S-1/A 1 fs12024a4_armlogi.htm AMENDMENT NO. 1 TO FORM S-1

As filed with the U.S. Securities and Exchange Commission on January 31, 2024

Registration No. 333-274667

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_____________________________

AMENDMENT NO. 4

TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

_____________________________

Armlogi Holding Corp.
(Exact name of registrant as specified in its charter)

_____________________________

Nevada

 

4220

 

92-0483179

(State or other jurisdiction of
incorporation or organization)

 

(Primary Standard Industrial
Classification Code Number)

 

(I.R.S. Employer
Identification Number)

20301 East Walnut Drive North
Walnut, California, 91789
(888) 691-2911
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

____________________________

Aidy Chou
Chief Executive Officer
Armlogi Holding Corp.
20301 East Walnut Drive North
Walnut, California, 91789
(888) 691-2911
(Name, address, including zip code, and telephone number, including area code, of agent for service)

_____________________________

With a Copy to:

Ying Li, Esq.
Lisa Forcht, Esq.
Hunter Taubman Fischer & Li LLC
950 Third Avenue, 19
th Floor
New York, NY 10022
(212) 530-2206

 

Pang Zhang-Whitaker, Esq.
Guy Ben
-Ami, Esq.
Carter Ledyard & Milburn LLP
28 Liberty Street, 41
st Floor
New York, NY 10022
(212) 238
-8844

_____________________________

Approximate date of commencement of proposed sale to the public: Promptly after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

 

     

Accelerated filer

 

   

Non-accelerated filer

 

     

Smaller reporting company

 

   
           

Emerging growth company

 

   

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

 

 

Table of Contents

The information in this prospectus is not complete and may be changed. We may not sell the securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting any offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

SUBJECT TO COMPLETION DATED JANUARY 31, 2024

PRELIMINARY PROSPECTUS

ARMLOGI HOLDING CORP.

2,000,000 Shares of Common Stock

This is an initial public offering on a firm commitment basis of our common stock, par value $0.00001 per share. Prior to this offering, there has been no public market for our common stock. We expect the initial public offering price to be in the range of $5 to $6 per share.

We have reserved the symbol “BTOC” for purposes of listing our common stock on the Nasdaq Capital Market (“Nasdaq”) and have applied to list our common stock on the Nasdaq Capital Market. At this time, Nasdaq has not yet approved our application to list our common stock. The closing of this offering is conditioned upon Nasdaq’s final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq.

We are an “emerging growth company” as that term is used in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and, as such, have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company.”

Additionally, we are, and following the completion of this offering, will continue to be a “controlled company” as defined under Nasdaq Marketplace Rules 5615(c). Aidy Chou, our Chief Executive Officer and controlling stockholder, will be able to exercise 68.10% of the aggregate voting power of our issued and outstanding shares of common stock and will be able to determine all matters requiring approval by our stockholders, immediately after the consummation of this offering, assuming the sales of 2,000,000 shares of common stock we are offering, and no exercise of the Representative’s Warrants (defined below) or the underwriters’ over-allotment option. For further information, see “Principal Stockholders.” We do not intend to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the Nasdaq Marketplace Rules. However, our decision not to rely on the “controlled company” exemption could change. See “Risk Factors” and “Management — Controlled Company.”

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 8 of this prospectus.

 

Per Share

 

Total Without
Over-Allotment
Option

 

Total With
Over-Allotment
Option

Initial public offering price of common stock

 

$

   

$

   

$

 

Underwriters’ discounts(1)

 

$

   

$

   

$

 

Proceeds to our company before expenses(2)

 

$

   

$

   

$

 

____________

(1)       Represents underwriting discounts equal to 7.5% per share of common stock.

(2)       In addition to the underwriting discounts listed above, we have agreed to issue, upon closing of this offering, warrants to Prime Number Capital LLC, as representative of the several underwriters (the “Representative”), exercisable during the five-year period from the commencement of sales of this offering, entitling the Representative to purchase 5% of the total number of shares of common stock sold in this offering (including any shares of common stock sold as a result of the exercise of the underwriters’ over-allotment option) at a per share price equal to 125.0% of the public offering price (the “Representative’s Warrants”). The registration statement of which this prospectus is a part also covers the Representative’s Warrants and the common stock issuable upon the exercise thereof. See “Underwriting” for additional information regarding total underwriter compensation.

We have granted the underwriters an option for a period of 45 days after the effective date of the registration statement of which this prospectus forms a part to purchase up to 15% of the total number of shares of common stock to be offered by us pursuant to this offering solely for the purpose of covering over-allotments, if any, at the public offering price less the underwriting discounts. If the underwriters exercise the option in full, the total underwriting discounts payable will be $948,750*, based on an assumed public offering price of $5.50 per share of common stock, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, and the total gross proceeds to us, before underwriting discounts and expenses, will be $12,650,000.

____________

* 2,300,000 shares x $5.50 per share x 7.5%

The underwriters expect to deliver the shares of our common stock against payment in U.S. dollars in New York, New York on or about [•], 2024.

Neither the U.S. Securities and Exchange Commission nor any state securities commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

Prospectus dated [•], 2024

 

Table of Contents

TABLE OF CONTENTS

 

Page

PROSPECTUS SUMMARY

 

1

THE OFFERING

 

6

RISK FACTORS

 

8

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

 

26

USE OF PROCEEDS

 

27

DIVIDEND POLICY

 

28

CAPITALIZATION

 

29

DILUTION

 

30

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

32

INDUSTRY

 

45

BUSINESS

 

52

MANAGEMENT

 

65

EXECUTIVE AND DIRECTOR COMPENSATION

 

70

PRINCIPAL STOCKHOLDERS

 

72

RELATED PARTY TRANSACTIONS

 

73

DESCRIPTION OF SHARE CAPITAL

 

76

SHARES ELIGIBLE FOR FUTURE SALE

 

78

UNDERWRITING

 

79

LEGAL MATTERS

 

85

EXPERTS

 

85

WHERE YOU CAN FIND ADDITIONAL INFORMATION

 

85

INDEX TO FINANCIAL STATEMENTS

 

F-1

We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the common stock offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.

For Investors Outside the United States:    The underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock and the distribution of this prospectus outside the United States.

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ABOUT THIS PROSPECTUS

Basis of Presentation

In connection with the consummation of this offering, we have effected certain reorganizational transactions, which we refer to collectively as the “Reorganization Transactions.” Unless otherwise stated or the context otherwise requires, all information in this prospectus reflects the consummation of the Reorganization Transactions and the consummation of this offering. See “Corporate History and Structure” in this prospectus for a description of the Reorganization Transactions and a diagram depicting our organizational structure after giving effect to the Reorganization Transactions, the consummation of this offering, and the use of proceeds therefrom.

Due to the Reorganization Transactions, we are a holding company that owns 100% of the equity interests in Armstrong Logistic Inc. (“Armstrong Logistic”). Armstrong Logistic is considered the predecessor of Armlogi Holding Corp. for accounting purposes, and its historical consolidated financial statements are our historical consolidated financial statements.

Unless the context indicates otherwise, all information in this prospectus assumes no exercise by the underwriters of their over-allotment option.

Numerical figures included in this prospectus may have been subject to rounding adjustments. Accordingly, numerical figures shown as totals in various tables may not be arithmetic aggregations of the figures that precede them.

Certain Definitions

Unless otherwise indicated or the context requires otherwise, references in this prospectus to:

        “Armlogi Holding” are to Armlogi Holding Corp., a corporation incorporated under the laws of the State of Nevada;

        “China” or the “PRC” are to the People’s Republic of China;

        “customs broker” are to an individual or firm that represents importers/exporters in dealings with customs. They are responsible for obtaining and submitting all documents for clearing merchandise through customs, arranging inland transport, and paying all charges related to these functions;

        “customs clearance” are to the act of obtaining permission to import merchandise from another country into the importing nation;

        “pallet” are to a platform (approximately four square feet) used for moving and storing products, goods, and merchandise. A forklift truck is used to lift and move a loaded pallet;

        “U.S. dollars,” “$,” and “dollars” are to the legal currency of the United States; and

        “we,” “us,” “our,” “our Company,” or the “Company” are to Armlogi Holding and its subsidiaries, as the case may be.

TRADEMARKS

This prospectus contains references to our trademark and service marks and to those belonging to other entities. Solely for convenience, trademarks, and trade names referred to in this prospectus may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trade names, trademarks, or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our common stock, discussed under “Risk Factors,” before deciding whether to buy our common stock.

Business Overview

Our Company

We are a fast-growing U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment.

With the boom of e-commerce and Internet technology, along with the development of global supply chains, a growing number of merchants are seeking to sell their products through international e-commerce platforms, such as Amazon and eBay. These merchants, however, are confronted with major logistical challenges because of the complexities involved in shipping goods across borders. Specifically, when a foreign consumer places an order online, it can take a long time for the goods to be delivered from one country to another (especially for bulky items), while facing high damage rates and congestion during peak seasons. One of the solutions to such problems is to set up overseas warehouses, which are local storage facilities established in a foreign country where the cross-border merchants intend to sell their goods. Cross-border e-commerce merchants can export goods in batches in advance to overseas warehouses, which can then be delivered to overseas consumers once orders are placed via e-commerce platforms. As a result, the delivery time and the rate of damaged and lost packages may be reduced significantly, therefore enhancing the shopping experience of consumers.

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 ten warehouses across the country, with an aggregate gross floor area of approximately 1,795,439 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 September 30, 2023 and June 30, 2023 and 2022, we had an active customer base of 57, 83, and 54, respectively, for our warehousing and logistics services.

We have experienced rapid growth since our inception. For the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, we had total revenue of $41.2 million, $135.0 million, and $56.0 million, respectively, and net income of $2.8 million, $13.9 million, and $2.0 million, respectively. While we do not have any subsidiaries, assets, or employees in the PRC, we generate a significant part of our revenue from customers based in China. During the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, we generated approximately 95%, 96%, and 93% of our revenue from PRC-based customers, respectively. See “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.”

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Our Strengths

We believe the following strengths are essential for our success and differentiate us from our competitors:

        quality warehousing and logistics services that meet ISO 9001 standards;

        reasonable service fees and delivery fees due to the large volume of goods we process;

        capability of providing efficient and low-error warehousing services by leveraging warehouse and order management technology; and

        an experienced management team with strong financial and operational expertise.

Growth Strategies

We intend to develop our business and strengthen our brand loyalty by implementing the following strategies:

        expand and diversify our customer base and geographic coverage;

        enhance our customers’ supply chain efficiency by expanding the breadth and depth of our solutions and services;

        further invest in supply chain technologies to drive sustainable growth; and

        pursue additional strategic and financially attractive acquisitions.

Organizational Structure

We were incorporated under the laws of the State of Nevada as a corporation in September 2022. For more details on our corporate history, please refer to “Business — Corporate History and Structure.”

The following diagram illustrates our corporate structure as of the date of this prospectus and upon completion of our initial public offering (“IPO”) based on a proposed number of 2,000,000 shares of common stock being offered, assuming no exercise of the underwriters’ over-allotment option.

Note:

(1)    Represents 27,300,000 shares of our common stock held by Aidy Chou as of the date of this prospectus.

(2)    Represents 3,460,000 shares of our common stock held by Tong Wu as of the date of this prospectus.

(3)    Represents an aggregate of 9,240,000 shares of our common stock held by 29 shareholders, each one of which holds less than 5% of shares of our common stock, as of the date of this prospectus.

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Corporate Information

Our principal executive office is located at 20301 East Walnut Drive North, Walnut, California, 91789. Our telephone number is (888) 691-2911 and our website address is www.armlogi.com. The information contained in, or that can be accessed through, our website is not incorporated by reference into, and is not part of, this prospectus.

Summary of Risk Factors

Investing in our common stock involves significant risks. You should carefully consider all of the information in this prospectus before making an investment in our common stock. Below please find a summary of the principal risks we face, organized under relevant headings. These risks are discussed more fully in the section titled “Risk Factors.”

