Armlogi Holding Corp.
For the period ended Jun 30, 2026. Filed Sep 28, 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 28, 2026
BTOC$1.83-2.1%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 2025-09-25.
0001213900-25-091684
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2026-06-30; filed 2026-09-28.
0001213900-26-103636
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 60 previous paragraphs and 61 current paragraphs.
26 unchanged; 25 reworded; 10 added; 9 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 23 previous and 22 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 (10)
Current report
Our overall gross profit margin improved from negative 1.6% for the year ended June 30, 2025 to positive 0.2% for the year ended June 30, 2026, primarily due to the decrease in freight costs as disclosed above.
Current report
Other income
Current report
Other income decreased by $0.1 million, or 12%, for the fiscal year ended June 30, 2026, as compared to the fiscal year ended June 30, 2025. The decrease was primarily attributable to a reduction in rental income from certain sublease arrangements recognized during the fiscal year ended June 30, 2026.
Current report
During the year ended June 30, 2026, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, on a prospective basis for the first annual period beginning after December 15, 2024. The adoption did not affect the recognized amounts of income tax expense or related tax balances; it expanded the income tax disclosures presented below. Prior comparative periods have not been restated (prospective application).
Current report
The Company’s provision for income recovery consisted of the following:
Current report
Net loss
Current report
Going Concern
Current report
Our financial statements for the fiscal years ended June 30, 2026 and 2025 have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. The Company incurred a net loss of $20.9 million and $5.1 million net cash used in operating activities during the fiscal year ended June 30, 2026 and, as of that date, had a negative working capital of $25.6 million and accumulated deficits of $12.5 million. Without additional financing, the Company may not be able to fund its ongoing operations. In connection with assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that this report is issued.
Current report
In order to strength the Company’s liquidity in the foreseeable future, the Company have taken the following measures:
Current report
For the fiscal year ended June 30, 2026, we had net cash used in financing activities of $2.6 million, which was primarily attributable to the following: (i) $2.0 million used for repayment of convertible notes pursuant to the SEPA (as defined below) ; and (ii) $0.6 million used to repay finance lease liabilities.
Removed paragraphs (9)
Previous report
Our rental expenses (primarily warehouse operating lease expenses), freight expenses, temporary labor expenses, and salary and benefits increased significantly by $7.9 million, $23.7 million, $4.8 million, and $2.7 million, respectively, in the fiscal year ended June 30, 2025 compared to the fiscal year ended June 30, 2024. The increases in lease expenses were due to the additional operating leases acquired during the year. The increases in freight expenses were due to the increase in UPS expenses. The increases in temporary labor expenses, warehouse expenses, and salary and benefits were due to the expansion of the warehouse operations.
Previous report
Our overall gross profit margin decreased from 10.8% for the fiscal year ended June 30, 2024 to -1.6% for the fiscal year ended June 30, 2025, primarily due to the increase in lease expenses, temporary labor expenses for new warehouses, and UPS expenses. This decline is attributable to increases in the rental expenses, freight expenses, salary and benefits, temporary labor expenses, and warehouse expenses of approximately 25.9%, 26.4%, 35.2%, 37.9%, and 66.4%, respectively, despite a relatively modest increase in warehousing services revenue of approximately 22.9%.
Previous report
The following table sets forth a breakdown of our income tax expense:
Previous report
Our income tax expense decreased by $4.5 million in the fiscal year ended June 30, 2025, mainly due to the decrease in profit before tax by $27.3 million in the fiscal year 2025, compared to the fiscal year 2024.
Previous report
Net income
Previous report
For the fiscal year ended June 30, 2024, we had net cash provided by financing activities of $7.8 million, which was primarily attributable to the net effects of: (i) $7.5 million collected from our initial public offering; (ii) $0.5 million collected from related parties for the repayment of loans we previously advanced to them; (iii) $1.0 million used for expenses relating to the initial public offering; (iv) $0.2 million used to repay finance lease liabilities; and (v) $1.0 million in capital contributions from stockholders.
Previous report
As of June 30, 2025, our significant contractual obligations also include Convertible Notes arising from the SEPA entered into by the Company in November 2024 with a principal balance of $10.0 million. Pursuant to the SEPA, the Company has the right to sell to the Investor up to the Commitment Amount of the Company’s shares of common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA.
