Quanome Technologies, Inc.
For the period ended Mar 31, 2025. Filed May 15, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 15, 2025
QNME$0.37+9.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-02-14.
0001213900-25-014238
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-15.
0001213900-25-044205
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 142 previous paragraphs and 147 current paragraphs.
59 unchanged; 71 reworded; 16 added; 11 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 16 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Uncertainty and Impacts on the Recent U.S. Tarriff Policies and Regulations
Current report
Our results of operations also depend on our ability to respond with the recent tariff and other restrictions placed on imports. The U.S. government recently increased U.S. special tariffs and proposed amendments to the de minimis rule significantly impacts companies operating in the cross-border freight forwarding industry. The heightened tariffs—particularly those targeting Chinese-origin goods and extending globally—raise the cost of imported goods, prompting clients to reduce shipment volumes, shift sourcing strategies, or consolidate cargo to offset rising expenses. On March 4, 2025, the U.S. imposed 25% tariffs on imports from Mexico and Canada and enacted an extra 10% tariff on Chinese imports, therefore doubling the previously levied tariff from February to an additional 20% on existing tariffs. On March 6, 2025, President Trump announced that the U.S. will pause the 25% tariffs on U.S. imports from Mexico and Canada that are covered under a 2020 United States-Mexico-Canada Agreement, or USMCA, trade agreement until April 2, 2025. Goods that are not covered by the agreement remain subject to tariffs. On April 2, 2025, President Trump announced new tariffs on many U.S. trading partners, including a 34% tax on imports from China, a 20% tax on products from the E.U., and a baseline 10% tax on imports from many countries. These tariffs were in addition to the previous announcements of 25% taxes on auto imports, tariffs implemented against China, Canada and Mexico, and trade penalties on steel and aluminum. However, the 20% charge on imports from China was in addition to the 34% import tax announced. On April 9, 2025, President Trump has increased the tariffs on Chinese imports to a total tariff rate of 145%. This included a 20% "fentanyl tariff" and a 125% "reciprocal tariff" aimed at addressing trade imbalances and other concerns. On April 10, 2025, China raised tariff on all U.S. goods to 84% and further increased to 125% on April 12, 2025. Meanwhile, amendments to the de minimis rule, which previously allowed low-value shipments (under $800) to enter the U.S. duty-free, now impose tighter restrictions, including exclusion of certain countries like China and increased scrutiny or disqualification of bulk shipments. These changes increase customs complexity, slow clearance times, and reduce the volume of low-value parcels traditionally handled by freight forwarders.
Current report
In May 2025, the US and China have agreed a truce to lower import taxes on goods being traded between the two countries for 90 days. 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 to the global economy.
Current report
Moreover, increasing trade protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly from the Asia-Pacific region, (ii) the length of time required to transport goods and (iii) the risks associated with exporting goods. Such increases may further reduce the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our customers’ business, operating results and financial condition and could thereby affect their ability to make timely payments to us and their orders quantity. This could have a material adverse effect on our business, operating results, cash flows and financial condition.
Current report
We will continue to actively monitor the situation and actively consider strategic adaptation to maintain service levels and profitability.
Current report
We anticipate further revenue declines in the next quarter due the competitive and uncertain economic environment. In addition to decreasing air freight volumes and new regulations that became effective in May 2025 and aimed at curtailing small-package and low-value shipments from China to the U.S., newly imposed tariffs on Chinese imports introduced in April 2025 are expected to further disrupt cross-border trade. These measures may significantly reduce the volume of goods imported into the U.S. and moving through e-commerce channels due to increased import costs. Despite these headwinds, we remain committed to exploring new customer opportunities while maintaining strong relationships with our existing clients.
Current report
The decrease in revenue from the U.S.-based customers for the three months ended March 31, 2025, compared to the same period in 2024, was primarily driven by concerns over a potential economic downturn and reduced consumer spending power in the U.S., which led to a decrease in shipment volumes.
Current report
Our interest expenses decreased by $61,738, or 241.8%, from $25,536 for the three months ended March 31, 2024, to $87,274 for the three months ended March 31, 2025. Increase in interest expense was mainly due to late credit card payments and interest expense in connection with convertible note for the three months ended March 31, 2025.
