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Item 7. Management’s Discussion and Analysis

2025-10-14 compared with 2024-09-30 · 539 added, 407 removed, 133 unchanged (88% of the section changed)

Management’s Discussion

and Analysis of Financial Condition and Results of Operations.

Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion

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and the related notes included elsewhere in this Report.

In addition to historical consolidated financial information, the following

discussion contains forward-looking statements that reflect our plans, estimates, and beliefs.

Our actual results could differ materially

from those discussed in the forward-looking statements.

In addition to historical consolidated financial information, the following discussion

contains forward-looking statements that reflect our plans, estimates, and beliefs.

Our actual results could differ materially from those

discussed in the forward-looking statements.

All amounts included herein with respect to the fiscal years ended June 30, 2025

and 2024 are derived from our audited consolidated financial statements included elsewhere in this Report.

Our financial statements

have been prepared in accordance with the U.S.

Our financial statements have

been prepared in accordance with the U.S.

We are a U.S.-based integrated

cross-border supply chain solution provider with a strategic focus on the Asian market including China and South Korea.

provide customized cross-border ocean freight solutions and airfreight solutions in the U.S.

We primarily provide

customized cross-border ocean freight solutions and airfreight solutions in the U.S.

that specifically cater to our customers’

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domestic ground transportation

Founded in Chicago, Illinois

in 2018, we are an Asian American-owned business rooted in the U.S.

Founded in Chicago, Illinois in 2018, we are an Asian American-owned

business rooted in the U.S.

with in-depth understanding of both the U.S.

international trading and logistics service markets.

Our customers are typically Asia- and U.S.-based logistics service companies serving

large e-commerce platforms, social commerce platforms and manufacturers to sell and transport consumer and industrial goods made in Asia

into the U.S.

Since inception and as of June 30, 2024, we had served over 300 customers to fulfill over 41,000 cross-border supply

chain solution orders.

We have established an extensive

collaboration network of service providers, including global freight carriers for our cross-border freight consolidation and forwarding

services as well as domestic ground transportation carriers for our U.S.

and Asian international trading and logistics service

Our customers are typically Asia- and U.S.-based logistics service companies serving large e-commerce platforms, social commerce

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

As of June 30, 2025, we

had served over 400 customers to fulfill over 55,000 cross-border supply chain solution orders.

We have established an extensive collaboration network of service providers,

including global freight carriers for our cross-border freight consolidation and forwarding services as well as domestic ground transportation

carriers for our U.S.

domestic transportation services.

Since inception and as

of June 30, 2024, we had collaborated with almost all major global ocean and air carriers to forward 31,300 TEU of container loads and

47,800 tons of air cargo.

As of June 30, 2024, we had also cooperated with over 200 domestic ground transportation carriers, including

almost all major U.S.

domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may be.

We operate two massive and

As of June 30, 2025, we had collaborated with almost all major global ocean

and air carriers to forward 35,900 TEU of container loads and 69,300 tons of air cargo.

As of June 30, 2025, we had also cooperated with

over 200 domestic ground transportation carriers, including almost all major U.S.

domestic ground transportation carriers, on a long-term,

short-term or order basis, as the case may be.

We operate three massive and

hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas.

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service offerings, of cross-border freight of an aggregate assessed value of over $54.0 million.

Leveraging our strong cross-border

supply chain service capabilities, extensive service provider network of cross-border freight carriers and U.S.

domestic ground transportation

carriers, massive and hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have

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

For the fiscal years ended June 30,

Leveraging our strong cross-border supply chain service capabilities,

extensive service provider network of cross-border freight carriers and U.S.

domestic ground transportation carriers, massive and

hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build

up our brand and reputation and have achieved fast growth since our inception.

As of June 30, 2025, we had fulfilled over 55,000 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 year ended June

30, 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 the year.

For the year ended June 30,

2025 and 2024, our revenues amounted to $17.8 million and $18.3 million, respectively, and our gross profit amounted to $2.9 million and

$3.7 million during the same periods, respectively.

As of June 30, 2024, we had fulfilled over 41,000 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.

Key Factors Affecting Our Results of Operations

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Our Ability to Expand Our Customer Base

Our results of operations are

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

Since inception and as of June 30, 2024, we had served over 300 customers

to fulfill over 41,000 cross-border supply chain solution orders.

We will continue to expand our customer base to achieve a sustainable

business growth.

We aim to attract new customers and maintain our existing customers.

We plan to improve the quality and expand the variety

of our services to obtain more customers.

Our results of operations are dependent upon our ability to expand

and maintain our customer base.

As of June 30, 2025, we had served over 400 customers to fulfill over 55,500 cross-border supply chain

solution orders.

We will continue to expand our customer base to achieve a sustainable business growth.

We aim to attract new customers

and maintain our existing customers.

We plan to improve the quality and expand the variety of our services to obtain more customers.

During fiscal year 2025, we

introduced a new revenue stream through the distribution of pharmaceutical and medical products.

Under this model, we purchase products

directly from manufacturers, store them in designated warehouses, and deliver them to customers’ warehouses or other specified locations.

While this business expansion creates opportunities to reach new customers in the healthcare sector.

It also exposes us to additional

risks compared with our traditional cross-border logistics services.

These risks include heightened regulatory and compliance requirements

for the handling and distribution of medical products, increased working capital exposure from holding inventory, and greater operational

complexity in maintaining product quality and safety.

Successfully expanding our customer base in this new segment will depend on our

ability to manage these risks effectively while maintaining high service standards and compliance with applicable regulations.

Our Ability to Control Costs

Our results of operations are

affected by our ability to control costs including transportation and delivery costs, warehouse service charges, custom declaration and

terminal charges, freight arrangement charges and other overhead cost allocation, which may be subject to factors, including, among other

things, fluctuations in wage rates, fuel prices, toll fees, and leasing costs.

Effective cost-control measures have a direct impact on

our financial condition and results of operations.

Our results of operations

are affected by our ability to control costs including transportation and delivery costs, warehouse service charges, custom declaration

and terminal charges, freight arrangement charges and other overhead cost allocation, which may be subject to factors, including, among

other things, fluctuations in wage rates, fuel prices, toll fees, and leasing costs.

Effective cost-control measures have a direct impact

on our financial condition and results of operations.

For example, our cross-border freight carrier and U.S.