Economic, Political, and Market Risks (for a more detailed discussion, see “Risk Factors — Economic, Political, and Market Risks” beginning on page 8 of this prospectus)

Risks and uncertainties related to economic, market, and geopolitical conditions include, but are not limited to, the following:

        We face competition in the market for warehousing and logistics activities, and we expect competition from existing competitors and other companies that may enter the market or introduce new solutions in the future, which may decrease our net revenue (see page 8 of this prospectus);

        Any adverse change in political relations between the PRC and the U.S., such as the ongoing U.S.-China trade war, may negatively affect our business (see page 9 of this prospectus);

        We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine and the increasing strained relationship between the U.S. and China. Our business, financial condition and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions (see page 9 of this prospectus); and

        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 (see page 9 of this prospectus).

Operational Risks (for a more detailed discussion, see “Risk Factors — Operational Risks” beginning on page 12 of this prospectus)

Risks and uncertainties related to our operations include, but are not limited to, the following:

        Failure to renew our current leases or locate desirable alternatives for our facilities could materially and adversely affect our business (see page 12 of this prospectus);

        If our customers are able to reduce their logistics and supply chain costs or increase utilization of their internal solutions, our business and operating results may be materially and adversely affected (see page 12 of this prospectus);

        Our largest customers generate a significant portion of our revenue and our business may rely on one or more suppliers that account for more than 10% of our 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 (see page 12 of this prospectus);

        Customer demand is difficult to forecast accurately, and as a result, we may be unable to make planning and spending decisions to match such demand (see page 13 of this prospectus);

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        Our dependence on third parties to provide overseas transportation and domestic distribution services may impact the delivery and quality of our transportation and logistics services, and any disruption to these services could result in a disruption to our business, negative publicity, and a slowdown in the growth of our customer base, materially and adversely affecting our business, financial condition, and results of operations (see page 13 of this prospectus);

        The ongoing COVID-19 pandemic has adversely impacted on our business, results of operations, and cash flows (see page 14 of this prospectus);

        If we fail to attract, recruit, or retain our key personnel, including our executive officers, senior management, and key employees, our ongoing operations and growth could be affected (see page 17 of this prospectus); and

        Future acquisitions may have an adverse effect on our ability to manage our business. Raising additional capital may cause dilution to our stockholders, including purchasers of our common stock in this offering (see page 17 of this prospectus).

Legal, Regulatory, and Compliance Risks (for a more detailed discussion, see “Risk Factors — Legal, Regulatory, and Compliance Risks” beginning on page 18 of this prospectus)

Risks and uncertainties related to legal, regulatory, and compliance include, but are not limited to, the following:

        We are subject to numerous laws and regulations applicable to the warehousing and logistics industry, which, if we are found to have violated, may adversely affect our business and results of operations (see page 18 of this prospectus);

        Non-compliance with laws and regulations on the part of any third parties with which we conduct business could expose us to legal expenses, compensations to third parties, penalties and disruption of our business, which may adversely affect our results of operations and financial performance (see page 19 of this prospectus);

        Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services (see page 19 of this prospectus); and

        We may from time to time be subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect our business, prospects, results of operations, and financial condition (see page 20 of this prospectus).

Common Stock and Trading Risks (for a more detailed discussion, see “Risk Factors — Common Stock and Trading Risks” beginning on page 20 of this prospectus)

In addition to the risks described above, we are subject to general risks and uncertainties relating to this offering and the trading market, including, but not limited to, the following:

        There has been no public market for our common stock prior to this offering, and you may not be able to resell our common stock at or above the price you pay for them, or at all (see page 20 of this prospectus);

        The market price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price (see page 20 of this prospectus);

        You will experience immediate and substantial dilution in the net tangible book value of common stock purchased in this offering (see page 22 of this prospectus); and

        If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our common stock may be materially and adversely affected (see page 22 of this prospectus).

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Implications of Being an “Emerging Growth Company”

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the JOBS Act. An “emerging growth company” may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:

        may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

        are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives, and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis”;

        are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002;

        are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency,” and “say-on-golden-parachute” votes);

        are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure; and

        are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions until we no longer meet the definition of an emerging growth company. The JOBS Act provides that we would cease to be an “emerging growth company” at the end of the fiscal year in which the fifth anniversary of our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act occurred, if we have more than $1.235 billion in annual revenue, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertible debt over a three-year period.

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THE OFFERING

Shares of common stock offered

 

2,000,000 shares

Price per share

 

We currently estimate that the initial public offering price will be in the range of $5 to $6 per share.

Shares of common stock outstanding prior to completion of this offering

 

40,000,000 shares

Shares of common stock outstanding immediately after this offering

 

42,000,000 shares, assuming no exercise of the underwriters’ over-allotment option and excluding 100,000 shares underlying the Representative’s Warrants

42,300,000 shares, assuming full exercise of the underwriters’ over-allotment option and excluding 115,000 shares underlying the Representative’s Warrants

Listing

 

We have applied to have our common stock listed on the Nasdaq Capital Market. At this time, Nasdaq has not yet approved our application to list our common stock. The closing of this offering is conditioned upon Nasdaq’s final approval of our listing application, and there is no guarantee or assurance that our common stock will be approved for listing on Nasdaq.

Proposed ticker symbol

 

“BTOC”

Transfer Agent

 

Transhare Corporation

Over-allotment Option

 

We have granted to the underwriters an option, exercisable within 45 days from the effective date of the registration statement of which this prospectus forms a part, to purchase up to an aggregate of 300,000 additional shares of our common stock.

Use of proceeds

 

We intend to use the proceeds from this offering to expand our warehouse network and develop warehousing and logistics services, develop international ocean freight services, develop port trucking services, and for working capital and other general corporate purposes. See “Use of Proceeds” on page 27 for more information.

Lock-up

 

We have agreed not to, for a period of 180 days from the date of this prospectus, issue, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right, or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our common stock or any securities convertible into or exercisable or exchangeable for shares of our common stock (excluding, however, the issuance of any shares of our common stock or other equity awards pursuant to our executive compensation or employee benefit plan), without the prior written consent of the Representative.

All of our directors and officers and our principal stockholders (5% or more stockholders) have agreed with the underwriters, subject to certain exceptions, not to sell, transfer, or dispose of, directly or indirectly, any of our common stock or securities convertible into or exercisable or exchangeable for our common stock for a period of six months after the date of this prospectus. See “Underwriting — Lock-up Agreements” for more information.

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Risk Factors

 

The common stock offered hereby involve a high degree of risk. You should read “Risk Factors,” beginning on page 8 for a discussion of factors to consider before deciding to invest in our common stock.

Representative’s Warrants

 

The registration statement of which this prospectus forms a part also registers for sale the Representative’s Warrants to purchase shares of common stock equal to 5% of the total number of shares of common stock sold in this offering, including the number of shares of common stock upon the exercise of the underwriters’ over-allotment option, as a portion of the underwriting compensation payable to the underwriters in connection with this offering. The Representative’s Warrants will be exercisable during the five-year period from the commencement of sales of this offering at a per share exercise price of $6.875 (125.0% of the public offering price of the common stock, based on an assumed offering price of $5.50 per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus). Please see “Underwriting — The Representative’s Warrants” for a description of these warrants.

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RISK FACTORS

An investment in our common stock involves a high degree of risk. Before deciding whether to invest in our common stock, you should consider carefully the risks described below, together with all of the other information set forth in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes. If any of these risks actually occurs, our business, financial condition, results of operations, or cash flow could be materially and adversely affected, which could cause the trading price of our common stock to decline, resulting in a loss of all or part of your investment. The risks described below and discussed in other parts of this prospectus are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial may also affect our business. You should only consider investing in our common stock if you can bear the risk of loss of your entire investment.

Economic, Political, and Market Risks

We face competition in the market for warehousing and logistics activities, and we expect competition from existing competitors and other companies that may enter the market or introduce new solutions in the future, which may decrease our net revenue.

The warehousing and logistics industry in the U.S. is competitive and rapidly evolving, with new companies increasingly joining the competition in recent years. As we provide a full spectrum of services, including facilitating overseas transportation of merchandise to the U.S., customs brokerage services, and warehouse management and order fulfillment services, we may compete with a broad range of companies, such as freight delivery service providers, customs brokers, warehousing companies, and third-party logistics service providers. As we currently primarily compete in a niche market targeting PRC customers seeking to establish overseas warehouses in the U.S., we have the advantage of offering one-stop integrated supply chain solutions that include a package of all the services above. Nonetheless, with the growth of overseas warehousing services, competition can be increasingly intensive and is expected to increase significantly in the future. The increased competition may lead to price reductions for customer acquisition, which may result in reduced margins and a loss of market share for us. We compete with other competitors on the following bases:

        warehouse and infrastructure capacity;

        operational capabilities;

        business model;

        brand recognition;

        quality of services;

        effectiveness of sales and marketing efforts; and

        hiring and retention of talented staff.

Our competitors may operate with different business models, have different service structures, and may ultimately prove to be more successful or more adaptable to new regulatory, technological, and other developments. They may in the future achieve greater market acceptance and recognition and gain a greater market share. It is also possible that potential competitors may emerge and acquire a significant market share. If existing or potential competitors develop or offer services that provide significant performance, price, creative optimization, or other advantages over those offered by us, our business, results of operations, and financial condition would be negatively affected. Our existing and potential competitors may enjoy competitive advantages over us, such as longer operating history, greater brand recognition, larger customer base, and better value-added services. We may lose clients if we fail to compete successfully, which could adversely affect our financial performance and business prospects. We cannot guarantee that our strategies will remain competitive or successful in the future. Increasing competition may result in pricing pressure and loss of our market share, either of which could have a material adverse effect on our financial condition and results of operations.

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Any adverse change in political relations between the U.S. and other countries or regions where our overseas customers are located (particularly the PRC), such as the ongoing U.S.-China trade conflicts, may negatively affect our business.

As we derived approximately 95%, 96%, and 93% of our revenue from overseas customers in the PRC during the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, respectively, the continued success of our operations will be heavily dependent on the willingness of our PRC customers to sell in the U.S. via global online e-commerce platforms, such as Amazon and eBay. This, in turn, depends heavily on stable political and economic relations between the PRC and the U.S. In the event of any significant deterioration in the PRC’s relations with the U.S., our customers in the PRC may refrain from selling their merchandise in the U.S. market, and executive action or legislation may be enacted that would adversely affect the profitability, feasibility, and thus the willingness of these customers to continue their global e-commerce business in the U.S. For example, due to the increased tariffs caused by the ongoing trade conflicts between the U.S. and China, the costs of importing and exporting certain goods or materials have increased. Given that we cannot predict what actions may ultimately be taken with respect to tariffs or trade relations between the U.S. and China, our supply chain, costs, and profitability may be negatively impacted by the adoption and expansion of trade restrictions, the continuation of the trade conflicts, or other government actions related to tariffs, trade agreements, or related policies. As a result, our business, financial condition, and results of operations may be adversely affected.

We are currently operating in a period of economic uncertainty and capital markets disruption, which has been significantly impacted by geopolitical instability due to the ongoing military conflict between Russia and Ukraine and the increasing strained relationship between the U.S. and China. Our business, financial condition, and results of operations could be materially adversely affected by any negative impact on the global economy and capital markets resulting from the conflict in Ukraine or any other geopolitical tensions.

U.S. and global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military conflict between Russia and Ukraine. On February 24, 2022, Russia initiated a full-scale military invasion of Ukraine. Although the length and impact of the ongoing military conflict is highly unpredictable, the conflict in Ukraine could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions.

The recent military conflict in Ukraine has led to sanctions and other penalties being levied by the United States, the European Union, and other countries against Russia. Additional potential sanctions and penalties have also been proposed or threatened. Russian military actions and the resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets, potentially making it more difficult for us to obtain additional funds. Although our business has not been materially impacted by the ongoing military conflict between Russian and Ukraine to date, it is impossible to predict the extent to which our operations, or those of our clients, will be impacted in the short and long term, or the ways in which the conflict may impact our business. The extent and duration of the military action, sanctions and resulting market disruptions are impossible to predict, but could be substantial. Any such disruptions may also magnify the impact of other risks described in this prospectus.