Current report
We had income tax expenses of $18,594 and $104,610 for the three months ended March 31, 2025 and 2024, respectively. A current income tax provision of $26,608 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the three months ended March 31, 2025. We recognized a recovery of deferred income tax of $8,014 due to amortization of intangible assets, resulting in a net income tax expense of $18,594 for the three months ended March 31, 2025.
Current report
We recognized a current income tax provision of 94,471 for the three months ended March 31, 2024 due to income before income tax of $117,378 for the three months ended March 31, 2024 and we recognized a deferred income tax expense of $10,139 due to temporary differences recognized.
Current report
For the Nine Months Ended March 31, 2025 Compared to the Nine Months Ended March 31, 2024
Current report
Gross Profit
Current report
Capital Expenditure
Current report
Common Stock Warrants Instruments
Current report
The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. The Company determined, upon further review of the warrant agreement, that the common stock warrant issued pursuant to the warrant agreement qualifies for equity accounting treatment. The fair value of equity-classified warrants is estimated as of the date of issuance using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model includes various assumptions, including the fair market value of our common stock, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside our control.
Current report
Refer to the notes to the condensed consolidated financial statements included in this report for further discussion of our significant accounting policies and the effect on our condensed consolidated financial statements.
Removed paragraphs (11)
Previous report
We anticipate a lower revenue in the next quarter in the competitive and uncertain economic environment. Despite of decreasing air freight volume and the upcoming new rules to curtail small package and low value shipment from China to the U.S., we are committed to exploring new customers opportunities while maintaining strong relationship with existing customers. We believe that the ongoing trend toward online shopping highlights the need for timely and competitively priced deliveries to end consumers.
Previous report
Gross Profit (loss)
Previous report
The gross loss occurred primarily due to two key factors. First, there was a significant decrease in revenue due to stricter enforcement on the de minimis shipments regulations for the six months ended December 31, 2024. Second, despite this decline in revenue, the company’s fixed overhead costs remained high. These costs, such as rent and warehouse labour are not easily adjusted in the short term. As a result, the fixed overhead costs could not be covered by the ordinary gross margin, leading to a gross loss for the period. Additionally, while other cost of revenue decreased in line with lower revenue, the reduction in costs lagged behind due to time constraints. Our gross margin of cross-border freight business remains a lower but positive number by not taking fixed overhead cost into consideration.
Previous report
Our traveling and entertainment expense increased by $0.2 million, or 224.8%, from $87,900 in the three months ended December 31, 2023, to $285,541 in the three months ended December 31, 2024. Our traveling and entertainment expense represented 14.9% and 8.9% of our total general and administrative expenses for three months ended December 31, 2024 and 2023, respectively. The increase was mainly due to higher entertainment and gift expenses related to networking with our business partners as we started a new business through the new subsidiary acquired.
Previous report
Our other income, net, increased by $50,253, or 121.1%, from $41,500 in the three months ended December 31, 2023, to $91,753 in the three months ended December 31, 2024. The increase was primarily becuase we did not rent out part of our warehouse space to our related party, Weship, during the three months ended December 31, 2023.
Previous report
We did not have current income tax provision in the three months ended December 31, 2023, due to net loss, however, we recognized a deferred income tax asset of $71,909, due to temporary differences recognized and a deferred income tax expense of $28,184 due to temporary differences recognized.
Previous report
For the Six Months Ended December 31, 2024 Compared to the Six Months Ended December 31, 2023
Previous report
The decrease in revenue from the U.S.-based customers in the six months ended December 31, 2024, compared to the same period in 2023, was primarily due to our strategic shift toward Asia-based e-commerce customers, in addition to the overall decline in revenue discussed earlier. Additionally, one-off special projects with larger shipment volumes from U.S. customers were completed in the six months ended December 31, 2023, with no comparable projects in the same period in 2024.
Previous report
Capital Expenditures
Previous report
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.
Previous report
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.
Reworded paragraphs (71)
Previous wording
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. and Asian 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 December 31, 2024, we had served over 300 customers to fulfill over 48,000 cross-border supply chain solution orders.