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the level of fee rates based on operating costs and market conditions, our profitability and cash flow may be adversely affected.

With the introduction of our new pharmaceutical

and medical product distribution business in fiscal year 2025, our cost structure has become more complex.

Unlike our traditional cross-border

logistics services, which are largely variable in nature, the new business requires us to hold inventory, maintain specialized warehouse

conditions, and comply with more stringent product handling standards.

These factors may increase fixed operating costs, including storage,

insurance, and quality control expenses.

Consequently, our ability to control costs in this new business segment will depend not only

on fuel and labor trends but also on our efficiency in managing inventory turnover and compliance-related expenses.

We have implemented, and expect to continue adopting,

additional cost-control measures to mitigate these risks.

However, such measures may not always be as effective as anticipated.

are unable to effectively control our operating costs or adjust our pricing in response to changing market conditions, our profitability

and cash flows may be adversely affected.

Our Ability to Provide High-quality Services

Our results of operations depend

on our ability to maintain and further enhance our service quality.

Together with our network of service providers, we provide integrated

cross-border ocean and air freight supply chain solutions and services to our customers.

If we or our service providers are unable to

provide express delivery services in a timely, reliable, safe and secure manner, our reputation and customer loyalty could be negatively

In additional, if our customer service personnel fail to satisfy customer needs or respond effectively to customer complaints,

we may lose potential or existing customers and experience a decrease in customer orders, which could have a material adverse effect on

our business, financial condition and results of operations.

Our results of operations

depend on our ability to maintain and further enhance our service quality.

Together with our network of service providers, we provide

integrated cross-border ocean and air freight supply chain solutions and services to our customers.

If we or our service providers are

unable to provide express delivery services in a timely, reliable, safe and secure manner, our reputation and customer loyalty could be

negatively affected.

In additional, if our customer service personnel fail to satisfy customer needs or respond effectively to customer

complaints, we may lose potential or existing customers and experience a decrease in customer orders, which could have a material adverse

effect on our business, financial condition and results of operations.

As we expand into pharmaceutical

and medical product distribution, maintaining high-quality service standards becomes even more critical.

This new business line involves

additional operational requirements, such as temperature-controlled storage, specialized handling, and compliance with healthcare product

Any lapse in these areas could result in regulatory penalties, product spoilage, or loss of customer trust.

Compared to our

existing logistics operations, the consequences of service failures in this segment could be more severe, given the sensitive nature of

medical products and the higher expectations of healthcare customers.

Ensuring consistent service quality will therefore require enhanced

employee training, strengthened supplier oversight, and continuous monitoring of compliance procedures.

Strategic Acquisitions and Investments

Our results of operations also

depend on our ability to pursue strategic acquisitions and investments in expanding our global footprints, diversifying our service offerings,

and advancing our technologies.

We may selectively pursue mergers, acquisitions, investments, joint ventures and partnerships that we

believe are strategic and complementary to our operations and technology.

However, we cannot assure you that we will make prudent decisions

at all times.

Our ability to successfully execute or effectively operate, integrate, leverage and grow these investments or strategic

partnerships could impact our results of operations and financial conditions.

Impact of COVID-19

The global spread of COVID-19

and the efforts to control it have slowed global economic activity and disrupted, and reduced the efficiency of, normal business activities

in much of the world.

The pandemic has resulted in authorities around the world implementing numerous unprecedented measures such as travel

restrictions, quarantines, shelter in place orders, and factory and office shutdowns.

These measures have impacted and will likely continue

to impact our workforce and operations, and those of our customers and suppliers.

Delays and congestions at various

ports as a result of the COVID-19 restrictions during the pandemic also prolonged the delivery times for certain of our cross-border freight.

Additionally, ocean freight carriers have consolidated with the potential for more to occur in the future.

COVID-19 has placed significant

stress on our global ocean and air freight carriers, U.S.

domestic ground transportation carriers as well as other service providers,

which may result in reduced carrier capacity or availability, pricing volatility or more limited carrier transportation schedules and

other services that we utilize, which could adversely impact our business, financial condition and results of operations.

Our results of operations

also depend on our ability to pursue strategic acquisitions and investments in expanding our global footprints, diversifying our service

offerings, and advancing our technologies.

We may selectively pursue mergers, acquisitions, investments, joint ventures and partnerships

that we believe are strategic and complementary to our operations and technology.

However, we cannot assure you that we will make prudent

decisions at all times.

Our ability to successfully execute or effectively operate, integrate, leverage and grow these investments or

strategic partnerships could impact our results of operations and financial conditions.

In response to governmental

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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.

Since February 2025, trade between

and China has remained under tight restrictions and elevated trade barriers.

While some temporary relief measures and exemptions

were granted, most U.S.

tariffs on Chinese goods remain in place, particularly affecting key sectors such as agriculture, automobiles,

industrial materials, and consumer goods.

These trade measures have significantly disrupted U.S.-China commerce, reducing exports in certain

categories and forcing companies on both sides to adjust supply chains, pricing, and sourcing strategies.

Despite some ongoing negotiations,

the overall trade environment remains challenging and uncertain, with cross-border business continuing to face heightened costs and operational

complexities.

In May 2025, the US and China

agreed to a truce to lower import taxes on goods being traded between the two countries for 90 days.

Under 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 in the global economy.

As of August 29, 2025, the

United States has permanently eliminated the $800 de minimis threshold that previously allowed low-value shipments to enter the country

This change applies to all international shipments, regardless of value, origin, or shipping method.

The decision was made

to strengthen trade enforcement and address concerns over illicit trade practices.

All imports, including those valued under $800, are

now subject to applicable duties and taxes.

These changes increase the complexity of customs processing, slow clearance times, and reduce

the volume of low-value parcels traditionally handled by freight forwarders.

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, extend shipping schedules, increase 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 order quantities.

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

and financial condition.

We will continue to actively

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

Key Components of Results of Operations

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domestic ground transportation services.

From December 2024, we started

to generate revenues from the distribution 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 .

cost of revenues mainly comprises transportation and delivery costs, warehouse service charges, custom declaration and terminal charges,

freight arrangement charges and other overhead cost allocation which includes operating and financing lease-related costs, depreciation

expenses of property and equipment and other miscellaneous expenses.

cost of revenues from customized cross-border ocean and air freight solutions mainly comprises transportation and delivery costs, warehouse

service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation which includes

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 comprises cost of pharmaceutical products from manufacturers.