In addition, the U.S.-China relationship has recently faced a daunting challenge, contributing to geopolitical instability worldwide. Because we derived approximately 95%, 96%, and 93% of our revenue from the PRC market during the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, respectively, our business relies on a stable economic and political relationship between the U.S. and China. However, the tensions between the two countries have intensified since the COVID-19 pandemic, exemplified by the ongoing trade conflicts between U.S. and China, and there is significant uncertainty about the future relationship between the two countries with respect to trade policies, treaties, government regulations, and tariffs. A deteriorating relationship between the U.S. and China, or a prolonged stalemate between them, could materially adversely affect our business, results of operations, and financial condition.

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.

While we do not have any subsidiaries, assets, or employees in the PRC, we generate a significant part of our revenue from customers based in China. During the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, we generated approximately 95%, 96%, and 93% of our revenue from the PRC market, respectively. We expect such PRC-based revenue to continue to comprise a significant part of our revenue going forward. As a result, any unforeseen

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events or circumstances that negatively impact our ability to provide our services to our PRC customers would materially and adversely affect our results of operations and financial condition. These negative events and circumstances include, but may not be limited to, the following:

        an economic downturn in China;

        changes in laws and regulations, in particular those with little advance notice;

        deterioration of relations or disruption of trade with the U.S., such as anti-U.S. campaigns; and

        tariffs and other trade barriers which could make it more expensive for our PRC customers to transport their goods and merchandise to the U.S.

The Chinese government has implemented regulations or policies that have adversely affected our business. For example, The PRC government has imposed controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. See “— If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.” There is no guarantee that the PRC government will not implement similar policies or regulations in the future. For example, any changes to trade policies or regulations in China could potentially impact the ability of e-commerce merchants to sell their merchandise in the U.S. market — possible tariffs imposed by the PRC government on goods exported to the U.S. could increase costs for e-commerce merchants selling their merchandise overseas. This could potentially lead to a decrease in demand for overseas warehousing and logistics services, as e-commerce merchants may opt to scale back their operations in the U.S. market.

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

Disruptions to the international supply chain systems could adversely impact our business, financial condition, and results of operations.

The cross-border e-commerce related warehousing and logistics market depends largely on the availability and reliability of the global supply chain systems. The COVID-19 pandemic has highlighted the vulnerability of international supply chain systems and the potential risks associated with disruptions to these systems. Supply chain disruptions, such as port congestion and container shortages, may cause stockouts, which can impact the availability of merchandise for e-commerce merchants to sell. In turn, this can reduce demand for our services, as e-commerce merchants may hold back on cross-border operations until stock availability is resolved. Furthermore, disruptions to the international supply chain systems may lead to increased costs associated with logistics, shipping, and warehousing, resulting in reduced margins and profitability of our business. In addition, supply chain issues may also cause delays in shipments, leading to customer dissatisfaction and decreased demand for our services. Our ability to mitigate these risks may be limited, and there can be no assurance that we will be successful in doing so. As a result, disruptions to the international supply chain systems could have a material and adverse impact on our business, financial condition, and results of operations.

Labor actions may disrupt the U.S. transportation network we rely on and thus may adversely impact our business, financial condition, and results of operations.

Our reliance on the global supply chain systems and the U.S. transportation network exposes us to potential disruptions and congestions caused by labor actions, such as labor disputes or port strikes. Labor disputes among freight carriers and at ports of entry in the U.S., where our PRC customers’ merchandise is imported, are not uncommon. For example, in June 2023, the union representing the employers of over 22,000 dock workers at U.S. West Coast seaports staged concerted and disruptive work actions, resulting in the shutdown of some terminals at ports in Los Angeles, Long

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Beach, Oakland and Hueneme in California and Tacoma and Seattle in Washington state. As such, we expect labor unrest and its effects on the transportation of our PRC customer’s merchandise to be a continuing challenge for us. Any disruptions, such as a port worker strike, work slowdown, or other transportation disruption in the U.S., may significantly disrupt our business. Although, as of the date of this prospectus, our business has not experienced material impacts from such disruptions caused by union actions, there is no guarantee that they will not occur in the future. In the event that such disruptions do occur, they could lead to increased transportation costs, reduced margins, and decreased profitability for our business. Additionally, they may cause shipment delays, resulting in customer dissatisfaction and reduced demand for our services. A prolonged transportation disruption caused labor action may materially adversely affect our business, results of operations and financial condition.

Demand for our services may be adversely impacted by the changing consumer spending power and habits in the U.S.

We offer one-stop warehousing and logistics services to cross-border e-commerce merchants outside the U.S. who seek to sell in the U.S. Our business success is closely tied to the demand for cross-border e-commerce in the U.S., which is, in turn, dependent on the demand from U.S. online shoppers for imported goods from countries such as China. As such, any significant economic changes in the U.S., such as recessions or economic downturns, could reduce consumer spending power, reduce cross-border trade, and affect the demand for our services. Additionally, any changes in consumer spending habits, such as a shift toward purchasing from domestic retailers, could also lead to reduced demand for our services and negatively impact our business. If we are unable to take effective measures in a timely manner to mitigate the negative impact of a decline in consumer spending power or shifts in spending habits in the U.S., our business, financial condition, and results of operations could be adversely affected.

We may be adversely affected by the effects of inflation and a potential recession.

Recent inflationary pressures have caused, and may continue to cause, higher interest rates and capital costs, elevated shipping costs, supply shortages, increased labor costs, weaker exchange rates, and other related effects. Since 2021, we have experienced, and may continue to experience, higher-than-expected inflation, including the escalation of transportation, commodity, and supply chain costs and disruptions that adversely affected our results of operations. Specifically, since 2021, we have partially offset the impact of inflation largely through price increases, in addition to continued supply chain optimization initiatives, and may continue to do so in the future. However, should inflation continue to impose significant pressures on our costs, we may not be able to offset the increased costs or otherwise handle the exposure, which could negatively impact our business, results of operations, or financial condition. Further, even if we are able to increase prices initially to counter inflationary pressures, we may not be able to sustain such price increases. If our competitors do not raise their prices or if consumers or customers decide not to pay the higher prices for our services, sustained price increases may eventually lead to a decrease in sales volume. Thus, inflationary pressures could damage our reputation, our brands, or threaten our profitability or market share. In addition, unfavorable economic and market conditions, including a potential recession, may negatively impact market sentiment, decreasing the demand for warehousing and logistics services, particularly those associated with cross-border e-commerce, which would adversely affect our operating income and results of operations. If we are unable to take effective measures in a timely manner to mitigate the impact of inflation as well as a potential recession, our business, financial condition, and results of operations could be adversely affected.

If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected.

The PRC government has imposed controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. For instance, the Circular on Promoting the Reform of Foreign Exchange Management and Improving Authenticity and Compliance Review, issued on January 26, 2017, provides that banks shall, when dealing with dividend remittance transactions from a domestic enterprise to its offshore shareholders of more than $50,000, review the relevant board resolutions, original tax filing form, and audited financial statements of such domestic enterprise based on the principle of genuine transaction. There is no guarantee that the PRC government will not further intervene or impose other restrictions on our PRC customers’ ability to transfer or distribute cash outside the PRC. In the event that the foreign exchange control system prevents our PRC customers from remitting their payments to the U.S., we may not be able to receive a substantial portion of our revenue. As a result, our business, financial condition, and results of operations may be adversely affected.

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Operational Risks

Failure to renew our current leases or locate desirable alternatives for our facilities could materially and adversely affect our business.

We lease properties for all of our offices, warehouses, and fulfilment centers. We may not be able to successfully extend or renew such leases upon expiration of the current term on commercially reasonable terms or at all, and may therefore be forced to relocate the affected operations. This could disrupt our operations and result in significant relocation expenses, which could adversely affect our business, financial condition, and results of operations. In addition, we compete with other businesses for premises at certain locations or of desirable sizes. As a result, even though we could extend or renew our leases, rental payments may significantly increase as a result of the high demand for the leased properties. In addition, we may not be able to locate desirable alternative sites for our facilities as our business continues to grow and failure in relocating our affected operations could adversely affect our business and operations.

If our customers are able to reduce their logistics and supply chain costs or increase utilization of their internal solutions, our business and operating results may be materially and adversely affected.

One of the main reasons that clients use contract warehouse and logistics management companies is the high cost, high degree of difficulties, and operational deficiencies associated with developing in-house logistics and supply chain expertise. If, however, our customers are able to develop their own logistics and supply chain solutions, increase utilization of their in-house supply chain, reduce their logistics spending, or otherwise choose to terminate our services, our business and operating results may be materially and adversely affected.

The suspension of PRC sellers on 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.

As we derived approximately 95%, 96%, and 93% of our revenue from the PRC market during the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, respectively, we believe that our continued growth depends largely on our ability to maintain our Chinese client base. In early 2021, Amazon, the world’s largest e-commerce platform, claimed that it had suspended the accounts of over 50,000 Chinese sellers for improper use of review functions. Specifically, instead of earning great reviews through high-quality products, those PRC sellers manipulated reviews by paying for positive product reviews or by giving away gift cards, which violates Amazon’s terms of service. It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling their merchandise to the U.S. via Amazon.

There is no guarantee that (i) 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 (ii) 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. If we are unable to attract new customers in a timely or cost-effective manner, our business, financial condition, and results of operations may be adversely affected.

Our largest customers generate a significant portion of our revenue and our business may rely on one or more 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.

During the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, we derived most of our revenue from a few customers. Specifically, for the three months ended September 30, 2023, Western Post (HK) Ltd., Aukey International Ltd., Union Grand Imp. & Exp. Co., Ltd., CJ (Hong Kong) Group Ltd., and Pundarika LLC accounted for 14.4%, 12.6%, 12.3%, 9.2%, and 7.9% of our total revenue, respectively. For the fiscal year ended June 30, 2023, our top five customers, Aukey International Ltd., Union Grand Imp. & Exp. Co., Ltd., Goldensee Ltd., CJ (Hong Kong) Group Ltd., and Western Post (HK) Ltd., accounted for 22.5%, 14.5%, 9.2%, 8.1%, and 7.7% of our total revenue, respectively. For the fiscal year ended June 30, 2022, our top five customers, Union Grand Imp. & Exp. Co., Ltd., Aukey International Ltd., Goldensee Ltd., Cocam Int’l Enterprises Ltd., and Ningbo Jiaview

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Supply Chain Co., Ltd., accounted for 30.0%, 27.3%, 9.4%, 7.5%, and 4.4% of our total revenue, respectively. For an example of a typical transaction, see “Business — Customers.” We may lose a significant customer due to a variety of factors, including our ability to provide quality warehouse and logistics management services. Even though we have a strong record of performance, we cannot guarantee that we will continue to maintain the business cooperation with these significant customers at the same level, or at all. If any significant customer terminates its relationship with us, we cannot assure you that we will be able to secure an alternative arrangement with comparable customer in a timely manner, or at all. Losing one or more of these significant customers could adversely affect our revenue and profitability.

In addition, we depend upon a significant supplier that accounted for more than 10% of our total purchases for approximately the past three years — specifically, FedEx accounted for 52%, 62%, and 63% of our total purchases during the three months ended September 30, 2023 and the fiscal year ended June 30, 2023 and 2022, respectively. We cannot ensure that we will have no concentration of suppliers in the future. Such third-party suppliers are run by independent entities that are subject to their own unique operational and financial risks, which are beyond our control. If such significant suppliers breach or terminate their contracts with us, or experience significant disruptions to their operations, we will be required to find and enter into arrangements with one or more replacement suppliers. Finding alternative suppliers could involve significant delays and other costs and these suppliers may not be available to us on reasonable terms or at all. As a result, this could harm our business and financial results and result in lost or deferred revenue.

Customer demand is difficult to forecast accurately, and as a result we may be unable to make planning and spending decisions to match such demand.