Current wording
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. and Asian 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 March 31, 2025, we had served over 400 customers to fulfill over 51,500 cross-border supply chain solution orders.
Previous wording
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 December 31, 2024, we had collaborated with almost all major global ocean and air carriers to forward 33,800 TEU of container loads and 59,600 tons of air cargo. As of December 31, 2024, we had also cooperated with over 200 domestic ground transportation carriers, including almost all major U.S. domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may be.
Current wording
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 March 31, 2025, we had collaborated with almost all major global ocean and air carriers to forward 34,900 TEU of container loads and 63,300 tons of air cargo. As of March 31, 2025, we had also cooperated with over 200 domestic ground transportation carriers, including almost all major U.S. domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may be.
Previous wording
We operate three massive and hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas. With an aggregate gross feet area of approximately 142,484 square feet and 52 docks, our regional warehousing and distribution centers have an aggregate daily floor load of up to 3,000 cubic meters of freight. In addition to our self-operated regional centers, we maintain close contact with over 150 warehouses and distribution terminals in almost all transportation hubs in the U.S. which we have cooperated in the past to support the warehousing and distributing services of our cross-border freight in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution in states other than Illinois and Texas. As of December 31, 2024, we had assisted with the customs clearance, in conjunction with our other service offerings, of cross-border freight of an aggregate assessed value of over $46.5 million.
Current wording
We operate three massive and hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas. With an aggregate gross feet area of approximately 142,484 square feet and 52 docks, our regional warehousing and distribution centers have an aggregate daily floor load of up to 3,000 cubic meters of freight. In addition to our self-operated regional centers, we maintain close contact with over 150 warehouses and distribution terminals in almost all transportation hubs in the U.S. which we have cooperated in the past to support the warehousing and distributing services of our cross-border freight in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution in states other than Illinois and Texas. As of March 31, 2025, we had assisted with the customs clearance, in conjunction with our other service offerings, of cross-border freight of an aggregate assessed value of over $50.0 million.
Previous wording
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 December 31, 2024, we had fulfilled over 48,000 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. states.
Current wording
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 March 31, 2025, we had fulfilled over 51,500 cross-border supply chain solution orders for freight of an aggregate assessed value of $1.0 billion, delivered to thousands of business and residential addresses in approximately 48 U.S. states.
Previous wording
During the three and six months ended December 31, 2024, we had a new business segment through acquired 100% equity interest of Hupan Pharmaceutical, a comprehensive pharmaceutical distribution and supply chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare technology support. We have partnered with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical products sold and distributed during this quarter.
Current wording
During the nine months ended March 31, 2025, we had a new business segment through acquired 100% equity interest of Hupan Pharmaceutical, a comprehensive pharmaceutical distribution and supply chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare technology support. We have partnered with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical products sold and distributed during this quarter.
Previous wording
For the six months ended December 31, 2024 and 2023, our total revenues amounted to $7.7 million and $9.1 million, respectively, and our gross profit amounted to $0.5 million and $1.7 million during the same periods, respectively. For the three months ended December 31, 2024 and 2023, our revenues amounted to $3.6 million and $4.9 million, respectively, and our gross profit amounted to negative $0.04 million and $1.1 million during the same periods, respectively.
Current wording
For the nine months ended March 31, 2025 and 2024, our total revenues amounted to $11.5 million and $13.5 million, respectively, and our gross profit amounted to $1.2 million and $2.7 million during the same periods, respectively. For the three months ended March 31, 2025 and 2024, our revenues amounted to $3.8 million and $4.5 million, respectively, and our gross profit amounted to negative $0.7 million and $1.0 million during the same periods, respectively.
Previous wording
Our results of operations are dependent upon our ability to expand and maintain our customer base. Since inception and as of December 31, 2024, we had served over 300 customers to fulfill over 48,000 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.
Current wording
Our results of operations are dependent upon our ability to expand and maintain our customer base. Since inception and as of March 31, 2025, we had served over 400 customers to fulfill over 51,500 cross-border supply chain solution orders. 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.