Previous report
Unless converted into our shares of common stock prior to their maturity, we are obligated to repay Convertible Notes in cash.
Previous report
The following table summarizes our future contractual obligations related to the Convertible Notes as of June 30, 2025:
Reworded paragraphs (25)
Previous wording
We provide one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market. We currently operate 10 warehouses across the country, with an aggregate gross floor area of approximately 3,905,020 square feet. Aside from a nationwide footprint and large storage space, our warehouses are equipped with automated sorting systems, heavy-duty forklifts, and pallets and trays that are suitable for processing bulky items. As a one-stop warehousing and logistics service provider, we offer a full spectrum of services, including (i) customs brokerage services; (ii) transportation of merchandise to U.S. warehouses; and (iii) warehouse management and order fulfillment services, which further include (a) product storage and retrieval, (b) product packing and labeling, (c) kitting and repackaging, (d) order assembly and load consolidation, (e) inventory management and sales forecasting, (f) third-party distribution coordination, and (g) other value-added services. We also provide warehousing and logistics services to our U.S.-based commercial customers, who are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations. In general, the warehousing and logistics services we provide to our domestic customers are similar to those we provide to our overseas customers. This allows us to provide integrated solutions for our customers, whether they need domestic or international warehousing and logistics support. As of June 30, 2025 and 2024, we had an active base of 505 and 105 customers, respectively, for our warehousing and logistics services.
Current wording
We provide one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. market. We currently operate eleven warehouses across the country, with an aggregate gross floor area of approximately 3,819,900 square feet. Aside from a nationwide footprint and large storage space, our warehouses are equipped with automated sorting systems, heavy-duty forklifts, and pallets and trays that are suitable for processing bulky items. As a one-stop warehousing and logistics service provider, we offer a full spectrum of services, including (i) customs brokerage services; (ii) transportation of merchandise to U.S. warehouses; and (iii) warehouse management and order fulfillment services, which further include (a) product storage and retrieval, (b) product packing and labeling, (c) kitting and repackaging, (d) order assembly and load consolidation, (e) inventory management and sales forecasting, (f) third-party distribution coordination, and (g) other value-added services. We also provide warehousing and logistics services to our U.S.-based commercial customers, who are typically domestic e-commerce merchants seeking efficient and reliable warehousing and logistics solutions to support their operations. In general, the warehousing and logistics services we provide to our domestic customers are similar to those we provide to our overseas customers. This allows us to provide integrated solutions for our customers, whether they need domestic or international warehousing and logistics support. As of June 30, 2026 and 2025, we had an active customer base of 525 and 505, respectively, for our warehousing and logistics services.
Previous wording
We have experienced rapid growth since our inception. For the fiscal years ended June 30, 2025 and 2024, we had total revenue of $190.4 million, and $167.0 million, respectively, and net loss of $15.3 million, and net income of $7.4 million, respectively. While we do not have any subsidiaries, assets, or employees in the PRC, we generate a significant portion of our revenue from customers based in China. During the fiscal years ended June 30, 2025 and 2024, we generated approximately 84% and 96% of our revenue from PRC-based customers, respectively. See “Item 1A. Risk Factors — Economic, Political, and Market Risks — China’s economic, political, and social conditions, as well as governmental policies, could affect the business environment and economic conditions in China, which may result in an adverse impact on the demand for our services, potentially harming our financial condition and operating results.”
Current wording
We have experienced rapid growth since our inception. For the fiscal years ended June 30, 2026 and 2025, we had total revenue of $185.8 million, and $190.4 million respectively, and net loss of $20.9 million, and $15.3 million respectively. While we do not have any subsidiaries, assets, or employees in the PRC, we generate a significant portion of our revenue from customers based in China. During the fiscal years ended June 30, 2026 and 2025, we generated approximately 78% and 84% of our revenue from PRC-based customers, respectively. See “Item 1A. Risk Factors — Economic, Political, and Market Risks — China’s economic, political, and social conditions, as well as governmental policies, could affect the business environment and economic conditions in China, which may result in an adverse impact on the demand for our services, potentially harming our financial condition and operating results.”