Selling Expenses.

selling expenses mainly represent commissions paid to unrelated parities for customer referrals.

selling expenses primarily include salaries expense, advertising expenses, 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 expense, depreciation on property and equipment, lease expenses, travelling and entertainment, 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, amortization on intangible assets, lease expenses warehouses used for administrative purpose and

office premises, travelling and entertainment expenses, bank charges, legal and professional fees, insurance expenses and other office

Other Income .

other income primarily consists of rental income and employee retention credit received, if any.

Our interest expenses primarily consist of the interest expenses incurred for finance leases, equipment

loans, vehicle loans and other loans and interest for late paid for credit card.

other income primarily consists of rental income.

Interest Expenses.

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

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

Income Tax Expenses .

income tax expenses consist primarily of U.S.

federal, state income taxes and replacement tax in the state of Illinois.

Fiscal Year Ended June 30, 2024 Compared

to Fiscal Year Ended June 30, 2023

federal, state income taxes, replacement tax in the state of Illinois and PRC enterprise

Results of Operations

The following table summarizes

our consolidated results of operations and percentages of certain items in relation to total revenues for the fiscal years ended

June 30, 2024 and 2023.

The operating results in any historical period are not necessarily indicative of the results that may be

expected for any future period.

For the fiscal year ended June 30,

the results of consolidated statements of operations and comprehensive income (loss) for the years ended June 30, 2025 and 2024 in U.S.

For the years ended June 30,

Revenue from cross border freight solutions

$ (3,287,195 )

Revenue from distribution of pharmaceutical products

Total revenue

Cost of revenue from cross border freight solutions

Cost of revenue from pharmaceutical products

Total cost of revenue

Gross profit from cross border freight solutions

Gross profit from pharmaceutical products

Operating expenses

Selling expenses

General and administrative expenses

Loss from deconsolidation of a subsidiary

Provision of allowance for expected credit loss

Total operating expenses

Loss from operations

Other income (expenses)

Other income, net

Interest expense

Total other (expenses) income, net

Loss before income taxes

Income taxes expense (credit)

$ (5,246,136 )

$ (5,017,859 )

Year Ended June 30, 2025 Compared to Year

Ended June 30, 2024

The following table summarizes

our consolidated results of operations and percentages of certain items in relation to total revenues for the years ended June 30, 2025

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

The operating results

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

For the years ended June 30,

Revenue from cross-border freight solutions

Cross-border ocean freight solutions

$ (2,092,655 )

Cross-border airfreight solutions

Revenue from distribution of pharmaceutical products

Total revenues

Cost of revenues

Our total revenues increased

by $5.4 million, or 42.3%, from $12.9 million in the fiscal year ended June 30, 2023, to $18.3 million in the fiscal year ended June 30,

The significant increase was primarily driven by higher revenues from our cross-border air freight solutions, partially offset by

a decrease in revenues from our cross-border ocean freight solutions.

Revenues generated from our

cross-border ocean freight solutions decreased by $0.2 million, or 2.5%, from $8.1 million in the fiscal year ended June 30, 2023,

to $7.9 million in the fiscal year ended June 30, 2024.

The volume of cross-border ocean freights processed and forwarded increased

from 4,218 TEU in the fiscal year ended June 30, 2023, to 5,458 TEU in the fiscal year ended June 30, 2024.

However, due to

fierce competition in ocean freight market and lower customer demand post COVID-19 pandemic, we offered more customized services that

involved only one or a few stages of the freight solution process for individual customers.

This led to a decreased unit revenue per TEU

compared to the same period in the prior year.

As a result, the gross revenue generated from our cross-border ocean freight solution slightly

decreased compared to the same period in the prior year.

Revenues generated from our

cross-border airfreight solutions increased by $5.6 million or 117.6% from $4.8 million in the fiscal year ended June 30, 2023, to

$10.4 million in the fiscal year ended June 30, 2024.

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

freight processed, from approximately 12,966 tons for the fiscal year ended June 30, 2023, to approximately 26,160 tons for the fiscal

Cost of revenues – cross-border freight solution

Cost of revenues – pharmaceutical products

Total cost of revenues

Gross profit – cross-border freight solution

Gross profit – pharmaceutical products

Total gross profit

Our total revenues from

cross-border freight solutions decreased by $3.3 million, or 17.9%, from $18.3 million for the year ended June 30, 2024, to $15.0

million for the year ended June 30, 2025.

The decrease was primarily driven by a decline in the volume of shipments we handled from

both of our cross-border ocean freight solution and airfreight solutions due to the U.S.

policy changes:

first, the termination of

the $800 de minimis rule eliminated duty-free entry for low-value shipments;

second, new tariffs—ranging from $50 to $150 or

up to 120% of the item value—were imposed on small packages, further discouraging direct-to-consumer exports;

expedited customs clearance modes like T86 were discontinued, requiring more complex documentation and longer processing times.

Together, these changes have led to a sharp decline in shipment volume and forced freight solution providers to rethink their

logistics strategies.

Additionally, a slowdown in consumer spending and business investments, caused by the overall economic

downturn and high interest and inflation rates, reduced the demand for imported goods, leading to lower container volumes.

Revenues from our cross-border

ocean freight solutions decreased by $2.1 million, or 26.6%, from $7.9 million for the year ended June 30, 2024, to $5.8 million for the

year ended June 30, 2025.

This surge can be attributed to our heightened focus on cross-border airfreight solutions in the second half

of the fiscal year ended June 30, 2023, in response to the growing demand for our services, fueled by the continued expansion of

the e-commerce industry.

We expect our revenues to continue

growing due to the resurgence of the U.S.

economy post-COVID-19, ongoing reductions in ocean freight charges stimulating import and export

activities, and the persistent trend of online purchases.

This trend highlights the need for prompt delivery to end-consumers with competitive

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

dropping from 5,458 TEU in the year ended June 30, 2024, to 4,609 TEU for the year ended June 30, 2025.

Revenues from our cross-border

airfreight solutions decreased by $1.2 million or 11.4%, from $10.4 million for the year ended June 30, 2024, to $9.2 million for the

year ended June 30, 2025.

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

approximately 26,160 tons for the year ended June 30, 2024, to approximately 21,511 tons for the year ended June 30, 2025.

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

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 year ended June 30, 2025,

our total revenue from pharmaceutical product distribution amounted to $2.8 million.