Previous wording
From December 2024, we started to generate revenues from the distribution of pharmaceutical and medial products. We order from the manufacturer, receive and carry the products at a designated warehouse, and deliver the products to the customers’ warehouses or designated locations.
Current wording
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.
Previous wording
Our cost of revenues from the distribution of pharmaceutical and medical products also comprises cost of pharmaceutical products from manufacturers, freight arrangement charges and other overhead costs.
Current wording
Our cost of revenues from the distribution of pharmaceutical and medical products comprises cost of pharmaceutical products from manufacturers, freight arrangement charges and other overhead costs.
Previous wording
Selling Expenses. Our selling expenses primarily include salaries expense of sales team engaged in developing potential customers and maintaining customer relationships.
Current wording
Selling Expenses. Our selling expenses primarily include salaries expense and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.
Previous wording
Interest Expenses. Our interest expenses primarily consist of the interest expenses incurred for finance leases, equipment loans, vehicle loans and other loans and interest for late credit card payment.
Current wording
Interest Expenses. Our interest expenses primarily consist of the interest expenses incurred for finance leases, convertible notes, equipment loans, vehicle loans and other loans and interest for late credit card payment.
Previous wording
The following table summarizes the results of condensed consolidated statements of operations and comprehensive income (unaudited) for the three and six months ended December 31, 2024 and 2023 in U.S. dollars.
Current wording
The following table summarizes the results of condensed consolidated statements of operations and comprehensive income (unaudited) for the three and nine months ended March 31, 2025 and 2024 in U.S. dollars.
Previous wording
For the Three Months Ended December 31, 2024 Compared to the Three Months Ended December 31, 2023
Current wording
Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024
Previous wording
Our total revenues from cross-border freight solutions decreased by $1.5 million, or 31.3%, from $4.9 million for the three months ended December 31, 2023, to $3.4 million for the three months ended December 31, 2024. The decrease was primarily driven by a significant decline in volume we handled from our cross-border airfreight solutions.
Current wording
Our total revenues from cross-border freight solutions decreased by $1.2 million, or 25.9%, from $4.5 million for the three months ended March 31, 2024, to $3.3 million for the three months ended March 31, 2025. The decrease was primarily driven by a significant decline in volume we handled from our cross-border airfreight solutions.
Previous wording
Revenues from our cross-border ocean freight solutions decreased by $0.4 million, or 24.2%, from $1.8 million in the three months ended December 31, 2023, to $1.4 million in the three months ended December 31, 2024. This reduction was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded, dropping from 1,330 TEU in the three months ended December 31, 2023, to 1,046 TEU in the three months ended December 31, 2024. Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn, reduced the demand for imported goods, leading to lower container volumes.
Current wording
Revenues from our cross-border ocean freight solutions decreased by $0.8 million, or 39.6%, from $2.1 million for the three months ended March 31, 2024, to $1.3 million for the three months ended March 31, 2025. This reduction was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded, dropping from 1,355 TEU in the three months ended March 31, 2024, to 1,118 TEU for the three months ended March 31, 2025. Additionally, a slowdown in consumer spending and business investments, impacted by the overall economic downturn, reduced the demand for imported goods, leading to lower container volumes. Furthermore, due to a reduction in market volume and increased competition, the service price charged to customers also decreased.
Previous wording
Revenues from our cross-border airfreight solutions decreased by $1.1 million or 35.5%, from $3.1 million in the three months ended December 31, 2023, to $2.0 million in the three months ended December 31, 2024. The decrease was primarily due to a decrease in the volume of cross-border air freight processed, from approximately 8,217 tons for the three months ended December 31, 2023, to approximately 4,459 tons for the three months ended December 31, 2024. Some of our customers reduced their orders and uncertainty in political regulations regarding tariffs, leading to a significant decline in our revenue.
Current wording
Revenues from our cross-border airfreight solutions decreased by $0.3 million or 13.5%, from $2.3 million for the three months ended March 31, 2024, to $2.0 million for the three months ended March 31, 2025. The decrease was primarily due to a decrease in the volume of cross-border air freight processed, from approximately 4,040 tons for the three months ended March 31, 2024, to approximately 3,775 tons for the three months ended March 31, 2025. Some of our customers reduced their orders due to the uncertainty in trade policies and higher tariffs since March 4, 2025, leading to a decline in our revenue.
