Quanome Technologies, Inc.
For the period ended Jun 30, 2026. Filed Sep 25, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2026 · Filed Sep 25, 2026
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-K
Period ended 2025-06-30; filed 2025-10-14.
0001213900-25-098720
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-09-25.
0001213900-26-103571
Item 7. 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 110 previous paragraphs and 110 current paragraphs.
26 unchanged; 23 reworded; 60 added; 60 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 6 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 (60)
Current report
Prior to February 12, 2026, we operated as a U.S.-based integrated cross-border supply chain solutions provider with a strategic focus on the Asian market, including China, through ABL Chicago, and were also engaged in the distribution of pharmaceutical products in China through Hupan Pharmaceutical. On February 12, 2026, we transferred the operations of ABL Chicago to an unrelated third party, which obtained operational control and substantially all economic interests associated with the business. Following the transfer, we ceased substantive involvement in ABL Chicago’s operations. Accordingly, the operations of ABL Chicago were classified as discontinued operations in our consolidated financial statements. The disposal represents a strategic shift in our business operations and allows management to further streamline resources and focus on the development and expansion of our pharmaceutical distribution business.
Current report
Our continuing operations are focused on the distribution of pharmaceutical products in China through Hupan Pharmaceutical. Revenue from continuing pharmaceutical operations was primarily derived from infusion products, specialty prescription drugs, and medical nutrition products. We procure products from manufacturers, store the products at designated warehouses, and distribute them to hospitals, distributors and other healthcare providers, primarily through agents. The Company operates within a highly regulated healthcare environment and generates revenue through sales to distributors, hospitals, and clinics.
Current report
Beginning in September 2026, the Company, through its indirectly wholly owned subsidiary, XDT Infrastructure I, LLC, a Delaware limited liability company, commenced activities relating to the provision of artificial intelligence compute capacity and managed inference services. Under this business model, the Company’s subsidiary procures, owns and operates servers and related computing infrastructure for its own account, and makes capacity on that infrastructure available to customers as a service. Capacity allocated to a customer is logically and operationally segregated from capacity allocated to other customers, with the level of segregation depending on the applicable customer arrangement. Customers may specify the artificial intelligence models to be deployed on the capacity allocated to them, subject to technical compatibility, licensing and other applicable requirements, as well as the Company’s operation of the underlying infrastructure. XDT’s role is primarily to provide and operate the underlying computing infrastructure and managed inference environment. As of the date of this report, the Company does not plan to develop or train proprietary AI models and does not use customer-provided content to train models unless separately authorized by the applicable customer.
Current report
The Company continually evaluates potential opportunities to expand and diversify its business operations. Smart Reserve Holding LTD and Smart Reserve Inc were formed in connection with the Company’s preliminary evaluation of potential opportunities relating to digital asset business activities. As of the date of this report, the Company has not commenced any such business and has not adopted any concrete operational plan relating thereto. Any future expansion initiatives may be affected by factors including market conditions, capital availability, regulatory developments, operational execution, technological requirements, and management resources.
Current report
The Company’s results of operations for the period reflect the performance of its continuing pharmaceutical distribution business, and accordingly, prior period results have been recast to present the disposed business as discontinued operations where applicable. Management evaluates the performance of the continuing operations based on revenue growth, gross margin, operating efficiency, and working capital.
Current report
Regulatory Environment in China
Current report
The pharmaceutical industry in China is subject to extensive government regulation, including pricing controls, tendering processes, and reimbursement policies. Government initiatives, such as centralized procurement programs and healthcare reforms, may affect product pricing, sales volumes, and margin levels.
Current report
Supplier and Manufacturer Relationships
Current report
The Company relies on relationships with pharmaceutical manufacturers and suppliers for product sourcing. Changes in supply terms, pricing arrangements, or product availability may impact revenue and gross margins.
Current report
Customer Concentration and Hospital Demand
Current report
A significant portion of the Company’s sales is generated from hospitals and large distributors. Purchasing patterns, tender cycles, and changes in hospital demand or procurement policies can lead to fluctuations in revenue. During the year ended June 30, 2026, we have generated revenue from the distribution of pharmaceutical products from 63 customers, of which, four customers took over 10% of the revenue.
Current report
Pricing Pressure and Competition
Current report
The Company operates in a competitive market with pressure from both domestic and international pharmaceutical distributors. Competitive pricing dynamics and participation in government bidding processes may compress margins.
Current report
Product types and composition
Current report
During the year ended June 30, 2026, the pharmaceutical products we distribute mainly consist of infusion drugs, specialty foods, and therapeutic drugs. The profitability level of different products varies, and the proportion of various products affects our gross profit level.
Current report
Accounts receivable collection
Current report
The current payment term provided by us to our main customers is between 0-90 days; while the payment term from the supplier is 60 days. There is also a situation of prepaying payment to the supplier. If the accounts receivable cannot be collected in a timely manner or there are identifiable uncollectible balances, our cash flow in operating activities may be negatively affected.