We did not generate any revenue from this segment

in the same period of the prior year.

Looking ahead, there remains

significant uncertainty regarding future tariff policies, trade regulations between the U.S.

and China, and the regulatory environment

affecting e-commerce platforms in the U.S.

We expect these factors to continue influencing cross-border freight activity in the near term.

These policies 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 fiscal year ended June 30,

For the years ended June 30,

Revenue from cross-border freight solutions

Asia-based customers

$ (1,023,653 )

U.S.-based customers

Revenue from distribution of pharmaceuticals

Asia-based customers

Total revenues

Revenues generated from the

Asia-based customers increased by $7.5 million, or 136.5%, from $5.5 million in the fiscal year ended June 30, 2023, to $13.1 million

in the fiscal year ended June 30, 2024.

Revenues generated from the U.S.-based customers decreased by $2.1 million, or 28.7%,

from $7.3 million in the fiscal year ended June 30, 2023 to $5.2 million in the fiscal year ended June 30, 2024.

The increase in revenues from

Asia-based customers in the fiscal year ended June 30, 2024, was driven by a surge in volume from these customers, particularly those

serving large e-commerce platforms.

This growth can primarily be attributed to the rising demand for our services, which is a direct result

of the overall expansion of the e-commerce market in the U.S.

Revenues from cross-border

freight solutions for the Asia-based customers decreased by $1.0 million, or 7.8%, from $13.1 million for the year ended June 30, 2024,

to $12.1 million for the year ended June 30, 2025.

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

by $2.2 million, or 43.2%, from $5.2 million for the year ended June 30, 2024 to $3.0 million for the same period in 2025.

The decrease in revenues from

Asia-based customers for the year ended June 30, 2025, was due to a decrease in shipments volume from Asia-based customers serving large

e-commerce platforms, driven by the discussions on the amendments to the de minimis rule and the imposition of higher tariffs on Chinese

The decrease in revenue from

the U.S.-based customers in the fiscal year ended June 30, 2024, compared to the fiscal year ended June 30, 2023, was primarily

due to our shift in focus toward Asia-based e-commerce customers.

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

customers were completed in the fiscal year ended June 30, 2023, with no similar projects in the fiscal year ended June 30, 2024.

the U.S.-based customers for the year ended June 30, 2025, compared to the same period in 2024, was primarily driven by a decrease

in shipment volumes serving e-commerce platforms and concerns over a potential economic downturn and reduced consumer spending power in

the U.S., which led to lower shipment volumes.

Our customers for the distribution

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

For the year ended June

30, 2025, our total revenue from pharmaceutical product distribution amounted to $2.8 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 fiscal years ended June 30, 2024 and 2023 is as follows:

For the fiscal year ended June 30,

revenues for the years ended June 30, 2025 and 2024 is as follows:

For years ended June 30,

Cost of revenue from cross-border freight solutions

Transportation and delivery costs

$ (1,886,991 )

Warehouse service charges

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Overhead cost

Cost of revenue from distribution of pharmaceuticals

Cost of goods sold

Total cost of revenue

Our cost of revenues increased

by $4.3 million, or 41.6%, from $10.3 million in the fiscal year ended June 30, 2023, to $14.6 million in the fiscal year ended June 30,

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

(i) an increase in transportation and delivery costs, including trucking, drayage, chassis rental,

freight and delivery cost during the fiscal year ended June 30, 2024, which was consistent with the increase in revenues during

the same period;

(ii) an increase in our warehouse service charges, mainly representing labor costs at our regional warehousing

and distribution centers during the fiscal year ended June 30, 2024, due to (a) extended service hours to process higher volumes of cross-border

airfreight, and (b) the hiring of additional employees at our regional warehousing and distribution centers to support our growing business;

(iii) an increase in custom declaration and terminal charges, consisting of customs fees, handling

charges, and entry service fees charged by ports and terminals during the fiscal year ended June 30, 2024, resulting from the

higher assessed value of cross-border freight, particularly airfreight, during the same period;

(iv) an increase in freight arrangement charges, mainly representing scheduling and booking fees for

cross-border ocean freight during the fiscal year ended June 30, 2024, primarily due to increased business for cross

boarder shipping from the U.S.

a slight increase in overhead costs, mainly comprising warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the fiscal year ended June 30, 2024.

The increase was mainly attributable to a rise in warehouse and equipment lease expenses, from $1,010,345 in the fiscal year ended June 30, 2023, to $1,195,808 in the fiscal year ended June 30, 2024.

Our gross profit increased

by $1.2 million, or 44.9%, from $2.6 million in the fiscal year ended June 30, 2023, to $3.7 million in the fiscal year ended June 30,

Our gross profit margin was 20.3% for the fiscal year ended June 30, 2024, compared to 19.9% for the fiscal year ended June 30,

The slight increase in gross profit margin was primarily attributable to the rise in sales and our promotion of a diverse range

of services, including warehousing, distribution, and customs clearance services, which we offered to current customers with a higher

Our cost of revenues from

cross-border freight solutions decreased by $0.9 million, or 6.2%, from $14.6 million for the year ended June 30, 2024, to $13.7 million

for the year ended June 30, 2025.

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

decrease in transportation and delivery costs, including trucking, drayage, chassis rental, freight, and delivery costs during the

year ended June 30, 2025, which was primarily due to a reduction in delivery services provided to customers.

Initially, our transportation and delivery costs decreased to a less

extent than our revenue due to high inflation in gasoline and labor costs, as well as operational efficiencies associated with airfreights

forwarding services that require strict timelines and often prevent full truckload utilization.

Subsequently, cost reduction outpaced

the decline in revenue as we optimized our delivery scheduling and negotiated lower delivery rates with our major vendors, resulting in

lower overall operating costs.

Although there was a lag in adjusting transportation costs due to the factors noted above, we ultimately

achieved a lower cost level in line with the reduced delivery volume.

a decrease in customs declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the year ended June 30, 2025, resulting from a drop in the volume of cross-border freight we handled, particularly airfreight, during the same period;

an increase in warehouse service charges,

primarily representing labor costs at our regional warehousing and distribution centers during the year ended June 30, 2025, was mainly

driven by three factors.

First, industry hourly wage rates increased during the year, leading to higher overall staffing expenses.

we adjusted our staffing structure by reducing regular part-time positions and increasing the use of contracted labor to improve operational

flexibility in response to the lower shipping volume experienced in the current year.