Previous wording
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 six months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the prior year.
Current wording
Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. For the three months ended March 31, 2025, our total revenue from pharmaceutical product distribution amounted to $0.5 million. We did not generate any revenue from this segment in the same period of the prior year.
Previous wording
Revenues from cross-border freight solutions for the Asia-based customers increased by $0.1 million, or 5.7%, from $2.6 million in the three months ended December 31, 2023, to $2.8 million in the three months ended December 31, 2024. Revenues from cross-border freight solutions for the U.S.-based customers decreased by $1.7 million, or 72.9%, from $2.3 million in the three months ended December 31, 2023 to $0.6 million in the same period in 2024.
Current wording
Revenues from cross-border freight solutions for the Asia-based customers decreased by $1.0 million, or 25.4%, from $3.8 million for the three months ended March 31, 2024, to $2.8 million for the three months ended March 31, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by $0.1 million, or 28.8%, from $0.6 million for the three months ended March 31, 2024 to $0.5 million for the same period in 2025.
Previous wording
The increase in revenues from Asia-based customers in the six months ended December 31, 2024, was driven by a surge in volume from a new Aisa-based customer since June 2024, which was partly offset by decrease in shipments volume from Asia-based customers serving large e-commerce platforms due to the discussion on the amendment of de minimis rule.
Current wording
The decrease in revenues from Asia-based customers for the three months ended March 31, 2025, was contributed by a decrease in shipments volume from Asia-based customers serving large e-commerce platforms due to the discussion on the amendments to the de minimis rule and the imposition of higher tariffs on Chinese goods.
Previous wording
Our customers for the distribution of pharmaceutical products are based in China, as we specifically target the Chinese market.*** ***For the six months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the prior year.
Current wording
Our customers for the distribution of pharmaceutical products are based in China, as we specifically target the Chinese market.*** ***For the three months ended March 31, 2025, our total revenue from pharmaceutical product distribution amounted to $0.5 million. We did not generate any revenue from this segment in the same period of the prior year.
Previous wording
Our cost of revenues from cross-border freight solutions decreased by $0.3 million, or 8.7%, from $3.9 million in the three months ended December 31, 2023, to $3.5 million in the three months ended December 31, 2024. The increase in cost of revenues was mainly due to the combined effects of:
Current wording
Our cost of revenues from cross-border freight solutions decreased by $0.5 million, or 14.8%, from $3.5 million for the three months ended March 31, 2024, to $3.0 million for the three months ended March 31, 2025. The decrease in cost of revenues was mainly due to the combined effects of:
Previous wording
Our overall gross loss was $42,231 in the three months ended December 31, 2024, compared to gross profit of $1,064,509 in same period last year.
Current wording
Our overall gross profit was $0.8 for the three months ended March 31, 2025, compared to gross profit of $1.0 in same period last year.
Previous wording
Our gross margin of distribution of pharmaceutical was 44.2% for the six months ended December 31, 2024. It is a new business segment during current quarter and thus no gross margin was noted compared to same period in prior year.
Current wording
Our gross margin of distribution of pharmaceutical was 76.0% for the three months ended March 31, 2025. This comparatively high margin was primarily due to favorable purchase discounts offered by our suppliers, who extended these incentives to support the establishment of a long-term partnership as we entered this market as a new customer. Excluding the favorable purchase discounts of $171,274, the gross margin for pharmaceutical distribution would be approximately 42% for the current quarter. It is a new business segment for the current quarter and thus no gross margin was noted compared to the same period of the prior year.
Previous wording
Our selling expenses amounted to $54,488 for the three months ended December 31, 2024, compared to nil for the same period in 2023. The increase was primarily driven by salaries for our sales team, which were incurred as part of the new pharmaceutical product business launched during the current quarter.
Current wording
Our selling expenses amounted to $0.1 million for the three months ended March 31, 2025, compared to nil for the same period in 2024. The increase was primarily driven by salaries for our sales team, which were incurred as part of the new pharmaceutical distribution service launched during the last quarter.