Previous wording
The majority of our customers consist of PRC e-commerce merchants who sell their merchandise into the U.S. market through e-commerce platforms. As such, our ability to acquire and maintain new or existing customers for our warehousing and logistics services is heavily reliant on their continued willingness to conduct cross-border e-commerce businesses, which may be significantly impacted by policies set by e-commerce platforms. For example, in early 2021, Amazon, the world’s largest e-commerce platform, claimed that it had suspended the accounts of over 50,000 Chinese sellers for improper use of review functions. Specifically, instead of earning favorable reviews through high-quality products, those PRC sellers manipulated reviews by paying for positive product reviews or by giving away gift cards, which violated Amazon’s terms of service. It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling their merchandise in the U.S. via Amazon. There is no guarantee that our current or future international customers are fully compliant with the terms of service of all the international e-commerce platforms they use, including Amazon, or that those e-commerce platforms will not from time to time initiate such a widespread suspension of PRC sellers in the future. Such a crackdown on PRC sellers may significantly reduce the number of Chinese e-commerce sellers who intend to sell in the U.S., who are our primary customers. The loss of our PRC customer base due to the widespread suspension of PRC sellers in the cross-border e-commerce industry could be detrimental to our ongoing operations. See “Item 1A. Risk factors — Operational Risks — The suspension of PRC sellers on using international e-commerce platforms, such as the crackdown on PRC sellers by Amazon in early 2021, has discouraged and may continue to discourage a growing number of PRC e-commerce sellers from selling their merchandise to the United States, thus adversely affecting our business, financial condition, and results of operations.”
Current wording
The majority of our customers consist of PRC e-commerce merchants who sell their merchandise into the U.S. market through e-commerce platforms. As such, our ability to acquire and maintain new or existing customers for our warehousing and logistics services is heavily reliant on their continued willingness to conduct cross-border e-commerce businesses, which may be significantly impacted by policies set by e-commerce platforms. For example, in early 2021, Amazon, the world’s largest e-commerce platform, claimed that it had suspended the accounts of over 50,000 Chinese sellers for improper use of review functions. Specifically, instead of earning great reviews through high-quality products, those PRC sellers manipulated reviews by paying for positive product reviews or by giving away gift cards, which violated Amazon’s terms of service. It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling their merchandise to the U.S. via Amazon. There is no guarantee that our current or future international customers are fully compliant with the terms of service of all the international e-commerce platforms they use, including Amazon, or that those e-commerce platforms will not from time to time initiate such a widespread suspension of PRC sellers in the future. Such a crackdown on PRC sellers may significantly reduce the number of Chinese e-commerce sellers who intend to sell in the U.S., who are our primary customers. The loss of our PRC customer base due to the widespread suspension of PRC sellers in the cross-border e-commerce industry could be detrimental to our ongoing operations. See “Item 1A. Risk factors — Operational Risks — The suspension of PRC sellers on using international e-commerce platforms, such as the crackdown on PRC sellers by Amazon in early 2021, has discouraged and may continue to discourage a growing number of PRC e-commerce sellers from selling their merchandise to the United States, thus adversely affecting our business, financial condition, and results of operations.”
Previous wording
During the fiscal years ended June 30, 2025 and 2024, our five largest customers accounted for approximately 55.1% and 53.0% of our total revenue, respectively. While we strive to maintain our competitive strengths, such as our quality warehousing and logistics services, competitive pricing, and quality customer services (see “Item 1. Business — Our Competitive Strengths”) to maintain our customer base, there is no guarantee that we will continue to maintain our business relationships with these major customers at the same level, or at all. In the event that a significant customer terminates its relationship with us, there is no assurance that we will be able to secure an alternative arrangement with another comparable customer in a timely manner, or at all. Losing one or more of these major customers could adversely affect our revenue and profitability. See “Item 1A. Risk Factors — Operational Risks — Our largest customers generate a significant portion of our revenue and our business may rely on two suppliers that account for more than 10% of our total purchases, and interruption in operations of such significant customers or supplier may have an adverse effect on our business, financial condition, and results of operations.”
