What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-05-15 compared with 2025-02-14 · 537 added, 500 removed, 311 unchanged (77% of the section changed)

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platforms, social commerce platforms and manufacturers to sell and transport consumer and industrial goods made in Asia into the U.S.

inception and as of December 31, 2024, we had served over 300 customers to fulfill over 48,000 cross-border supply chain solution orders.

inception and as of March 31, 2025, we had served over 400 customers to fulfill over 51,500 cross-border supply chain solution orders.

We have established an extensive

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Since inception and as

of December 31, 2024, we had collaborated with almost all major global ocean and air carriers to forward 33,800 TEU of container loads

and 59,600 tons of air cargo.

As of December 31, 2024, we had also cooperated with over 200 domestic ground transportation carriers, including

of March 31, 2025, we had collaborated with almost all major global ocean and air carriers to forward 34,900 TEU of container loads and

63,300 tons of air cargo.

As of March 31, 2025, we had also cooperated with over 200 domestic ground transportation carriers, including

almost all major U.S.

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in states other than Illinois and Texas.

As of December 31, 2024, we had assisted with the customs clearance, in conjunction with our

other service offerings, of cross-border freight of an aggregate assessed value of over $46.5 million.

As of March 31, 2025, we had assisted with the customs clearance, in conjunction with our other

service offerings, of cross-border freight of an aggregate assessed value of over $50.0 million.

Leveraging our strong cross-border

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been able to build up our brand and reputation and have achieved fast growth since our inception.

As of December 31, 2024, we had fulfilled

As of March 31, 2025, we had fulfilled

over 51,500 cross-border supply chain solution orders for freight of an aggregate assessed value of $1.0 billion, delivered to thousands

of business and residential addresses in approximately 48 U.S.

During the three and six months

ended December 31, 2024, we had a new business segment through acquired 100% equity interest of Hupan Pharmaceutical, a comprehensive

pharmaceutical distribution and supply chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare

technology support.

We have partnered with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical

products sold and distributed during this quarter.

For the six months ended December

31, 2024 and 2023, our total revenues amounted to $7.7 million and $9.1 million, respectively, and our gross profit amounted to $0.5 million

and $1.7 million during the same periods, respectively.

For the three months ended December 31, 2024 and 2023, our revenues amounted to

$3.6 million and $4.9 million, respectively, and our gross profit amounted to negative $0.04 million and $1.1 million during the same

periods, respectively.

During the nine months ended

March 31, 2025, we had a new business segment through acquired 100% equity interest of Hupan Pharmaceutical, a comprehensive pharmaceutical

distribution and supply chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare technology

We have partnered with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical products

sold and distributed during this quarter.

For the nine months ended

March 31, 2025 and 2024, our total revenues amounted to $11.5 million and $13.5 million, respectively, and our gross profit amounted to

$1.2 million and $2.7 million during the same periods, respectively.

For the three months ended March 31, 2025 and 2024, our revenues

amounted to $3.8 million and $4.5 million, respectively, and our gross profit amounted to negative $0.7 million and $1.0 million during

the same periods, respectively.

Key Factors Affecting Our Results of Operations

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are dependent upon our ability to expand and maintain our customer base.

Since inception and as of December 31, 2024, we had served over

Since inception and as of March 31, 2025, we had served over

400 customers to fulfill over 51,500 cross-border supply chain solution orders.

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authorities, or that we determine are in the best interests of our employees, customers, service providers and stockholders.

Uncertainty and Impacts on the Recent U.S.

Tarriff Policies and Regulations

Our results of operations also depend on our ability to respond with

the recent tariff and other restrictions placed on imports.

government recently increased U.S.

special tariffs and proposed amendments

to the de minimis rule significantly impacts companies operating in the cross-border freight forwarding industry.

The heightened tariffs—particularly

those targeting Chinese-origin goods and extending globally—raise the cost of imported goods, prompting clients to reduce shipment

volumes, shift sourcing strategies, or consolidate cargo to offset rising expenses.

On March 4, 2025, the U.S.

imposed 25% tariffs on

imports from Mexico and Canada and enacted an extra 10% tariff on Chinese imports, therefore doubling the previously levied tariff from

February to an additional 20% on existing tariffs.

On March 6, 2025, President Trump announced that the U.S.

will pause the 25% tariffs

imports from Mexico and Canada that are covered under a 2020 United States-Mexico-Canada Agreement, or USMCA, trade agreement

until April 2, 2025.

Goods that are not covered by the agreement remain subject to tariffs.

On April 2, 2025, President Trump announced

new tariffs on many U.S.

trading partners, including a 34% tax on imports from China, a 20% tax on products from the E.U., and a baseline

10% tax on imports from many countries.

These tariffs were in addition to the previous announcements of 25% taxes on auto imports, tariffs

implemented against China, Canada and Mexico, and trade penalties on steel and aluminum.

However, the 20% charge on imports from China

was in addition to the 34% import tax announced.

On April 9, 2025, President Trump has increased the tariffs on Chinese imports to a total

tariff rate of 145%.

This included a 20% "fentanyl tariff" and a 125% "reciprocal tariff" aimed at addressing trade

imbalances and other concerns.

On April 10, 2025, China raised tariff on all U.S.

goods to 84% and further increased to 125% on April

Meanwhile, amendments to the de minimis rule, which previously allowed low-value shipments (under $800) to enter the U.S.

now impose tighter restrictions, including exclusion of certain countries like China and increased scrutiny or disqualification of bulk

These changes increase customs complexity, slow clearance times, and reduce the volume of low-value parcels traditionally handled

by freight forwarders.

In May 2025, the US and China have agreed a truce to lower import taxes on goods being traded between the two countries for 90 days.

the terms of the agreement, both countries committed to pausing the imposition of new tariffs and partially rolling back existing duties

on select goods, primarily in the technology, agricultural, and consumer product sectors.

Although the agreement marks a major de-escalation

of the trade war between the two countries, there is still a high degree of uncertainty surrounding U.S.

tariff policy, how

it will be implemented, and how other countries will react to it.

It also remains uncertain whether increased tariffs and trade tensions

will create further disruptions and uncertainties to the international trade and lead to a downturn to the global economy.

Moreover, increasing trade

protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly from the Asia-Pacific region,

(ii) the length of time required to transport goods and (iii) the risks associated with exporting goods.

Such increases may further reduce

the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact

on our customers’ business, operating results and financial condition and could thereby affect their ability to make timely payments

to us and their orders quantity.

This could have a material adverse effect on our business, operating results, cash flows and financial

We will continue to actively

monitor the situation and actively consider strategic adaptation to maintain service levels and profitability.

Key Components of Results of Operations

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From December 2024, we started to generate revenues from the distribution

of pharmaceutical and medial products.

We order from the manufacturer, receive and carry the products at a designated warehouse, and deliver

the products to the customers’ warehouses or designated locations.

of pharmaceutical and medical products.

We order from the manufacturer, receive and carry the products at a designated warehouse, and

deliver the products to the customers’ warehouses or designated locations.

Cost of Revenues .

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operating and financing lease-related costs, depreciation expenses of property and equipment and other miscellaneous expenses.

Our cost of revenues from

the distribution of pharmaceutical and medical products also comprises cost of pharmaceutical products from manufacturers, freight arrangement

charges and other overhead costs.

Our cost of revenues from the distribution of pharmaceutical and medical

products comprises cost of pharmaceutical products from manufacturers, freight arrangement charges and other overhead costs.

Selling Expenses.

selling expenses primarily include salaries expense of sales team engaged in developing potential customers and maintaining customer relationships.

selling expenses primarily include salaries expense and traveling expense of sales team engaged in developing potential customers and

maintaining customer relationships and transportation cost for selling pharmaceutical products.

General and Administrative

Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance

expenses, depreciation on property and equipment, lease expenses, travelling and entertainment expenses, bank charges, legal and professional

fees, insurance expenses and other office expenses.

Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance expenses,

depreciation on property and equipment, lease expenses, travelling and entertainment expenses, bank charges, legal and professional fees,

insurance expenses and other office expenses.

Other Income .

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Interest Expenses.

interest expenses primarily consist of the interest expenses incurred for finance leases, equipment loans, vehicle loans and other loans

and interest for late credit card payment.

interest expenses primarily consist of the interest expenses incurred for finance leases, convertible notes, equipment loans, vehicle

loans and other loans and interest for late credit card payment.

Income Tax Expenses .

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The following table summarizes

the results of condensed consolidated statements of operations and comprehensive income (unaudited) for the three and six months ended

December 31, 2024 and 2023 in U.S.

Six Months Ended

the results of condensed consolidated statements of operations and comprehensive income (unaudited) for the three and nine months ended

March 31, 2025 and 2024 in U.S.

