labor expenses by $1.5 million, rental expenses by $2.0 million, and other related operating expenses.

Freight costs decreased by $1.0 million due to a decreased proportion of traditional customer order volume and an increased proportion of Temu and TikTok order volume.

Aggressive market pushes by e-commerce platforms incentivizing sellers to ship orders through the platforms instead of directly to customers.

While overall order volume has increased, freight costs have decreased due to fewer orders utilize our transportation and freight services.

Traditional customers are much more likely to rely on our services for deliveries and transfers.

Costs of services decreased by $2.0 million, or 4.4%, during the three months ended March 31, 2026, compared

with the same period in 2025.

The decrease was primarily driven by the following two factors:

Labor expenses temporarily increased by $1.3 million for the three months ended March 31, 2026 due to inventory reorganization taking place among the California warehouses during that time period.

There was a large increase in workload due to the organizing, packing, loading, moving, and unloading of a significant amount of warehouse customer inventory.

Freight costs decreased by $3.0 million due to a reduction in freight volume.

Customers favored arranging their own shipment options for outbound orders rather than use services provided by our vendors.

Our overall gross profit/(loss) margin decreased

from 0.9% for the three months ended December 31, 2024 to -1.5% for the same period in 2025, primarily due to a decrease in the proportion

of shipments using our shipping services, which typically has higher profit margins.

Many of the new customers have come through the Temu

and TikTok e-commerce platforms, which provide their own shipping labels.

This has muted the holiday season increase in revenue from transportation

services we typically see and we have had to cut profit margins of the shipping services to keep competitive prices.

Additionally, the

new warehouses added between December 31, 2024 and December 31, 2025 have been used for lower profit margin services, such as handling

returned orders.

Although revenue increased by $0.4 million during this period, the Company was unable to generate profit from warehouse-related

expenditures.

Six Months Ended December 31, 2025 and

from 0.6% for the three months ended March 31, 2025 to negative 4.5% for the same period in 2026, primarily due to significant inventory

reorganization taking place among the California warehouses during the three months ended March 31, 2026.

The associated increase in workload

and labor needs resulted in an increase to temporary labor expenses without a direct impact on revenue for that time period.

Nine months Ended March 31, 2026 and

Costs of services increased by $5.5 million,

or 7.8%, during the six months ended December 31, 2025, compared with the same period in 2024.

The increase was primarily driven

by the following two factors:

Between December 31, 2024 and December 31, 2025, the Company expanded its operations through opening three new warehouses, including a new warehouse in the State of Illinois.

These new facilities focused less on the traditional drop-shipping model, instead operating as hubs for lower profit margin services such as transfers or returns.

These dynamics resulted in a notable increase in temporary labor expenses by $2.9 million, rental expenses by $3.5 million, and other related operating expenses.

Freight costs increased by $1.0 million due to additional order volume from the three new warehouses added between December 31, 2024 and December 31, 2025.

While the new Illinois and California warehouses did not focus mainly on drop-shipped orders, they still handled a significant amount.

The volume of orders at these two warehouses further increased during the three months ended June 30, 2025 and the three months ended December 31, 2025, respectively, when several larger customers started utilizing the new warehouses for drop-shipped orders.

Our overall gross loss margin slightly improved

from 3.3% for the six months ended December 31, 2024 to 3.2% for the same period in 2025, primarily due to the Company’s increased

focus on overall warehouse efficiency.

We have been expanding our selection of temporary labor service providers with the goal of decreasing

costs without sacrificing warehouse output.

or 3.9%, during the nine months ended March 31, 2026, compared with the same period in 2025.

The increase was primarily driven by the

following three factors:

Between March 31, 2025 and March 31, 2026, the Company expanded its operations by the addition of a warehouse unit in Texas and an extension to the sublease of a location in California.

Additionally, warehouse operations significantly increased in the Ontario, California location between the two time periods, reallocating a greater amount of its expense from operating expenses to cost of services.

These factors lead to a $4.3 million increase in lease expenses for the nine months ended March 31, 2026 compared to the same period in 2025.