Current wording
During the fiscal years ended June 30, 2026 and 2025, our five largest customers accounted for approximately 55.9% and 55.1% of our total revenue, respectively. While we strive to maintain our competitive strengths, such as our quality warehousing and logistics services, competitive pricing, and quality customer services to maintain our customer base (see “Item 1. Business — Our Competitive Strengths”), there is no guarantee that we will continue to maintain our business relationships with these major customers at the same level, or at all. In the event that a significant customer terminates its relationship with us, we cannot assure that we will be able to secure an alternative arrangement with another comparable customer in a timely manner, or at all. Losing one or more of these major customers could adversely affect our revenue and profitability. See “Item 1A. Risk Factors — Operational Risks — Our largest customers generate a significant portion of our revenue and our business may rely on two suppliers that account for more than 10% of our total purchases, and interruption in operations of such significant customers or supplier may have an adverse effect on our business, financial condition, and results of operations.”
Previous wording
Our revenue increased by $23.4 million, or 14.0%, to $190.4 million during the fiscal year ended June 30, 2025, compared to $167.0 million for the fiscal year ended June 30, 2024. The increase was due to the following factors:
Current wording
Our revenue decreased by $4.6 million, or 2.4%, to $185.8 million during the fiscal year ended June 30, 2026, compared to $190.4 million for the fiscal year ended June 30, 2025. The decrease was due to the following factors:
Previous wording
Our cost of service mainly represented the costs incurred for the use of third-party direct freight service carriers, such as FedEx and UPS, warehouse rental expenses, costs of labor, and trucking expenses. Cost of service increased by $44.5 million, or 29.9%, during the fiscal year ended June 30, 2025, compared with the fiscal year ended June 30, 2024. The increase was primarily driven by the following two factors:
Current wording
Our costs of services mainly represented the costs incurred for the use of third-party direct freight service carriers, such as FedEx and UPS, warehouse rental expenses, costs of labor, and trucking expenses. Costs of services decreased by $8.0 million, or 4.1%, to $185.4 million for the fiscal year ended June 30, 2026, from $193.4 million for the fiscal year ended June 30, 2025. The decrease was primarily driven by the following factors:
Previous wording
Our general and administrative expenses increased by $4.7 million, from $10.0 million for the fiscal year ended June 30, 2024 to $14.7 million for the fiscal year ended June 30, 2025, representing an increase of 47.2%. The increase was due to the following factors:
Current wording
Our general and administrative expenses increased by $7.3 million, or 49.7%, from $14.7 million for the fiscal year ended June 30, 2025 to $22.0 million for the fiscal year ended June 30, 2026. The increase was primarily attributable to the following factors:
Previous wording
Our California subsidiaries are subject to the current California state corporate income tax at a rate of 8.84% and federal income tax at a flat rate of 21%.
Current wording
Our California subsidiaries are subject to California state corporate income tax at a rate of 8.84% and federal income tax at a flat rate of 21%.
Previous wording
As a result of the foregoing, our net loss for the fiscal year ended June 30, 2025 was $15.3 million, compared with the net income of $7.4 million for the fiscal year ended June 30, 2024, representing a decrease by $22.8 million.
Current wording
As a result of the foregoing, our net loss for the fiscal year ended June 30, 2026 was $20.9 million, compared with the net loss of $15.3 million for the fiscal year ended June 30, 2025, representing an increase of $5.6 million.
Previous wording
In assessing our liquidity, management monitors and analyzes our cash on-hand, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. As of the date of this annual report, we have financed our operations primarily through cash generated by operating activities, equity financing, debt financing from third parties and capital contributions from stockholders. As of June 30, 2025 and 2024, we had cash and cash equivalents and restricted cash of $13.6 million and $10.0 million, respectively, which primarily consisted of cash deposited in banks.
Current wording
The Company can make no assurances that required financing will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events do not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfalls, there would likely be a material adverse effect on the Company and would materially adversely affect its ability to continue as a going concern. In assessing our liquidity, management monitors and analyzes our cash on-hand, our ability to generate sufficient revenue sources in the future, and our operating and capital expenditure commitments. As of the date of this Report, we have financed our operations primarily through cash flow generated from our business operations in previous years, and capital raised through equity financing activities. As of June 30, 2026 and 2025, we had cash and cash equivalents and restricted cash of $6.5 million and $13.6 million, respectively, which primarily consisted of cash deposited in banks.