Nine Months Ended

Three Months Ended

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Cost of revenue from cross-border freight solutions – related party

Cost of revenue from pharmaceutical products - related parties

Cost of revenue from pharmaceutical products – third parties

Total cost of revenue

Gross profit (loss)

Operating expenses:

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Loss from deconsolidation of a subsidiary

Provision (reversal) of allowance for expected

Provision (reversal) of allowance for expected credit loss

Total operating expenses

Income (loss) from operations

(Loss) income from operations

Other income, net

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(Loss) income before income taxes

Income tax expense (credit)

Income tax expense

Net (loss) income

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Other comprehensive (loss) income:

Foreign currency translation income

Foreign currency translation (loss) income

Comprehensive (loss) income

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$ (1,067,213 )

( Loss) earnings per share – basic and diluted

Loss per share – basic and diluted

Weighted Average Shares Outstanding – basic and diluted

For the Three Months Ended December 31,

2024 Compared to the Three Months Ended December 31, 2023

Three Months Ended March 31, 2025 Compared

to the Three Months Ended March 31, 2024

The following table summarizes

our consolidated results of operations and percentages of certain items in relation to total revenues for the three months ended December 31,

our consolidated results of operations and percentages of certain items in relation to total revenues for the three months ended March

31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

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results in any historical period are not necessarily indicative of the results that may be expected for any future period.

For the three months ended December 31,

For the three months ended

Revenue from cross-border freight solutions

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Gross profit – pharmaceutical products

Total gross (loss) profit

$ (1,106,740 )

Our total revenues from cross-border freight solutions decreased by

$1.5 million, or 31.3%, from $4.9 million for the three months ended December 31, 2023, to $3.4 million for the three months ended

December 31, 2024.

The decrease was primarily driven by a significant decline in volume we handled from our cross-border airfreight

Total gross profit

Our total revenues from cross-border

freight solutions decreased by $1.2 million, or 25.9%, from $4.5 million for the three months ended March 31, 2024, to $3.3 million for

the three months ended March 31, 2025.

The decrease was primarily driven by a significant decline in volume we handled from our cross-border

airfreight solutions.

Revenues from our cross-border

airfreight solutions decreased by $1.1 million or 35.5%, from $3.1 million in the three months ended December 31, 2023, to $2.0 million

in the three months ended December 31, 2024.

The decrease was primarily due to a decrease in the volume of cross-border air

freight processed, from approximately 8,217 tons for the three months ended December 31, 2023, to approximately 4,459 tons for the

three months ended December 31, 2024.

Some of our customers reduced their orders and uncertainty in political regulations regarding

tariffs, leading to a significant decline in our revenue.

Revenues from our cross-border ocean freight solutions decreased by

$0.4 million, or 24.2%, from $1.8 million in the three months ended December 31, 2023, to $1.4 million in the three months ended

December 31, 2024.

This reduction was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded,

dropping from 1,330 TEU in the three months ended December 31, 2023, to 1,046 TEU in the three months ended December 31, 2024.

Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn, reduced the demand for

imported goods, leading to lower container volumes.

Starting from December 2024,

we established a new revenue stream through the distribution of pharmaceutical products.

We procured pharmaceuticals—primarily pharmaceutical

solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics.

For the three months ended December

31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment

in the same period of the prior year.

We anticipate a lower revenue

in the next quarter in the competitive and uncertain economic environment.

Despite of decreasing air freight volume and the upcoming new

rules to curtail small package and low value shipment from China to the U.S., we are committed to exploring new customers opportunities

while maintaining strong relationship with existing customers.

We believe that the ongoing trend toward online shopping highlights the

need for timely and competitively priced deliveries to end consumers.

ocean freight solutions decreased by $0.8 million, or 39.6%, from $2.1 million for the three months ended March 31, 2024, to $1.3 million

for the three months ended March 31, 2025.

This reduction was primarily due to a decrease in the volume of cross-border ocean freights

processed and forwarded, dropping from 1,355 TEU in the three months ended March 31, 2024, to 1,118 TEU for the three months ended March

Additionally, a slowdown in consumer spending and business investments, impacted by the overall economic downturn, reduced the

demand for imported goods, leading to lower container volumes.

Furthermore, due to a reduction in market volume and increased competition,

the service price charged to customers also decreased.

Revenues from our cross-border airfreight solutions decreased by $0.3

million or 13.5%, from $2.3 million for the three months ended March 31, 2024, to $2.0 million for the three months ended March 31, 2025.

The decrease was primarily due to a decrease in the volume of cross-border air freight processed, from approximately 4,040 tons for

the three months ended March 31, 2024, to approximately 3,775 tons for the three months ended March 31, 2025.

Some of our customers reduced

their orders due to the uncertainty in trade policies and higher tariffs since March 4, 2025, leading to a decline in our revenue.

Starting from December 2024, we established a new revenue stream through

the distribution of pharmaceutical products.

We procured pharmaceuticals—primarily pharmaceutical solutions—directly from

manufacturers and supplied them to distributors, hospitals, and clinics.

For the three months ended March 31, 2025, our total revenue

from pharmaceutical product distribution amounted to $0.5 million.

We did not generate any revenue from this segment in the same period

of the prior year.

We anticipate further

revenue declines in the next quarter due the competitive and uncertain economic environment.

In addition to decreasing air freight

volumes and new regulations that became effective in May 2025 and aimed at curtailing small-package and low-value shipments from

China to the U.S., newly imposed tariffs on Chinese imports introduced in April 2025 are expected to further disrupt

cross-border trade.

These measures may significantly reduce the volume of goods imported into the U.S.

and moving through e-commerce

channels due to increased import costs.

Despite these headwinds, we remain committed to exploring new customer opportunities while

maintaining strong relationships with our existing clients.

Revenues by Customer Geographic

For the three months ended December 31,

For the three months ended

Revenue from cross-border freight solutions

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Total revenues

$ (1,320,514 )

Revenues from cross-border

freight solutions for the Asia-based customers increased by $0.1 million, or 5.7%, from $2.6 million in the three months ended December 31,

2023, to $2.8 million in the three months ended December 31, 2024.

Revenues from cross-border freight solutions for the U.S.-based customers

decreased by $1.7 million, or 72.9%, from $2.3 million in the three months ended December 31, 2023 to $0.6 million in the same period

The increase in revenues from

Asia-based customers in the three months ended December 31, 2024, was driven by a surge in volume from a new Aisa-based customer

since June 2024, which was partly offset by decrease in shipments volume from Asia-based customers serving large e-commerce platforms

due to the discussion on the amendment of de minimis rule.

The decrease in revenue from the U.S.-based customers in the three

months ended December 31, 2024, compared to the same period in 2023, was primarily due to our strategic shift toward Asia-based e-commerce

customers, in addition to the overall decline in revenue discussed earlier.

Additionally, one-off special projects with larger shipment

volumes from U.S.

customers were completed in the three months ended December 31, 2023, with no comparable projects in the same period

Our customers for the distribution

of pharmaceutical products are based in China, as we specifically target the Chinese market.

For the three months ended

December 31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this

segment in the same period of the prior year.

Revenues from cross-border freight solutions for the Asia-based customers

decreased by $1.0 million, or 25.4%, from $3.8 million for the three months ended March 31, 2024, to $2.8 million for the three months

ended March 31, 2025.

Revenues from cross-border freight solutions for the U.S.-based customers decreased by $0.1 million, or 28.8%,

from $0.6 million for the three months ended March 31, 2024 to $0.5 million for the same period in 2025.

The decrease in revenues from

Asia-based customers for the three months ended March 31, 2025, was contributed by a decrease in shipments volume from Asia-based customers

serving large e-commerce platforms due to the discussion on the amendments to the de minimis rule and the imposition of higher tariffs

on Chinese goods.

The decrease in revenue from

the U.S.-based customers for the three months ended March 31, 2025, compared to the same period in 2024, was primarily driven by concerns

over a potential economic downturn and reduced consumer spending power in the U.S., which led to a decrease in shipment volumes.

Our customers for the distribution of pharmaceutical products are based

in China, as we specifically target the Chinese market.

For the three months ended March 31, 2025, our total revenue

from pharmaceutical product distribution amounted to $0.5 million.

We did not generate any revenue from this segment in the same period

of the prior year.

Cost of Revenues

A breakdown of our cost of

revenues for the three months ended December 31, 2024 and 2023 is as follows:

For the three months ended December 31,

revenues for the three months ended March 31, 2025 and 2024 is as follows:

For the three months ended

Cost of revenue from cross-border freight solutions

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Total cost of revenue

Our cost of revenues from

cross-border freight solutions decreased by $0.3 million, or 8.7%, from $3.9 million in the three months ended December 31, 2023,

to $3.5 million in the three months ended December 31, 2024.