Current report
Foreign Currency Fluctuations
Current report
As the Company operates primarily in China while reporting in United States Dollar (“USD”), fluctuations in foreign exchange rates, particularly between the Renminbi and the reporting currency, may impact reported revenue and profitability.
Current report
Revenues. We currently generate revenue from the distribution of pharmaceutical and medical products. We purchase products from manufacturers, receive and hold the products at designated warehouses, and deliver them to customers’ warehouses or other designated locations. Revenue is recognized at a point in time when control of the products is transferred to and accepted by the customers.
Current report
*Write-off of supplier advance:*The expense consists of the write-off of an advance payment made to a supplier for inventory intended for a new business initiative.
Current report
*Provision of allowance for expected credit loss on loan receivable:*The expense consists of the allowance recognized for expected credit losses on loans receivable from third parties, based on the borrowers’ creditworthiness, repayment history, current financial condition and relevant economic factors.
Current report
Continuing Operation
Current report
Our continuing operations are focused on the distribution of pharmaceutical products in China. Revenue from continuing pharmaceutical operations was primarily derived from infusion products, specialty prescription drugs, and medical nutrition products. The Company operates within a highly regulated healthcare environment and generates revenue through sales to hospitals through agent, and other healthcare providers.
Current report
Discontinued Operation
Current report
On February 12, 2026, the sale of 100% of the issued and outstanding shares of ABL Chicago was duly approved and adopted by the Company’s shareholders. Accordingly, the Company consummated the transfer of the ABL Chicago business. Immediately prior to the Transaction, the Company forgave $3,402,808 of amounts due from ABL Chicago. The Company recorded a gain on the sale of the ABL Chicago business in the amount of $2,556,315 as follows:
Current report
For the Year Ended June 30, 2026 Compared to the Year Ended June 30, 2025
Current report
Revenue from the distribution of pharmaceutical products increased by approximately $3.1 million, or 111.8%, from approximately $2.8 million for the year ended June 30, 2025 to approximately $5.9 million for the year ended June 30, 2026. The increase was primarily attributable to higher sales of infusion products, an increase in the number of active customers from 8 to 12, and the inclusion of a full year of operations for the year ended June 30, 2026. The Company commenced its pharmaceutical distribution operations in December 2024; accordingly, the results for the year ended June 30, 2025 reflected only a partial year of operations.
Current report
Infusion products accounted for approximately 91.1% and 82.9% of pharmaceutical distribution revenue for the years ended June 30, 2026 and 2025, respectively. Revenue from infusion products increased by approximately $3.0 million, from approximately $2.3 million in fiscal 2025 to approximately $5.3 million for the year ended June 30, 2026. The increase was primarily driven by higher sales volumes and new customer acquisitions.
Current report
Cost of Revenues and Gross Profit
Current report
Cost of revenue from the distribution of pharmaceutical products increased by approximately $1.3 million, or 109.2%, from approximately $1.2 million for the year ended June 30, 2025 to approximately $2.5 million for the year ended June 30, 2026. The increase was primarily driven by higher sales volume, consistent with the significant growth in revenue during the period as the Company continued to expand its pharmaceutical distribution operations.
Current report
Gross profit margin increased from approximately 56.1% for the year ended June 30, 2025 to approximately 56.7% for the year ended June 30, 2026. The increase in gross margin was primarily attributable to changes in supplier incentives, specifically a growth in purchase rebates offered by suppliers in the current period compared to the prior-year period.
Current report
Our selling expenses amounted to approximately $2.6 million for the year ended June 30, 2026, compared to approximately $0.4 million for the same period in 2025. The increase was primarily attributable to: (i) an approximately $1.0 million increase in advertising expenses to increase market awareness, promote our products and support the growth of our pharmaceutical distribution business; (ii) an approximately $0.6 million increase in market research and business development expenses incurred to identify prospective customers and develop customer relationships; (iii) an approximately $0.1 million increase in business entertainment expenses; and (iv) an approximately $0.3 million increase in salaries and related costs resulting from the expansion of our sales team.
Current report
Our general and administrative expenses increased by approximately $3.1 million, or 117.6%, from approximately $2.6 million for the year ended June 30, 2025, to approximately $5.7 million for the year ended June 30, 2026. The increase was mainly due to an increase in our professional expense.
Current report
Our professional fees increased by approximately $3.1 million, or 247.4%, from approximately $1.2million for the year ended June 30, 2025, to approximately $4.3 million for the year ended June 30, 2026. Our professional fee represented 75.9% and 47.6% of our total general and administrative expenses for the year ended June 30, 2026 and 2025, respectively. The increase was primarily due to advisory and consulting expenses for strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.