Temporary labor expenses increased by $4.2 million

due to warehouse operations significantly increasing at the Georgia, Illinois, and California locations between March 31, 2025 and March

31, 2026, as well as significant inventory reorganization taking place among the California warehouses during the nine months ended March

The Georgia and Illinois locations were added during or just before the nine months ended March 31, 2025 and mainly used temporary

labor services rather than employed warehouse workers, but operations had not reached capacity by the end of the period.

California location was added during the nine months ended March 31, 2025 and also mainly used temporary labor services rather than employed

warehouse workers.

The location was underutilized until December 2025, when several larger customers started using the warehouse as their

main California warehouse.

Freight costs decreased by $2.0 million due to a reduction in freight volume.

Customers favored arranging their own shipment options for outbound orders rather than use services provided by our vendors.

Our overall gross loss margin worsened from negative

2.0% for the nine months ended March 31, 2025 to negative 3.6% for the same period in 2026, primarily due to an increased in warehousing

labor costs for the three months ended March 31, 2026 following significant warehouse inventory reorganization among the California warehouses

during that time period.

Operating expenses

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and administrative expenses.

The following table sets forth a breakdown of our general and administrative expenses for the three and six months

ended December 31, 2025 and 2024:

The following table sets forth a breakdown of our general and administrative expenses for the three and nine

months ended March 31, 2026 and 2025:

Office expenses

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Other expenses

Credit loss expenses (recovery)

Three Months Ended December 31,

2025 and 2024

Our general and administrative expenses increased

by $0.7 million, from $2.7 million for the three months ended December 31, 2024 to $3.3 million for the same period

in 2025, representing an increase of 25.2%.

The increase was due to the following factors:

Office expenses increased by $0.3 million, or 92.5% as a result of

the growth in our dispatching services team.

Credit loss expenses

Three Months Ended March 31, 2026 and

Our general and administrative expenses decreased

by $1.1 million, from $4.5 million for the three months ended March 31, 2025 to $3.3 million for the same period in

2026, representing a decrease of 25.7%.

The decrease was due to the following factors:

Office expenses increased by $0.4 million, or 75.9% as a result of the growth in our dispatching services team.

The increase in personnel necessitated an increased expenditure in office supplies and necessities.

Rental expenses increased by $0.2 million, or 145.3%.

The increase is mainly due to new warehouse locations added between December 2024 and December 2025.

Rental expenses decreased by $1.0 million, or 75.3%.

The decrease is mainly due to increased warehouse operations at the Ontario, California location between March 31, 2025 and March 31, 2026 and the resulting reclassification of its general and administrative rental expenses to cost of services lease expenses.

Repairs and maintenance expenses increased by $0.4 million, or 174.9%, mainly due to additional warehouse locations and growth in our truck fleet.

Salary and benefits increased by $0.4 million, or 50.8%, due to personnel increases from the additional warehouse locations and transportation service growth.

Salary and benefits decreased by $0.2 million, or 18.1%, due to restructuring and consolidation of personnel following the termination of warehouse locations between March 2025 and March 2026.

Professional fees decreased by $0.5 million, or 55.3%.

The decrease is mainly due to fewer external consultants used in the three months ended December 31, 2025.

Six Months Ended December 31, 2025 and 2024

Our general and administrative expenses increased

by $1.2 million, from $6.3 million for the six months ended December 31, 2024 to $7.5 million for the same period

The decrease is mainly due to fewer external consultants used in the three months ended March 31, 2026.

Nine months Ended March 31, 2026 and 2025

Our general and administrative expenses slightly

increased by $0.1 million, from $10.8 million for the nine months ended March 31, 2025 to $10.9 million for the same period

in 2026, representing an increase of 0.7%.

The increase was due to the following factors:

Rental expenses increased by $0.7 million, or 311.4%.

The increase is mainly due to new warehouse locations added between December 2024 and December 2025.

Office expenses increased by $0.6 million, or 25.9% as a result of the growth in our dispatching services team.