The increase in cost of revenues was mainly due to the combined effects

a decrease in transportation and delivery costs, including trucking, drayage, chassis rental, freight and delivery cost during the three months ended December 31, 2024, which was primarily due to a reduction in delivery service provided to customers.

However, our reduction in transportation and delivery costs are significantly lower than the decline in revenue, due to high inflation in gasoline and labor cost over past year.

Additionally, the forwarding service for airfreights have strict timing requirements, preventing us from fully utilizing the capacity of each delivery, often resulting in trucks operating at half capacity;

a decrease in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the three months ended December 31, 2024, resulting from a drop in volume of cross-border freight we handled, particularly airfreight, during the same period;

Our cost of revenues from cross-border freight solutions decreased

by $0.5 million, or 14.8%, from $3.5 million for the three months ended March 31, 2024, to $3.0 million for the three months ended March

The decrease in cost of revenues was mainly due to the combined effects of:

a decrease in transportation and delivery costs, including trucking, drayage, chassis rental, freight and delivery cost during the three months ended March 31, 2025, which was primarily due to a reduction in delivery service provided to customers.

Our transportation and delivery costs decreased more significantly than our revenue decline, due to high inflation in gasoline and labor cost over past year.

Additionally, the forwarding service for airfreights has strict timing requirements, which often prevents us from fully utilizing truck capacity of each delivery, often resulting in vehicles operating at partial loads;

a decrease in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the three months ended March 31, 2025, resulting from a drop in volume of cross-border freight we handled, particularly airfreight, during the same period;

a decrease in our warehouse service charges, mainly

representing labor costs at our regional warehousing and distribution centers during the three months ended December 31, 2024.

was due to a reduction in staffing costs related to unpacking shipments into smaller packages.

We gradually reduced the warehouse labor

however, adjusting to new labor schedules takes time;

no material change in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight during the three months ended December 31, 2024, primarily due to increased business for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising

warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the three months

ended December 31, 2024.

The warehouse and equipment lease expenses increased significantly, from $ 255,654 in the three months

ended December 31, 2023, to $499,021 in the three months ended December 31, 2024.

The increase was primarily because we had

two more warehouse lease agreements during the three months ended December 31, 2024, compared to the same period last year.

agreements were negotiated before the significant decline in our revenue.

To mitigate costs and improve our gross profit margin, we plan

to sublease one of the warehouse at Chicago in the next fiscal quarter.

Gross Profit (loss)

Our overall gross loss was

$42,231 in the three months ended December 31, 2024, compared to gross profit of $1,064,509 in same period last year.

The gross loss occurred primarily

due to two key factors.

First, there was a significant decrease in revenue due to stricter enforcement on the de minimis shipments regulations

for the six months ended December 31, 2024.

Second, despite this decline in revenue, the company’s fixed overhead costs remained high.

These costs, such as rent and warehouse labour are not easily adjusted in the short term.

As a result, the fixed overhead costs could

not be covered by the ordinary gross margin, leading to a gross loss for the period.

Additionally, while other cost of revenue decreased

in line with lower revenue, the reduction in costs lagged behind due to time constraints.

Our gross margin of cross-border freight

business remains a lower but positive number by not taking fixed overhead cost into consideration.

Our gross margin of distribution

of pharmaceutical was 44.2% for the three months ended December 31, 2024.

It is a new business segment during current quarter and

thus no gross margin was noted compared to same period in prior year.

representing labor costs at our regional warehousing and distribution centers during the three months ended March 31, 2025.

to a reduction in staffing costs related to unpacking shipments into smaller packages;

a decrease in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight during the three months ended March 31, 2025, primarily due to decreased business volumes for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising warehouse and equipment

lease expenses, utilities, depreciation of property and equipment, and other direct costs during the three months ended March 31, 2025.

The warehouse and equipment lease expenses increased significantly, from $258,219 for the three months ended March 31, 2024, to $555,278

for the three months ended March 31, 2025.

The increase was primarily because we had two more warehouse lease agreements during the three

months ended March 31, 2025, compared to the same period last year.

These agreements were negotiated before the significant decline in

To mitigate costs and improve our gross profit margin, we plan to sublease one of the warehouse at Chicago in the next fiscal

Our overall gross profit was

$0.8 for the three months ended March 31, 2025, compared to gross profit of $1.0 in same period last year.

Our gross margin of cross-border freight solution was 10.2% for the

three months ended March 31, 2025, compared to 21.9% for the three months ended March 31, 2024.

The decline in gross margin was primarily

attributable to (i) disproportionate decrease in our revenue from the airfreight and ocean freight solution compared to the decrease in

our cost of revenue, such as transportation and delivery cost, warehouse services, custom declaration and terminal charges, and (ii) increased

overhead costs allocated, as discussed above.

Our gross margin of distribution of pharmaceutical was 76.0% for the

three months ended March 31, 2025.

This comparatively high margin was primarily due to favorable purchase discounts offered by our suppliers,

who extended these incentives to support the establishment of a long-term partnership as we entered this market as a new customer.

the favorable purchase discounts of $171,274, the gross margin for pharmaceutical distribution would be approximately 42% for the current

It is a new business segment for the current quarter and thus no gross margin was noted compared to the same period of the prior

Selling Expenses

Our selling expenses amounted

to $54,488 for the three months ended December 31, 2024, compared to nil for the same period in 2023.

The increase was primarily driven

by salaries for our sales team, which were incurred as part of the new pharmaceutical product business launched during the current quarter.

Our selling expenses amounted to $0.1 million for the three months

ended March 31, 2025, compared to nil for the same period in 2024.

The increase was primarily driven by salaries for our sales team, which

were incurred as part of the new pharmaceutical distribution service launched during the last quarter.

General and Administrative Expenses

Our general and administrative

expenses increased by $0.9 million, or 94.1%, from $1.0 million in the three months ended December 31, 2023, to $1.9 million in the

three months ended December 31, 2024.

These expenses represented 53.2% and 20.0% of our total revenues for the three months ended

December 31, 2024 and 2023, respectively.

The increase was primarily attributed to higher salary and employee benefit expenses and

professional fee operating as a listed company.

Our salaries and employee benefits expenses increased by $0.4 million,

or 64.1%, from $0.6 million in the three months ended December 31, 2023, to $1.1 million in the three months ended December 31,

Our salaries and employee benefits expenses represented 55.8% and 66.0% of our total general and administrative expenses for the

three months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to the recruitment of additional sales,

customer services, and back-office support personnel to support our business growth in first half of 2024, along with the salary expenses

associated with the two new subsidiaries in China.

For our salaries and employee benefits expenses, (i) our payroll expenses increased

by $0.4 million, or 70.7%, from $0.6 million in the three months ended December 31, 2023, to $1.0 million in the three months ended December

31, 2024, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution plan

in China, meal allowance and health insurance expenses, increased by $21,914, or 23.9%, from $91,674 in the three months ended December

31, 2023, to $113,588 in the three months ended December 31, 2024, representing 5.9% and 9.3% of our total general and administrative

expenses for the three months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to rising employee health insurance

expenses increased by $0.7 million, or 74.6%, from $1.0 million for the three months ended March 31, 2024, to $1.7 million for the three

months ended March 31, 2025.

These expenses represented 44.2% and 21.6% of our total revenues for the three months ended March 31, 2025

and 2024, respectively.

The increase was primarily attributed to higher salary and employee benefit expenses and professional fees operating

as a listed company.

Additionally, the launch of our new pharmaceutical distribution segment in the second quarter of the fiscal year

contributed to the rise in operating costs.

Our salaries and employee

benefits expenses increased by $0.2 million, or 22.7%, from $0.7 million for the three months ended March 31, 2024, to $0.9 million for

the three months ended March 31, 2025.

Our salaries and employee benefits expenses represented 54.5% and 77.6% of our total general and

administrative expenses for the three months ended March 31, 2025 and 2024, respectively.

The increase was mainly due to the salary expenses

associated with the two new subsidiaries to support our operation in new business segment starting from second quarter of the fiscal year

For our salaries and employee benefits expenses, (i) our payroll expenses increased by $0.2 million, or 23.5% from $0.6 million

for the three months ended March 31, 2024, to $0.8 million for the three months ended March 31, 2025, and (ii) our employee benefit expenses,

which mainly consist of 401(k) company contribution, employee defined contribution plan in China, meal allowance and health insurance

expenses, increased by $23,150, or 18.9%, from $122,312 for the three months ended March 31, 2024, to $145,462 for the three months ended

March 31, 2025, representing 8.7% and 12.7% of our total general and administrative expenses for the three months ended March 31, 2025

and 2024, respectively.