Previous wording
Our working capital requirements mainly consist of cost of service and general and administrative expenses. We expect that our capital requirements will be met by cash generated from our financing activities. On November 25, 2024, we entered into a Standby Equity Purchase Agreement (the “SEPA”) with YA II PN, Ltd. (the “Investor”), pursuant to which we have the right to sell to the Investor up to $50.0 million (the “Commitment Amount”) of our shares of common stock, subject to certain limitations and conditions set forth in the SEPA, from time to time during the term of the SEPA. In connection with the SEPA, and subject to the conditions set forth therein, the Investor agreed to advance to the Company pursuant to certain convertible promissory notes (the “Convertible Notes”) an aggregate principal amount of up to $21.0 million (the “Pre-Paid Advance”), subject to a 10% original issue discount. We believe that our current cash and cash generated from our operating and financing activities will be sufficient to meet our current and anticipated working capital requirements and capital expenditures for at least the next 12 months. We may, however, need additional cash resources in the future if we experience changes in our business conditions or other developments.
Current wording
Our working capital requirements mainly consist of costs of services and general and administrative expenses.
Previous wording
We had a balance of cash and cash equivalents and restricted cash of $13.6 million as of June 30, 2025, compared with a balance of $10.0 million as of June 30, 2024. During the fiscal years ended June 30, 2025 and 2024, we mainly derived our cash inflow from operating and financing activities.
Current wording
We had cash and cash equivalents and restricted cash of $6.5 million as of June 30, 2026, compared with $13.6 million as of June 30, 2025.
Previous wording
Net cash provided by operating activities was $1.5 million for the fiscal year ended June 30, 2025, compared to net cash provided by operating activities of $3.0 million for the fiscal year ended June 30, 2024, representing a $1.5 million decrease in the net cash inflow provided by operating activities. The decrease was primarily due to the following:
Current wording
Net cash used in operating activities was $5.1 million for the fiscal year ended June 30, 2026, compared with net cash provided by operating activities of $1.5 million for the fiscal year ended June 30, 2025, representing a decrease of $6.6 million. The decrease was primarily due to the following:
Previous wording
For the fiscal year ended June 30, 2024, net cash used in investing activities was $7.4 million, primarily attributable to $5.2 million cash used for purchase of property and equipment and $2.2 million used for loans extended to others.
Current wording
Net cash provided by investing activities was $0.7 million for the fiscal year ended June 30, 2026, primarily attributable to $4.8 million in proceeds received from loan repayments, partially offset by $1.8 million of cash used for the purchase of property and equipment and $2.4 million of cash used for loans extended to others.
Previous wording
Net cash used in investing activities was $1.8 million for the fiscal year ended June 30, 2025, primarily attributable to $2.9 million cash used for the purchase of property and equipment, and net of $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan repayments.
Current wording
Net cash used in investing activities was $1.8 million for the fiscal year ended June 30, 2025, primarily attributable to $2.9 million cash used for the purchase of property and equipment, net of $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan repayments.
Previous wording
For the fiscal year ended June 30, 2025, we had net cash provided by financing activities of $4.0 million, which was primarily attributable to the net effects of: (i) $8.1 million of net proceeds convertible notes; (ii) $0.4 million of loans advanced to related parties; (iii) $3.4 million used for the repayment of convertible notes and commitment fees payable; and (iv) $0.4 million used to repay finance lease liabilities.
Current wording
For the fiscal year ended June 30, 2025, we had net cash provided by financing activities of $4.0 million, which was primarily attributable to the net effects of: (i) $8.1 million of net proceeds from the Pre-Paid Advance under the SEPA; (ii) $0.4 million in loans advanced to related parties; (iii) $3.4 million used for repayment of convertible notes and the related commitment fee payable pursuant to the SEPA; and (iv) $0.4 million used to repay finance lease liabilities.
Previous wording
As of June 30, 2025, we had operating and finance leases for office space, warehouse space, and forklifts. Lease terms expire at various dates through July 2025 to November 2034 with options to renew for varying terms at our sole discretion. We have not included these options to extend or terminate in the calculation of right-of-use assets or lease liabilities, as there is no reasonable certainty, as of the date of this annual report, that these options will be exercised.