The increase in personnel necessitated an increased expenditure in office supplies and necessities.

Rental expenses decreased by $0.3 million, or 18.4%.

Repairs and maintenance expenses increased by $1.3 million, or 198.8%, mainly due to additional warehouse locations and growth in our truck fleet.

Professional fees decreased by $1.1 million, or 48.8%.

The decrease is mainly due to fewer external consultants used in the six months ended December 31, 2025.

Our income tax recovery decreased by $0.1 million

for the three months ended December 31, 2025 compared to the same period in 2024, mainly due to the non-recurring reversal of recognized

deferred tax liabilities during the three months ended December 31, 2024.

The decrease is mainly due to fewer external consultants used in the nine months ended March 31, 2026.

Our income tax recovery decreased by $1.5 million

for the six months ended December 31, 2025 compared to the same period in 2024, mainly due to the non-recurring reversal of previously

recognized deferred tax liabilities during the six months ended December 31, 2024.

for the nine months ended March 31, 2026 compared to the same period in 2025, mainly due to the non-recurring reversal of previously recognized

deferred tax liabilities during the nine months ended March 31, 2025.

As a result of the foregoing, our net loss for

the three months ended December 31, 2025 was $3.9 million, compared with $1.7 million for the same period in 2024, representing

a decrease by $2.2 million.

Our net loss for the six months ended December 31,

2025 was $10.4 million, compared with $6.3 million for the same period in 2024, representing a decrease by $4.1 million.

the three months ended March 31, 2026 was $5.1 million, compared with $3.8 million for the same period in 2025, representing

an increase by $1.3 million.

Our net loss for the nine months ended March 31,

2026 was $15.4 million, compared with $10.1 million for the same period in 2025, representing an increase by $5.4 million.

Liquidity and Capital Resources

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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.

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 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

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.

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.

Such adjustments could be material.

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.

In assessing our liquidity, management monitors

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and capital contributions from stockholders.

As of December 31, 2025 and June 30, 2025, we had cash and cash equivalents and restricted

cash of $9.4 million and $13.6 million, respectively, which primarily consisted of cash deposited in banks.

As of March 31, 2026 and June 30, 2025, we had cash and cash equivalents and restricted cash

of $7.1 million and $13.6 million, respectively, which primarily consisted of cash deposited in banks.

Our working capital requirements mainly consist

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We may, however, need additional cash resources in the future if we experience changes in our business conditions or other developments.

Cash Flows for the six months Ended

December 31, 2025 and 2024

Cash Flows for the nine months Ended

March 31, 2026 and 2025

Net cash used in operating activities

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Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of six months period

Cash and cash equivalents and restricted cash at end of six months period

Cash and cash equivalents and restricted cash at beginning of nine months period

Cash and cash equivalents and restricted cash at end of nine months period

We had a balance of cash and cash equivalents

and restricted cash of $9.4 million as of December 31, 2025, compared with a balance of $13.6 million as of June 30, 2025.

the six months ended December 31, 2025, changes in our cashflow were mainly due to the following activities:

and restricted cash of $7.1 million as of March 31, 2026, compared with a balance of $13.6 million as of June 30, 2025.

the nine months ended March 31, 2026, changes in our cashflow were mainly due to the following activities:

Operating Activities

Net cash used in operating activities was $5.5

million for the six months ended December 31, 2025, compared to net cash used in operating activities of $9.2 million

for the same period in 2024, representing a $5.8 million increase in the net cash inflow from operating activities.

was primarily due to the following:

had net loss of $10.4 million for the six months ended December 31, 2025.

For the six months ended December 31, 2024,

we had net loss of $6.3 million, which led to a $4.1 million decrease in net cash inflow from operating activities.

in accounts receivable and other receivables were $2.7 million cash inflow for the six months ended December 31, 2025.

the six months ended December 31, 2024, changes in accounts receivable and other receivables were $6.0 million cash outflow,

which led to an $8.7 million increase in net cash inflow from operating activities.