The increase was mainly due to rising employee health insurance premiums.

Our professional fee increased by $0.2 million, or 884.3%, from $24,063

in the three months ended December 31, 2023, to $216,012 in the three months ended December 31, 2024.

for the three months ended March 31, 2024, to $235,858 for the three months ended March 31, 2025.

Our professional fee represented 14.1%

11.3% and 1.5% of our total general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively.

The increase was primarily due to audit fee, legal fee, consulting expense, investor-related expenses and financial reporting service

fees for the three months ended December 31, 2024.

In the three months ended December 31, 2023, most of the expenses directly

related to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.

Our traveling and entertainment expense increased by $0.2 million,

or 224.8%, from $87,900 in the three months ended December 31, 2023, to $285,541 in the three months ended December 31, 2024.

Our traveling and entertainment expense represented 14.9% and 8.9% of our total general and administrative expenses for three months ended

December 31, 2024 and 2023, respectively.

The increase was mainly due to higher entertainment and gift expenses related to networking

with our business partners as we started a new business through the new subsidiary acquired.

and 2.5% of our total general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively.

was primarily due to audit fees, legal fees, consulting expenses, investor-related expenses and financial reporting service fees for the

three months ended March 31, 2025.

For the three months ended March 31, 2024, most expenses directly related to offering that were not

included in professional fees, as they were accounted for as deferred initial public offering assets.

Other Income, net

Our other income, net, increased by $50,253, or 121.1%, from $41,500

in the three months ended December 31, 2023, to $91,753 in the three months ended December 31, 2024.

The increase was primarily

becuase we did not rent out part of our warehouse space to our related party, Weship, during the three months ended December 31,

Our other income, net, decreased

by $6,817, or 6.7%, from $102,438 for the three months ended March 31, 2024, to $109,255 for the three months ended March 31, 2025, remained

relatively stable compared to same period in last year.

Interest Expenses

Our interest expenses for

the three months ended December 31, 2024, remained relatively stable compared to same period in last year.

Our interest expenses decreased by $61,738, or 241.8%, from $25,536

for the three months ended March 31, 2024, to $87,274 for the three months ended March 31, 2025.

Increase in interest expense was mainly

due to late credit card payments and interest expense in connection with convertible note for the three months ended March 31, 2025.

Income (Loss) Before Income Taxes

We had loss before income

taxes of $1.9 million for the three months ended December 31, 2024, compared to income before income taxes of $92,408 for the three

months ended December 31, 2023.

We were in a loss position before income taxes for the three months ended December 31, 2024,

primarily attributable to the net effects of:

(i) the decrease in gross profit, (ii) the rise in operating expenses;

and (iii) the

increase in other income for the three months ended December 31, 2024 as mentioned above.

We had a net loss before income taxes of $1.1 million for the three

months ended March 31, 2025, compared to a net income before income taxes of $0.1 million for the three months ended March 31, 2024.

were in a loss position before income taxes for the three months ended March 31, 2025, primarily attributable to the net effects of:

decrease in gross profit, (ii) the rise in operating expenses, and (iii) the increase in interest expense for the three months

ended March 31, 2025 as mentioned above.

Income Tax Expense

We had income tax expense

of $nil and $28,184 in the three months ended December 31, 2024 and 2023, respectively.

We did not have current income tax provision

in the three months ended December 31, 2024, due to net operating loss, and we recognized a net deferred income tax asset of $585,197

due to temporary differences recognized and net operating loss carried forward.

We also recognized a valuation allowance of $585,197 to

write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable

income, resulting in a net income tax expense of $nil in the three months ended December 31, 2024.

We did not have current income

tax provision in the three months ended December 31, 2023, due to net loss, however, we recognized a deferred income tax asset of

$71,909, due to temporary differences recognized and a deferred income tax expense of $28,184 due to temporary differences recognized.

We had income tax expenses

of $18,594 and $104,610 for the three months ended March 31, 2025 and 2024, respectively.

A current income tax provision of $26,608 was

recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating

loss for the three months ended March 31, 2025.

We recognized a recovery of deferred income tax of $8,014 due to amortization of intangible

assets, resulting in a net income tax expense of $18,594 for the three months ended March 31, 2025.

We recognized a current income tax provision of 94,471 for the three

months ended March 31, 2024 due to income before income tax of $117,378 for the three months ended March 31, 2024 and we recognized a

deferred income tax expense of $10,139 due to temporary differences recognized.

Net Income (Loss)

As a result of the foregoing,

we had a net loss of $1.9 million and a net income of $64,224 for the three months ended December 31, 2024 and 2023, respectively.

For the Six Months Ended December 31,

2024 Compared to the Six Months Ended December 31, 2023

we had a net loss of $1.1 million and a net income of $12,768 for the three months ended March 31, 2025 and 2024, respectively.

For the Nine Months Ended March 31, 2025

Compared to the Nine Months Ended March 31, 2024

The following table summarizes

our consolidated results of operations and percentages of certain items in relation to total revenues for the six months ended December 31,

our consolidated results of operations and percentages of certain items in relation to total revenues for the nine months ended March

31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods.

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results in any historical period are not necessarily indicative of the results that may be expected for any future period.

For the six months ended December 31,

For the nine months ended

Revenue from cross-border freight solutions

Cross-border ocean freight solutions

$ (1,142,466 )

Cross-border airfreight solutions

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Cost of revenues – cross-border solution

Cost of revenues –pharmaceutical products

Cost of revenues –

pharmaceutical products

Total cost of revenues

Gross profit – cross-border freight solution

Gross profit –pharmaceutical products

Gross profit –

pharmaceutical products

$ (1,491,456 )

Our total revenues from cross-border

freight solution decreased by $1.6 million, or 17.7%, from $9.1 million for the six months ended December 31, 2023, to $7.5

million for the six months ended December 31, 2024.

The decrease was primarily driven by a significant decline in volume we handled

from our cross-border airfreight solutions.

Revenues from our cross-border

airfreight solutions decreased by $1.3 million or 23.4%, from $5.5 million in the six months ended December 31, 2023, to $4.2 million

in the six months ended December 31, 2024.

The decrease was primarily due to a decrease in the volume of cross-border air freight

processed, from approximately 16,034 tons for the six months ended December 31, 2023, to approximately 11,732 tons for the six months

ended December 31, 2024.

Some of our customers reduced their orders and uncertainty in political regulations regarding tariffs, leading

to a significant decline in our revenue.

Our total revenues from cross-border freight solution decreased by

$2.8 million, or 20.4%, from $13.5 million for the nine months ended March 31, 2024, to $10.7 million for the nine months ended March

The decrease was primarily driven by a decline in volume we handled from our cross-border airfreight solutions.

Revenues from our cross-border ocean freight solutions decreased by

$1.1 million, or 20.3%, from $5.6 million for the nine months ended March 31, 2024, to $4.5 million for the nine months ended March 31,

It was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded, dropping from 3,895 TEU

for the nine months ended March 31, 2024, to 3,594 TEU for the nine months ended March 31, 2025.

Additionally, a slowdown in consumer

spending and business investments, impacted by overall economic downturn, reduced the demand for imported goods, leading to lower container

Furthermore, due to a reduction in market volume and increased competition, the service price charged to customers also decreased.

Revenues from our cross-border

ocean freight solutions decreased by $0.3 million, or 8.7%, from $3.5 million in the six months ended December 31, 2023, to $3.2

million in the six months ended December 31, 2024.

This growth was primarily due to a decrease in the volume of cross-border ocean

freights processed and forwarded, dropping from 2,620 TEU in the six months ended December 31, 2023, to 2,476 TEU in the six months

ended December 31, 2024.

Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn,

reduced the demand for imported goods, leading to lower container volumes.

airfreight solutions decreased by $1.7 million or 20.5%, from $7.9 million for the nine months ended March 31, 2024, to $6.3 million for

the nine months ended March 31, 2025.

The decrease was primarily due to a decrease in the volume of cross-border air freight processed,

from approximately 20,074 tons for the nine months ended March 31, 2024, to approximately 15,507 tons for the nine months ended March

Some of our customers reduced their orders due to the uncertainty in political regulations and higher tariffs since March 2025,

leading to a significant decline in our revenue.

Starting from December 2025, we established a new revenue stream through

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manufacturers and supplied them to distributors, hospitals, and clinics.