Current report
Write-off of supplier advance
Current report
During the year ended June 30, 2026, the Company made an advance payment of $2,947,635 (RMB 20,000,000) to a supplier for the purchase of inventory intended for a new business initiative. The supplier subsequently failed to fulfill its obligations under the purchase agreement. As a result, the Company did not receive the inventory and was unable to recover the advance payment. Accordingly, the Company determined that the advance was not recoverable and wrote off the full amount, recognizing a loss of $2,859,594 (RMB 20,000,000) in write-off of supplier advance in the consolidated statement of operations for the year ended June 30, 2026.
Current report
Provision of allowance for expected credit loss on loan receivable
Current report
During the year ended June 30, 2026, the Company recognized an expected credit loss of approximately $2.3 million on loans to third parties. The provision was recorded based on management’s assessment of the borrowers’ creditworthiness, repayment history, current financial condition, and other relevant economic factors. The Company will continue to monitor the collectability of these loans and update its expected credit loss estimates as additional information becomes available.
Current report
Our other income, net, increased by $262,082, or 789.0%, from $33,217 for the year ended June 30, 2025, to $295,299 for the year ended June 30, 2026. The increase was primarily due to an increase in interest income in connection with a third-party loan.
Showing the first 40 of 60 passages. Open the source sections for the rest.
Removed paragraphs (60)
Previous report
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. As of June 30, 2025, we had served over 400 customers to fulfill over 55,000 cross-border supply chain solution orders.
Previous report
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. As of June 30, 2025, we had collaborated with almost all major global ocean and air carriers to forward 35,900 TEU of container loads and 69,300 tons of air cargo. As of June 30, 2025, we had also cooperated with over 200 domestic ground transportation carriers, including almost all major U.S. domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may be.
Previous report
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 June 30, 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 $54.0 million.
Previous report
Leveraging our strong cross-border supply chain service capabilities, extensive service provider network of cross-border freight carriers and U.S. domestic ground transportation carriers, massive and hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build up our brand and reputation and have achieved fast growth since our inception. As of June 30, 2025, we had fulfilled over 55,000 cross-border supply chain solution orders for freight of an aggregate assessed value of $1.0 billion, delivered to thousands of business and residential addresses in approximately 48 U.S. states.
Previous report
During the year ended June 30, 2025, we had a new business segment through acquired 100% equity interest of Hupan Pharmaceutical, a comprehensive pharmaceutical distribution and supply chain service provider headquartered in Wuhan, China with verticals in brand promotion and healthcare technology support. We have partnered with some pharmaceutical manufacturers to supply infusion fluids, which are our major pharmaceutical products sold and distributed during the year.
Previous report
For the year ended June 30, 2025 and 2024, our revenues amounted to $17.8 million and $18.3 million, respectively, and our gross profit amounted to $2.9 million and $3.7 million during the same periods, respectively.
Previous report
Our Ability to Expand Our Customer Base
Previous report
Our results of operations are dependent upon our ability to expand and maintain our customer base. As of June 30, 2025, we had served over 400 customers to fulfill over 55,500 cross-border supply chain solution orders. We will continue to expand our customer base to achieve a sustainable business growth. We aim to attract new customers and maintain our existing customers. We plan to improve the quality and expand the variety of our services to obtain more customers.
Previous report
During fiscal year 2025, we introduced a new revenue stream through the distribution of pharmaceutical and medical products. Under this model, we purchase products directly from manufacturers, store them in designated warehouses, and deliver them to customers’ warehouses or other specified locations. While this business expansion creates opportunities to reach new customers in the healthcare sector. It also exposes us to additional risks compared with our traditional cross-border logistics services. These risks include heightened regulatory and compliance requirements for the handling and distribution of medical products, increased working capital exposure from holding inventory, and greater operational complexity in maintaining product quality and safety. Successfully expanding our customer base in this new segment will depend on our ability to manage these risks effectively while maintaining high service standards and compliance with applicable regulations.
Previous report
Our Ability to Control Costs
Previous report
Our results of operations are affected by our ability to control costs including transportation and delivery costs, warehouse service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation, which may be subject to factors, including, among other things, fluctuations in wage rates, fuel prices, toll fees, and leasing costs. Effective cost-control measures have a direct impact on our financial condition and results of operations. For example, our cross-border freight carrier and U.S. domestic ground transportation carrier services providers use large quantities of fuel to operate vehicles, and therefore, hence the higher fuel cost incurred by them may causes our higher fee rates cost charged on us by such the service providers. The availability and price of fuel and third-party transportation capacity are subject to political, economic, and market factors that are beyond our control. We also incur a significant amount of costs in relation to transportation and labor. Any unexpected increase in these costs, which is subject to factors beyond our control, could adversely impact our profitability. We have adopted, and expect to adopt, additional cost control measures. However, the measures we have adopted or will adopt in the future may not be as effective as expected. If we are not able to effectively control our costs and adjust the level of fee rates based on operating costs and market conditions, our profitability and cash flow may be adversely affected.