Previous wording
Our general and administrative expenses increased by $0.9 million, or 94.1%, from $1.0 million in the three months ended December 31, 2023, to $1.9 million in the three months ended December 31, 2024. These expenses represented 53.2% and 20.0% of our total revenues for the three months ended December 31, 2024 and 2023, respectively. The increase was primarily attributed to higher salary and employee benefit expenses and professional fee operating as a listed company.
Current wording
Our general and administrative expenses increased by $0.7 million, or 74.6%, from $1.0 million for the three months ended March 31, 2024, to $1.7 million for the three months ended March 31, 2025. These expenses represented 44.2% and 21.6% of our total revenues for the three months ended March 31, 2025 and 2024, respectively. The increase was primarily attributed to higher salary and employee benefit expenses and professional fees operating as a listed company. Additionally, the launch of our new pharmaceutical distribution segment in the second quarter of the fiscal year contributed to the rise in operating costs.
Previous wording
Our salaries and employee benefits expenses increased by $0.4 million, or 64.1%, from $0.6 million in the three months ended December 31, 2023, to $1.1 million in the three months ended December 31, 2024. Our salaries and employee benefits expenses represented 55.8% and 66.0% of our total general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively. The increase was mainly due to the recruitment of additional sales, customer services, and back-office support personnel to support our business growth in first half of 2024, along with the salary expenses associated with the two new subsidiaries in China. For our salaries and employee benefits expenses, (i) our payroll expenses increased by $0.4 million, or 70.7%, from $0.6 million in the three months ended December 31, 2023, to $1.0 million in the three months ended December 31, 2024, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution plan in China, meal allowance and health insurance expenses, increased by $21,914, or 23.9%, from $91,674 in the three months ended December 31, 2023, to $113,588 in the three months ended December 31, 2024, representing 5.9% and 9.3% of our total general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively. The increase was mainly due to rising employee health insurance premiums.
Current wording
Our salaries and employee benefits expenses increased by $0.2 million, or 22.7%, from $0.7 million for the three months ended March 31, 2024, to $0.9 million for the three months ended March 31, 2025. Our salaries and employee benefits expenses represented 54.5% and 77.6% of our total general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively. The increase was mainly due to the salary expenses associated with the two new subsidiaries to support our operation in new business segment starting from second quarter of the fiscal year in China. For our salaries and employee benefits expenses, (i) our payroll expenses increased by $0.2 million, or 23.5% from $0.6 million for the three months ended March 31, 2024, to $0.8 million for the three months ended March 31, 2025, and (ii) our employee benefit expenses, which mainly consist of 401(k) company contribution, employee defined contribution plan in China, meal allowance and health insurance expenses, increased by $23,150, or 18.9%, from $122,312 for the three months ended March 31, 2024, to $145,462 for the three months ended March 31, 2025, representing 8.7% and 12.7% of our total general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively. The increase was mainly due to rising employee health insurance premiums.
Previous wording
Our professional fee increased by $0.2 million, or 1,359.3%, from $14,802 in the three months ended December 31, 2023, to $216,012 in the three months ended December 31, 2024. Our professional fee represented 11.3% and 1.5% of our total general and administrative expenses for the three months ended December 31, 2024 and 2023, respectively. The increase was primarily due to audit fee, legal fee, consulting expense, investor-related expenses and financial reporting service fees for the three months ended December 31, 2024. In the three months ended December 31, 2023, most of the expenses directly related to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.
Current wording
Our professional fee increased by $0.2 million, or 884.3%, from $24,063 for the three months ended March 31, 2024, to $235,858 for the three months ended March 31, 2025. Our professional fee represented 14.1% and 2.5% of our total general and administrative expenses for the three months ended March 31, 2025 and 2024, respectively. The increase was primarily due to audit fees, legal fees, consulting expenses, investor-related expenses and financial reporting service fees for the three months ended March 31, 2025. For the three months ended March 31, 2024, most expenses directly related to offering that were not included in professional fees, as they were accounted for as deferred initial public offering assets.