For the six months ended December 31, 2024, our total revenue

from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the

For the nine months ended March 31, 2025, our total revenue from

pharmaceutical product distribution amounted to $0.7 million, compared to no revenue from this segment for the same period of the prior

Revenues by Customer Geographic

For the six months ended December 31,

For the nine months ended

Revenue from cross-border freight solutions

6 unchanged sentences

Revenues from cross-border

freight solutions for the Asia-based customers increased by $1.3 million, or 29.4%, from $4.3 million in the six months ended December 31,

2023, to $5.6 million in the six months ended December 31, 2024.

freight solutions for the Asia-based customers increased by $0.3 million, or 3.6%, from $8.1 million for the nine months ended March 31,

2024, to $8.4 million for the nine months ended March 31, 2025.

Revenues from cross-border freight solutions for the U.S.-based customers

decreased by $2.9 million, or 60.2%, from $4.8 million in the six months ended December 31, 2023 to $1.9 million in the same period

The increase in revenues from

Asia-based customers in the six months ended December 31, 2024, was driven by a surge in volume from a new Aisa-based customer since

June 2024, which was partly offset by decrease in shipments volume from Asia-based customers serving large e-commerce platforms due to

the discussion on the amendment of de minimis rule.

decreased by $3.0 million, or 56.5%, from 5.4 million for the nine months ended March 31, 2024 to $2.4 million for the same period in

The slightly increase in revenues from Asia-based customers for the

nine months ended March 31, 2025, was driven by increases volume from Aisa-based customer, which was partly offset by recent decrease

in shipments volume from Asia-based customers serving large e-commerce platforms due to the discussion on the amendment of de minimis

rule and imposition of tariff on Chinese goods,

The decrease in revenue from

the U.S.-based customers in the six months ended December 31, 2024, compared to the same period in 2023, was primarily due to our

strategic shift toward Asia-based e-commerce customers, in addition to the overall decline in revenue discussed earlier.

Additionally,

one-off special projects with larger shipment volumes from U.S.

customers were completed in the six months ended December 31, 2023,

with no comparable projects in the same period in 2024.

Our customers for the distribution of pharmaceutical products are based

in China, as we specifically target the Chinese market.

For the six months ended December 31, 2024, our total revenue

from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the

the U.S.-based customers for the nine months ended March 31, 2025, compared to the same period in 2024, was primarily due to decreased

in shipments volume.

Additionally, one-off special projects with larger shipment volumes from U.S.

customers were completed for the nine

months ended March 31, 2024, with no comparable projects for the same period in 2025.

Our customers for the distribution

of pharmaceutical products are based in China, as we specifically target the Chinese market.

For the nine months ended

March 31, 2025, our total revenue from pharmaceutical product distribution amounted to $0.7 million, compared to no revenue from this

segment in the same period of the prior year.

Cost of Revenues

A breakdown of our cost of

revenues for the six months ended December 31, 2024 and 2023 is as follows:

For the six months ended December 31,

revenues for the nine months ended March 31, 2025 and 2024 is as follows:

For the nine months ended

Cost of revenue from cross-border freight solutions

Transportation and delivery costs

$ (1,034,754 )

Warehouse service charges

5 unchanged sentences

Total cost of revenue

Our cost of revenues decreased by $0.2 million, or 2.1%, from $7.4

million in the six months ended December 31, 2023, to $7.2 million in the six months ended December 31, 2024.

The decrease in

cost of revenues was mainly due to the combined effects of:

a decrease in transportation and delivery costs,

including trucking, drayage, chassis rental, freight and delivery cost during the six months ended December 31, 2024, which was primarily

due to a reduction in delivery service provided to customers.

However, our reduction in transportation and delivery costs are significantly

lower than the decline in revenue, due to high inflation in gasoline and labor cost over past year.

Additionally, the forwarding service

for airfreights have strict timing requirements, preventing us from fully utilizing the capacity of each delivery, often resulting in

trucks operating at half capacity;

a decrease in our warehouse service charges, mainly representing labor

costs at our regional warehousing and distribution centers during the six months ended December 31, 2024, due to decrease in staff

cost in connection with unpackaging shipment into small packages.

Our cost of revenues decreased

by $0.5 million, or 5.1%, from $10.8 million for the nine months ended March 31, 2024, to $10.3 million for the nine months ended March

The decrease in cost of revenues was mainly due to the combined effects of:

a decrease in transportation and delivery costs, including trucking,

drayage, chassis rental, freight and delivery cost during the nine months ended March 31, 2025, which was primarily due to a reduction

in delivery service provided to customers;

a decrease in our warehouse service charges, mainly representing labor costs at our regional warehousing and distribution centers during the nine months ended March 31, 2025, due to decrease in staff cost in connection with unpackaging shipment into small packages.

We gradually reduced the warehouse labor shifts;

however, adjusting

to new labor schedules takes time;

a decrease in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the six months ended December 31, 2024，resulting from a drop in volume of cross-border freight we handled, particularly airfreight, during the same period.;

however, adjusting to new labor schedules takes time;

a decrease in custom declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the nine months ended March 31, 2025，resulting from a drop in volume of cross-border freight we handled, particularly airfreight, during the same period.;

an increase in freight arrangement charges, mainly

representing scheduling and booking fees for cross-border ocean freight during the six months ended December 31, 2024, primarily

due to increased business for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising warehouse and equipment

lease expenses, utilities, depreciation of property and equipment, and other direct costs during the six months ended December 31,

The warehouse and equipment lease expenses increased significantly, from $527,759 in the six months ended December 31, 2023,

to $1,002,820 in the six months ended December 31, 2024.

The increase was primarily we had two more warehouse lease agreements during

the three months ended December 31, 2024, compared to the same period last year.

These agreements were negotiated before the significant

decline in our revenue.

To mitigate costs and improve our gross profit margin, we plan to sublease one of the warehouse at Chicago in

the next fiscal quarter.

representing scheduling and booking fees for cross-border ocean freight during the nine months ended March 31, 2025, primarily due

to increased business for cross boarder shipping from the U.S.

an increase in overhead costs, mainly comprising warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the nine months ended March 31, 2025.

The warehouse and equipment lease expenses increased significantly, from $794,978 for the nine months ended March 31, 2024, to $1,558,099 for the nine months ended March 31, 2025.

The increase was primarily we had two more warehouse lease agreements during the nine months ended March 31, 2025, compared to the same period last year.

These agreements were negotiated before the significant decline in our revenue.

To mitigate costs and improve our gross profit margin, we plan to sublease one of the warehouse at Chicago in the next fiscal quarter.

Our overall gross profit decreased

by $1.2 million, or 71.9%, from $1.7 million in the six months ended December 31, 2023, to $0.5 million in the six months ended December 31,

Our gross margin of cross-border freight solution was 5.1% for the six months ended December 31, 2024, compared to 18.9% for

the six months ended December 31, 2023.

The decline in gross margin was primarily attributable to (i) revenue from the airfreight

and ocean freight solution decreased to a greater extend to decrease in our cost of revenue, such as transportation and delivery cost,

warehouse services, custom declaration and terminal charges, and (ii) increased overhead costs allocated, as discussed above.

by $1.5 million, or 55.5%, from $2.7 million for the nine months ended March 31, 2024, to $1.2 million for the nine months ended March

Our gross margin of cross-border freight solution was 6.7% for the nine months ended March 31, 2025, compared to 19.9% for the

nine months ended March 31, 2024.

The decline in gross margin was primarily attributable to (i) revenue from the airfreight and ocean

freight solution decreased to a greater extent to decrease in our cost of revenue, such as transportation and delivery cost, warehouse

services, custom declaration and terminal charges, and (ii) increased overhead costs allocated, as discussed above.

Our gross margin of distribution

of pharmaceutical was 44.2% for the six months ended December 31, 2024.

It is a new business segment during current quarter and thus

no gross margin was noted compared to same period in prior year.

of pharmaceutical was 66.3% for the nine months ended March 31, 2025.

This comparatively high margin was primarily due to favorable purchase

discounts offered by our suppliers, who extended these incentives to support the establishment of a long-term partnership as we entered

this market as a new customer.

It is a new business segment for the current quarter and thus no gross margin was noted compared to same

period in prior year.

Selling Expenses

Our selling expenses amounted to $54,488 for the six months ended December

31, 2024, compared to nil for the same period in 2023.

The increase was primarily driven by salaries for our sales team, which were incurred

as part of the new pharmaceutical product business launched during the current quarter.

Our selling expenses amounted to $0.2 million for the nine months ended

March 31, 2025, compared to nil for the same period in 2024.

The increase was primarily driven by salaries for our sales team and transportation

expense for selling pharmaceutical products, which were incurred as part of the new pharmaceutical product business launched during the

current quarter.

General and Administrative Expenses

Our general and administrative expenses increased by $2.6 million,

or 103.7%, from $1.8 million in the six months ended December 31, 2023, to $3.7 million in the six months ended December 31,

These expenses represented 48.8% and 20.3% of our total revenues for the six months ended December 31, 2024 and 2023, respectively.