Previous report
With the introduction of our new pharmaceutical and medical product distribution business in fiscal year 2025, our cost structure has become more complex. Unlike our traditional cross-border logistics services, which are largely variable in nature, the new business requires us to hold inventory, maintain specialized warehouse conditions, and comply with more stringent product handling standards. These factors may increase fixed operating costs, including storage, insurance, and quality control expenses. Consequently, our ability to control costs in this new business segment will depend not only on fuel and labor trends but also on our efficiency in managing inventory turnover and compliance-related expenses.
Previous report
We have implemented, and expect to continue adopting, additional cost-control measures to mitigate these risks. However, such measures may not always be as effective as anticipated. If we are unable to effectively control our operating costs or adjust our pricing in response to changing market conditions, our profitability and cash flows may be adversely affected.
Previous report
Our Ability to Provide High-quality Services
Previous report
Our results of operations depend on our ability to maintain and further enhance our service quality. Together with our network of service providers, we provide integrated cross-border ocean and air freight supply chain solutions and services to our customers. If we or our service providers are unable to provide express delivery services in a timely, reliable, safe and secure manner, our reputation and customer loyalty could be negatively affected. In additional, if our customer service personnel fail to satisfy customer needs or respond effectively to customer complaints, we may lose potential or existing customers and experience a decrease in customer orders, which could have a material adverse effect on our business, financial condition and results of operations.
Previous report
As we expand into pharmaceutical and medical product distribution, maintaining high-quality service standards becomes even more critical. This new business line involves additional operational requirements, such as temperature-controlled storage, specialized handling, and compliance with healthcare product regulations. Any lapse in these areas could result in regulatory penalties, product spoilage, or loss of customer trust. Compared to our existing logistics operations, the consequences of service failures in this segment could be more severe, given the sensitive nature of medical products and the higher expectations of healthcare customers. Ensuring consistent service quality will therefore require enhanced employee training, strengthened supplier oversight, and continuous monitoring of compliance procedures.
Previous report
Strategic Acquisitions and Investments
Previous report
Our results of operations also depend on our ability to pursue strategic acquisitions and investments in expanding our global footprints, diversifying our service offerings, and advancing our technologies. We may selectively pursue mergers, acquisitions, investments, joint ventures and partnerships that we believe are strategic and complementary to our operations and technology. However, we cannot assure you that we will make prudent decisions at all times. Our ability to successfully execute or effectively operate, integrate, leverage and grow these investments or strategic partnerships could impact our results of operations and financial conditions.
Previous report
In response to governmental directives and recommended safety measures, we have implemented personal safety measures at all of our facilities. However, these measures may not be sufficient to mitigate the risk of infection by COVID-19. If a significant number of our employees, or third parties performing key functions, including our chief executive officer and members of our board of directors, become ill, our business may be further adversely impacted.
Previous report
The impact of COVID-19 pandemic on us in the future will depend on future developments which are highly unpredictable and beyond our control, such as the frequency, duration and severity of the resurgence of COVID-19 and the emergence of new variants, as well as the measures that may be taken by governments around the world in response to these developments, the impact of the pandemic on the global economy and the measures taken by governments to stimulate the general economy. Therefore, we cannot guarantee that the pandemic will not continue to have an adverse effect on our business and results of operations in the future, which may be material.
Previous report
We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, service providers and stockholders.
Previous report
Uncertainty and Impacts on the Recent U.S. Tarriff Policies and Regulations
Previous report
Our results of operations also depend on our ability to respond with the recent tariff and other restrictions placed on imports. Since February 2025, trade between the U.S. and China has remained under tight restrictions and elevated trade barriers. While some temporary relief measures and exemptions were granted, most U.S. tariffs on Chinese goods remain in place, particularly affecting key sectors such as agriculture, automobiles, industrial materials, and consumer goods. These trade measures have significantly disrupted U.S.-China commerce, reducing exports in certain categories and forcing companies on both sides to adjust supply chains, pricing, and sourcing strategies. Despite some ongoing negotiations, the overall trade environment remains challenging and uncertain, with cross-border business continuing to face heightened costs and operational complexities.
Previous report
In May 2025, the US and China agreed to a truce to lower import taxes on goods being traded between the two countries for 90 days. Under the terms of the agreement, both countries committed to pausing the imposition of new tariffs and partially rolling back existing duties on select goods, primarily in the technology, agricultural, and consumer product sectors. Although the agreement marks a major de-escalation of the trade war between the two countries, there is still a high degree of uncertainty surrounding U.S. tariff policy, how it will be implemented, and how other countries will react to it. It also remains uncertain whether increased tariffs and trade tensions will create further disruptions and uncertainties to the international trade and lead to a downturn in the global economy.
Previous report
As of August 29, 2025, the United States has permanently eliminated the $800 de minimis threshold that previously allowed low-value shipments to enter the country duty-free. This change applies to all international shipments, regardless of value, origin, or shipping method. The decision was made to strengthen trade enforcement and address concerns over illicit trade practices. All imports, including those valued under $800, are now subject to applicable duties and taxes. These changes increase the complexity of customs processing, slow clearance times, and reduce the volume of low-value parcels traditionally handled by freight forwarders.