We make planning and spending decisions, including capacity expansion, procurement commitments, personnel needs, and other resource requirements based on our estimates of customer demand. A significant portion of our revenue is derived from customers whose demand for the warehousing and shipping services is tied closely to the end consumers in the U.S. Therefore, our customer demand may be impacted by factors out of our control, such as unexpected shifts in the preferences of U.S. end consumers for our customers’ merchandise, foreign exchange rate fluctuations that could adversely impact our customers’ costs and pricing strategies, and manufacturing production delays. Moreover, we may potentially experience capacity and resource shortages in fulfilling e-commerce orders on behalf of our customers during the peak season of e-commerce consumption or following special promotional campaigns on any e-commerce platforms. Failure to meet customer demand in a timely fashion or at all may adversely affect our financial condition and results of operations.

Our dependence on third parties to provide overseas transportation and domestic distribution services may impact the delivery and quality of our transportation and logistics services, and any disruption to these services could result in a disruption to our business, negative publicity, and a slowdown in the growth of our customer base, materially and adversely affecting our business, financial condition, and results of operations.

As we do not have our own delivery team and networks, our business depends on the services provided by, and relationships with, various independent third parties, to provide truck and ocean services and to report certain events to us, including, but not limited to, shipment status information and freight claims. For example, we rely on ocean carriers for the transportation of our customer’s goods and merchandise to the U.S, before they complete customs clearance and are delivered to U.S. warehouses. We also rely on common carriers such as FedEx and UPS to distribute merchandise to the U.S. end consumer who place orders online. Several third-party logistics service providers contributed a significant part of the total cost of revenue of our Company. In particular, for the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, FedEx accounted for approximately 57%, 62%, and 68% of our total cost of revenue, respectively. These third-party logistics service providers may not fulfill their obligations to us, which may prevent us from meeting our commitments to our customers. This reliance also could cause delays in reporting certain events, including recognizing claims. In addition, if we are unable to secure sufficient equipment or other transportation services from third parties to meet our commitments to our customers, our operating results could be materially and adversely affected, and our customers could switch to our competitors temporarily or permanently. Many of these risks are beyond our control, including:

        equipment and driver shortages in the transportation industry;

        changes in regulations impacting transportation;

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        disruption in the supply or cost of fuel;

        unanticipated changes in ocean or truck freight markets; and

        increases in shipping costs or other issues that adversely affect the global supply chains, such as global availability of shipping containers, and related labor and fuel costs.

Our business may be disrupted by natural disasters causing supply chain disruptions.

Natural disasters such as earthquakes, tsunamis, hurricanes, tornadoes, floods, or other adverse weather and climate conditions, whether occurring in the United States or abroad, could disrupt our operations and could damage or destroy infrastructure necessary to transport products as part of the supply chain. These events could make it difficult or impossible for us to provide logistics services; disrupt or prevent our ability to perform functions at the corporate level; and/or otherwise impede our ability to continue business operations in a continuous manner consistent with the level and extent of business activities prior to the occurrence of the unexpected event, which could adversely affect our business and results of operations.

The ongoing COVID-19 pandemic has adversely impacted our business, results of operations, and cash flows.

The ongoing COVID-19 pandemic has resulted in the implementation of significant governmental measures intended to control the spread of the virus, including lockdowns, closures, quarantines, travel bans, and other precautionary measures, which has resulted in significant business and supply chain disruptions and has had direct impacts on international trade. Such governmental actions, together with the development of the COVID-19 pandemic, could materially disrupt our business and operations, slow down the overall economy, curtail consumer spending, and make it difficult to adequately staff our operations. During the fiscal year ended June 30, 2022, the COVID-19 pandemic had a material impact on our financial position and operating results. Specifically, the COVID-19 pandemic posed significant challenges for logistics companies globally. Multiple national lockdowns, in particular the lockdowns, travel restrictions, mandatory cessations of business operations, or mandatory quarantines imposed in the PRC, have continued to slow or even temporarily stop the flow of raw materials and finished goods, thus disrupting the manufacturing and distribution of goods. During the three months ended September 30, 2023 and the fiscal year ended June 30, 2023, the COVID-19 pandemic did not have a material impact on our financial position and operating results.

In early December 2022, the PRC government announced a nationwide relaxation of its zero-COVID policy, resulting in a surge in Covid-19 infections across the PRC after related restrictions were lifted. As of the date of this prospectus, although the spread of COVID-19 appears to be under control, the extent to which the COVID-19 pandemic may impact our future financial results will depend on future developments which are uncertain and unpredictable, including the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the effectiveness of efforts to contain or treat cases, and future actions that may be taken in response to these developments. In addition, the COVID-19 pandemic has also caused heightened uncertainty in the global economy. The global spread of COVID-19 pandemic in major countries of the world may also result in global economic distress, and the extent to which it may affect our results of operations will depend on future developments of the COVID-19 pandemic, which are highly uncertain and difficult to predict. There may be potential impacts on our results of operations if the pandemic and the resulting disruption were to extend over a prolonged period. Consequently, the COVID-19 pandemic may continue to adversely affect our business, financial condition and results of operations in the current and future years.

Our results of operations are subject to seasonal fluctuations.

We experience seasonality in our business, mainly correlating to the seasonality patterns associated with the e-commerce and logistics and supply chain industries in the U.S. We typically experience a seasonal surge in volume of service orders during the second and fourth quarters of each year due to holiday seasons and summer revenue, respectively. We may experience capacity and resource shortages in our warehousing and order fulfillment services during the period such season surge in our business. On the other hand, activity levels across our business lines are typically lower in the first and third quarters of each year, primarily due to relatively weaker consumer spending and decreased availability of delivery personnel and warehouse staff during these periods. As a result, our financial condition and results of operations for future periods may continue to fluctuate, and the trading price of our common stock may fluctuate from time to time, due to seasonality.

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Our business and results of operations may be harmed by the misconduct of authorized employees that have access to important assets of our Company such as inventory, bank accounts, and confidential information.

During the course of our business operations, some of our employees have access to certain valuable assets of our Company, such as warehouse inventory, bank accounts, and confidential information. In the event of misconduct by such authorized employees, our Company could suffer significant losses. Employee misconduct may include misappropriating warehouse inventory or bank accounts, falsifying inventory records or bank accounts, improper use or disclosure of confidential information to the public or our competitors, and failure to comply with our code of conduct or other policies or with federal or state laws or regulations regarding the use and safeguarding of classified or other protected information, import-export control, and any other applicable laws or regulations. Although we have implemented policies, procedures, and controls to prevent and detect these activities, these precautions may not prevent all intentional or negligent misconduct, and as a result, we could face unknown risks or losses. Furthermore, such unethical, unprofessional, or even criminal behavior by employees could damage our reputation, result in fines, penalties, restitution, or other damages, and lead to the loss of current and future customers, all of which would adversely affect our business, financial condition, and results.

Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage.

While we have auto liability insurance and commercial insurance for self-operated vehicles, cargo insurance, warehouse insurance, general liability insurance, and workers compensation and employer liability insurance, we are self-insured for a portion of our potential liabilities. In certain instances, our insurance may not fully cover an insured loss, depending on the magnitude and nature of the claim. Additionally, changes in the cost of insurance or the availability of insurance in the future could substantially increase our costs to maintain our current level of coverage or could cause us to reduce our insurance coverage and increase the portion of our risks that we self-insure.

Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation, and harm our business.

Cybersecurity threats and incidents directed at us could range from uncoordinated individual attempts to gain unauthorized access to information technology systems to sophisticated and targeted measures aimed at disrupting business or gathering personal data of customers. We have relied on a technology platform that enables us to deliver one-stop warehouse and logistics management services to our customers with simplicity, convenience, speed, and reliability, primarily including our Armlogi order management system (“OMS”). Our technology platform supports the smooth performance of certain key functions of our business, such as storage management, order management, payment calculation, and customers services. The secure processing, maintenance, and transmission of information in these systems are critical to our operations. Nonetheless, our technology operations are vulnerable to security breaches and attacks against our system and network. Although we employ measures designed to prevent, detect, address, and mitigate these threats (including access controls, data encryption, vulnerability assessments, and maintenance of backup and protective systems), cybersecurity incidents, depending on their nature and scope, could potentially result in the misappropriation, destruction, corruption, or unavailability of critical data and confidential or proprietary information (our own or that of third parties, including potentially sensitive personal information of our customers) and the disruption of business operations. Any such compromises to our security could cause harm to our reputation, which could cause customers to lose trust and confidence in us or could cause agents to stop working for us. In addition, we may incur significant costs for remediation that may include liability for stolen assets or information, repair of system damage, and compensation to customers and business partners. We may also be subject to legal claims, government investigation, and additional state and federal statutory requirements.

The potential consequences of a material cybersecurity incident include regulatory violations of applicable U.S. and international privacy and other laws, reputational damage, loss of market value, litigation with third parties (which could result in our exposure to material civil or criminal liability), diminution in the value of the services we provide to our customers, and increased cybersecurity protection and remediation costs (that may include liability for stolen assets or information), which in turn could have a material adverse effect on our competitiveness and results of operations.

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Our business, financial condition, and reputation may be substantially harmed by security breaches, interruptions, delays, and failures in our systems and operations.

With our technology platform, we are able manage the entire flow of inventory, labor force, and information in and out of our warehouse network, and optimize our warehouse storage and order management services. The performance and reliability of our systems and operations are critical to our business. Our systems and operations are vulnerable to security breaches, interruption, or malfunction due to certain events beyond our control, including natural disasters, such as earthquakes, fires, floods, power outages, telecommunication failures, break-ins, sabotage, computer viruses, and intentional acts of vandalism. Security breaches, interruptions, delays, or failures in our systems or operations can lead to lower quality service, increased costs, litigation and other consumer claims, and damage our reputation, all of which could have a significant impact on our financial condition and operating results.

Our business and financial condition may be substantially harmed by inventory losses caused by theft, vandalism, or accidents during transportation and/or warehousing.

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

If we fail to manage our growth or execute our strategies and future plans effectively, we may not be able to take advantage of market opportunities or meet the demand of our customers.

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

Our future results of operations also depend largely on our ability to execute our future plans successfully. In particular, our continued growth may subject us to the following additional challenges and constraints:

        we face challenges in ensuring the productivity of a large employee base and recruiting, training, and retaining skilled personnel, including areas of procurement, sales and marketing, and information technology for our growing operations;

        we face challenges in responding to evolving industry standards and government regulation that impact our business and the warehousing and logistics industry in general;

        the technological or operational challenges may arise from the new services;

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        the execution of our future plans will be subject to the availability of funds to support the relevant capital investment and expenditures; and

        the successful execution of our strategies is subject to factors beyond our control, such as general market conditions, and economic and political developments in the U.S. and globally.

All of these endeavors involve risks and will require significant management, financial, and human resources. We cannot assure you that we will be able to effectively manage our growth or to implement our strategies successfully. There is no assurance that the investment to be made by our Company as contemplated under our future plans will be successful and generate the expected return. If we are not able to manage our growth or execute our strategies effectively, or at all, our business, results of operations, and prospects may be materially and adversely affected.

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

Sustaining our ongoing operations and propelling future growth requires a significant investment in capital assets, coupled with sufficient working capital. In particular, as a growing company, we may require additional capital to finance our operations, make strategic investments, or respond to market conditions. For example, we are scheduled to commence the expansion of our warehouse network through leasing additional warehouse space in California in August  2023, with an estimated cost of approximately $5 million, and we plan to refine and optimize our international ocean freight services with an estimated cost of approximately $2 million. There can be no assurance that we will be able to obtain the necessary financing on favorable terms or at all. Factors beyond our control, such as unfavorable market conditions, general economic downturns, or investor sentiment, may make it challenging for us to secure additional funding. In the event we are unable to obtain additional financing, we may have to significantly limit, or even terminate, our primary operations, or delay, reduce, or eliminate certain of our planned operations (including further building our warehousing network and developing comprehensive and sophisticated solutions and services that span the entire supply chain, from ocean freight to distribution and delivery), resulting in a complete loss of investment for our stockholders. Our inability to obtain financing on acceptable terms when needed may have a material adverse effect on our business, results of operations, financial condition, and prospects.