The increase was primarily attributed to higher salary and employee benefit expenses, professional fee, office expense and traveling,

insurance expense and entertainment expense:

Our salaries and employee benefits expenses increased by $0.8 million,

or 63.0%, from $1.2 million in the six months ended December 31, 2023, to $2.0 million in the six months ended December 31,

Our salaries and employee benefits expenses represented 53.1% and 66.3% of our total general and administrative expenses for the

six months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to (i) the recruitment of additional sales,

customer services, and back-office support personnel to support our business in first half 2024, and (ii) salaries of management and operation

team for our new business in China.

For our salaries and employee benefits expenses, (i) our payroll expenses increased by $0.7 million,

or 67.5%, from $1.0 million in the six months ended December 31, 2023, to $1.7 million in the six months ended December 31,

2024, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution plan

in China, meal allowance and health insurance expenses, increased by $0.1 million, or 39.8%, from $0.2 million in the six months ended

December 31, 2023, to $0.3 million in the six months ended December 31, 2024, representing 7.4% and 10.8% of our total general

and administrative expenses for the six months ended December 31, 2024 and 2023, respectively.

The increase was mainly due to rising

employee health insurance premiums.

Our professional fee increased by $0.5 million, or 1,619.8%, from $32,337

in the six months ended December 31, 2023, to $556,126 in the six months ended December 31, 2024.

Our professional fee represented

14.8% and 1.8% of our total general and administrative expenses for the six months ended December 31, 2024 and 2023, respectively.

The increase was primarily due to audit fee, legal fee, consulting expense, investor-related expenses and financial reporting service

fees for the six months ended December 31, 2024.

In the six months ended December 31, 2023, most of the expenses directly related

to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.

Our insurance expense increased

by $0.1 million, or 1,701.0%, from $6,948 in the six months ended December 31, 2023, to $125,131 in the six months ended December 31,

The increase was primarily due to purchasing insurance premiums for our directors and officers, as we became a public company in

or 93.7%, from $2.8 million in the nine months ended March 31, 2024, to $5.4 million for the nine months ended March 31, 2025.

These expenses

represented 47.3% and 20.7% of our total revenues for the nine months ended March 31, 2025 and 2024, respectively.

The increase was primarily

attributed to higher salary and employee benefit expenses, professional fee, office expense and traveling, insurance expense and entertainment

Our salaries and employee

benefits expenses increased by $0.9 million, or 47.7%, from $2.0 million in the nine months ended March 31, 2024, to $2.9 million for

the nine months ended March 31, 2025.

Our salaries and employee benefits expenses represented 53.5% and 70.2% of our total general and

administrative expenses for the nine months ended March 31, 2025 and 2024, respectively.

The increase was mainly due to (i) the recruitment

of additional sales, customer services, and back-office support personnel to support our business in first half 2025, and (ii) salaries

of management and operation team for our new business in China.

For our salaries and employee benefits expenses, (i) our payroll expenses

increased by $0.8 million, or 50.8%, from $1.6 million for the nine months ended March 31, 2024, to $2.4 million for the nine months ended

March 31, 2025, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution

plan in China, meal allowance and health insurance expenses, increased by $0.1 million, or 31.8%, from $0.3 million for the nine months

ended March 31, 2024, to $0.4 million for the nine months ended March 31, 2025, representing 7.8% and 11.5% of our total general and administrative

expenses for the nine months ended March 31, 2025 and 2024, respectively.

The increase was mainly due to rising employee health insurance

Our professional fee increased

by $0.7 million, or 1,306.0%, from $56,400 for the nine months ended March 31, 2024, to $792,984 for the nine months ended March 31, 2025.

Our professional fee represented 14.6% and 2.0% of our total general and administrative expenses for the nine months ended March 31, 2025

and 2024, respectively.

The increase was primarily due to audit fees, legal fees, consulting expenses, investor-related expenses and financial

reporting service fees for the nine months ended March 31, 2025.

For the nine months ended March 31, 2024, most of the expenses directly

related to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.

Our insurance expense increased by $170,153, or 850.7%, from $20,001

for the nine months ended March 31, 2024, to $190,154 for the nine months ended March 31, 2025.

The increase was primarily due to purchasing

insurance premiums for our directors and officers, as we became a public company in July 2025.

Our traveling and entertainment

expense represented 11.0% and 8.7% of our total general and administrative expenses for six months ended December 31, 2024 and 2023,

respectively.

The increase was mainly due to higher entertainment and gift expenses related to networking with our business partners as

well as more business trips during recent quarter.

expense represented 8.3% and 5.7% of our total general and administrative expenses for nine months ended March 31, 2025 and 2024, respectively.

The increase was mainly due to higher entertainment and gift expenses related to networking with our business partners as well as more

business trips during recent quarter.

Other Income, Net

Our other income, net, increased by $0.1 million, or 127.9%, from $0.1

million in the six months ended December 31, 2023, to $0.2 million in the six months ended December 31, 2024.

The increase was

primarily due to renting out part of our warehouse space to our related party, Weship, for an additional five months during the six months

ended December 31, 2024.

Our other income, net, increased

by $0.1 million, or 62.8%, from $0.2 million for the nine months ended March 31, 2024, to $0.3 million for the nine months ended March

The increase was primarily due to renting out part of our warehouse space to our related party, Weship, for an additional five

months and renting out part of our two warehouse space to our related party, Intermodal, during the nine months ended March 31, 2025.

Interest Expenses

Our interest expenses increased by $15,128, or 28.1%, from $53,864

in the six months ended December 31, 2024, to $68,992 in the six months ended December 31, 2024.

Increase interest expense was

mainly due to late credit card payments.

Our interest expenses increased

by $76,866, or 96.8%, from $79,400 for the nine months ended March 31, 2025, to $156,266 for the nine months ended March 31, 2025.

expense was mainly due to late credit card payments and interest expense in connection with convertible note issued in March 2025.

Loss Before Income Taxes

We had loss before income

taxes of $3.2 million and $0.2 million for the six months ended December 31, 2024 and 2023.

Our loss before income taxes increased

primarily attributable to the net effects of:

We had net loss before income taxes of $4.2 million and of $0.1 million

for the nine months ended March 31, 2025 and 2024.

Our loss before income taxes increased primarily, attributable to the net effects of:

(i) the decrease in gross profit, (ii) the rise in operating expenses;

and (iii) the

increase in other income for the six months ended December 31, 2024 as mentioned above.

and (iii) the increase in interest expense for the

nine months ended March 31, 2025 as mentioned above.

Income Tax Expense

We had income tax expense

of $89,581 and $26,125 in the six months ended December 31, 2024 and 2023, respectively.

We did not have current income tax provision

in the six months ended December 31, 2024, due to net operating loss, and we recognized a deferred income tax asset of $959,094 due

to temporary differences recognized and net operating loss carried forward.

We also recognized a valuation allowance of $1,048,675 to

write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable

income, resulting in a net income tax expense of $89,581 in the six months ended December 31, 2024.

We did not have current income

tax provision in the six months ended December 31, 2023, due to net loss, however, we recognized a deferred income tax asset of $8,231,

due to temporary differences recognized and a deferred income tax expense of $17,894 due to the change from an S Corporation to a C Corporation

upon the completion of our reorganization on September 23, 2023.

We had an income tax expense of $108,175 and $130,735 for the nine

months ended March 31, 2025 and 2024, respectively.

A current income tax provision of $26,608 was recognized for a subsidiary with net

assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the nine months ended

March 31, 2025.

We recognized a net deferred income tax expense of $81,567 due to temporary differences recognized and net operating loss

carried forward.

We also recognized a valuation allowance of $1,360,798 to write off our deferred tax asset since we are uncertain that

we will be able to utilize the deferred tax asset to offset future taxable income, resulting in a net income tax expense of $108,175 for

the nine months ended March 31, 2025.

We recognized a current income tax provision of

$94,471 for the nine months ended March 31, 2024 due to net assessable income, and a deferred income tax expense $18,370 due to temporary differences

recognized and a deferred income tax expense of $17,894 due to the change from an S Corporation to a C Corporation upon the completion

of our reorganization on September 23, 2023.

For the nine months ended March 31, 2024, the Company was taxed at rates of 2.5% and 28.0%

for the replacement tax and pass-through-entity tax, respectively.

As a result of the foregoing,

we had a net loss of $3.3 million and $0.2 million for the six months ended December 31, 2024 and 2023, respectively.

we had a net loss of $4.3 million and $0.2 million for the nine months ended March 31, 2025 and 2024, respectively.