Previous 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, extend shipping schedules, increase voyage costs, and other associated costs, which could have an adverse impact on our customers’ business, operating results and financial condition and could thereby affect their ability to make timely payments to us and their order quantities. This could have a material adverse effect on our business, operating results, cash flows and financial condition.
Previous report
We will continue to actively monitor the situation and consider strategic adaptation to maintain service levels and profitability.
Previous report
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 report
Year Ended June 30, 2025 Compared to Year Ended June 30, 2024
Previous report
Our total revenues from cross-border freight solutions decreased by $3.3 million, or 17.9%, from $18.3 million for the year ended June 30, 2024, to $15.0 million for the year ended June 30, 2025. The decrease was primarily driven by a decline in the volume of shipments we handled from both of our cross-border ocean freight solution and airfreight solutions due to the U.S. policy changes: first, the termination of the $800 de minimis rule eliminated duty-free entry for low-value shipments; second, new tariffs—ranging from $50 to $150 or up to 120% of the item value—were imposed on small packages, further discouraging direct-to-consumer exports; and third, expedited customs clearance modes like T86 were discontinued, requiring more complex documentation and longer processing times. Together, these changes have led to a sharp decline in shipment volume and forced freight solution providers to rethink their logistics strategies. Additionally, a slowdown in consumer spending and business investments, caused by the overall economic downturn and high interest and inflation rates, reduced the demand for imported goods, leading to lower container volumes.
Previous report
Revenues from our cross-border ocean freight solutions decreased by $2.1 million, or 26.6%, from $7.9 million for the year ended June 30, 2024, to $5.8 million for the year ended June 30, 2025. This reduction was primarily due to a decrease in the volume of cross-border ocean freight processed and forwarded, dropping from 5,458 TEU in the year ended June 30, 2024, to 4,609 TEU for the year ended June 30, 2025.
Previous report
Revenues from our cross-border airfreight solutions decreased by $1.2 million or 11.4%, from $10.4 million for the year ended June 30, 2024, to $9.2 million for the year ended June 30, 2025. The decrease was primarily due to a decrease in the volume of cross-border air freight processed, from approximately 26,160 tons for the year ended June 30, 2024, to approximately 21,511 tons for the year ended June 30, 2025. 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 report
Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. For the year ended June 30, 2025, our total revenue from pharmaceutical product distribution amounted to $2.8 million. We did not generate any revenue from this segment in the same period of the prior year.
Previous report
Looking ahead, there remains significant uncertainty regarding future tariff policies, trade regulations between the U.S. and China, and the regulatory environment affecting e-commerce platforms in the U.S. We expect these factors to continue influencing cross-border freight activity in the near term. These policies may significantly reduce the volume of goods imported into the U.S. and moving through e-commerce channels due to increased import costs. Despite these headwinds, we remain committed to exploring new customer opportunities while maintaining strong relationships with our existing clients.
Previous report
Revenues by Customer Geographic
Previous report
Revenues from cross-border freight solutions for the Asia-based customers decreased by $1.0 million, or 7.8%, from $13.1 million for the year ended June 30, 2024, to $12.1 million for the year ended June 30, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by $2.2 million, or 43.2%, from $5.2 million for the year ended June 30, 2024 to $3.0 million for the same period in 2025.
Previous report
The decrease in revenues from Asia-based customers for the year ended June 30, 2025, was due to a decrease in shipments volume from Asia-based customers serving large e-commerce platforms, driven by the discussions on the amendments to the de minimis rule and the imposition of higher tariffs on Chinese goods.
Previous report
The decrease in revenue from the U.S.-based customers for the year ended June 30, 2025, compared to the same period in 2024, was primarily driven by a decrease in shipment volumes serving e-commerce platforms and concerns over a potential economic downturn and reduced consumer spending power in the U.S., which led to lower shipment volumes.
Previous report
Our customers for the distribution of pharmaceutical products are located in China, as we specifically target the Chinese market.*** ***For the year ended June 30, 2025, our total revenue from pharmaceutical product distribution amounted to $2.8 million. We did not generate any revenue from this segment in the same period of the prior year.
Previous report
Cost of Revenues
Showing the first 40 of 60 passages. Open the source sections for the rest.
Reworded paragraphs (23)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. All amounts included herein with respect to the fiscal years ended June 30, 2025 and 2024 are derived from our audited consolidated financial statements included elsewhere in this Report. Our financial statements have been prepared in accordance with the U.S. GAAP.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. All amounts included herein with respect to the years ended June 30, 2026 and 2025 are derived from our consolidated financial statements included elsewhere in this annual report. Our financial statements have been prepared in accordance with the U.S. GAAP.
Previous wording
Revenues. We generate revenues primarily by providing customized cross-border ocean freight solutions and airfreight solutions to customers that specifically cater to their requirements and needs in transporting goods into the U.S. Under the service agreements with our customers, we offer a wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.