If we fail to attract, recruit, or retain our key personnel, including our executive officers, senior management, and key employees, our ongoing operations and growth could be affected.

Our success depends, to a large extent, on the efforts of our key personnel, including our executive officers, senior management, and other key employees who have valuable experience, knowledge, and connections in global supply chains as well as the warehousing and logistics industry. There is no assurance that these key personnel will not voluntarily terminate their employment with us. We do not carry, and do not intend to procure, key person insurance on any of our senior management team. The loss of any of our key personnel could be detrimental to our ongoing operations. Our success will also depend on our ability to attract and retain qualified personnel to manage our existing operations as well as our future growth. We may not be able to successfully attract, recruit, or retain key personnel, and this could adversely impact our financial condition, operating results, and business prospects.

Future acquisitions may have an adverse effect on our ability to manage our business. Raising additional capital may cause dilution to our stockholders, including purchasers of our common stock in this offering.

We may acquire businesses, technologies, services, or products that are complementary to our warehousing and logistics business. Future acquisitions may expose us to potential risks, including risks associated with the integration of new operations, services, and personnel, unforeseen or hidden liabilities, the diversion of resources from our existing business and technology, our potential inability to generate sufficient revenue to offset new costs, the expenses of acquisitions, or the potential loss of or harm to relationships with both employees and customers resulting from our integration of new businesses.

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Any of the potential risks listed above could have a material adverse effect on our ability to manage our business, revenue, and net income. We may need to raise additional debt funding or sell additional equity securities to make such acquisitions. The raising of additional debt funding by our Company, if required, would result in increased debt service obligations and could result in additional operating and financing covenants, or liens on our assets, that would restrict our operations. The sale of additional equity securities could result in additional dilution to our stockholders.

Our previous growth rates and performance may not be sustainable or indicative of our future growth and financial outcomes, and there is no assurance that we will be able to achieve the same level of financial performance in the future.

We have experienced strong growth in the past. Our total revenue increased by approximately $12.9 million, or 45.4%, to approximately $41.2 million for the three months ended September 30, 2023 from $28.4 million for the same period in 2022. Our total revenue increased by approximately $79.0 million, or 141.0%, to approximately $135.0 million for the fiscal year ended June 30, 2023 from $56.0 million for the fiscal year ended June 30, 2022. Our total revenue increased by approximately $47.0 million, or 521.4%, to approximately $56.0 million for the fiscal year ended June 30, 2022 from approximately $9.0 million for the fiscal year ended June 30, 2021. We reported net income of approximately $2.8 million for the three months ended September 30, 2023, representing a decrease by $0.4 million, from $3.1 million for the same period in 2022. We reported net income of approximately $13.9 million for the fiscal year ended June 30, 2023, representing a significant increase by $11.9 million, or 602.7%, from net income of $2.0 million for the fiscal year ended June 30, 2022. We reported net income of approximately $2.0 million for the fiscal year ended June 30, 2022, representing a significant increase by $1.6 million, or 391.2%, from net income of $0.4 million for the fiscal year ended June 30, 2021. While we have achieved strong financial results in the past, these results may not be sustainable or indicative of future results, and we cannot assure you that we will achieve or maintain profitability on a consistent basis. Our revenue growth may slow or our revenue may decline for a number of reasons, including reduced demand for our warehousing and logistics services, increased competition, industry trend, or our failure to capitalize on growth opportunities. Meanwhile, we expect our overall selling, general, and administrative expenses, including marketing expenses, salaries, and professional and business consulting expenses, to continue to increase in the foreseeable future, as we plan to hire additional personnel and incur additional expenses in connection with the expansion of our business operations. In addition, we also expect to incur significant additional legal, accounting, and other expenses as a newly public company. These efforts and additional expenses may be more costly than we currently expect, and there is no assurance that we will be able to maintain sufficient operating revenue to offset our operating expenses. Any failure to increase revenue or to manage our costs as we continue to grow and invest in our business would prevent us from achieving or maintaining profitability or maintaining positive operating cash flow at all, or on a consistent basis, which would cause our business, financial condition, and results of operations to suffer.

Legal, Regulatory, and Compliance Risks

We are subject to numerous laws and regulations applicable to the warehousing and logistics industry in the U.S., which, if we are found to have violated, may adversely affect our business and results of operations.

A number of U.S. federal and state laws and regulations applicable to the warehousing and logistics industry affect our business and conduct. For example, we are subject to regulation by the Federal Maritime Commission (“FMC”) as an ocean transportation intermediary (“OTI”). As a licensed OTI, we are required to comply with several regulations, including the filing of our tariffs. We provide customs brokerage services as a customs broker under a license issued by the U.S. Customs and Border Protection (“CBP”) and other authoritative governmental agencies. Further, Department of Homeland Security (the “DHS”) regulations applicable to our customers who import goods into the U.S. and our contracted ocean carriers can impact our ability to provide and/or receive services with and from these parties. Enforcement measures related to violations of these regulations can slow and/or prevent the delivery of shipments, which may negatively impact our operations. Moreover, the Occupational Safety and Health Administration (the “OSHA”) implements and enforces safety and health regulations in the workplace, which provide standards applicable to all industries generally and specific to the warehousing industry, such as standards for, among other things, proper storage of materials, use of material handling equipment, and employee training. Furthermore, as we are involved in the transportation of goods, we must comply with the U.S. Department of Transportation (the “DOT”) regulations regarding driver qualifications, vehicle maintenance, and hours of service. Additionally, as with other warehousing and logistics companies, we are required to follow federal and state employment laws, which cover important aspects, such as minimum wage, overtime pay, and anti-discrimination policies, among other things. We are also required to comply with local zoning ordinances and building codes, which may specify the permissible locations for our facilities and the

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safety standards that must be adhered to. See “Business — Governmental Regulations — Operations.” Any failure to comply with these laws and regulations may result in the assessment of administrative, civil, or criminal penalties, the imposition of investigatory remedial obligations or the issuance of injunctions limiting or prohibiting our operations. We confirm that, as of the date of this prospectus, each of our subsidiaries has obtained a valid business license or permit required for its operations. To the best of our knowledge, we are not obliged to obtain any other approvals, licenses, or permits from any federal, state, or local authorities to conduct our business, nor have we received any notice requesting such approvals, licenses, or permits from these authorities. However, it is uncertain whether we will be required to obtain additional approvals, licenses, or permits in connection with our business operations pursuant to evolving federal or state laws and regulations, and whether we will be able to obtain such approvals, licenses, or permits on a timely basis. Failure to do so may results in a material change in our operations, and the value of our common stock could deprecate significantly or become worthless.

Non-compliance with laws and regulations on the part of any third parties with which we conduct business could expose us to legal expenses, compensation to third parties, penalties, and disruptions of our business, which may adversely affect our results of operations and financial performance.

Third parties with which we conduct business, including third-party logistics service providers and brokers, may be subject to regulatory penalties or punishments because of their regulatory compliance failures or infringement upon other parties’ legal rights, which may, directly or indirectly, disrupt our business. We cannot be certain whether such third parties have violated any regulatory requirements or infringed or will infringe any other parties’ legal rights, which could expose us to legal expenses or compensation to third parties, or both.

We, therefore, cannot rule out the possibility of incurring liabilities or suffering losses due to any non-compliance by third parties. There is no assurance that we will be able to identify irregularities or non-compliance in the business practices of third parties with which we conduct business, or that such irregularities or non-compliance will be corrected in a prompt and proper manner. Any legal liabilities and regulatory actions affecting third parties involved in our business may affect our business activities and reputation, and may in turn affect our business, results of operations, and financial performance.

Moreover, regulatory penalties or punishments against our business stakeholders such as third-party logistics service providers and brokers, whether or not resulting in any legal or regulatory implications upon us, may nonetheless cause business interruptions or even suspension of these business stakeholders, which could in turn disrupt our usual course of business and result in material negative impact on our business operations, results of operation and financial condition.

Failure to protect intellectual property rights could adversely affect our business.

We regard our trademark, domain names, trade secrets, proprietary technologies, and other intellectual property as critical to our success. See “Business — Technology and Intellectual Property.” We have taken measures to protect our intellectual property, but these measures might not be sufficient or effective. We may bring lawsuits to protect against the potential infringement of our intellectual property rights. Policing unauthorized use of our proprietary technology and other intellectual property is difficult and expensive, and litigation may be necessary in the future to enforce their intellectual property rights. Future litigation could result in substantial costs and diversion of our resources and could disrupt our business, as well as materially adversely affect our financial condition and results of operations. Further, despite the potentially substantial costs, we cannot assure you that we will prevail in such litigation. In addition, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition, and results of operations.

Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services.

We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademarks, copyrights, or other intellectual property rights held by third parties. We may from time to time in the future be subject to legal proceedings and claims relating to the intellectual property rights of others. For instance, we may face claims of trademark or copyright infringement for the use of images, pictures, or materials used on our website or in promotional materials such as brochures or videos. Additionally, we may be subject to software copyright infringement claims for the technology platform we rely on for our daily operations. See “Business — Technology and

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Intellectual Property.” There could also be existing intellectual property of which we are not aware that our services may inadvertently infringe. If any third-party infringement claims are brought against us, we may be forced to divert management’s time and other resources from our business and operations to defend against these claims, regardless of their merits. Additionally, the application and interpretation of intellectual property right laws and the procedures and standards for granting trademarks, copyrights, or other intellectual property rights are evolving and may be uncertain, and we cannot assure you that courts or regulatory authorities would agree with our analysis. Such claims, even if they do not result in liability, may harm our reputation. If we were found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or be forced to develop alternatives of our own. As a result, our business and financial performance may be materially and adversely affected.

We may from time to time be subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect our business, prospects, results of operations, and financial condition.

We may from time to time become subject to or involved in various claims, controversies, lawsuits, and legal proceedings. However, claims and threats of lawsuits are subject to inherent uncertainties, and we are uncertain whether any of these claims would develop into a lawsuit. Lawsuits, or any type of legal proceeding, may cause our Company to incur defense costs, utilize a significant portion of our resources, and divert management’s attention from our day-to-day operations, any of which could harm our business. Any settlements or judgments against our Company could have a material adverse impact on our financial condition, results of operations, and cash flows. In addition, negative publicity regarding claims or judgments made against our Company may damage our reputation and may result in a material adverse impact on us.

We may be the subject of allegations, harassment, or other detrimental conduct by third parties, which could harm our reputation and cause them to lose market share and customers.

We may be subject to allegations by third parties or purported former employees, negative Internet postings, and other adverse public exposure on our business, operations, and staff compensation. We may also become the target of harassment or other detrimental conduct by third parties or disgruntled former or current employees. Such conduct may include complaints, anonymous or otherwise, to regulatory agencies, media, or other organizations. We may be subject to government or regulatory investigation or other proceedings as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that we will be able to conclusively refute each of the allegations within a reasonable period of time, or at all. Additionally, allegations, directly or indirectly against our Company, may be posted on the Internet, including social media platforms by anyone on an anonymous basis. Any negative publicity on our Company or our management can be quickly and widely disseminated. Social media platforms and devices immediately publish the content of their users’ posts, often without filters or checks on the accuracy of the content posted. The information posted may be inaccurate and adverse to our Company, and it may harm our reputation, business, or prospects. The harm may be immediate without affording us an opportunity for redress or correction. Our reputation may be negatively affected as a result of the public dissemination of negative and potentially false information about our business and operations, which in turn may cause them to lose market shares and customers.

Common Stock and Trading Risks

There has been no public market for our common stock prior to this offering, and you may not be able to resell our common stock at or above the price you pay for them, or at all.

Prior to this offering, there has not been a public market for our common stock. We have applied for the listing of our common stock on the Nasdaq Capital Market. An active public market for our common stock, however, may not develop or be sustained after the offering, in which case the market price and liquidity of our common stock will be materially and adversely affected.

The market price of our common stock may be volatile or may decline regardless of our operating performance, and you may not be able to resell your shares at or above the initial public offering price.