Liquidity and Capital Resources

As of December 31, 2024,

we had a cash and cash equivalent balance of $1.1 million.

Our current assets were $4.4 million, and our current liabilities were

$5.4 million, resulting in a current ratio of 0.81:1 and a negative working capital of $1.1 million.

Total stockholders’ equity

as of December 31, 2024 was $1.6 million.

As of December 31, 2024

and June 30, 2024, we had accounts receivable net of allowance of $1.9 million and $2.8 million, respectively.

We periodically review

our accounts receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional

allowances if necessary.

For the accounts receivable, as of December 31, 2024 and June 30, 2024, we provided a credit loss allowance

of $56,022 and $54,066, respectively.

As of March 31, 2025, we had

a cash and cash equivalent balance of $1.5 million.

Our current assets were $5.0 million, and our current liabilities were $6.8 million,

resulting in a current ratio of 0.73:1 and a negative working capital of $1.7 million.

Total stockholders’ equity as of March

31, 2025 was $0.8 million.

As of March 31, 2025 and June 30,

2024, we had accounts receivable net of allowance of $1.7 million and $2.8 million, respectively.

We periodically review our accounts

receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional allowances

if necessary.

For the accounts receivable, as of March 31, 2025 and June 30, 2024, we provided a credit loss allowance of $62,087

and $54,066, respectively.

In assessing our liquidity, we monitor and analyze our cash on hand,

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Historically,

we have funded our working capital needs primarily through operations, loans, and working capital loans from stockholders.

capital requirements are influenced by the efficiency of our operations, the volume and dollar value of our revenue contracts, the progress

or execution of customer contracts, and the timing of accounts receivable collections.

we have funded our working capital needs primarily through operations, issuance of convertible notes, loans, initial public offerings

and working capital loans from stockholders.

Our working capital requirements are influenced by the efficiency of our operations, the

volume and dollar value of our revenue contracts, the progress or execution of customer contracts, and the timing of accounts receivable

The following table sets forth

summary of our cash flows for the periods indicated:

For the six months ended

For the nine months ended

Net cash (used in) provided by operating activities

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Operating Activities

Net cash used in operating activities was $1,933,000 in the six months

ended December 31, 2024, including net loss of $3,282,227, adjusted for non-cash items for $1,183,152 and changes in working capital

of positive $166,075.

The non-cash items primarily included $989,003 amortization and interest expense of operating lease assets, $87,132

depreciation included in G&A and cost of revenue, $15,480 depreciation of right-of-use finance assets and $1,956 from provision of

allowance for expected credit loss and a decrease of $89,581 from deferred tax asset due to recognition of valuation allowance.

Net cash used in operating activities was $2,171,304 for the nine months

ended March 31, 2025, including net loss of $4,353,023, adjusted for non-cash items for $1,839,163 and changes in working capital of positive

The non-cash items primarily included $1,515,688 amortization and interest expense of operating lease assets, $148,854 depreciation

included in G&A and cost of revenue, $24,081 depreciation of right-of-use finance assets, $32,056 amortization of intangible asset,

$40,541 interest expense of convertible notes, $11,645 uncollected interest income from a third party loan, $8,021 from provision of allowance

for expected credit loss and a decrease of $81,567 from deferred tax asset due to recognition of valuation allowance.

The adjustments

for changes in working capital mainly included a decrease of $424,648 and $565,766 in accounts receivable — third parties and related

parties, respectively, due to a decrease of revenues near period end and an increase of $312,722 in accrued expense and other payable,

partially offset by an increase in prepayment of $112,620, a decrease of $742,649 in operating lease liabilities and a decrease of $156,165

in accounts payable — related parties.

Net cash provided by operating

activities was $257,836 for the six months ended December 31, 2023, including net loss of $243,061, adjusted for non-cash items

for $674,713, and changes in working capital of negative $173,816.

The non-cash items primarily included $439,142 non-cash operating lease

expense, $72,319 depreciation and amortization, $49,591 from provision of allowance for expected credit loss, and impacted by a loss of

$73,151 from deconsolidation of a subsidiary.

The adjustments for changes in working capital mainly included (i) an increase of $192,609

in accounts receivable — related parties, (ii) an increase of $479,056 in accounts receivable — third

parties reflecting the impact of revenue growth combined with the timing of payments to third party providers, related parties and collections

from clients on net working capital and (iii) an increase of $27,169 in contract assets, partially offset by (i) an increase of $539,542

in accounts payable — third parties, (ii) an increase of $241,721 in accounts payable — related parties

and (iii) an increase of $122,547 in accrued expenses and other payables.

The $2,190,836 increase in cash used in operating activities in the

six months ended December 31, 2024 compared to the prior year was primarily due to an increase in net loss of $3,039,166 in

the six months ended December 31, 2024 compared to same period in the prior year, partly offset by an increase of $339,891 in

cash flow from working capital due to timing of vendor payments, client payments and related parties payment.

for changes in working capital mainly included a decrease of $666,858 and $466,764 in accounts receivable from third parties and related

parties, respectively, due to a decrease of revenues near period end, an increase of $415,186 in accounts payable from third parties and

an increase of $393,633 in accrued expense and other payable, partially offset by an increase in prepayment of $158,359, a decrease of

$1,151,931 in operating lease liabilities and a decrease of $158,827 in accounts payable to related parties.

Net cash provided by operating activities was $161,644 for the nine

months ended March 31, 2024, including net loss of $230,293, adjusted for non-cash items for $921,352, and changes in working capital

of negative $529,415.

The non-cash items primarily included $658,713 non-cash operating lease expense, $108,478 depreciation and amortization,

$22,198 from provision of allowance for expected credit loss, and impacted by a loss of $73,151 from deconsolidation of a subsidiary.

The adjustments for changes in working capital mainly included (i) an increase of $565,824 in accounts receivable from related parties,

(ii) an increase of $283,936 in accounts receivable from third parties reflecting the revenue growth near period end, (iii) an increase

of $58,498 in contract assets, and (iv) an increase of 606,756 in change in operating lease liabilities, partially offset by (i) an increase

of $493,085 in accounts payable to third parties, (ii) an increase of $57,420 in accounts payable to related parties, (iii) an increase

of $111,122 in accrued expenses and other payables, and (iv) an increase of $94,471 in tax payable.

The $2,332,948 increase in

cash used in operating activities for the nine months ended March 31, 2025 compared to the prior year was primarily due to an increase

in net loss of $4,122,730 for the nine months ended March 31, 2025 compared to same period in the prior year, partly offset by an

increase of $871,971 in cash flow from working capital due to timing of vendor payments, client payments and related parties payment.

Investing Activities

Net cash used in investing activities was $1,350,498 and $78,799 for

the six months ended December 31, 2024 and 2023, respectively.

Net cash used in investing activities for the six months

ended December 31, 2024, was primarily attributable to net cash payment of $552,721 for intangible assets through acquisition of

100% equity interest in Hupan Pharmaceutical and we had a loan of $686,697 to a third party.

We also purchased property and equipment,

conducted office renovation for our operation of subsidiaries in Mainland China.

On August 4, 2023, we reduced our unpaid registered capital

contribution in our investee company in China, namely ABL Wuhan, and concurrently, the third-party shareholders increased their registered

capital contribution accordingly.

Following this change, the third-party shareholders own 80% of equity interest and we own 20% of equity

interest in ABL Wuhan.

Net cash used in investing

activities was $1,227,150 and $78,799 for the nine months ended March 31, 2025 and 2024, respectively.

Net cash used in investing

activities for the nine months ended March 31, 2025, was primarily attributable to net cash payment of $552,721 for intangible assets

through acquisition of 100% equity interest in Hupan Pharmaceutical and we had a loan of $561,901 to a third party.

We also purchased

property and equipment, conducted office renovation for our operation of subsidiaries in Mainland China.

On August 4, 2024, we reduced

our unpaid registered capital contribution in our investee company in China, namely ABL Wuhan, and concurrently, the third-party shareholders

increased their registered capital contribution accordingly.

Following this change, the third-party shareholders own 80% of equity interest

and we own 20% of equity interest in ABL Wuhan.

Consequently, ABL Wuhan ceased to be the Company’s subsidiary after August 4, 2024.

Therefore, we had cash

outflow of $48,893 upon deconsolidation of a subsidiary and payment for registered capital of $29,906 during the six months ended

December 31, 2023.

Therefore, we had cash outflow of $48,893 upon deconsolidation of a subsidiary and payment for registered capital of $29,906 during the

nine months ended March 31, 2024.

Financing Activities

Net cash provided by financing activities was $4,295,361 for the six months

ended December 31, 2024, compared to net cash used in financing activities of $15,538 for same period in prior year, respectively.