Current wording
Prior to the disposition of our cross-border logistics business in February 2026, we also generate revenues primarily by providing customized cross-border ocean freight solutions and airfreight solutions to customers that specifically cater to their requirements and needs in transporting goods into the U.S. Under the service agreements with our customers, we offer a wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.
Previous wording
Cost of Revenues. Our cost of revenues from customized cross-border ocean and air freight solutions mainly comprises transportation and delivery costs, warehouse service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation which includes operating and financing lease-related costs, depreciation expenses of property and equipment and other miscellaneous expenses.
Current wording
Cost of Revenues. Our cost of revenues from the distribution of pharmaceutical and medical products comprises cost of pharmaceutical products from manufacturers. Our cost of revenues from customized cross-border ocean and air freight solutions mainly comprises transportation and delivery costs, warehouse service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation which includes operating and financing lease-related costs, depreciation expenses of property and equipment and other miscellaneous expenses.
Previous wording
Selling Expenses. Our selling expenses primarily include salaries expense, advertising expenses, and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.
Current wording
Selling Expenses. Our selling expenses primarily include salaries expense, advertising expenses, marketing expense of a system, entertainment expenses and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.
Previous wording
General and Administrative Expenses. Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance expenses, depreciation on property and equipment, amortization on intangible assets, lease expenses warehouses used for administrative purpose and office premises, travelling and entertainment expenses, bank charges, legal and professional fees, insurance expenses and other office expenses.
Current wording
General and Administrative Expenses. Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance expenses, depreciation on property and equipment, amortization on intangible assets, lease expenses on office premises, travelling and entertainment expenses, bank charges, legal and professional fees, insurance expenses and other office expenses.
Previous wording
Other Income. Our other income primarily consists of rental income.
Current wording
Other Income. Our other income primarily consists of interest income in connection with third-party loan.
Previous wording
Interest Expenses. Our interest expenses primarily consist of the interest expenses incurred for finance leases, convertible debts, equipment loans, vehicle loans and other loans and interest for late credit card payment.
Current wording
Interest Expenses. Our interest expenses primarily consist of the interest expenses incurred for convertible debts and other loans.
Previous wording
Income Tax Expenses. Our income tax expenses consist primarily of U.S. federal, state income taxes, replacement tax in the state of Illinois and PRC enterprise income tax.
Current wording
Income Tax Expenses. Our income tax expenses consist primarily of PRC enterprise income tax.
Previous wording
We are a U.S.-based integrated cross-border supply chain solution provider with a strategic focus on the Asian market including China and South Korea. We primarily provide customized cross-border ocean freight solutions and airfreight solutions in the U.S. that specifically cater to our customers’ requirements and needs in transporting goods into the U.S. We offer a wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.
Current wording
ABL Chicago is a U.S.-based integrated cross-border supply chain solution provider with a strategic focus on the Asian market including China. We primarily provide customized cross-border ocean freight solutions and airfreight solutions in the U.S. that specifically cater to our customers’ requirements and needs in transporting goods into the U.S. We offer a wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.
Previous wording
The following table summarizes the results of consolidated statements of operations and comprehensive income (loss) for the years ended June 30, 2025 and 2024 in U.S. dollars.
Current wording
The following table summarizes the results of consolidated statements of operations and comprehensive loss for the years ended June 30, 2026 and 2025 in U.S. dollars.
Previous wording
Our interest expenses increased by $0.3 million, or 271.5%, from $0.1 million for the year ended June 30, 2024, to $0.4 million for the year ended June 30, 2025. The increase in interest expense was mainly due to late credit card payments and interest expense in connection with the convertible note issued during the year ended June 30, 2025.
Current wording
Our interest expenses decreased by $79,597, or 34.7%, from $229,254 for the year ended June 30, 2025, to $149,657 for the year ended June 30, 2026. The decrease in interest expense was mainly due to reduced interest expense related to the convertible note following partial conversion of the note for the year ended June 30, 2026.
Previous wording
We had income tax expenses of $0.3 million for the years ended June 30, 2025, and an income tax credit for the year ended June 30, 2024. A current income tax provision of $0.2 million was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the year ended June 30, 2025.
Current wording
We had income tax expenses of $91,711 and $212,296 for the years ended June 30, 2026 and 2025, respectively. A current income tax provision of $174,611 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the year ended June 30, 2026.
Previous wording
In the prior fiscal year, the Company recognized deferred tax assets (DTAs) related to its net operating loss carryforwards, based on management’s assessment of future taxable income. However, during the current fiscal year ended June 30, 2025, the Company reassessed its ability to realize these DTAs and determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred tax assets. This change in assessment led to the recognition of a deferred income tax expense of $89,581 in the current year. We recognized a recovery of deferred income tax credit of $13,357 due to amortization of intangible assets, resulting in a net income tax expense of $301,877 for the year ended June 30, 2025.
Current wording
Based on management’s assessment of future taxable income, the Company determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred tax assets. We recognized a deferred income tax credit of $82,900 due to credit loss allowance and amortization of intangible assets, resulting in a net income tax credit of $91,711 for the year ended June 30, 2026.