Current wording
As of June 30, 2026, we had operating and finance leases for office space, warehouse space, and forklifts. Lease terms expire at various dates ranging from September 2026 to November 2034, with options to renew for varying terms at our sole discretion. We have not included these options to extend or terminate in the calculation of right-of-use assets or lease liabilities, as there is no reasonable certainty, as of the date of this annual report, that these options will be exercised.
Previous wording
As of June 30, 2025, aggregate annual lease obligations for each of the following fiscal years ending June 30 and thereafter were as follows:
Current wording
As of June 30, 2026, maturities of lease liabilities for each of the following fiscal years ending June 30 and thereafter were as follows:
Previous wording
Other than the above leases and the Convertible Notes, we did not have significant commitments, long-term obligations, or guarantees as of June 30, 2025.
Current wording
Other than the above leases, we did not have any significant commitments, long-term obligations, or guarantees as of June 30, 2026.
Previous wording
Other than six standby letters of credit with Eastwest Bank in the aggregate amount of $4,387,550, we did not have during the period presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of June 30, 2025, we still had unused credit of $4,387,550 with Eastwest Bank.
Current wording
Other than six standby letters of credit with Eastwest Bank in the aggregate amount of $4,325,148, we did not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements as defined under the rules and regulations of the SEC, or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As of June 30, 2026, we had unused credit of $4,325,148 available with Eastwest Bank.
Previous wording
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities, each as of the date of this annual report, and revenue and expenses during the periods presented. On an ongoing basis, management evaluates their estimates and assumptions, and the effects of any such revisions are reflected in the financial statements in the period in which they are determined to be necessary. Management bases their estimates on historical experience and on various other factors that they believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our consolidated financial statements.
Current wording
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, contingent assets and liabilities as of the date of this annual report, and revenue and expenses during the periods presented. On an ongoing basis, management evaluates its estimates and assumptions, and the effects of any such revisions are reflected in the financial statements in the period in which they are determined to be necessary. Management bases its estimates on historical experience and on various other factors that it believes are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual outcomes could differ materially from those estimates in a manner that could have a material effect on our consolidated financial statements.
Previous wording
Despite that management determines that there are no critical accounting estimates, the one that requires relatively significant estimates relates to useful lives of property and equipment.
Current wording
Although management has determined that there are no critical accounting estimates, the estimate that requires relatively significant judgment relates to the useful lives of property and equipment.
Previous wording
Property and equipment are recorded at cost, less accumulated depreciation and impairment. The estimation of useful lives impacts the level of annual depreciation expenses recorded and the estimation is a matter of judgment based on the experience of our Company and general industry practice with similar assets. The estimated annual deprecation rates of our property and equipment are generally as follows:
Current wording
Property and equipment are recorded at cost, less accumulated depreciation and impairment. The estimation of useful lives impacts the level of annual depreciation expenses recorded and is a matter of judgment based on the experience of our Company and general industry practice with similar assets. The estimated annual depreciation rates of our property and equipment are generally as follows:
Previous wording
As of June 30, 2025 and 2024, the historical cost of property and equipment was $17,532,767 and $14,773,842, respectively.
Current wording
As of June 30, 2026 and 2025, the historical cost of property and equipment was $19,843,974 and $17,532,767, respectively.
Previous wording
We recorded depreciation expenses of $2,555,625 and $1,827,231 during the fiscal years ended June 30, 2025 and 2024, respectively. Specifically, $2,349,234 and $1,513,947 of the depreciation expenses were recorded in cost of service for the fiscal years ended June 30, 2025 and 2024, respectively. $206,391 and $313,284 of the depreciation expenses were recorded in general and administrative expenses for the fiscal years ended June 30, 2025 and 2024, respectively.
Current wording
We recorded depreciation expenses of $2,899,311 and $2,555,625 during the fiscal years ended June 30, 2026 and 2025, respectively. Specifically, $2,704,417 and $2,349,234 of the depreciation expenses were recorded in cost of service for the fiscal years ended June 30, 2026 and 2025, respectively. $194,894 and $206,391 of the depreciation expenses were recorded in general and administrative expenses for the fiscal years ended June 30, 2026 and 2025, respectively.