The initial public offering price for our common stock will be determined through negotiations between the underwriters and us and may vary from the market price of our common stock following our initial public offering. If you purchase our common stock in our initial public offering, you may not be able to resell those shares at or above the initial public

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offering price. We cannot assure you that the initial public offering price of our common stock, or the market price following our initial public offering, will equal or exceed prices in privately negotiated transactions of our shares that have occurred from time to time prior to our initial public offering. The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

        actual or anticipated fluctuations in our revenue and other operating results;

        the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;

        actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our Company, or our failure to meet these estimates or the expectations of investors;

        announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

        price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;

        lawsuits threatened or filed against us; and

        other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. Stock prices of many companies have fluctuated in a manner unrelated or disproportionate to the operating performance of those companies. In the past, stockholders have filed securities class litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and adversely affect our business.

The price of our common stock could be subject to rapid and substantial volatility.

There have been instances of extreme stock price run-ups followed by rapid price declines and strong stock price volatility with recent initial public offerings, especially among those with relatively smaller public floats. As a relatively small-capitalization company with a relatively small public float, we may experience greater stock price volatility, extreme price run-ups, lower trading volume, and less liquidity than large-capitalization companies. In particular, our common stock may be subject to rapid and substantial price volatility, low volumes of trades, and large spreads in bid and ask prices. Such volatility, including any stock run-ups, may be unrelated to our actual or expected operating performance and financial condition or prospects, making it difficult for prospective investors to assess the rapidly changing value of our common stock.

In addition, if the trading volumes of our common stock are low, persons buying or selling in relatively small quantities may easily influence the price of our common stock. This low volume of trades could also cause the price of our common stock to fluctuate greatly, with large percentage changes in price occurring in any trading day session. Holders of our common stock may also not be able to readily liquidate their investment or may be forced to sell at depressed prices due to low volume trading. Broad market fluctuations and general economic and political conditions may also adversely affect the market price of our common stock. As a result of this volatility, investors may experience losses on their investment in our common stock. A decline in the market price of our common stock also could adversely affect our ability to issue additional shares of common stock or other of our securities and our ability to obtain additional financing in the future. No assurance can be given that an active market in our common stock will develop or be sustained. If an active market does not develop, holders of our common stock may be unable to readily sell the shares they hold or may not be able to sell their shares at all.

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You will experience immediate and substantial dilution in the net tangible book value of common stock purchased in this offering.

The initial public offering price of our common stock is substantially higher than the (pro forma) net tangible book value per share of our common stock. Consequently, when you purchase shares of our common stock in the offering, upon completion of the offering you will incur immediate dilution of $4.66 per share, assuming an initial public offering price of $5.50. See “Dilution.” In addition, you may experience further dilution to the extent that additional shares of common stock are issued upon exercise of outstanding options we may grant from time to time.

If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in our internal control over financial reporting that have been identified, we may fail to meet our reporting obligations or be unable to accurately report our results of operations or prevent fraud, and investor confidence and the market price of our common stock may be materially and adversely affected.

Prior to this offering, we have been a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. Our independent registered public accounting firm has not conducted an audit of our internal control over financial reporting. However, in preparing our consolidated financial statements as of and for the fiscal years ended June 30, 2023 and 2022, we have identified material weaknesses in our internal control over financial reporting and other control deficiencies. The material weaknesses identified included (i) a lack of sufficient skilled staff with U.S. GAAP knowledge and the SEC reporting knowledge for the purpose of financial reporting as well as a lack of formal accounting policies and procedures manual to ensure proper financial reporting in accordance with U.S. GAAP and SEC reporting requirements; (ii) a lack of formal policies and procedures to establish risk assessment process and internal control framework; and (iii) information technology-related deficiencies in the areas of: a) risk and vulnerability assessment, b) third-party (service organization) vendor management, c) backup management, disaster recovery, and proper equipment in physical environment control, and d) system security and access.

Following the identification of the material weaknesses and control deficiencies, we have taken certain remedial measures, including adopting directors’ resolutions to appoint independent directors, establish an audit committee, and strengthen corporate governance. We plan to take additional remedial measures, including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen the financial reporting function and to set up a financial and system control framework; and (ii) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel.

However, the implementation of these measures may not fully address the material weaknesses in our internal control over financial reporting. Our failure to correct the material weaknesses or our failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations, and prospects, as well as the trading price of our common stock, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders our ability to prevent fraud.

Upon completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002 will require that we include a report of management on our internal control over financial reporting in our annual report on 10-K beginning with our annual report for the fiscal year ending June 30, 2024. In addition, once we cease to be an “emerging growth company,” as such term is defined in the JOBS Act, our independent registered public accounting firm must attest to and report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified, if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated, or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational, and financial resources and systems for the foreseeable future. We may be unable to complete our evaluation testing and any required remediation in a timely manner.

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We will incur substantial increased costs as a result of being a public company.

Upon consummation of this offering, we will incur significant legal, accounting, and other expenses as a public company that we did not incur as a private company. These additional costs could negatively affect our financial results. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and Nasdaq, impose various requirements on the corporate governance practices of public companies.

Compliance with these laws, rules, and regulations increases our legal and financial compliance costs and makes some corporate activities more time-consuming and costlier. These laws, regulations, and standards are subject to varying interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-generating activities to compliance activities. We have incurred additional costs in obtaining director and officer liability insurance. In addition, we incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.

We are an “emerging growth company,” as defined in the JOBS Act and will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of this offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700 million as of the prior December 31, and (2) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 in the assessment of the emerging growth company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until such time as those standards apply to private companies.

After we are no longer an “emerging growth company,” or until five years following the completion of our initial public offering, whichever is earlier, we expect to incur significant additional expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 and the other rules and regulations of the SEC. For example, as a public company, we have been required to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures.

We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

We may not be able to maintain the listing of our common stock on the Nasdaq Capital Market.

Even if our common stock is approved for listing on the Nasdaq Capital Market, there can be no assurance that we will be able to maintain the listing standards of that exchange, which includes requirements that we maintain our stockholders’ equity, total value of shares held by unaffiliated stockholders, and market capitalization above certain specified levels. If we fail to conform to the Nasdaq listing requirements on an ongoing basis, our common stock might cease to trade on the Nasdaq Capital Market exchange, and may move to the OTCQB or OTC Pink Markets operated by OTC Markets Group, Inc. These quotation services are generally considered to be markets that are less efficient and that provide less liquidity in the shares than the Nasdaq Capital Market.

Substantial future sales of our common stock or the anticipation of future sales of our common stock in the public market could cause the price of our common stock to decline.

Sales of substantial amounts of our common stock in the public market after this offering, or the perception that these sales could occur, could cause the market price of our common stock to decline. An aggregate of 40,000,000 shares of common stock are outstanding before the consummation of this offering. An aggregate of 42,000,000 shares of common stock will be outstanding immediately after the consummation of this offering, assuming no exercise of the over-allotment option, and 42,300,000 shares of common stock will be outstanding immediately after the consummation of this offering, assuming the full exercise of the over-allotment option. Sales of these shares into the market could cause the market price of our common stock to decline.

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If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our common stock, the price of our common stock and trading volume could decline.

Any trading market for our common stock may depend in part on the research and reports that industry or securities analysts publish about us or our business. We do not have any control over these analysts. If one or more of the analysts who cover us downgrade us, the price of our common stock would likely decline. If one or more of these analysts cease coverage of our Company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause the price of our common stock and the trading volume to decline.

Our management has broad discretion to determine how to use the funds raised in the offering and may use them in ways that may not enhance our results of operations or the price of our common stock.

We anticipate that we will use the net proceeds from this offering to expand our warehouse network and develop warehousing and logistics services, develop international ocean freight services, develop port trucking services, and for working capital and other general corporate purposes. Our management will have significant discretion as to the use of the net proceeds to us from this offering and could spend the proceeds in ways that do not improve our results of operations or enhance the market price of our common stock.

We will be a “controlled company” within the meaning of the Nasdaq listing rules, and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders.

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

We are an “emerging growth company” and a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.

We are an “emerging growth company” and a “smaller reporting company” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies” and “smaller reporting companies” including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

In addition, Section 107 of the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period for complying with new or revised accounting standards.

We will remain an “emerging growth company” until the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement under the Securities Act, although we will lose that status sooner if our revenue exceeds $1.235 billion, if we issue more than $1 billion in non-convertible debt in a three-year period, or if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last day of our most recently completed second fiscal quarter.

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We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our common stock held by non-affiliates is equal to or less than $250 million as of the last business day of the most recently completed second fiscal quarter, or (ii) our annual revenue is equal to or less than $100 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is equal to or less than $700 million as of the last business day of the most recently completed second fiscal quarter.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. In addition, taking advantage of reduced disclosure obligations may make comparison of our financial statements with other public companies difficult or impossible. If investors are unable to compare our business with other companies in our industry, we may not be able to raise additional capital as and when we need it, which may materially and adversely affect our financial condition and results of operations.

Our pre-IPO stockholders will be able to sell their shares of common stock upon completion of this offering subject to restrictions under Rule 144 under the Securities Act and the lock-up agreements.

All of our directors and officers and our shareholders owning 5% or more of our shares of common stock have agreed with the Representative not to sell, transfer, or dispose of, directly or indirectly, any of our shares of common stock or securities convertible into or exercisable or exchangeable for our common stock for a period of six months from the date of this prospectus. See “Underwriting — Lock-up Agreements.” Our pre-IPO stockholders may be able to sell their shares of common stock under Rule 144 after the completion of this offering and following the expiration of that lock-up period, if applicable. See “Shares Eligible for Future Sale” below. Because these stockholders have paid a lower price per share of our common stock than participants in this offering, when they are able to sell their pre-IPO shares under Rule 144 and following the expiration of the lock-up period, if applicable, they may be more willing to accept a lower sales price than the IPO price. This fact could impact the trading price of the common stock following the completion of the offering, to the detriment of participants in this offering. Under Rule 144, before our pre-IPO stockholders can sell their shares, in addition to meeting other requirements, they must meet the required holding period. We do not expect any of the common stock to be sold pursuant to Rule 144 during the pendency of this offering.

Nasdaq may apply additional and more stringent criteria for our initial and continued listing, since we plan to have a relatively small public offering and insiders will hold a large portion of our listed securities.

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities on Nasdaq and Nasdaq may use such discretion to deny initial listing, apply additional or more stringent criteria for the initial or continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes initial or continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for initial or continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny initial or continued listing or to apply additional and more stringent criteria in the instances, including: (i) where the company engaged an auditor that has not been subject to an inspection by the Public Company Accounting Oversight Board of the United States (the “PCAOB”), an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company’s audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company’s listed securities (in which instance, Nasdaq was concerned that the offering size was insufficient to establish the company’s initial valuation, and there would not be sufficient liquidity to support a public market for the company); and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. Since we plan to have a relatively small public offering and our insiders will hold a large portion of our listed securities, Nasdaq may apply additional and more stringent criteria for our initial and continued listing, which may cause delay or even denial of our listing application.

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DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results, and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:

        assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items;

        our ability to execute our growth strategies, including our ability to meet our goals;

        current and future economic and political conditions;

        our capital requirements and our ability to raise any additional financing which we may require;

        our ability to attract clients and further enhance our brand recognition;

        our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business;

        the COVID-19 pandemic;

        trends and competition in the warehousing and logistics industry; and

        other assumptions described in this prospectus underlying or relating to any forward-looking statements.

We describe certain material risks, uncertainties and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied, or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.

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USE OF PROCEEDS

Based upon an assumed initial public offering price of $5.50 per share of our common stock, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, we estimate that we will receive net proceeds from this offering, after deducting the estimated underwriting discounts and the estimated offering expenses payable by us, of approximately $8.4 million if the underwriters do not exercise their over-allotment option, and $10.0 million if the underwriters exercise their over-allotment option in full.

We plan to use the net proceeds we receive from this offering for the following purposes:

        approximately $2.5 million, or 30% of the net proceeds we receive from this offering, for further expanding our warehouse network and developing warehousing and logistics services;

        approximately $2.5 million, or 30% of the net proceeds we receive from this offering, for further developing international ocean freight services;

        approximately $0.8 million, or 10% of the net proceeds we receive from this offering, for developing port trucking services; and

        the balance to fund working capital and for other general corporate purposes.