Third, more labor was required for unpacking shipments

into smaller packages to meet customer requirements, which further contributed to the increase in warehouse labor costs.

This more flexible

staffing model positions us to adjust more efficiently to future changes in shipment volume, and if volume decreases further, we expect

to be able to reduce labor costs more promptly;

in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight and airfreights from

to China, during the year ended June 30, 2025, primarily due to higher business volumes for export cross-border airfreights

arrangement with higher unit cost, partially offset by a slight decrease in the volume of cross-border ocean arrangements, 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 year ended June 30, 2025.

The warehouse and equipment lease expenses increased significantly, from $1,195,808 for the year ended June 30, 2024, to $2,086,549 for the year ended June 30, 2025.

The increase was primarily because we entered into two more warehouse lease agreements during the year ended June 30, 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 warehouses in Chicago in the next fiscal year.

Our cost of revenues from the distribution of

pharmaceuticals was $1.2 million for the year ended June 30, 2025.

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

of the prior year.

overall gross profit was $2.9 million for the year ended June

30, 2025, compared to $3.7 million in the same period of the prior year.

gross margin for cross-border freight solutions was 8.8% for the year ended June 30, 2025, compared to 20.3% for the year ended June

The significant decline in gross margin was primarily attributable to (i) a 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 costs, customs

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

gross margin for the distribution of pharmaceutical was 56.1% for the year ended June 30, 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.

Excluding the favorable purchase discounts of $489,625, the gross margin for

pharmaceutical distribution would be approximately 38.4% for the current year.

This is a new business segment in the current year and

therefore no gross margin was reported in the same period of the prior year.

Selling Expenses

Our selling expenses decreased

by $77,322, or 96.9%, from $79,822 in the fiscal year ended June 30, 2023, to $2,500 in the fiscal year ended June 30, 2024.

The decrease was mainly driven by fewer customer referrals from third parties during the fiscal year ended June 30, 2024.

selling expenses amounted to $0.4 million for the year ended June 30, 2025, compared to a nominal amount for the same period in 2024.

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

the advertising expense amounted to $138,000, both of which were incurred in connection with the launch of our new pharmaceutical distribution

service during the year.

General and Administrative Expenses

general and administrative expenses increased by $1.8 million, or 77.5%, from $2.3 million in the fiscal year ended June 30,

2023, to $4.1 million in the fiscal year ended June 30, 2024.

These expenses represented 22.6% and 18.1% of our total revenues

for the fiscal years ended June 30, 2024 and 2023, respectively.

The increase was primarily attributed to higher salary

and employee benefit expenses, office expense and professional fee:

Our salaries and employee benefits expenses represented 66.1% and 61.4%

of our total general and administrative expenses for the fiscal years ended June 30, 2024 and 2023, respectively.

was mainly due to the recruitment of additional sales, customer services, and back-office support personnel to support our business growth.

For our salaries and employee benefits expenses, (i) our payroll expenses increased by $1.1 million, or 94.5%, from $1.2 million in the

fiscal year ended June 30, 2023, to $2.3 million in the fiscal year ended June 30, 2024, and (ii) our employee benefit expenses,

which mainly consist of 401(k) company contribution, meal allowance and health insurance expenses, increased by $0.2 million, or 73.6%,

from $0.2 million in the fiscal year ended June 30, 2023, to $0.4 million in the fiscal year ended June 30, 2024, representing

9.9% and 10.1% of our total general and administrative expenses for the fiscal years ended June 30, 2024 and 2023, respectively.

The increase was mainly due to higher meal allowance for overtime compensation and rising employee health insurance premiums.

Our professional fee increased

by $0.3 million, or 266.6%, from $0.1 million in the fiscal year ended June 30, 2023, to $0.4 million in the fiscal year ended June 30,

Our professional fee represented 9.2% and 4.5% of our total general and administrative expenses for the fiscal years ended

June 30, 2024 and 2023, respectively.

The increase was primarily due to accrued audit fees, legal fees, and financial reporting service

fees of approximately $0.3 million for the annual audit for the fiscal year ended June 30, 2024.

In the fiscal year ended June 30, 2023,

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

Our office expense represented

9.5% and 7.7% of our total general and administrative expenses for fiscal years ended June 30, 2024 and 2023, respectively.

was mainly due to office hardware including monitors and keyboard, printer ink, printer kits and charger purchased and more office supplies

consumed due to more staff hired.

Our general and administrative expenses increased by $3.3 million,

or 79.1%, from $4.1 million for the year ended June 30, 2024, to $7.4 million for the year ended June 30, 2025.

These expenses represented

41.7% and 22.6% of our total revenues for the years ended June 30, 2025 and 2024, respectively.

The increase was primarily attributed

to higher salary and employee benefit expenses and professional fees incurred in connection with operating as a listed company.

Additionally,

the launch of our new pharmaceutical distribution segment in the second quarter of the fiscal year ended June 30, 2025 contributed to

the rise in operating costs.

Our salaries and

employee benefits expenses increased by $1.2 million, or 41.6%, from $2.7 million for the year ended June 30, 2024, to $3.9 million

for the year ended June 30, 2025.

Our salaries and employee benefits expenses represented 52.3% and 66.1% of our total general and

administrative expenses for the years ended June 30, 2025 and 2024, respectively.

The increase was mainly due to the salary expenses

associated with two new subsidiaries supporting operations in the new business segment beginning in the second quarter of the fiscal

year in China.

For our salaries and employee benefits expenses, (i) our payroll expenses increased by $1.0 million, or 43.2% from

$2.3 million for the year ended June 30, 2024, to $3.3 million for the year ended June 30, 2025, and (ii) our employee benefit

expenses, which mainly consist of 401(k) company contribution in U.S., employee defined contribution plan in China, meal allowance

and health insurance expenses, increased by $0.1 million, or 32.1%, from $0.4 million for the year ended June 30, 2024, to $0.5

million for the year ended June 30, 2025, representing 7.3% and 9.9% of our total general and administrative expenses for the years

ended June 30, 2025 and 2024, respectively.

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

Our professional fees increased

by $1.0 million, or 263.4%, from $0.4 million for the year ended June 30, 2024, to $1.4 million for the year ended June 30, 2025.

professional fee represented 18.7% and 9.2% of our total general and administrative expenses for the years ended June 30, 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 year ended June 30, 2025.