Previous wording
Our interest expenses for the three months ended December 31, 2024, remained relatively stable compared to same period in last year.
Current wording
Our other income, net, decreased by $6,817, or 6.7%, from $102,438 for the three months ended March 31, 2024, to $109,255 for the three months ended March 31, 2025, remained relatively stable compared to same period in last year.
Previous wording
We had loss before income taxes of $1.9 million for the three months ended December 31, 2024, compared to income before income taxes of $92,408 for the three months ended December 31, 2023. We were in a loss position before income taxes for the three months ended December 31, 2024, primarily attributable to the net effects of: (i) the decrease in gross profit, (ii) the rise in operating expenses; and (iii) the increase in other income for the three months ended December 31, 2024 as mentioned above.
Current wording
We had a net loss before income taxes of $1.1 million for the three months ended March 31, 2025, compared to a net income before income taxes of $0.1 million for the three months ended March 31, 2024. We were in a loss position before income taxes for the three months ended March 31, 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 three months ended March 31, 2025 as mentioned above.
Previous wording
As a result of the foregoing, we had a net loss of $1.9 million and a net income of $64,224 for the three months ended December 31, 2024 and 2023, respectively.
Current wording
As a result of the foregoing, we had a net loss of $1.1 million and a net income of $12,768 for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
The following table summarizes our consolidated results of operations and percentages of certain items in relation to total revenues for the six months ended December 31, 2024 and 2023, 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.
Current wording
The following table summarizes our consolidated results of operations and percentages of certain items in relation to total revenues for the nine months ended March 31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.
Previous wording
Our total revenues from cross-border freight solution decreased by $1.6 million, or 17.7%, from $9.1 million for the six months ended December 31, 2023, to $7.5 million for the six months ended December 31, 2024. The decrease was primarily driven by a significant decline in volume we handled from our cross-border airfreight solutions.
Current wording
Our total revenues from cross-border freight solution decreased by $2.8 million, or 20.4%, from $13.5 million for the nine months ended March 31, 2024, to $10.7 million for the nine months ended March 31, 2025. The decrease was primarily driven by a decline in volume we handled from our cross-border airfreight solutions.
Previous wording
Revenues from our cross-border ocean freight solutions decreased by $0.3 million, or 8.7%, from $3.5 million in the six months ended December 31, 2023, to $3.2 million in the six months ended December 31, 2024. This growth was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded, dropping from 2,620 TEU in the six months ended December 31, 2023, to 2,476 TEU in the six months ended December 31, 2024. Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn, reduced the demand for imported goods, leading to lower container volumes.
Current wording
Revenues from our cross-border ocean freight solutions decreased by $1.1 million, or 20.3%, from $5.6 million for the nine months ended March 31, 2024, to $4.5 million for the nine months ended March 31, 2025. It was primarily due to a decrease in the volume of cross-border ocean freights processed and forwarded, dropping from 3,895 TEU for the nine months ended March 31, 2024, to 3,594 TEU for the nine months ended March 31, 2025. Additionally, a slowdown in consumer spending and business investments, impacted by overall economic downturn, reduced the demand for imported goods, leading to lower container volumes. Furthermore, due to a reduction in market volume and increased competition, the service price charged to customers also decreased.
Previous wording
Revenues from our cross-border airfreight solutions decreased by $1.3 million or 23.4%, from $5.5 million in the six months ended December 31, 2023, to $4.2 million in the six months ended December 31, 2024. The decrease was primarily due to a decrease in the volume of cross-border air freight processed, from approximately 16,034 tons for the six months ended December 31, 2023, to approximately 11,732 tons for the six months ended December 31, 2024. Some of our customers reduced their orders and uncertainty in political regulations regarding tariffs, leading to a significant decline in our revenue.
Current wording
Revenues from our cross-border airfreight solutions decreased by $1.7 million or 20.5%, from $7.9 million for the nine months ended March 31, 2024, to $6.3 million for the nine months ended March 31, 2025. The decrease was primarily due to a decrease in the volume of cross-border air freight processed, from approximately 20,074 tons for the nine months ended March 31, 2024, to approximately 15,507 tons for the nine months ended March 31, 2025. Some of our customers reduced their orders due to the uncertainty in political regulations and higher tariffs since March 2025, leading to a significant decline in our revenue.