Previous wording
As a result of the foregoing, we had a net loss of $5.2 million and of $0.2 million for the years ended June 30, 2025 and 2024, respectively.
Current wording
As a result of the foregoing, we had a net loss of approximately $10.1 million and approximately $1.9 million for the year ended June 30, 2026 and 2025, respectively.
Previous wording
As of June 30, 2025, we had a cash balance of $5.0 million. Our current assets were $10.3 million, and our current liabilities were $9.7 million, resulting in a current ratio of 1.06:1 and positive working capital of $0.6 million. Total stockholders’ equity as of June 30, 2025 was $2.8 million.
Current wording
As of June 30, 2026, we had a cash balance of approximately $0.7 million. Our current assets were approximately $11.0 million, and our current liabilities were approximately $4.5 million, resulting in a current ratio of 2.46 and working capital surplus of approximately $6.5 million. Total stockholders’ equity as of June 30, 2026 was approximately $7.0 million.
Previous wording
As of June 30, 2025 and June 30, 2024, we had accounts receivable net of allowance of $3.3 million and $2.8 million, respectively. We periodically review our accounts receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional allowances if necessary. For accounts receivable as of June 30, 2025 and June 30, 2024, we provided a credit loss allowance of $87,728 and $54,066, respectively.
Current wording
As of June 30, 2026 and 2025, we had accounts receivable net of allowance of approximately $1.1 million and approximately $1.4 million, respectively. We periodically review our accounts receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional allowances if necessary. For accounts receivable as of June 30, 2026 and 2025, we provided a credit loss allowance of $95,494 and $33,039, respectively.
Previous wording
The following table sets forth summary of our cash flows for the periods indicated:
Current wording
The following table sets forth a summary of our cash flows from continuing operations for the periods indicated:
Previous wording
Net cash used in operating activities was $53,640 in the fiscal year ended June 30, 2024, which included a net loss of $228,277, adjusted for non-cash items of $1,168,010 and changes in working capital of negative $993,373. The non-cash items primarily included $1,005,686 non-cash operating lease expense, $144,637 depreciation, $30,712 depreciation of right-of-use finance assets and $28,157 from provision of allowance for expected credit loss, offset by an increase of $114,333 from deferred tax credit. The adjustments for changes in working capital mainly included an increase of $722,522 and $732,769 in accounts receivable — third parties and related parties, respectively, due to significant increase of revenues in the fiscal year ended June 30, 2024, and an increase of $846,992 in operating lease liabilities, partially offset by an increase of $468,284 in accrued liabilities and other payables due to unpaid IPO related expense, a decrease of $328,820 in other receivable — related parties because of settlement of rental income, an increase of $699,644 in accounts payable — third parties and an increase of $46,996 in tax payable.
Current wording
Net cash used in operating activities was $3,183,694 for the year ended June 30, 2026, primarily reflecting a net loss from continuing operations of $10,138,418, adjusted for non-cash items of $8,430,011 and changes in working capital deficits of $1,475,287. The non-cash items primarily included $94,413 straight-line lease expense related to operating leases, $3,254,580 stock-based compensation for consulting expenses, $52,012 depreciation, $109,753 amortization of discount and bond issuance cost, $85,484 amortization of intangible assets, $2,859,594 write-off of supplier advance, $268,711 interest income from third-party loan, $2,256,647 from provision of allowance for expected credit loss on loan receivable, $58,801 from provision of allowance for expected credit loss on accounts receivable and a decrease of $82,900 from deferred tax liabilities. The adjustments for changes in working capital mainly included a decrease of $279,861 in accounts receivable due to a decrease of revenues near period end, an increase of $2,840,631 in prepayment, deposit and other receivable and a payment of $82,497 for operating lease liabilities, partially offset by a decrease of $411,766 in accounts payable, a decrease of $66,732 in note receivable, an increase of $745,330 in refund liabilities, an increase of $154,119 in income tax payable, and an increase of $772,122 in accrued liabilities and other payables, an increase in inventory of $91,890, an increase in right of return asset of $341,296 and an increase in due to related party of $220,220.
Previous wording
Net cash used in operating activities was $2,655,006 in the fiscal year ended June 30, 2025, which included a net loss of $5,246,136, adjusted for non-cash items of $2,601,253 and changes in working capital deficits of $10,123. The non-cash items primarily included $2,042,946 straight line lease expense of operating leases, $198,527 depreciation included in G&A and cost of revenue, $32,681 depreciation of right-of-use finance assets, $138,994 amortization of discount and bond issuance cost, $53,427 amortization of intangible assets, $39,804 interest expense on convertible debts, $28,120 interest income from a third party loan, $33,432 from provision of allowance for expected credit loss and a decrease of $68,022 from deferred tax asset due to recognition of valuation allowance. The adjustments for changes in working capital mainly included an increase of $856,634 in accounts receivable from third parties due to an increase of revenues near period end, an increase in inventory of $96,534, an increase of $141,687 in right of return asset, a decrease of $162,485 in accounts payable from related parties, an increase of $241,567 in prepayment and other receivable and a payment of $1,540,032 for operating lease liabilities, partially offset by an increase of $1,332,359 in accounts payable from third parties, a decrease of $376,728 in accounts receivable from related parties, an increase of $233,078 in tax payable, and an increase of $1,072,789 in accrued liabilities and other payables.