The foregoing represents our current intentions based upon our present plans and business conditions to use and allocate the net proceeds of this offering. Our management, however, will have significant flexibility and discretion to apply the net proceeds of this offering. If an unforeseen event occurs or business conditions change, we may use the proceeds of this offering differently than as described in this prospectus. To the extent that the net proceeds we receive from this offering are not immediately used for the above purposes, we intend to invest our net proceeds in short-term, interest-bearing bank deposits or debt instruments.

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DIVIDEND POLICY

As of the date of this prospectus, we have not paid any cash dividends on our common stock, and our board of directors intends to continue a policy of retaining earnings, if any, for use in our operations. We are organized under the Nevada Revised Statutes (the “NRS”), which prohibits the payment of a dividend if, after giving it effect, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities. Any determination by our board of directors to pay dividends in the future to stockholders will be dependent upon our operational results, financial condition, capital requirements, business projections, general business conditions, statutory and regulatory restrictions, and any other factors deemed appropriate by our board of directors.

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CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2023:

        on an actual basis; and

        on an as adjusted basis to reflect the issuance and sale of 2,000,000 shares of common stock by us in this offering at the assumed initial public offering price of $5.50 per share, which is the midpoint of the estimated initial public offering price range set forth on the cover page of this prospectus, after deducting the estimated discounts to the underwriters, non-accountable expense allowance, and the estimated offering expenses payable by us. The following capitalization table assumes the over-allotment option has not been exercised.

You should read this capitalization table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes appearing elsewhere in this prospectus.

 

September 30, 2023

Actual

 

As
adjusted

   

$

 

$

Cash and restricted cash

 

$

8,394,200

 

16,952,475

Stockholders’ Equity:

 

 

     

Common stock, $0.00001 par value, 100,000,000 shares authorized, 40,000,000 shares issued and outstanding; 42,000,000 shares issued and outstanding, as adjusted

 

$

400

 

420

Additional paid-in capital(1)

 

$

9,080,007

 

17,638,282

Retained earnings

 

$

19,082,983

 

19,082,983

Total Stockholders’ Equity

 

$

28,163,390

 

36,721,685

____________

(1)      Reflects the sale of the common stock in this offering at an assumed initial public offering price of $5.50 per share, and after deducting the estimated underwriting discounts, non-accountable expense allowance, and estimated offering expenses payable by us. The as adjusted information is illustrative only, and we will adjust this information based on the actual initial public offering price and other terms of this offering determined at pricing. Additional paid-in capital reflects the net proceeds we expect to receive, after deducting the underwriting discounts, non-accountable expense allowance, and estimated offering expenses payable by us. We estimate that such net proceeds will be approximately $8.6 million.

A $1.00 increase (decrease) in the assumed initial public offering price of $5.50 per share would increase (decrease) each of additional paid-in capital, total stockholders’ equity and total capitalization by $2.0 million, assuming the number of the common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and estimated expenses payable by us.

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DILUTION

If you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock in this offering and the net tangible book value per share of common stock upon completion of this offering. Dilution results from the fact that the initial public offering price per share is substantially in excess of the net tangible book value per share attributable to the existing stockholders for our presently outstanding shares of common stock.

Our net tangible book value as of September 30, 2023 was $26,660,432, or $0.67 per share of common stock. Net tangible book value represents the amount of our total consolidated tangible assets, less the amount of our total consolidated liabilities. Dilution is determined by subtracting the net tangible book value per share common stock (as adjusted for the offering) from the initial public offering price per share and after deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

After giving effect to our sale of 2,000,000 shares of common stock offered in this offering based on the initial public offering price of $5.50 per share after deduction of the estimated underwriting discounts and the estimated offering expenses payable by us, our as adjusted net tangible book value as of September 30, 2023, would have been $35,218,707, or $0.84 per outstanding share of common stock. This represents an immediate increase in net tangible book value of $0.17 per share of common stock to the existing stockholders, and an immediate dilution in net tangible book value of $4.66 per share to investors purchasing the common stock in this offering. The as adjusted information discussed above is illustrative only.

The following table illustrates such dilution:

 

Post-Offering(1)

 

Full Exercise of
Over-Allotment
Option

Assumed initial public offering price per share

 

$

5.50

 

$

5.50

Net tangible book value per share as of September 30, 2023

 

$

0.67

 

$

0.87

Increase per share attributable to this offering

 

$

0.17

 

$

0.20

As adjusted net tangible book value per share immediately after this offering

 

$

0.84

 

$

0.87

Amount of dilution in net tangible book value per share to new investors in the offering

 

$

4.66

 

$

4.63

____________

(1)      Assumes that the underwriters’ over-allotment option has not been exercised.

If the underwriters exercise their over-allotment option in full, our as adjusted net tangible book value as of September 30, 2023, would have been $36,728,457, or $0.87 per outstanding share of common stock. This represents an immediate increase in net tangible book value of $0.20 per share of common stock to the existing stockholders, and an immediate dilution in net tangible book value of $4.63 per share to investors purchasing the common stock in this offering.

The following tables summarize, on an as adjusted basis as of September 30, 2023, the differences between existing stockholders and the new investors with respect to the number of shares of our common stock purchased from us, the total consideration paid and the average price per share before deducting the estimated underwriting discounts and the estimated offering expenses payable by us.

Over-allotment option not exercised

 

Shares
purchased

 

Total
consideration

 

Average
price
Per share

Number

 

Percent

 

Amount

 

Percent

 

Existing stockholders

 

40,000,000

 

95.24

%

 

$

400

 

0.004

%

 

$

0.00001

New investors

 

2,000,000

 

4.76

%

 

$

11,000,000

 

99.996

%

 

$

5.50

Total

 

42,000,000

 

100.00

%

 

$

11,000,400

 

100.00

%

 

$

0.26

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Over-allotment option exercised in full

 

Shares
purchased

 

Total
consideration

 

Average
price
Per share

Number

 

Percent

 

Amount

 

Percent

 

Existing stockholders

 

40,000,000

 

94.56

%

 

$

400

 

0.003

%

 

$

0.00001

New investors

 

2,300,000

 

5.44

%

 

$

12,650,000

 

99.997

%

 

$

5.50

Total

 

42,300,000

 

100.00

%

 

$

12,650,400

 

100.00

%

 

$

0.30

The as adjusted information as discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our common stock and other terms of this offering determined at the pricing.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included in this prospectus. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See “Disclosure Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and elsewhere in this prospectus.

Overview

We are a fast-growing U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment.

With the boom of e-commerce and Internet technology, along with the development of global supply chains, a growing number of merchants are seeking to sell their products through international e-commerce platforms, such as Amazon and eBay. These merchants, however, are confronted with major logistical challenges because of the complexities involved in shipping goods across borders. Specifically, when a foreign consumer places an order online, it can take a long time for the goods to be delivered from one country to another (especially for bulky items), while facing high damage rates and congestion during peak seasons. One of the solutions to such problems is to set up overseas warehouses, which are local storage facilities established in a foreign country where the cross-border merchants intend to sell their goods. Cross-border e-commerce merchants can export goods in batches in advance to overseas warehouses, which can then be delivered to overseas consumers once orders are placed via e-commerce platforms. As a result, the delivery time and the rate of damaged and lost packages may be reduced significantly, therefore enhancing the shopping experience of consumers.

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 ten warehouses across the country, with an aggregate gross floor area of approximately 1,795,439 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 September 30, 2023 and June 30, 2023 and 2022, we had an active customer base of 57, 83, and 54, respectively, for our warehousing and logistics services.

We have experienced rapid growth since our inception. For the three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, we had total revenue of $41.2 million, $135.0 million, and $56.0 million respectively, and net income of $2.8 million, $13.9 million, and $2.0 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 three months ended September 30, 2023 and the fiscal years ended June 30, 2023 and 2022, we generated approximately 95%, 96%, and 93% of our revenue from PRC-based customers, respectively. See “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.”

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COVID-19 Pandemic Affecting Our Results of Operations

During the fiscal year ended June 30, 2022, the COVID-19 pandemic had a material impact on our financial positions and operating results. Specifically, the COVID-19 pandemic has posed significant challenges for logistics globally. During the fiscal years ended June 30, 2022, multiple rounds of lockdowns, travel restrictions, mandatory cessations of business operations, or mandatory quarantines imposed in the PRC slowed or even temporarily stopped the flow of raw materials and finished goods, thus disrupting the manufacturing and distribution of goods. In particular, our warehousing and logistics business has been negatively impacted by the COVID-19 pandemic in several ways. First, the global economic slowdown due to lockdowns and other restrictive measures has resulted in reduced demand for goods, affecting logistics companies’ ability to grow. Second, the COVID-19 pandemic has caused significant disruptions to global supply chains, resulting in port congestion, container shortages, and subsequent delays that have resulted in reduced logistics efficiency. Finally, the COVID-19 pandemic has also impeded staffing, with many workers falling ill or staying home to care for family members, resulting in a labor shortage and reduced productivity in the logistics sector. Overall, the COVID-19 pandemic has had a significant impact on our business, slowing down the growth of the logistics industry and disrupting global trade and supply chains. During the three months ended September 30, 2023 and the fiscal year ended June 30, 2023, the COVID-19 pandemic did not have a material impact on our financial position and operating results.

The emergence of regional recurrences of the pandemic and the corresponding restrictive measures are beyond our control. The extent to which the COVID-19 pandemic may impact our future financial results will depend on future developments, such as new information on the effectiveness of the mitigation strategies, the duration, spread, severity, and recurrence of COVID-19 and any COVID-19 variants, the related travel advisories and restrictions, the overall impact of the COVID-19 pandemic on the global economy and capital markets, and the efficacy of COVID-19 vaccines, which may also take extended time to be widely and adequately distributed, all of which remain highly uncertain and unpredictable. Given this uncertainty, we are currently unable to quantify the expected impact of the COVID-19 pandemic on our future operations, financial condition, liquidity, and results of operations if the current situation continues. See “Risk Factors — Operational Risks — The ongoing COVID-19 pandemic has adversely impacted our business, results of operations, and cash flows.”

Key Factors Affecting Our Results of Operations

We believe the following key factors may affect our financial condition and results of operations.

Supportive Cross-Border E-Commerce Business Environment and Platform Policies that Facilitate Sales by PRC E-Commerce Merchants into the U.S. Market

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 violates Amazon’s terms of service. It is estimated that the 50,000 affected accounts caused approximately RMB100 billion in losses for the cross-border e-commerce industry in the PRC, which has discouraged a growing number of PRC e-commerce sellers from selling their merchandise to the U.S. via Amazon. 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 “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”

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Our Ability to Maintain Our Major Customers

During the three months ended September 30, 2023 and the years ended June 30, 2023 and 2022, our five largest customers accounted for approximately 56.0%, 62.0%, and 78.6% 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 “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, 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 “Risk Factors — Operational Risks — Our largest customers generate a significant portion of our revenue and our business may rely on one or more suppliers that account for more than 10% of our total purchases, and interruption in operations of such significant customers or supplier may have an adverse effect on our business, financial condition, and results of operations.”

Our Ability to Effectively Develop and Expand our Labor Force

Our ability to increase our customer base and achieve broader market acceptance will depend to a significant extent on our ability to expand our sales, marketing, and support operations, as well as our ability to recruit and retain talented personnel. We plan to continue expanding our labor force in these areas of the business and engaging additional partners. This expansion will require us to invest significant financial and other resources to attract and retain a skilled workforce. Our business will be harmed if we are unable to hire, develop, and retain skilled and qualified personnel, if our new personnel are unable to achieve desired productivity levels in a reasonable period of time, or if we are unable to retain our existing personnel.