For the year ended June 30, 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 decreased

by $0.6 million, or 61.8%, from $0.9 million in the fiscal year ended June 30, 2023, to $0.3 million in the fiscal year ended June 30,

The decrease was primarily attributable to the termination of a sublease agreement for certain office and warehouse space with a

related party, which occurred from August 2023 to December 2023.

Additionally, we received an employee retention credit of $0.3 million

in the fiscal year ended June 30, 2023, but we did not have such income in the fiscal year ended June 30, 2024.

Our other income, net, increased

by $0.1 million, or 23.0%, from $0.3 million for the year ended June 30, 2024, to $0.4 million for the year ended June 30, 2025.

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 warehouses to our related party, Intermodal, during the year ended June 30, 2025.

Interest Expenses

Our interest expenses for

the fiscal year ended June 30, 2024, remained relatively stable compared to same period in last year.

Income (Loss) Before Income Taxes

We had loss before income

taxes of $295,614 for the fiscal year ended June 30, 2024, compared to income before taxes of $1,008,798 for the fiscal year ended

June 30, 2023.

We were in a loss position before income taxes for the fiscal year ended June 30, 2024, was primarily attributable

to the net effects of:

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

and (iii) the decrease in

other income for the fiscal year ended June 30, 2024 as mentioned above.

Our interest expenses increased by $0.3 million, or 271.5%, from $0.1

million for the year ended June 30, 2024, to $0.4 million for the year ended June 30, 2025.

The increase in interest expense was mainly

due to late credit card payments and interest expense in connection with the convertible note issued during the year ended June 30, 2025.

Loss Before Income Taxes

We had a net loss before income taxes of $4.9 million and $0.3 million

for the years ended June 30, 2025 and 2024, respectively.

We were in a loss position before income taxes for the year ended June 30, 2025,

primarily attributable to the net effects of:

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

increase in interest expense for the year ended June 30, 2025 as mentioned above.

Income Tax Expense

We had income tax credit of

$67,337 and income tax expense of $65,068 in the fiscal year ended June 30, 2024 and 2023, respectively.

We recognized a current

income tax provision of $46,996 for the fiscal year ended June 30, 2024, due to net assessable income, and a deferred income tax

credit $186,485 due to temporary differences recognized and a deferred income tax expense of $72,152 due to the change from an S Corporation

to a C Corporation upon the completion of our reorganization on September 23, 2023.

For the fiscal year ended June 30, 2024 and 2023,

the Company was taxed at rates of 2.5% and 7.0% and 2.5% and 4.95% for the Illinois replacement tax and pass-through-entity tax, respectively.

Since our transition to a C Corporation on September 23, 2023, we are now obligated to pay federal tax at a rate of 21%.

This tax obligation

was previously exempt for us as an S Corporation.

Net Income (Loss)

As a result of the foregoing, we had a net loss of $225,252 for the

fiscal year ended June 30, 2024, compared to our net income of $983,602 in the fiscal year ended June 30, 2023.

We had income tax expenses

of $0.3 million for the years ended June 30, 2025, and an income tax credit for the year ended June 30, 2024.

A current income tax provision

of $0.2 million 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 year ended June 30, 2025.

In the prior fiscal year,

the Company recognized deferred tax assets (DTAs) related to its net operating loss carryforwards, based on management’s assessment

of future taxable income.

However, during the current fiscal year ended June 30, 2025, the Company reassessed its ability to realize these

DTAs and determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the

deferred tax benefits.

As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred

This change in assessment led to the recognition of a deferred income tax expense of $89,581 in the current year.

We recognized

a recovery of deferred income tax credit of $13,357 due to amortization of intangible assets, resulting in a net income tax expense of

$301,877 for the year ended June 30, 2025.

We recognized a current income

tax provision of $46,996 for the fiscal year ended June 30, 2024, due to net assessable income, and a deferred income tax credit of $186,485

due to temporary differences recognized and a deferred income tax expense of $72,152 due to the change from an S Corporation to a C Corporation

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

As a result of the foregoing,

we had a net loss of $5.2 million and of $0.2 million for the years ended June 30, 2025 and 2024, respectively.

Liquidity and Capital Resources

2 unchanged sentences

Our current assets were $10.3 million, and our current liabilities were $9.7 million, resulting in

a current ratio of 0.6:1.

Total stockholders’ equity as of June 30, 2024 was $0.6 million.

As of June 30, 2024 and

2023, we had accounts receivable net of allowance of $2.8 million and $1.4 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 June 30, 2024 and 2023, we provided a credit loss allowance of $54,066 and $25,909,

respectively.

In assessing our liquidity,

we monitor and analyze our cash on hand, our ability to generate sufficient revenue sources in the future, and our operating and capital

expenditure commitments.

Historically, we have funded our working capital needs primarily through operations, loans, 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 collections.

As of June 30, 2024, we had

a working capital deficit of $2.3 million.

We are currently focused on improving our liquidity and securing additional capital sources

through various short-term and long-term strategies.

In the short term, we intend to primarily focus on the followings:

enhancing the collection of outstanding accounts receivable balance, as a result of which, subsequent to June 30, 2024 and through the report date, we had collected approximately $2.8 million, representing 95.8% of the accounts receivable balance as of June 30, 2024, and our accounts receivable turnover days was 42 days for the fiscal year ended June 30, 2024;

(ii) collecting the balance of due from related parties in full

of approximately $0.4 million by December 31, 2024;

(iii) continued expansion of our business and service scope to

achieve anticipated levels of revenues, while continuing to control costs;

(iv) commitments by our stakeholders in providing working capital

loans to us when needed;

(v) actively seeking favorable equity financings, including through

IPO with approximately $5.79 million which was closed on July 1, 2024, and obtaining additional bank loans to meet our capital requirements.

Our IPO was closed in July 2024, which is subsequent to the end of

the fiscal year of this report, we will have sufficient funds to fulfill its short-term financial obligations.

In the long term, we anticipate

generating sufficient cash flow from our operations, obtaining additional bank loans and other borrowings to meet our capital requirements

to fund our operations and growth plans.

Based on our current operating plan, our management is confident that we will have sufficient

working capital and other financial resources to fund its operations and fulfill financial obligations for at least twelve months from

the issuance date of the consolidated financial statement.

a current ratio of 1.06:1 and positive working capital of $0.6 million.