Current wording
Net cash used in operating activities was $778,830 for the year ended June 30, 2025, including net loss from continuing operations of $1,898,782, adjusted for non-cash items for $311,581 and changes in working capital surplus of $808,371. The non-cash items primarily included $80,419 straight-line lease expense of operating leases, $15,809 depreciation expense, $53,427 amortization of intangible asset, $39,804 interest expense of convertible notes, $138,994 amortization of discount and bond issuance cost, $32,807 provision of allowance for expected credit loss on accounts receivable, $28,120 uncollected interest income from a third-party loan and a decrease of $21,559 from deferred tax liabilities. The adjustments for changes in working capital mainly included an increase of $1,450,463 in accrued expense and other payable, an increase of $233,078 in income tax payable, an increase of $1,018,228 in accounts payable and an increase of $15,355 in contract liabilities, partially offset by an increase of $1,439,727 in accounts receivable, an increase of $96,534 in inventories, an increase of $150,919 in prepayment, deposit and other receivable, an increase in right of return asset of $141,687 and a decrease of $91,969 in operating lease liabilities.
Previous wording
The 2,601,366 increase in cash used in operating activities for the fiscal year ended June 30, 2025, compared to the prior year, was primarily due to an increase in net loss of $5,017,859 compared to the same period in the prior year, partly offset by a decrease of $983,250 in cash outflow from working capital due to the timing of vendor, client, and related parties payment.
Current wording
The $2,404,864 increase in cash used in operating activities for the year ended June 30, 2026, compared to the prior year, was primarily due to an increase in advance deposits of $2,689,712 to suppliers.
Previous wording
Net cash provided by financing activities was $8,166,465 for the fiscal year ended June 30, 2025, compared to net cash provided by financing activities of $78,755 for the same period in prior year. The increase in net cash provided by financing activities was mainly due to the net proceeds of $5,351,581 from the offering, net proceeds of $2,999,700 from an offering of private placement, net proceeds of $1,170,513 from issuance of convertible debts, proceeds from loan borrowing of $1,017,919 and proceeds from a related-party loan of $124,176, partially offset by repayment of $805,345 to shareholders, advance to related parties of $715,309 and loans repayment of $533,440 during the fiscal year ended June 30, 2025. During the fiscal year ended June 30, 2024, the Company did not engage in any financing activities such as the issuance of convertible debentures, private placements, or initial public offerings. No proceeds were raised through equity or debt instruments,
Current wording
Net cash provided by financing activities was $7,767,642 and $8,581,938 for the years ended June 30, 2026 and 2025. The increase was primarily due to proceeds from private placement of financing activities compared with the prior period. During the year ended June 30, 2026, we generated cash inflows from private placements of $8,236,231, which were partially offset by $432,948 in principal repayments of convertible debt. During the year ended June 30, 2025, we had the net proceeds of $5,351,581 from the offering and net proceeds of $1,170,513 from issuance of convertible note and advances of $2,999,700 from Hupan Pharmaceutical prior to acquisition, partly offset by repayment of $805,946 to shareholders, during the year ended June 30, 2025.
Previous wording
Our capital expenditures are incurred primarily in connection with the purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold improvement and vehicles. Our capital expenditures amounted to $150,904 and $nil for the fiscal years ended June 30, 2025 and 2024, respectively.
Current wording
Our capital expenditures are incurred primarily in connection with the purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold improvement and vehicles. Our capital expenditures amounted to 2,048 and $71,177 for the years ended June 30, 2026 and 2025, respectively.
Previous wording
We prepare our condensed consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amounts of assets, liabilities, revenue, costs and expenses, and any related disclosures. Actual results could materially differ from those estimates. Critical accounting policy is both material to the presentation of financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on financial condition or results of operations. Accounting estimates and assumptions may become critical when they are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance.
Current wording
We prepare our consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amounts of assets, liabilities, revenue, costs and expenses, and any related disclosures. Actual results could materially differ from those estimates. Critical accounting policy is both material to the presentation of financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on financial condition or results of operations. Accounting estimates and assumptions may become critical when they are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
A current income tax provision of $233,855 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the year ended June 30, 2025. We recognized a deferred income tax credit of $21,559 due to amortization of intangible assets and credit loss allowance, resulting in a net income tax expense of $212,296 for the year ended June 30, 2025.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Our cost of revenues from the distribution of pharmaceutical and medical products comprises cost of pharmaceutical products from manufacturers.