Results of Operations for the Three Months Ended September 30, 2023 and 2022

The following table outlines our condensed consolidated statements of income for the three months ended September 30, 2023 and 2022:

 

For the
Three Months
Ended
September 30,

2023

 

For the
Three Months
Ended
September 30,

2022

   

US$

 

US$

Revenue

 

41,245,845

 

 

28,363,851

 

Costs of sales

 

36,019,413

 

 

22,911,126

 

Gross profit

 

5,226,432

 

 

5,452,725

 

     

 

   

 

Operating costs and expenses:

   

 

   

 

General and administrative

 

1,908,156

 

 

1,403,084

 

Total operating costs and expenses

 

1,908,156

 

 

1,403,084

 

     

 

   

 

Income from operations

 

3,318,276

 

 

4,049,641

 

     

 

   

 

Total other (income) expenses

 

(528,828

)

 

(300,950

)

     

 

   

 

Income before provision for income taxes

 

3,847,104

 

 

4,350,591

 

Current income tax expense

 

649,305

 

 

1,073,389

 

Deferred income tax expense

 

443,023

 

 

132,424

 

Total income tax expenses

 

1,092,328

 

 

1,205,813

 

Net income

 

2,754,776

 

 

3,144,778

 

Total comprehensive income

 

2,754,776

 

 

3,144,778

 

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Revenue, costs of sales, and gross profit margin

The following table sets forth our revenue for the three months ended September 30, 2023 and 2022:

 

For the
Three Months
Ended
September 30,
2023

 

For the
Three Months
Ended
September 30,
2022

   

US$

 

US$

Revenue

 

41,245,845

 

 

28,363,851

 

Costs of sales

 

36,019,413

 

 

22,911,126

 

     

 

   

 

Gross profit

 

5,226,432

 

 

5,452,725

 

Gross profit margin %

 

12.7

%

 

19.2

%

The following table outlines the compositions of our revenue streams:

 

For the
Three Months
Ended
September 30,
2023

 

For the
Three Months
Ended
September 30,
2022

   

US$

 

US$

Transportation services

 

29,738,530

 

20,570,401

Warehousing services

 

11,289,613

 

7,639,607

Other services

 

217,702

 

153,843

Total

 

41,245,845

 

28,363,851

Our revenue increased by $12.9 million, or 45.4%, to $41.2 million during the three months ended September 30, 2023, compared to $28.4 million for the same period in 2022. The increase was due to the following factors:

1)      Revenue from our transportation services increased by $9.2 million, or 44.6%, due to the rapid expansion of our business in 2023, as we expanded our warehouse operational capacities in California and New Jersey.

2)      Revenue from our warehousing services increased by $3.7 million, or 47.8%. As an integrated part of our one-stop warehousing and logistics services, our warehousing services also significantly increased as a result of the significant growth in our transportation services.

3)      Revenue from other services increased by $0.06 million. Other revenue mainly consisted of revenue from our customs brokerage services.

Our costs of sales 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 sales increased by $13.1 million, or 57.2%, during the three months ended September 30, 2023, compared with the same period in 2022. The increase was in line with the significant increase of our revenue.

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The following table sets forth a breakdown of our costs of sales for the three months ended September 30, 2023 and 2022:

 

For the
Three Months
Ended
September 30,
2023

 

For the
Three Months
Ended
September 30,
2022

   

US$

 

US$

Amortization

 

53,266

 

49,129

Depreciation

 

324,849

 

201,555

Rental expenses

 

6,803,740

 

3,323,832

Freight expenses

 

22,477,545

 

16,473,687

Port handling and customs fees

 

150,244

 

145,187

Salary and benefits

 

1,614,339

 

821,790

Temporary labor expenses

 

2,961,150

 

1,582,597

Warehouse expenses

 

1,388,731

 

180,442

Utilities

 

143,778

 

102,077

Other expenses

 

101,771

 

30,830

Total

 

36,019,413

 

22,911,126

Our freight expenses, rental expenses (primarily warehouse operating lease expenses), temporary labor expenses, and salary and benefits increased significantly by $6.0 million, $3.5 million, $1.4 million, and $0.8 million, respectively, during the three months ended September 30, 2023 compared to the same period in 2022. The increases in these expenses were all due to the growth of our revenue in transportation services and warehouse services.

Our overall gross profit margin decreased from 19.2% for the three months ended September 30, 2022 to 12.7% for the same period in 2023, primarily due to our expansion into Fontana, California warehouse and the temporary disruption of operations in California as inventory was relocated to a new facility. Although the profit margins of our transportation services (e.g. FedEx, ocean freight, and truck deliveries) for the three months ended September 30, 2023, remained stable or slightly higher compared to the previous year, the profit margins for our warehousing services experienced a significant decrease during the same period. This decline is attributable to increases in the rental expenses, salary and benefits, temporary labor expenses, and warehouse expenses of approximately 105%, 96%, 87%, and 670%, respectively, despite a relatively modest increase in warehousing services revenue of approximately 48%.

Operating expenses

Our operating expenses consist primarily of general and administrative expenses. The following table sets forth a breakdown of our general and administrative expenses for the three months ended September 30, 2023 and 2022:

 

For the
Three Months
Ended
September 30,
2023

 

For the
Three Months
Ended
September 30,
2022

   

US$

 

US$

Bank charges

 

57,103

 

 

8,854

 

Depreciation

 

64,080

 

 

44,360

 

Office expenses

 

565,664

 

 

277,912

 

Professional fees

 

66,175

 

 

43,111

 

Rental expenses

 

116,988

 

 

134,064

 

Repairs and maintenance

 

162,100

 

 

87,598

 

Salary and benefits

 

976,994

 

 

785,408

 

Sundries

 

47,496

 

 

17,583

 

Tax and licenses

 

44,247

 

 

8,840

 

Vehicle expenses

 

95,668

 

 

39,828

 

Other expenses

 

46,979

 

 

23,992

 

Credit loss expenses

 

(335,338

)

 

(68,466

)

Total

 

1,908,156

 

 

1,403,084

 

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Table of Contents

Our general and administrative expenses increased by $0.5 million, from $1.4 million for the three months ended September 30, 2022 to $1.9 million for the same period in 2023, representing an increase of 36.0%. The increase was due to increased administrative activities primarily related to additional employees, office supplies, and repairs and maintenance, to accommodate our business expansions.

Income Tax

Our income tax expense decreased by $0.1 million for the three months ended September 30, 2023 compared to the same period in 2022, mainly due to the decrease in profit before tax by $0.5 million during the three months ended September 30, 2023.

Net income

As a result of the foregoing, our net income for the three months ended September 30, 2023 was $2.8 million, compared with the net income of $3.1 million for the same period in 2022, representing a decrease by $0.3 million.

Results of Operations for the Fiscal Years Ended June 30, 2023 and 2022

The following table outlines our condensed consolidated statements of income for the fiscal years ended June 30, 2023 and 2022:

 

For the
Fiscal
Year
Ended

June 30,
2023

 

For the
Fiscal
Year
Ended

June 30,
2022

   

US$

 

US$

Revenue

 

135,044,436

 

 

56,030,258

 

Costs of sales

 

109,310,993

 

 

49,701,008

 

Gross profit

 

25,733,443

 

 

6,329,250

 

     

 

   

 

Operating costs and expenses:

   

 

   

 

General and administrative

 

7,799,116

 

 

4,077,765

 

Total operating costs and expenses

 

7,799,116

 

 

4,077,765

 

Income (expense) from operations

 

17,934,327

 

 

2,251,485

 

     

 

   

 

Other (income) expenses:

   

 

   

 

Other (income)

 

(1,408,634

)

 

(698,638

)

Finance costs

 

60,419

 

 

37,140

 

Loss on disposal of assets

 

 

 

90,580

 

Total other (income) expenses

 

(1,348,215

)

 

(570,918

)

Income (loss) before provision for income taxes

 

19,282,542

 

 

2,822,403

 

     

 

   

 

Current income tax (recovery) expense

 

4,980,481

 

 

486,709

 

Deferred income tax (recovery) expense

 

380,523

 

 

354,600

 

Total income taxes expenses

 

5,361,004

 

 

841,309

 

Net income

 

13,921,538

 

 

1,981,094

 

Total comprehensive income

 

13,921,538

 

 

1,981,094

 

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Table of Contents

Revenue, costs of sales, and gross profit margin

The following table sets forth our revenue for the fiscal years ended June 30, 2023 and 2022:

 

For the
Fiscal
Year
Ended

June 30,
2023

 

For the
Fiscal
Year
Ended

June 30,
2022

   

US$

 

US$

Revenue

 

135,044,436

 

 

56,030,258

 

Costs of sales

 

109,310,993

 

 

49,701,008

 

     

 

   

 

Gross profit

 

25,733,443

 

 

6,329,250

 

Gross profit margin %

 

19.1

%

 

11.3

%

Our revenue was primarily derived from transportation services and warehousing services. The following table outlines the compositions of our revenue streams:

 

For the
Fiscal
Year
Ended

June 30,
2023

 

For the
Fiscal
Year
Ended

June 30,
2022

   

US$

 

US$

Transportation services

 

97,072,485

 

40,445,079

Warehousing services

 

37,304,824

 

15,218,801

Other services

 

667,127

 

366,378

Total

 

135,044,436

 

56,030,258

Our revenue increased by $79.0 million, or 141.0%, to $135.0 million during the fiscal year ended June 30, 2023, compared to $56.0 million for the fiscal year ended June 30, 2022. The increase was due to the following factors:

1)      Revenue from our transportation services increased by $56.6 million, or 140.0%, due to the rapid expansion of our business during the fiscal year ended June 30, 2023, as we expanded our warehouse operational capacities in California and New Jersey.

The rapid expansion of our transportation services was reflected in increases in service volume, service coverage, and the number of major customers. For most of the year ended June 30, 2022, we operated only one warehouse each in California, Texas, and New Jersey. Although we added a fourth warehouse location in Walnut, California in January 2022, the first quarter of 2022 was focused on optimizing it to reach its full operational capacity. In addition to increased warehouse space and processing volume, these expansions also allowed for the growth of newer customers. Prior to the expansions, many new, promising customers were unable to grow, due to older, established customers already occupying warehouse space. As a result of the expansions, the number of our total shipment orders increased from approximately 1.8 million for the fiscal year ended June 30, 2022 to approximately 3.0 million for the fiscal year ended June 30, 2023. As of June 30, 2023, the aggregate square footage of our warehouses increased over 36% compared to that as of June 30, 2022.

During the year ended June 30, 2023, approximately $79.0 million, or 141%, of revenue growth compared to the same period in 2022, was attributable to warehouses that were newly added during the year ended June 30, 2023 or to the Walnut warehouse, which achieved full operational capacity in the year ended June 30, 2022.

2)      Revenue from our warehousing services increased by $22.1 million, or 145.1%. As an integrated part of our one-stop warehousing and logistics services, our warehousing services also significantly increased as a result of the significant growth in our transportation services. As such, we established four new warehouses in the year ended June 30, 2023 to support the expansion of our transportation services.

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Table of Contents

Warehousing services cover all of the operations related to receiving goods, unloading and shelving inventory, storage and inventory management, and processing orders for shipment. These services are directly related to and influenced by order volume and the efficiency of warehouse operations. Factors influencing warehousing service income are similar to factors influencing our transportation services, including the increases in service volume, service coverage, and the number of major customers.

With the expansion of warehouse locations in California on July 1, 2022 and March 1, 2023, and the expansion of warehouse locations in New Jersey on April 1, 2023 and May 1, 2023, our service capacity was significantly increased to meet customer demand. Storage income rose as a direct result of the increased total warehouse square footage and order processing income from preparing outbound orders naturally rose and order volume increased.

3)      Revenue from other services increased by $0.3 million. Other revenue in the years ended June 30, 2023 and 2022 mainly consisted of revenue from our customs brokerage services.

Our costs of sales mainly represented the costs of freight 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 sales increased by $59.6 million, or 120%, in the year ended June 30, 2023, compared with the year ended June 30, 2022. The increase was in line with the significant increase of our revenue.

The following table sets forth a breakdown of our costs of sales for the fiscal years ended June 30, 2023 and 2022:

 

For the
Fiscal
Year Ended
June 30,
2023

 

For the
Fiscal
Year
Ended

June 30,
2022

   

US$

 

US$

Amortization

 

204,457

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