Total stockholders’ equity as of June 30, 2025 was

$2.8 million.

of June 30, 2025 and June 30, 2024, we had accounts receivable net of allowance of $3.3 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 accounts receivable as of June 30, 2025 and June 30,

2024, we provided a credit loss allowance of $87,728 and $54,066, respectively.

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

our ability to generate sufficient revenues sources in the future, and our operating and capital expenditure commitments.

Historically,

we have funded our working capital needs primarily through operations, issuances of convertible debts, private placements, 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 in the execution of customer contracts, and the timing

of accounts receivable collections.

The following table sets forth

summary of our cash flows for the periods indicated:

For the fiscal years ended

Net cash (used in) provided by operating activities

For the years ended

Net cash used in operating activities

$ (2,655,006 )

Net cash used in investing activities

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net decrease in cash

Net increase in cash and cash equivalent

Cash, beginning of the year

Cash, end of the year

* Revised to reflect reclassification of cash flows described

in Note 2 in the accompanying consolidated financial statements included elsewhere in this Report

Operating Activities

Net cash used in operating activities was $2,655,006 in the fiscal

year ended June 30, 2025, which included a net loss of $5,246,136, adjusted for non-cash items of $2,601,253 and changes in working capital

deficits of $10,123.

The non-cash items primarily included $2,042,946 straight line lease expense of operating leases, $198,527 depreciation

included in G&A and cost of revenue, $32,681 depreciation of right-of-use finance assets, $138,994 amortization of discount and bond

issuance cost, $53,427 amortization of intangible assets, $39,804 interest expense on convertible debts, $28,120 interest income from

a third party loan, $33,432 from provision of allowance for expected credit loss and a decrease of $68,022 from deferred tax asset due

to recognition of valuation allowance.

The adjustments for changes in working capital mainly included an increase of $856,634 in accounts

receivable from third parties due to an increase of revenues near period end, an increase in inventory of $96,534, an increase of $141,687

in right of return asset, a decrease of $162,485 in accounts payable from related parties, an increase of $241,567 in prepayment and other

receivable and a payment of $1,540,032 for operating lease liabilities, partially offset by an increase of $1,332,359 in accounts payable

from third parties, a decrease of $376,728 in accounts receivable from related parties, an increase of $233,078 in tax payable, and an

increase of $1,072,789 in accrued liabilities and other payables.

Net cash used in operating

activities was $53,640 in the fiscal year ended June 30, 2024, including net loss of $228,277, adjusted for non-cash items for $1,168,010

activities was $53,640 in the fiscal year ended June 30, 2024, which included a net loss of $228,277, adjusted for non-cash items of $1,168,010

and changes in working capital of negative $993,373.

5 unchanged sentences

revenues in the fiscal year ended June 30, 2024, and an increase of $846,992 in operating lease liabilities, partially offset by an increase

of $468,284 in accrued liabilities and other payables due to unpaid IPO related expense, a decrease of $328,820 in due from related parties

because of settlement of rental income, an increase of $699,644 in accounts payable — third parties and an increase of $46,996 in

Net cash provided by operating

activities was $39,303 in the fiscal year ended June 30, 2023, including net income of $943,730, adjusted for non-cash items for $927,316

and changes in working capital of negative $1,831,743.

The non-cash items primarily included $826,284 non-cash operating lease expense,

$130,755 depreciation, $31,780 depreciation of right-of-use finance assets, offset by $93,742 from reversal of allowance for expected

credit loss, and impacted by an increase of $32,239 from deferred state tax expense.

The adjustments for changes in working capital mainly

included an increase of $506,152 in accounts receivable — third parties due to significant increase of revenues in the fiscal year

ended June 30, 2023, an increase of $579,496 in due from related parties because of unpaid rental income, a decrease of $101,896 in accounts

payable — related parties, and a decrease of $833,365 in operating lease liabilities, partially offset by an increase of $57,701

in accrued liabilities and other payables, a decrease of $54,441 in contract assets, an increase of $32,829 in tax payable and a decrease

of $18,672 in prepayment and other deposit.

The $92,943 decrease in cash used in operating activities in the fiscal

year ended June 30, 2024 compared to the prior year was primarily due to a net loss of $228,227 in the fiscal year ended June 30, 2024

compared to a net income of $943,730 in the prior fiscal year, offset by a decrease of $838,370 in cash outflow from working capital due

to timing of vendor payments, client payments and related parties payment.

In our ordinary course of business,

we typically grant a credit term of 15 days to customers that are independent third parties for their accounts receivable balances, while

our major vendors generally provide us with a credit term of 30 days.

Historically, our credit terms with related parties were more flexible.

The decrease of $838,370 in cash outflow from the working capital in the fiscal year ended June 30, 2024 compared to the prior fiscal

year was primarily attributable to:

(i) a faster collection cycle from related-party customers for

both accounts receivable and advances from the related parties for the fiscal year ended June 30, 2024;

increase in accounts payable to related parties as of June 30, 2024,

(iii) a significant increase in our revenue near fiscal year ended and completed shipment that we not invoiced

to our customers, which resulted in significantly higher accounts receivable balances from non-related-party customers as of June 30,

2024, thereby impacting our cash flow position.

of $468,284 in accrued liabilities and other payables due to unpaid IPO related expense, a decrease of $328,820 in other receivable —

related parties because of settlement of rental income, an increase of $699,644 in accounts payable — third parties and an increase

of $46,996 in tax payable.

The 2,601,366 increase in

cash used in operating activities for the fiscal year ended June 30, 2025, compared to the prior year, was primarily due to an increase

in net loss of $5,017,859 compared to the same period in the prior year, partly offset by a decrease of $983,250 in cash outflow from

working capital due to the timing of vendor, client, and related parties payment.

Investing Activities

Net cash used in investing

activities was $78,799 in the fiscal year ended June 30, 2024, compared to $18,288 in the fiscal year ended June 30, 2023.

2023, we reduced our unpaid registered capital contribution in our investee company in China, ABL Wuhan, while the third-party shareholders

increased their registered capital contribution accordingly.

As a result, the third-party shareholders now hold 80% of equity interest

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

Consequently, ABL Wuhan ceased to be our subsidiary after August 4, 2023.

resulted in a cash outflow of $48,893 due to the deconsolidation of the subsidiary and a payment for registered capital of $29,906 during

the fiscal year ended June 30, 2024.

Net cash used in investing activities for the fiscal year ended June 30, 2023, was primarily attributable

to our purchases of property and equipment.

activities was $688,261 and $78,799 for fiscal years ended June 30, 2025 and 2024, respectively.

Net cash used in investing activities

for the year ended June 30, 2025, was primarily attributable to net cash outflow of $276,356 related to intangible assets through acquisition

of 100% equity interest in Hupan Pharmaceutica.

This amount comprises a total cash payment of $552,721, partially offset by $276,365

in cash acquired as part of assets acquisition.

In addition, we provided a loan of $277,741 to two related parties, purchased property

and equipment of $49,816 and conducted office renovation of $50,740 for our subsidiaries in Mainland China, and conducted warehouse renovation

of $50,348 for our subsidiaries in U.S.

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 owned 80% of equity interest and we owned 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 year ended June 30, 2024.

Financing Activities

Net cash provided by financing

activities was $78,755 in the fiscal year ended June 30, 2024, compared to $253,088 net cash used in the fiscal year ended June 30, 2023.

The increase in net cash provided by financing activities was mainly due to the net proceeds of $185,014 from loans borrowed and proceeds

of $237,302 from stockholders, partially offset by payment of IPO related cost of $170,000, the repayment of equipment and vehicle loans

and principle payment of finance leases totaling of $149,592 during the fiscal year ended June 30, 2024.

The net cash used in financing

activities for the fiscal year ended June 30, 2023, was primarily attributable to payment of IPO related cost of $90,000, the repayment

of equipment and vehicle loans amounting to $104,598, repayment of loans of $100,864 and net proceeds from stockholders totaling $63,014.

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.

expenditures amounted to nil and $18,288 in the fiscal years ended June 30, 2024 and 2023, respectively.

Net cash provided by financing activities was $8,166,465 for the fiscal

year ended June 30, 2025, compared to net cash provided by financing activities of $78,755 for the same period in prior year.

in net cash provided by financing activities was mainly due to the net proceeds of $5,351,581 from the offering, net proceeds of $2,999,700

from an offering of private placement, net proceeds of $1,170,513 from issuance of convertible debts, proceeds from loan borrowing of

$1,017,919 and proceeds from a related-party loan of $124,176, partially offset by repayment of $805,345 to shareholders, advance to related

parties of $715,309 and loans repayment of $533,440 during the fiscal year ended June 30, 2025.

During the fiscal year ended June 30,

2024, the Company did not engage in any financing activities such as the issuance of convertible debentures, private placements, or initial

public offerings.

No proceeds were raised through equity or debt instruments,

Capital Expenditure

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 $150,904 and $nil for the fiscal years ended June 30, 2025 and 2024, respectively.

We expect that our capital

1 unchanged sentence

We intend to fund our future capital expenditures

with our existing cash balance, proceeds of loans, working capitals loans from stockholders and the proceeds from our IPO which was closed

in July 2024.

Commitments and Contractual Obligations

As of June 30, 2024, the Company’s contractual

obligations consist of the following:

Contractual Obligations

Operating lease obligations

Finance lease obligations

Vehicle loans

Equipment loans

Off-Balance Sheet Commitments and Arrangements

There were no off-balance sheet

arrangements as of and for the fiscal years ended June 30, 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.

with our existing cash balance, proceeds of loans and issuance of convertible debts and private placement offering.

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.

The estimates were based on

a number of factors including historical experience, the age of the accounts receivable balances, the credit quality of customers, current

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.

Recent Accounting Pronouncements

We consider the applicability

and impact of all accounting standards updates (“ASUs”).

Management periodically reviews newly issued accounting standards.

In August 2020, the FASB

issued ASU No.

2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and

Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for Convertible Instruments and Contracts

in an Entity’s Own Equity, which simplifies accounting for convertible instruments by removing major separation models required

under current U.S.

This ASU also removes certain settlement conditions that are required for equity-linked contracts to

qualify for the derivative scope exception, and it simplifies the diluted earnings per share calculation in certain areas.

The new standard

will become effective for us beginning January 1, 2024, using either a modified retrospective or a fully retrospective method of

transition and early adoption is permitted.

Management is currently evaluating the impact of the new standard on our financial statements.

In June 2022, the FASB

issued ASU No.

2022-03, “ Fair Value Measurements (Topic 820):

Fair Value Measurement of Equity Securities Subject to

Contractual Sale Restrictions ,” which clarifies and amends the guidance of measuring the fair value of equity securities subject

to contractual restrictions that prohibit the sale of the equity securities.

The guidance will be effective for years beginning after

December 15, 2023 and interim periods within those years.

We do not expect the adoption to have a material impact on our consolidated

We prepare our condensed

consolidated financial statements in conformity with U.S.

GAAP, which requires us to make judgments, estimates and assumptions

that affect our reported amounts of assets, liabilities, revenue, costs and expenses, and any related disclosures.

Actual results

could materially differ from those estimates.

Critical accounting policy is both material to the presentation of financial

statements and requires management to make difficult, subjective or complex judgments that could have a material effect on financial

condition or results of operations.

Accounting estimates and assumptions may become critical when they are material due to the

levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to

change, and that have a material impact on financial condition or operating performance.

Critical accounting estimates are estimates that require us to make

assumptions about matters that were highly uncertain at the time the accounting estimate were made and if different estimates that we

reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely occur from period to

period, have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

The management of the Company believes the following critical accounting estimate is the most significantly affected by judgments and

assumptions used in the preparation of our consolidated financial statements:

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 and the convertible debt agreement,

that the common stock warrants are qualified 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.

Refer to Notes 2 to the consolidated

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

financial statements.

We do not believe other recently

issued but not yet effective accounting standards, if currently adopted, would have a material effect on our consolidated balance sheets,

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

Quantitative and Qualitative

Disclosures About Market Risk.

Recent Accounting Pronouncements

The Company considers the

applicability and impact of all accounting standards updates (“ASUs”).

Management periodically reviews new accounting standards

that are issued, see Note 2 - Summary Of Significant Accounting Policies in the note of financial statement

Quantitative and Qualitative Disclosures

About Market Risk.

We are a smaller reporting

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What changed 10-K

Item 7. Management’s Discussion and Analysis