Previous wording
Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. For the three months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the prior year.
Current wording
Starting from December 2025, 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 nine months ended March 31, 2025, our total revenue from pharmaceutical product distribution amounted to $0.7 million, compared to no revenue from this segment for the same period of the prior year.
Previous wording
Revenues from cross-border freight solutions for the Asia-based customers increased by $1.3 million, or 29.4%, from $4.3 million in the six months ended December 31, 2023, to $5.6 million in the six months ended December 31, 2024. Revenues from cross-border freight solutions for the U.S.-based customers decreased by $2.9 million, or 60.2%, from $4.8 million in the six months ended December 31, 2023 to $1.9 million in the same period in 2024.
Current wording
Revenues from cross-border freight solutions for the Asia-based customers increased by $0.3 million, or 3.6%, from $8.1 million for the nine months ended March 31, 2024, to $8.4 million for the nine months ended March 31, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by $3.0 million, or 56.5%, from 5.4 million for the nine months ended March 31, 2024 to $2.4 million for the same period in 2025.
Previous wording
The increase in revenues from Asia-based customers in the three months ended December 31, 2024, was driven by a surge in volume from a new Aisa-based customer since June 2024, which was partly offset by decrease in shipments volume from Asia-based customers serving large e-commerce platforms due to the discussion on the amendment of de minimis rule.
Current wording
The slightly increase in revenues from Asia-based customers for the nine months ended March 31, 2025, was driven by increases volume from Aisa-based customer, which was partly offset by recent decrease in shipments volume from Asia-based customers serving large e-commerce platforms due to the discussion on the amendment of de minimis rule and imposition of tariff on Chinese goods,
Previous wording
The decrease in revenue from the U.S.-based customers in the three months ended December 31, 2024, compared to the same period in 2023, was primarily due to our strategic shift toward Asia-based e-commerce customers, in addition to the overall decline in revenue discussed earlier. Additionally, one-off special projects with larger shipment volumes from U.S. customers were completed in the three months ended December 31, 2023, with no comparable projects in the same period in 2024.
Current wording
The decrease in revenue from the U.S.-based customers for the nine months ended March 31, 2025, compared to the same period in 2024, was primarily due to decreased in shipments volume. Additionally, one-off special projects with larger shipment volumes from U.S. customers were completed for the nine months ended March 31, 2024, with no comparable projects for the same period in 2025.
Previous wording
Our customers for the distribution of pharmaceutical products are based in China, as we specifically target the Chinese market.*** ***For the three months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to $0.2 million, compared to no revenue from this segment in the same period of the prior year.
Current wording
Our customers for the distribution of pharmaceutical products are based in China, as we specifically target the Chinese market.*** ***For the nine months ended March 31, 2025, our total revenue from pharmaceutical product distribution amounted to $0.7 million, compared to no revenue from this segment in the same period of the prior year.
Previous wording
A breakdown of our cost of revenues for the six months ended December 31, 2024 and 2023 is as follows:
Current wording
A breakdown of our cost of revenues for the nine months ended March 31, 2025 and 2024 is as follows:
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Our gross margin of cross-border freight solution was 10.2% for the three months ended March 31, 2025, compared to 21.9% for the three months ended March 31, 2024. The decline in gross margin was primarily attributable to (i) disproportionate decrease in our revenue from the airfreight and ocean freight solution compared to the decrease in our cost of revenue, such as transportation and delivery cost, warehouse services, custom declaration and terminal charges, and (ii) increased overhead costs allocated, as discussed above.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
We had income tax expense of $89,581 and $26,125 in the six months ended December 31, 2024 and 2023, respectively. We did not have current income tax provision in the six months ended December 31, 2024, due to net operating loss, and we recognized a deferred income tax asset of $959,094 due to temporary differences recognized and net operating loss carried forward. We also recognized a valuation allowance of $1,048,675 to write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable income, resulting in a net income tax expense of $89,581 in the six months ended December 31, 2024.