The increase in net cash provided by financing activities was mainly due to the net proceeds of $5,351,281 from the offering and proceeds

from loan borrowing of $195,000 and a loan from a third party of $276,365, partly offset by repayment of $805,345 to shareholders and

loans repayment of $339,914 during the six months ended December 31, 2024.

The net cash provided by financing activities for

the six months ended December 31, 2023, mainly due to the proceeds from loans of $225,000 that we borrowed, and net proceeds

from shareholders by $158,455, partially offset by repayment of loans, vehicle loans and equipment loans of $245,564, and the payment

for deferred offering cost of 140,000.

Capital Expenditures

Our capital expenditures are

incurred primarily in connection with the purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold

improvement and vehicles.

Our capital expenditures amounted to $256,314 and $nil in the six months ended December 31, 2024 and

2023, respectively.

We expect that our capital

expenditures will increase in the future as our business continues to develop and expand.

We intend to fund our future capital expenditures

with our existing cash balance, proceeds of loans, working capitals loans from stockholders.

Net cash provided by financing

activities was $4,782,547 for the nine months ended March 31, 2025, compared to net cash used in financing activities of $67,964

for same period in prior year, respectively.

The increase in net cash provided by financing activities was mainly due to the net proceeds

of $5,351,281 from the offering, net proceeds of $755,512 from issuance of convertible note, proceeds from loan borrowing of $294,975

and Advances of $276,365 from Hupan Pharmaceutical prior to acquisition, partly offset by repayment of $805,345 to shareholders, advance to related parties of $685,247

and loans repayment of $420,765 during the nine months ended March 31, 2025.

The net cash provided by financing activities for the

nine months ended March 31, 2024, mainly due to the proceeds from loans of $225,000 that we borrowed, and net proceeds from shareholders

by $158,455, partially offset by repayment of loans, vehicle loans and equipment loans of $289,934, and the payment for deferred offering

cost of 140,000.

Capital Expenditure

Our capital expenditure is incurred primarily in connection with the

purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold improvement and vehicles.

Our capital expenditures

amounted to $337,954 and $nil for the nine months ended March 31, 2025 and 2024, respectively.

We expect that our capital expenditure will increase in the future

as our business continues to develop and expand.

We intend to fund our future capital expenditure with our existing cash balance, proceeds

of loans and issuance of convertible notes.

Commitments and Contractual Obligations

As of December 31, 2024, the Company’s

contractual obligations consist of the following:

As of March 31, 2025, the Company’s contractual

obligations consist of the following:

Contractual Obligations

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Finance lease obligations

Construction-in-progress project

Vehicle loans

Equipment loans

Convertible note

Loan payable to a related party

Off-Balance Sheet Commitments and Arrangements

There were no off-balance

sheet arrangements as of and for the six months ended December 31, 2024 and 2023, that have, or that in the opinion of management

are likely to have, a current or future material effect on our financial condition or results of operations.

sheet arrangements as of and for the nine months ended March 31, 2025 and 2024, that have, or that in the opinion of management are

likely to have, a current or future material effect on our financial condition or results of operations.

Critical Accounting Policies and Estimates

We prepare our consolidated

financial statements in conformity with U.S.

GAAP, which requires us to make judgments, estimates and assumptions that affect our

reported amount of assets, liabilities, revenue, costs and expenses, and any related disclosures.

Although there were no material changes

made to the accounting estimates and assumptions in the past two years, we continually evaluate these estimates and assumptions based

on the most recently available information, our own historical experience and various other assumptions that we believe to be reasonable

under the circumstances.

Since the use of estimates is an integral component of the financial reporting process, actual results could

differ from our expectations as a result of changes in our estimates.

Despite the fact that the

management determines there are no critical accounting estimates, the most significant estimates relate to allowance for credit losses,

for which we are required to estimate the collectability of accounts receivable, and contract asset relating to shipment in transit.

We prepare our condensed consolidated financial statements in conformity

GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amount of assets, liabilities,

revenue, costs and expenses, and any related disclosures.

Actual results could materially differ from those estimates.

We have identified

the following critical accounting policies:

Common Stock Warrants Instruments

The Company accounts for common stock warrants as either equity-classified

or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance

in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing

Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers

whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC

480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments

are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement”

in a circumstance outside of the Company’s control, among other conditions for equity classification.

This assessment, which requires

the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while

the instruments are outstanding.

The Company determined, upon further review of the warrant agreement, that the common stock warrant issued

pursuant to the warrant agreement qualifies for equity accounting treatment.

The fair value of equity-classified warrants is estimated

as of the date of issuance using the Black-Scholes option-pricing model.

The Black-Scholes option-pricing model includes various assumptions,

including the fair market value of our common stock, expected life of stock options, the expected volatility and the expected risk-free

interest rate, among others.

These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions

generally outside our control.

The estimates were based on

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and reasonably expected future economic conditions, and other factors that may affect our ability to collect from customers.

The estimated contract asset

is based on the estimated completion percentage of the performance obligation.

We believe that customers simultaneously benefit from the

comprehensive services it provides.

For customers with goods entering the United States, we offer customs clearance, container unloading,

storage, unpacking, packing, and transportation services to customer-specified locations after the goods arrive at a U.S.

For customers shipping goods overseas, we provide cargo space arrangement, storage, packing, export customs clearance, and

transportation to the seaport or airport for loading.

The performance obligation is satisfied over time as customers receive the benefits

of these services during the process of transporting goods from one location to another.

As a result, we recognize revenue over time.

We believe that the methodology employed is comparable to that of other global logistics companies and offers faithful depiction of the

services rendered to customers.

While our significant

accounting policies are more fully described in Note 2 — Summary of Significant Accounting Policies to our consolidated

financial statements, we believe that there were no critical accounting policies that affect the preparation of financial statements.

The estimated contract asset is based on the estimated completion percentage

of the performance obligation.

We believe that customers simultaneously benefit from the comprehensive services they provide.

Refer to the notes to the condensed consolidated financial statements

included in this report for further discussion of our significant accounting policies and the effect on our condensed consolidated financial

Recent Accounting Pronouncements

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that are issued.

In November 2023, the FASB

issued ASU No.

2023-07, “Improvements to Reportable Segment Disclosures” (Topic 280).

This ASU updates reportable segment

disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating

Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss.

This ASU also requires

disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures

of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for

annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

of the ASU should be applied retrospectively to all prior periods presented in the financial statements.

In November 2024, the FASB issued ASU No.

2024-07, “Improvements

to Reportable Segment Disclosures” (Topic 280).

This ASU updates reportable segment disclosure requirements by requiring disclosures

of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and

included within each reported measure of a segment’s profit or loss.

This ASU also requires disclosure of the title and position

of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or

loss in assessing segment performance and deciding how to allocate resources.

The ASU is effective for annual periods beginning after

December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025.

Adoption of the ASU should be applied retrospectively

to all prior periods presented in the financial statements.

Early adoption is also permitted.

This ASU will likely result in us including the additional required disclosures when adopted.

Management is currently evaluating the provisions

of this ASU and expect to adopt them for the year ending June 30, 2025.

In December 2023, the FASB

issued ASU No.

2023-09, “Improvements to Income Tax Disclosures” (Topic 740).

The ASU requires disaggregated information about

a reporting entity’s effective tax rate reconciliation as well as additional information on income tax paid.

The ASU is effective

on a prospective basis for annual periods beginning after December 15, 2024.

Early adoption is also permitted for annual financial statements

that have not yet been issued or made available for issuance.

This ASU will likely result in the required additional disclosures being

included in the Company’s consolidated financial statements, once adopted.

This ASU will likely result in us including

the additional required disclosures when adopted.

Management is currently evaluating the provisions of this ASU and expects to adopt them

for the year ending June 30, 2025.

In December 2024, the FASB issued ASU No.

2024-09, “Improvements

to Income Tax Disclosures” (Topic 740).

The ASU requires disaggregated information about a reporting entity’s effective tax

rate reconciliation as well as additional information on income tax paid.

The ASU is effective on a prospective basis for annual periods

beginning after December 15, 2025.

Early adoption is also permitted for annual financial statements that have not yet been issued or made

available for issuance.

This ASU will likely result in the required additional disclosures being included in the Company’s audited

condensed consolidated financial statements, once adopted.

The Company does not believe other recently issued but not yet effective

accounting standards, if currently adopted, would have a material effect on the Company’s unaudited consolidated balance sheets,

statements of income (loss) and comprehensive income (loss) and statements of cash flows.

accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance

sheets, statements of income (loss) and comprehensive income (loss) and statements of cash flows.

Quantitative and Qualitative Disclosures About Market Risk

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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 2. Management’s Discussion and Analysis