(iii) Changes

in accounts payable and accrued liabilities used $0.3 million net cash outflow for the six months ended December 31, 2025.

months ended December 31, 2024, changes in accounts payable and accrued liabilities provided net cash outflow of $2.0 million, which

led to a $1.7 million increase in net cash inflow from operating activities.

in non-cash items provided $5.3 million net cash inflow for the six months ended December 31, 2025.

For the six months

ended December 31, 2024, changes in non-cash items provided net cash inflow of $4.4 million, which led to a $0.9 million increase

in net cash inflow from operating activities.

million for the nine months ended March 31, 2026, compared to net cash used in operating activities of $5.6 million for the

same period in 2025, representing a $0.1 million increase in the net cash inflow from operating activities.

The increase was primarily

due to the following:

We had net loss of $15.4 million for the nine months ended March 31, 2026.

For the nine months ended March 31, 2025, we had net loss of $10.1 million, which led to a $5.4 million decrease in net cash inflow from operating activities.

Changes in accounts receivable and other receivables were $3.8 million cash inflow for the nine months ended March 31, 2026.

For the nine months ended March 31, 2025, changes in accounts receivable and other receivables were $1.6 million cash outflow, which led to a $5.4 million increase in net cash inflow from operating activities.

Changes in accounts payable and accrued liabilities used $1.3 million net cash outflow for the nine months ended March 31, 2026.

For the nine months ended March 31, 2025, changes in accounts payable and accrued liabilities used net cash outflow of $0.6 million, which led to a $0.7 million decrease in net cash inflow from operating activities.

Changes in non-cash items provided $7.3 million net cash inflow for the nine months ended March 31, 2026.

For the nine months ended March 31, 2025, changes in non-cash items provided net cash inflow of $6.7 million, which led to a $0.6 million increase in net cash inflow from operating activities.

Investing Activities

Net cash provided by investing activities was

$1.6 million for the six months ended December 31, 2025, primarily attributable to $0.6 million cash used for the purchase

of property and equipment, $2.4 million cash used for loans extended to others, and $4.6 million proceeds received from loan repayments.

For the six months ended December 31, 2024,

$1.5 million for the nine months ended March 31, 2026, primarily attributable to $0.8 million cash used for the purchase of

property and equipment, $2.4 million cash used for loans extended to others, and $4.6 million proceeds received from loan repayments.

For the nine months ended March 31, 2025,

net cash used in investing activities was $1.5 million, primarily attributable to $2.6 million cash used for the purchase of

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Financing Activities

For the six months ended December 31, 2025,

For the nine months ended March 31, 2026,

we had net cash used in financing activities of $2.5 million, which was primarily attributable to the $0.5 million used to repay

finance lease liabilities and $2.0 million used to repay convertible notes.

For the six months ended December 31, 2024,

For the nine months ended March 31, 2025,

we had net cash inflow from financing activities of $6.6 million, which was primarily attributable to the net effects of:

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(ii) $7.2 million of net proceeds from the Pre-Paid Advance under the SEPA;

(iii) $0.2 million used to repay

commitment fee payable;

and (iv) $0.1 million used to repay finance lease liabilities.

Commitments and Contractual Obligations

As of December 31, 2025, we had operating and

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

Lease terms expire at various dates through June 2026 to November 2034

with options to renew for varying terms at our sole discretion.

We have 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.

As of December 31, 2025, maturities of lease liabilities

As of March 31, 2026, we had operating and finance

leases for office space, warehouse space, and forklifts.

Lease terms expire at various dates through June 2026 to November 2034 with options

to renew for varying terms at our sole discretion.

We have 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

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 than the above leases, we did not have significant

commitments, long-term obligations, or guarantees as of December 31, 2025.

commitments, long-term obligations, or guarantees as of March 31, 2026.

Off-balance Sheet Commitments and Arrangements

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for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

As of December 31, 2025,

As of March 31, 2026,

we still have an unused line of credit of $4,398,412 with Eastwest Bank.

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As a smaller reporting company, we are not required

to provide this information.

to provide the information required by this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis