BTOC 10-K & 10-Q changes, risk factors and insider trading

U.S. government trade actionsactions, including ongoing tariff escalations, trade negotiations with China, and new tariff measures targeting forced labor concerns, could have a material adverse effect on our business, financial position, and results of operations.

Over the past several years, the U.S. government has taken a number of trade actions that impact or could impact our operations, including imposing tariffs on certain goods imported into the U.S. As the majority of our customers import products into the U.S. from China, many of their products are subject to the tariffs imposed under Section 301 of U.S. trade law that have been applied to separate lists of Chinese goods imported into the U.S., beginning during the first Trump Administration,Administration. whichThe remainedBiden Administration largely inmaintained, effectdefended, inand theenforced Bidenthese Administration.particular trade actions. A number of lawsuits and other legal challenges with respect to the Section 301 tariff actions have been filed and remain pending, which could result in further changes to the tariffs. Notably, in 2026, the U.S. Supreme Court issued a decision in Learning Resources v. Trump that invalidated certain sweeping emergency duties previously imposed on Chinese imports. The Bidencurrent Trump Administration largelyhas maintained,significantly defended,expanded upon these tariff measures, imposing additional tariffs on Chinese imports and enforced these particularreigniting trade actions.tensions with key U.S. trading partners. In response to the U.S. Supreme Court’s ruling, the U.S. Trade Representative initiated new Section 301 investigations targeting forced labor concerns, resulting in the announcement on June 2, 2026, and implementation in late July 2026, of a new tariff of up to 12.5% on Chinese goods on the basis that the PRC lacks an effective prohibition on the importation of goods produced with forced labor. China has condemned this unilateral action, and the situation remains subject to ongoing developments.

It is unclear what actions the Trump administration or Congress will take next with respect to these proposals. Ongoing or new trade wars or other governmental action related to tariffs or international trade agreements or policies could reduce demand for our customers’ products and services, increase their costs, reduce their profitability, adversely impact their supply chain or otherwise have a material adverse effect on their business and results of operations, any of which could have a material adverse effect on our business, financial position, and results of operations. Even where tariff rates have been temporarily reduced through negotiated frameworks, there can be no assurance that such reductions will be maintained, and tariff levels may be increased again at any time. The introduction of new tariff measures — such as the forced labor-based Section 301 tariff of up to 12.5% implemented in July 2026 — and the potential for further legal challenges following the U.S. Supreme Court’s decision in Learning Resources v. Trump, introduce additional layers of uncertainty as to the applicable tariff regime. Given the uncertainty regarding the scope and duration of these trade actions by the U.S. government or other countries, as well as the potential for additional trade actions, retaliatory measures, a breakdown in ongoing negotiations, or the expiration or modification of provisional suspension agreements, the impact on our business and results of operations remains uncertain.

The Chinese government has implemented regulations or policies that have adversely affected our business. For example, Thethe PRC government has imposed controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. See “Item 1A. Risk Factors — Economic, Political, and Market Risks — If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.” There is no guarantee that the PRC government will not implement similar policies or regulations in the future. For example, any changes to trade policies or regulations in China could potentially impact the ability of e-commerce merchants to sell their merchandise in the U.S. market — possible tariffs imposed by the PRC government on goods exported to the U.S. could increase costs for e-commerce merchants selling their merchandise overseas. In light of the renewed escalation of the U.S.-China trade war under the current Trump administration, these risks have intensified. In early 2025, the U.S. imposed new tariffs on Chinese goods — raising certain rates up to 145% — prompting the PRC government to implement retaliatory measures, including tariffs of up to 125% and restrictions on exports of critical raw materials, which tariffs have been reduced by the U.S. to 30% and China to 10% until November 10, 2025 on a temporary basis. In 2026, the U.S. Trade Representative announced and implemented a new tariff of up to 12.5% on Chinese goods on the basis of forced labor concerns, following the U.S. Supreme Court’s decision in Learning Resources v. Trump, which invalidated certain prior emergency duties. These developments have increased the cost and complexity of cross-border trade, which could discourage Chinese e-commerce merchants from expanding or continuing their U.S.-bound operations. This could potentially lead to a decrease in demand for overseas warehousing and logistics services, as e-commerce merchants may opt to scale back their operations in the U.S. market.

Additionally, potential deterioration in China’s macroeconomic environment could reduce the purchasing power of PRC e-commerce merchants, who may choose to reduce their e-commerce business targeting U.S. consumers or, in some cases, even exit the U.S. market altogether, leading to a decrease in demand for overseas warehousing and logistics services. Furthermore, potential economic deuteriationdeterioration in the PRC could make it more challenging for us to attract new customers and retain existing ones, potentially leading to a decrease in our service utilization. If the demand for cross-border e-commerce from the PRC decreases, it could adversely impact our revenue and profitability. While we plan to mitigate such risks by diversifying our customer base, there can be no assurance that we will be successful in doing so. As such, the economic, political, and social conditions in the PRC could materially and adversely impact our financial condition and results of operations.

As we derived approximately 84%78% and 96%of 84% of our revenue from the PRC market during the fiscal years ended June 30, 20252026 and 2024,2025, respectively, we believe that our continued growth depends largely on our ability to maintain our Chinese client base. In early 2021, Amazon, the world’s largest e-commerce platform, claimed that it had suspended the accounts of over 50,000 Chinese sellers for improper use of review functions. Specifically, instead of earning great reviews through high-quality products, those PRC sellers manipulated reviews by paying for positive product reviews or by giving away gift cards, which violates Amazon’s terms of service. It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling their merchandise to the U.S. via Amazon.

During the fiscal years ended June 30, 2025 2026 and 2024,2025, we derived most of our revenue from a few customers. For the fiscal year ended June 30, 2026, our two largest customers, Goldensee Ltd. and Aukey International Limited, accounted for approximately 21.8% and 14.4% of our total revenue, respectively. For the fiscal year ended June 30, 2025, our two largest customers, Goldensee Ltd. and Kimberly Tenneco Inc, accounted for approximately 22.0% and 10.8% of our total revenue, respectively. For the fiscal year ended June 30, 2024, our top four customers, Aukey International Ltd., Western Post (HK) Ltd., Goldensee Ltd., and Union Grand Imp. & Exp. Co., Ltd., accounted for approximately 11.7%, 11.7%, 10.9%, and 10.0% of our total revenue, respectively. No other customers represented 10% or more of our total revenue for the years ended June 30, 20252026 and 2024.2025. For an example of a typical transaction, see “Item 1. Business — Customers.” We may lose a significant customer due to a variety of factors, including our ability to provide quality warehouse and logistics management services. Even though we have a strong record of performance, we cannot guarantee that we will continue to maintain the business cooperation with these significant customers at the same level, or at all. If any significant customer terminates its relationship with us, there is no assurance you that we will be able to secure an alternative arrangement with comparable customer in a timely manner, or at all. Losing one or more of these significant customers could adversely affect our revenue and profitability.

In addition, we depend upon a significant supplier suppliers that accounted for more than 10% of our total purchasespurchases. for approximately the past two years — specifically, FedEx accounted for 9% and 50% of our total purchases duringDuring the fiscal year ended June 30, 20252026, Flatiron Merchants Inc. and 2024,Fastbuy Inc., two third-party vendors providing shipping services via FedEx, accounted for approximately 13.5% and 12.5% of our total purchases, respectively. During the fiscal year ended June 30, 2025, UPS accounted for approximately 15.2% and MEGA CORP LOGISTIC LLC, a third-party vendor providing shipping services via FedEx, accounted for approximately 10%, respectively. We cannot ensure that we will have no concentration of suppliers in the future. Such third-party suppliers are run by independent entities that are subject to their own unique operational and financial risks, which are beyond our control. If such significant suppliers breach or terminate their contracts with us, or experience significant disruptions to their operations, we will be required to find and enter into arrangements with one or more replacement suppliers. Finding alternative suppliers could involve significant delays and other costs and these suppliers may not be available to us on reasonable terms or at all. As a result, this could harm our business and financial results and result in lost or deferred revenue.

Because we do not have our own delivery team and networks, our business depends on the services provided by, and relationships with, various independent third parties, to provide truck and ocean services and to report certain events to us, including, but not limited to, shipment status information and freight claims. For example, we rely on ocean carriers for the transportation of our customer’s goods and merchandise to the U.S, before they complete customs clearance and are delivered to U.S. warehouses. We also rely on common carriers such as FedEx and UPS to distribute merchandise to the U.S. end consumer who place orders online. Several third-party logistics service providers contributed a significant part of the total cost of revenue of our Company. In particular, for the fiscal years ended June 30, 20252026 and 2024,2025, FedEx accounted for approximately 9%3% and 50%9% of our total cost of revenue, respectively. During the fiscal year ended June 30, 2026, Flatiron Merchants Inc. and Fastbuy Inc., two third-party vendors providing shipping services via FedEx, accounted for approximately 13.5% and 12.5% of our total purchases, respectively. During the fiscal year ended June 30, 2025, UPS accounted for approximately 15.2% and MEGA CORP LOGISTIC LLC, a third-party vendor providing shipping services via FedEx, accounted for approximately 10%, respectively. These third-party logistics service providers may not fulfill their obligations to us, which may prevent us from meeting our commitments to our customers. This reliance also could cause delays in reporting certain events, including recognizing claims. In addition, if we are unable to secure sufficient equipment or other transportation services from third parties to meet our commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently. Many of these risks are beyond our control, including:

We may face risks related to natural disasters, health epidemics, and other outbreaks, which could significantly disrupt our operationsoperations.

Natural disasters such as earthquakes, tsunamis, hurricanes, tornadoes, floods, or other adverse weather and climate conditions, whether occurring in the United States or abroad, could disrupt our operations and could damage or destroy infrastructure necessary to transport products as part of the supply chain. These events could make it difficult or impossible for us to provide logistics services; disrupt or prevent our ability to perform functions at the corporate level; and/or otherwise impede our ability to continue business operations in a continuous manner consistent with the level and extent of business activities prior to the occurrence of the unexpected event, which could adversely affect our business and results of operations. In addition, our business may be negatively impacted by the fear of, exposure to, or actual effects of, a disease outbreak, epidemic, pandemic, or similar widespread public health concern, including travel restrictions or recommendations or mandates from governmental authorities.

As we maintain customers’ goods and merchandise in our warehouses, we bear the risk of damage and loss prior to coordinating with third-party logistics service providers to distribute the goods or merchandise ordered online to their end consumers. In addition, we offer port trucking services to assist customers with the transportation of shipping containers from ports to storage or warehouses. Although we also maintain cargo insurance and warehouse insurance for the warehouses operated and managed by us, and take steps to enhance control by engaging dependable truck drivers for transportation and renting more secure warehouseswarehouse space, we remain subject to inventory losses caused by theft, vandalism, or accidents during transportation and/or warehousing. In addition, force majeure events such as flooding, fires, or hail may affect a large numbervolume of our automobiles. customers’ goods and merchandise. Such events may cause us to incur large damages, deprive us of a significant portion of our inventory, and reduce customer satisfaction if it leads to our failure to deliver soldgoods automobiles.and merchandise in a timely manner. If any of the foregoing occurs, our business reputation, financial condition, and results of operations may be adversely affected.

Our business has grown substantially since our inception, and we expect it to continue to grow in terms of scale and diversity of operations. For example, we launched our international ocean freight services in January 2023 and are actively expanding and refining these offerings. With this new addition, we can now offer our manufacturer customers a comprehensive one-stop logistics solution, covering the entire journey from their overseas factory door to the doorstep of the end consumer here in the United States. In addition, we plan to continue to develop comprehensive and sophisticated solutions and services that span the entire supply chain, from ocean freight to distribution and delivery. This will enable us to offer a full range of value-added services to our customers, including sales forecasts and inventory planning. Such expansions increase the complexity of our operations and may cause strain on our managerial, operational, and financial resources. We must continue to hire, train, and effectively manage new employees. In the event that our new hires fail to perform as expected, or if we fail to hire, train, manage, and integrate new employees, our business, financial condition, and results of operations may be materially adversely affected. The expansion of our services will also require us to maintain consistency in the quality of our services so that our market reputation is not damaged by any deviations in quality, whether actual or perceived.

To sustain our operations and future business growth, we need to make significant investments in both capital and working capital, and if we are unable to secure sufficient financing when needed, our ability to execute our business plan as outlined in this prospectusannual report will be impaired, which may negatively impact our business and prospects.

Sustaining our ongoing operations and propelling driving future growth requires a significant investment in capital assets,assets coupled withand sufficient working capital. In particular, as a growing company, we may require additional capital to finance our operations, make strategic investments, or respond to market conditions. For example, we are scheduled to commence the expansion of our warehouse network through leasing additional warehouse space in California and Illinois by December 2024, with an estimated cost of approximately $4 million to $5 million, and we plan to refine and optimize our international ocean freight services with an estimated cost of approximately $2 million. There can be no assurance that we will be able to obtain the necessary financing on favorable termsterms, or at all. Factors beyond our control, such as unfavorable market conditions, general economic downturns, or adverse investor sentiment, may make it challenging for us to secure additional funding. In the event we are unable to obtain additional financing, we may have to significantly limit,curtail, or even terminate, our primary operations, or delay, reduce, or eliminate certain of our planned operations (including further buildingexpanding our warehousing network and developing comprehensive and sophisticated solutions and services that span the entire supply chain, from ocean freight to distribution and delivery), resulting in a complete loss of investment for our stockholders. Our inability to obtain financing on acceptable terms when needed may have a material adverse effect on our business, results of operations, financial condition, and prospects.

Our total revenue decreased by approximately $4.6 million, or 2.4%, to approximately $185.8 million for the fiscal year ended June 30, 2026 from $190.4 million for the fiscal year ended June 30, 2025. Our total revenue increased by approximately $23.4 million, or 14.0%, to approximately $190.4 million for the fiscal year ended June 30, 2025 from $167.0 million for the fiscal year ended June 30, 2024. OurWe totalreported revenuenet increasedloss byof approximately $31.9 million, or 23.6%, to approximately $167.0 million for the fiscal year ended June 30, 2024 from $135.0$20.9 million for the fiscal year ended June 30, 2023.2026, representing an increase by $5.6 million, or 36.6%, from net loss of $15.3 million for the fiscal year ended June 30, 2025. We reported net loss of approximately $15.3 million for the fiscal year ended June 30, 2025, representing a decrease by $22.8 million, or 306.3%, from net income of $7.4 million for the fiscal year ended June 30, 2024. We reported net income of approximately $7.4 million for the fiscal year ended June 30, 2024, representing a decrease by $6.5 million, from $13.9 million for the fiscal year ended June 30, 2023. While we have achieved strong financial results in the past, these results may not be sustainable or indicative of future results, and we cannot assure you that we will achieve or maintain profitability on a consistent basis. Our revenue growth may slow down or our revenue may decline for a number of reasons, including reduced demand for our warehousing and logistics services, increased competition, industry trend, or our failure to capitalize on growth opportunities. Meanwhile, we expect our overall selling, general, and administrative expenses, including marketing expenses, salaries, and professional and business consulting expenses, to continue to increase in the foreseeable future, as we plan to hire additional personnel and incur additional expenses in connection with the expansion of our business operations. In addition, we also expect to incur significant additional legal, accounting, and other expenses as a newly public company. These efforts and additional expenses may be more costly than we currently expect, and there is no assurance that we will be able to maintain sufficient operating revenue to offset our operating expenses. Any failure to increase revenue or to manage our costs as we continue to grow and invest in our business would prevent us from achieving or maintaining profitability or maintaining positive operating cash flow at all, or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.

A number of U.S. federal and state laws and regulations applicable to the warehousing and logistics industry affect our business and conduct. For example, we are subject to regulation by the FMC as an OTI. As a licensed OTI, we are required to comply with several regulations, including the filing of our tariffs. We provide customs brokerage services as a customs broker under a license issued by the CBP and other authoritative governmental agencies. Further, DHS regulations applicable to our customers who import goods into the U.S. and our contracted ocean carriers can impact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations. Moreover, the OSHA implements and enforces safety and health regulations in the workplace, which provide standards applicable to all industries generally and specific to the warehousing industry, such as standards for, among other things, proper storage of materials, use of material handling equipment, and employee training. Furthermore, as we are involved in the transportation of goods, we must comply with the DOT regulations regarding driver qualifications, vehicle maintenance, and hours of service. Additionally, as with other warehousing and logistics companies, we are required to follow federal and state employment laws, which cover important aspects, such as minimum wage, overtime pay, and anti-discrimination policies, among other things. We are also required to comply with local zoning ordinances and building codes, which may specify the permissible locations for our facilities and the safety standards that must be adhered to. See “Item 1. Business — Governmental Regulations — Operations.” Any failure to comply with these laws and regulations may result in the assessment of administrative, civil, or criminal penalties, the imposition of investigatory remedial obligations or the issuance of injunctions limiting or prohibiting our operations. We confirm that, as of the date of this annual report, each of our subsidiaries has obtained a valid business license or permit required for its operations. To the best of our knowledge, we are not obliged to obtain any other approvals, licenses, or permits from any federal, state, or local authorities to conduct our business, nor have we received any notice requesting such approvals, licenses, or permits from these authorities. However, it is uncertain whether we will be required to obtain additional approvals, licenses, or permits in connection with our business operations pursuant to evolving federal or state laws and regulations, and whether we will be able to obtain such approvals, licenses, or permits on a timely basis. Failure to do so may resultsresult in a material change in our operations, and the value of our common stock could deprecatedepreciate significantly or become worthless.

The market price of our common stock may be volatile or may decline regardless of our operating performance, and youwe may not be ableunable to resellmaintain yourcompliance shareswith atNasdaq’s orcontinued abovelisting the initial public offering price.requirements.

There is no assurance that we will be able to regain or maintain compliance with the Nasdaq listing criteria or continue to meet the continued listing requirements of The Nasdaq Capital Market. In addition to the foregoing, the market price of our common stock may fluctuate significantly in response to numerous other factors, many of which are beyond our control, including:

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business. Our receipt of the Nasdaq bid price deficiency notice and the uncertainty surrounding our ability to regain compliance may further contribute to volatility in the market price of our common stock and could adversely affect investor confidence in our Company.

We are a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we include a report of management on our internal control over financial reporting in our annual reportreports on 10-KForm beginning with our annual report for the fiscal year ended June 30, 2025.10-K. In addition, once we cease to be an “emerging growth company,” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. In preparing our consolidated financial statements as of and for the fiscal years ended June 30, 20252026 and 2024,2025, we have identified a material weakness in our internal controls over financial reporting, which is a lack of formal policies and procedures related to a risk assessment process and internal control environment.

As of the date of this annual report, our largest stockholder, Mr. Aidy Chou, holds and will continue to hold, directly or indirectly, more than a majority of the voting power of our outstanding common stock shares and will be able to determine all matters requiring approval by our stockholders. Under the Nasdaq listing rules, a company of which more than 50% of the voting power is held by an individual, group, or another company is a “controlled company” and is permitted to phase in its compliance with the independent committee requirements. Although we do not intend to rely on the “controlled company” exemptions under the Nasdaq listing rules even if we are a “controlled company,” we could elect to rely on these exemptions in the future. If we were to elect to rely on the “controlled company” exemptions, a majority of the members of our board of directors might not be independent directors and our nominating and corporate governance and compensation committees might not consist entirely of independent directors. Accordingly, if we rely on the exemptions, during the period we remain a controlled company and during any transition period following a time when we are no longer a controlled company, you would not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.

We provide one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market. We currently operate 10 eleven warehouses across the country, with an aggregate gross floor area of approximately 3,905,0203,819,900 square feet. Aside from a nationwide footprint and large storage space, our warehouses are equipped with automated sorting systems, heavy-duty forklifts, and pallets and trays that are suitable for processing bulky items. As a one-stop warehousing and logistics service provider, we offer a full spectrum of services, including (i) customs brokerage services; (ii) transportation of merchandise to U.S. warehouses; and (iii) warehouse management and order fulfillment services, which further include (a) product storage and retrieval, (b) product packing and labeling, (c) kitting and repackaging, (d) order assembly and load consolidation, (e) inventory management and sales forecasting, (f) third-party distribution coordination, and (g) other value-added services. We also provide warehousing and logistics services to our U.S.-based commercial customers, who are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations. In general, the warehousing and logistics services we provide to our domestic customers are similar to those we provide to our overseas customers. This allows us to provide integrated solutions for our customers, whether they need domestic or international warehousing and logistics support. As of June 30, 20252026 and 2024,2025, we had an active customer base of 505 525 and 105 customers,505, respectively, for our warehousing and logistics services.

We have experienced rapid growth since our inception. For the fiscal years ended June 30, 20252026 and 2024,2025, we had total revenue of $190.4$185.8 million, and $167.0$190.4 million,million respectively, and net loss of $15.3$20.9 million, and net$15.3 income of $7.4 million,million respectively. While we do not have any subsidiaries, assets, or employees in the PRC, we generate a significant portion of our revenue from customers based in China. During the fiscal years ended June 30, 20252026 and 2024, 2025, we generated approximately 84%78% and 96%84% of our revenue from PRC-based customers, respectively. See “Item 1A. Risk Factors — Economic, Political, and Market Risks — China’s economic, political, and social conditions, as well as governmental policies, could affect the business environment and economic conditions in China, which may result in an adverse impact on the demand for our services, potentially harming our financial condition and operating results.”

The majority of our customers consist of PRC e-commerce merchants who sell their merchandise into the U.S. market through e-commerce platforms. As such, our ability to acquire and maintain new or existing customers for our warehousing and logistics services is heavily reliant on their continued willingness to conduct cross-border e-commerce businesses, which may be significantly impacted by policies set by e-commerce platforms. For example, in early 2021, Amazon, the world’s largest e-commerce platform, claimed that it had suspended the accounts of over 50,000 Chinese sellers for improper use of review functions. Specifically, instead of earning favorablegreat reviews through high-quality products, those PRC sellers manipulated reviews by paying for positive product reviews or by giving away gift cards, which violated Amazon’s terms of service. It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling their merchandise into the U.S. via Amazon. There is no guarantee that our current or future international customers are fully compliant with the terms of service of all the international e-commerce platforms they use, including Amazon, or that those e-commerce platforms will not from time to time initiate such a widespread suspension of PRC sellers in the future. Such a crackdown on PRC sellers may significantly reduce the number of Chinese e-commerce sellers who intend to sell in the U.S., who are our primary customers. The loss of our PRC customer base due to the widespread suspension of PRC sellers in the cross-border e-commerce industry could be detrimental to our ongoing operations. See “Item 1A. Risk factors — Operational Risks — The suspension of PRC sellers on using international e-commerce platforms, such as the crackdown on PRC sellers by Amazon in early 2021, has discouraged and may continue to discourage a growing number of PRC e-commerce sellers from selling their merchandise to the United States, thus adversely affecting our business, financial condition, and results of operations.”

During the fiscal years ended June 30, 2025 2026 and 2024,2025, our five largest customers accounted for approximately 55.1%55.9% and 53.0%55.1% of our total revenue, respectively. While we strive to maintain our competitive strengths, such as our quality warehousing and logistics services, competitive pricing, and quality customer services to maintain our customer base (see “Item 1. Business — Our Competitive Strengths”) to maintain our customer base,, there is no guarantee that we will continue to maintain our business relationships with these major customers at the same level, or at all. In the event that a significant customer terminates its relationship with us, therewe iscannot no assuranceassure that we will be able to secure an alternative arrangement with another comparable customer in a timely manner, or at all. Losing one or more of these major customers could adversely affect our revenue and profitability. See “Item 1A. Risk Factors — Operational Risks — Our largest customers generate a significant portion of our revenue and our business may rely on two suppliers that account for more than 10% of our total purchases, and interruption in operations of such significant customers or supplier may have an adverse effect on our business, financial condition, and results of operations.”

Our revenue increaseddecreased by $23.4$4.6 million, or 14.0%, 2.4%, to $190.4$185.8 million during the fiscal year ended June 30, 2025,2026, compared to $167.0$190.4 million for the fiscal year ended June 30, 2024.2025. The increasedecrease was due to the following factors:

Our general and administrative expenses increased by $4.7$7.3 million, or 49.7%, from $10.0$14.7 million for the fiscal year ended June 30, 20242025 to $14.7$22.0 million for the fiscal year ended June 30, 2025, representing an increase of 47.2%.2026. The increase was dueprimarily attributable to the following factors:

Our California subsidiaries are subject to the current California state corporate income tax at a rate of 8.84% and federal income tax at a flat rate of 21%.

Net incomeloss

As a result of the foregoing, our net loss for the fiscal year ended June 30, 20252026 was $15.3$20.9 million, compared with the net incomeloss of $7.4$15.3 million for the fiscal year ended June 30, 2024,2025, representing aan decreaseincrease byof $22.8$5.6 million.

The Company can make no assurances that required financing will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events do not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfalls, there would likely be a material adverse effect on the Company and would materially adversely affect its ability to continue as a going concern. In assessing our liquidity, management monitors and analyzes our cash on-hand, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. As of the date of this annual report,Report, we have financed our operations primarily through cash flow generated by operating activities, equity financing, debt financing from thirdour partiesbusiness operations in previous years, and capital contributionsraised fromthrough stockholders.equity financing activities. As of June 30, 20252026 and 2024,2025, we had cash and cash equivalents and restricted cash of $13.6$6.5 million and $10.0$13.6 million, respectively, which primarily consisted of cash deposited in banks.

Net cash used in operating activities was $5.1 million for the fiscal year ended June 30, 2026, compared with net cash provided by operating activities was of $1.5 million for the fiscal year ended June 30, 2025, compared to net cash provided by operating activities of $3.0 million for the fiscal year ended June 30, 2024, representing a $1.5 million decrease inof the$6.6 netmillion. cash inflow provided by operating activities. The decrease was primarily due to the following:

Net cash usedprovided inby investing activities was $1.8 $0.7 million for the fiscal year ended June 30, 2025,2026, primarily attributable to $2.9$4.8 million in proceeds received from loan repayments, partially offset by $1.8 million of cash used for the purchase of property and equipment,equipment and net$2.4 million of $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan repayments.others.

ForNet cash used in investing activities was $1.8 million for the fiscal year ended June 30, 2024, net cash used in investing activities was $7.4 million,2025, primarily attributable to $5.2$2.9 million cash used for the purchase of property and equipment andequipment, $2.2net of $1.0 million cash used for loans extended to others.others, and $2.0 million proceeds received from loan repayments.

For the fiscal year ended June 30, 2025,2026, we had net cash providedused by in financing activities of $4.0$2.6 million, which was primarily attributable to the net effects offollowing: (i) $8.1 million of net proceeds convertible notes; (ii) $0.4 million of loans advanced to related parties; (iii) $3.4$2.0 million used for the repayment of convertible notes andpursuant commitmentto feesthe payableSEPA (as defined below) ; and (ivii) $0.4$0.6 million used to repay finance lease liabilities.

For the fiscal year ended June 30, 2024,2025, we had net cash provided by financing activities of $7.8$4.0 million, which was primarily attributable to the net effects of: (i) $7.5 $8.1 million collectedof net proceeds from ourthe initialPre-Paid publicAdvance offeringunder the SEPA; (ii) $0.5$0.4 million collected from related parties for the repayment ofin loans we previously advanced to themrelated parties; (iii) $1.0$3.4 million used for expensesrepayment relatingof convertible notes and the related commitment fee payable pursuant to the initialSEPA; public offering;and (iv) $0.2$0.4 million used to repay finance lease liabilities; and (v) $1.0 million in capital contributions from stockholders.liabilities.

As of June 30, 2025,2026, we had operating and finance leases for office space, warehouse space, and forklifts. Lease terms expire at various dates throughranging Julyfrom 2025September 2026 to November 20342034, with options to renew for varying terms at our sole discretion. We have not included these options to extend or terminate in the calculation of right-of-use assets or lease liabilities, as there is no reasonable certainty, as of the date of this annual report, that these options will be exercised.

As of June 30, 2025,2026, aggregatematurities annualof lease obligationsliabilities for each of the following fiscal years ending June 30 and thereafter were as follows:

Other than the above leases and the Convertible Notes,leases, we did not have any significant commitments, long-term obligations, or guarantees as of June 30, 2025.2026.

Other than six standby letters of credit with Eastwest Bank in the aggregate amount of $4,387,550,$4,325,148, we did not have during the periodperiods presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of June 30, 2025, 2026, we still had unused credit of $4,387,550$4,325,148 available with Eastwest Bank.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, eachliabilities as of the date of this annual report, and revenue and expenses during the periods presented. On an ongoing basis, management evaluates their its estimates and assumptions, and the effects of any such revisions are reflected in the financial statements in the period in which they are determined to be necessary. Management bases theirits estimates on historical experience and on various other factors that theyit believe believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our consolidated financial statements.

Despite thatAlthough management determineshas determined that there are no critical accounting estimates, the oneestimate that requires relatively significant estimatesjudgment relates to the useful lives of property and equipment.

Property and equipment are recorded at cost, less accumulated depreciation and impairment. The estimation of useful lives impacts the level of annual depreciation expenses recorded and the estimation is a matter of judgment based on the experience of our Company and general industry practice with similar assets. The estimated annual deprecationdepreciation rates of our property and equipment are generally as follows:

As a smaller reporting company, we are not required to provide the information required by this item. However, the Company is including the following risk factorfactors to update the disclosures previously provided in its Annual Report on Form 10-K for the fiscal year ended June 30, 2025:

For the sixnine months ended DecemberMarch 31, 2025,2026, we incurred incurred a net loss of $10.4$15.4 million and $5.5 million net cash used in operating activities and, as of that date, we had a net current liability of $20.9 million and accumulated deficits of $15.8$7.0 million. These conditions may cast significant doubt about our ability to continue as a going concern. Our ability to continue as a going concern is dependent upon our ability to generate sufficient cash flow from operations and to raise additional capital through equity or debt financings. While management is currently executing a cost optimization plan and is in discussions with several financial institutions to secure additional credit facilities, there is no assurance that these plans will be successful or that additional financing will be available on favorable terms, or at all.

If we are unable to raise sufficient working capital, we may be required to significantly curtail our operations, delay capital expenditures, or even cease operations entirely. Furthermore, our financial statements do not include any adjustments that might result from the outcome of this uncertainty, such as adjustments to the recoverability or classification of recorded asset amounts or the amounts and classification of liabilities. If we are unable to continue as a going concern, investors may lose the entire value of their investment in our securitiessecurities.

We provide one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market. We currently operate tentwelve warehouses across the country, with an aggregate gross floor area of approximately 3,946,620 square feet. Aside from a nationwide footprint and large storage space, our warehouses are equipped with automated sorting systems, heavy-duty forklifts, and pallets and trays that are suitable for processing bulky items. As a one-stop warehousing and logistics service provider, we offer a full spectrum of services, including (i) customs brokerage services; (ii) transportation of merchandise to U.S. warehouses; and (iii) warehouse management and order fulfillment services, which further include (a) product storage and retrieval, (b) product packing and labeling, (c) kitting and repackaging, (d) order assembly and load consolidation, (e) inventory management and sales forecasting, (f) third-party distribution coordination, and (g) other value-added services. We also provide warehousing and logistics services to our U.S.-based commercial customers, who are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations. In general, the warehousing and logistics services we provide to our domestic customers are similar to those we provide to our overseas customers. This allows us to provide integrated solutions for our customers, whether they need domestic or international warehousing and logistics support. As of DecemberMarch 31, 20252026 and June 30, 2025, we had an active customer base base of 588,601, and 505, respectively, for our warehousing and logistics services.

For the sixnine months ended DecemberMarch 31, 20252026 and 2025, 2024, we had total revenue of $101.0$142.7 million and $93.6$139.5 million, and net loss of $10.4$15.4 million and $6.3$10.1 million, respectively. While we do do not have any subsidiaries, assets, or employees in the PRC, we generate a significant portion of our revenue from customers based in China. China. During the sixnine months ended DecemberMarch 31, 20252026 and 2024,2025, we generated approximately 83%76% and 86%87% of our revenue from PRC-based customers, respectively.

The following table outlines our consolidated statements of operations for the three and sixnine months ended DecemberMarch 31, 20252026 and 20242025:

The following table sets forth our revenue for the three and sixnine months ended DecemberMarch 31, 20252026 and 20242025:

Three Months Ended DecemberMarch 31, 2026 and 2025 and 2024

Our revenue slightly increaseddecreased by $0.4$4.2 million, or or 0.8%,9.1%, to $51.5$41.7 million during the three months ended DecemberMarch 31, 2025,2026, compared to $51.1$45.8 million for the same period in 2024. 2025. The increasedecrease was mainly due to the following factors:

SixNine Monthsmonths Ended DecemberMarch 31, 20252026 and 20242025

Our revenue increased by $7.4$3.2 million, or 7.9%, 2.3%, to $101.0$142.7 million during the sixnine months ended DecemberMarch 31, 2025,2026, compared to $93.6$139.5 million for the same period in 2024. 2025. The increase was due to the following factors:

The following table sets forth a breakdown of our costs of services for the three and sixnine months ended DecemberMarch 31, 20252026 and 20242025:

Three Months Ended DecemberMarch 31, 2026 and 2025 and 2024

Our costs of services mainly represented the costs incurred for the use of third-party direct freight service carriers, such as FedEx and UPS, warehouse rental expenses, costs of labor, and trucking expenses. Costs of services increaseddecreased by $1.7$2.0 million, or 3.3%,4.4%, during the three months ended DecemberMarch 31, 2025,2026, compared compared with the same period in 2024.2025. The increasedecrease was primarily driven by the following two factors:

SixNine Monthsmonths Ended DecemberMarch 31, 20252026 and 20242025

Costs of services increased by $7.5$5.5 million, or 7.8%,3.9%, during the sixnine months ended DecemberMarch 31, 2025,2026, compared with the same period in 2024.2025. The increase was primarily driven by the following twothree factors:

Our overall gross loss margin slightlyworsened improved from 3.3%negative 2.0% for the sixnine months ended DecemberMarch 31, 20242025 to 3.2%negative 3.6% for the same period in 2025,2026, primarily due to an increased in warehousing labor costs for the Company’sthree increased focusmonths onended overallMarch 31, 2026 following significant warehouse efficiency.inventory Wereorganization have been expanding our selection of temporary labor service providers withamong the goalCalifornia ofwarehouses during decreasing coststhat withouttime sacrificing warehouse output.period.

Our operating expenses consist primarily of general and administrative expenses. The following table sets forth a breakdown of our general and administrative expenses for the three and sixnine months months ended DecemberMarch 31, 20252026 and 20242025:

Three Months Ended DecemberMarch 31, 2026 and 2025 and 2024

Our general and administrative expenses increaseddecreased by $0.7$1.1 million, from $2.7$4.5 million for the three months ended DecemberMarch 31, 20242025 to $3.3 million for the same period in in 2025,2026, representing ana increasedecrease of 25.2%.25.7%. The increasedecrease was due to the following factors:

SixNine Monthsmonths Ended DecemberMarch 31, 20252026 and 20242025

Our general and administrative expenses slightly increased by $1.2$0.1 million, from $6.3$10.8 million for the sixnine months ended DecemberMarch 31, 20242025 to $7.5$10.9 million for the same period in 2025,2026, representing an increase of 19.2%.0.7%. The increase was due to the following factors:

Our income tax recovery decreased by $1.5 million for the sixnine months ended DecemberMarch 31, 20252026 compared to the same period in 2024,2025, mainly due to the non-recurring reversal of previously recognized recognized deferred tax liabilities during the sixnine months ended DecemberMarch 31, 2024.2025.

As a result of the foregoing, our net loss for the three months ended DecemberMarch 31, 20252026 was $3.9$5.1 million, compared with $1.7$3.8 million for the same period in 2024,2025, representing aan decreaseincrease by $2.2$1.3 million.

Our net loss for the sixnine months ended DecemberMarch 31, 20252026 was $10.4$15.4 million, compared with $6.3$10.1 million for the same period in 2024,2025, representing aan decreaseincrease by $4.1$5.4 million.

These financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company incurred a net loss of $10.4$15.4 million and $5.5 million net cash used in operating activities during the six nine months ended DecemberMarch 31, 20252026 and as of that date, had a net current liability of $15.8$20.9 million and accumulated deficits of $7.0 million. Without additional financing, the Company may not be able to fund its ongoing operations. The Company is expanding its service offerings to new customers, optimizing warehouse utilization, and developing higher-margin logistics solutions to improve profitability and cash generation. Management is executing a cost optimization plan, including delaying certain non-essential capital expenditures, reducing third-party service costs, and improving operational efficiency across warehouse operations to preserve cash flow. In addition, the Company is in discussions with several financial institutions and investors to secure additional credit facilities and other forms of financing to strengthen working capital. There is no assurance that the Company will be able to obtain financings or obtain them on favorable terms. These uncertainties may cast significant doubt on the Company’s ability to continue as a going concern. The Company will need to raise sufficient working capital to maintain operations. These financial statements do not include any adjustments related to the recoverability of assets and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.

In assessing our liquidity, management monitors and analyzes our cash on-hand, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. As of the date of this Quarterly Report, we have financed our operations primarily through cash generated by operating activities and capital contributions from stockholders. As of DecemberMarch 31, 20252026 and June 30, 2025, we had cash and cash equivalents and restricted cash cash of $9.4$7.1 million and $13.6 million, respectively, which primarily consisted of cash deposited in banks.

Cash Flows for the sixnine months Ended DecemberMarch 31, 20252026 and 20242025

We had a balance of cash and cash equivalents and restricted cash of $9.4$7.1 million as of DecemberMarch 31, 2025,2026, compared with a balance of $13.6 million as of June 30, 2025. During the sixnine months ended DecemberMarch 31, 2025,2026, changes in our cashflow were mainly due to the following activities:

Net cash used in operating activities was $3.4$5.5 million for the sixnine months ended DecemberMarch 31, 2025,2026, compared to net cash used in operating activities of $9.2$5.6 million for the same period in 2024,2025, representing a $5.8$0.1 million increase in the net cash inflow from operating activities. The increase was primarily due to the following:

Net cash provided by investing activities was $1.6$1.5 million for the sixnine months ended DecemberMarch 31, 2025,2026, primarily attributable to $0.6$0.8 million cash used for the purchase of of property and equipment, $2.4 million cash used for loans extended to others, and $4.6 million proceeds received from loan repayments.

For the sixnine months ended DecemberMarch 31, 2024,2025, net cash used in investing activities was $1.0$1.5 million, primarily attributable to $2.1$2.6 million cash used for the purchase of property and equipment, $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan repayments.

For the sixnine months ended DecemberMarch 31, 2025,2026, we had net cash used in financing activities of $2.3$2.5 million, which was primarily attributable to the $0.3$0.5 million used to repay finance lease liabilities and $2.0 million used to repay convertible notes.

For the sixnine months ended DecemberMarch 31, 2024,2025, we had net cash inflow from financing activities of $7.7$6.6 million, which was primarily attributable to the net effects of: (i) $0.4 million repayment to related parties; (ii) $8.1$7.2 million of net proceeds from the Pre-Paid Advance under the SEPA.SEPA; (iii) $0.2 million used to repay commitment fee payable; and (iv) $0.1 million used to repay finance lease liabilities.

As of DecemberMarch 31, 2025,2026, we had operating and finance finance leases for office space, warehouse space, and forklifts. Lease terms expire at various dates through June 2026 to November 2034 with options to renew for varying terms at our sole discretion. We have not included these options to extend or terminate in the calculation of ROU assets or lease liabilities, as there is no reasonable certainty, as of the date of this Quarterly Report, that these options will be be exercised.

As of DecemberMarch 31, 2025,2026, maturities of lease liabilities for each of the following fiscal years ending June 30 and thereafter were as follows:

Other than the above leases, we did not have significant commitments, long-term obligations, or guarantees as of DecemberMarch 31, 2025.2026.

Other than six standby letters of credit with Eastwest Bank in the aggregate amount of $4,394,812,$4,398,412, we did not have during the period presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of DecemberMarch 31, 2025,2026, we still have an unused line of credit of $4,394,812$4,398,412 with Eastwest Bank.