BTOC Amlogi Holding Corporation

Armlogi Holding Corp. (“Armlogi” or the “Company”) (Nasdaq: BTOC), a U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions related to warehouse management and order fulfillment, today announced financial results for its fiscal 2025 second quarter and first half ended December 31, 2024. Today, the Company filed its Quarterly Report on Form 10-Q with the U.S. Securities and Exchange Commission.

Financial Results for the Three Months Ending December 31, 2024:

• Total revenue increased by $9.1 million, or 21.8%, to $51.1 million during the three months ended December 31, 2024, compared to $42.0 million for the same period in 2023.
  • Revenue from our transportation services increased by $6.2 million, or 20.8%, to $36.1 million during the three months ended December 31, 2024, compared with $29.9 million during the three months ended December 31, 2023, due to the addition of new warehouse locations, which has enabled an increase in shipment volume compared to the same period in 2023. This segment comprises reselling third-party carrier services to our customers.
  • Revenue from our warehousing services increased by $3.1 million, or 25.7%, to $15.0 million during the three months ended December 31, 2024, compared with $11.9 million during the three months ended December 31, 2023, driven by the addition of new warehouses acquired in the last fiscal quarter. This segment comprises inventory management and storage offerings.
  • Revenue from other services decreased by $0.2 million, or 96%. This segment is primarily comprised of customs brokerage services.
• Costs of sales increased by $16.3 million, or 47.6%, to $50.7 million during the three months ended December 31, 2024, compared with $34.3 million during the same period in 2023. The increase was driven by a rise in freight expenses due to higher UPS shipping charges and increases in lease expenses, employee salary and benefits, and temporary labor costs, as we expanded our warehouse and operations team to support growth.

• Our freight expenses, lease expenses (primarily warehouse operating lease expenses), temporary labor expenses, warehouse expenses, and salary and benefits increased by $8.3 million, $2.7 million, $2.9 million, $1.2 million, and $0.7 million, respectively, during the three months ended December 31, 2024, compared to the same period in 2023. The increases in lease expenses were due to the additional operating leases acquired in the last and current fiscal quarter. The increases in freight expenses were due to the increase in UPS expenses. The increases in temporary labor expenses, warehouse expenses, and salary and benefits were due to the expansion of the warehouse operations.

• Our overall gross profit margin decreased from 18.3% for the three months ended December 31, 2023, to 0.9% for the same period in 2024, primarily due to the increase in the surcharge by UPS and the decreases in customer order volume, as well as some of the recently leased warehouses that are not fully utilized.

• Our net loss for the three months ended December 31, 2024, was $1.7 million, compared with the net income of $3.7 million for the same period in 2023, representing a decrease of $5.4 million.

Financial Results for the Six Months Ending December 31, 2024:

• Total revenue increased by $10.4 million, or 12.5%, to $93.6 million during the six months ended December 31, 2024, compared to $83.2 million for the same period in 2023.
  • Revenue from our transportation services increased by $5.0 million, or 8.3%, to $64.6 million during the six months ended December 31, 2024, compared to $59.6 million during the six months ended December 31, 2023, due to the addition of new warehouse locations which has enabled an increase in shipment volume compared to the same period in 2023.
  • Revenue from our warehousing services increased by $5.7 million, or 24.7%, to $29.0 million during the six months ended December 31, 2024, compared to $23.2 million during the six months ended December 31, 2023, driven by the addition of new warehouses acquired in the last fiscal quarter.
  • Revenue from other services decreased by $0.4 million, or 93.7%. Other revenue mainly consisted of revenue from our customs brokerage services.
• Costs of sales increased by $26.4 million, or 37.5%, to $96.7 million during the six months ended December 31, 2024, compared with $70.3 million in the same period in 2023. The increase was driven by a rise in freight expenses due to higher UPS shipping charges and increases in lease expenses, employee salary and benefits, and temporary labor costs as we expanded our warehouse and operations team to support growth.

• Our freight expenses, lease expenses (primarily warehouse operating lease expenses), temporary labor expenses, warehouse expenses, and salary and benefits increased by $11.5 million, $4.8 million, $5.7 million, $1.8 million and $1.6 million, respectively, during the three months ended December 31, 2024, compared to the same period in 2023. The increases in lease expenses were due to the additional operating leases acquired in the last and current fiscal quarter. The increases in freight expenses were due to the increase in UPS expenses. The increases in temporary labor expenses, warehouse expenses, and salary and benefits were due to the expansion of the warehouse operations.

• Our overall gross profit margin decreased from 15.5% for the six months ended December 31, 2023 to 3.3% for the same period in 2024, primarily due to the increase in the surcharge by UPS and the decreases in customer order volume, as well as some of the recently leased warehouses that are not fully utilized.

• Our net loss for the six months ended December 31, 2024, was $6.3 million, compared with the net income of $6.5 million for the same period in 2023, representing a decrease of $12.8 million.

Liquidity

As of December 31, 2024, we had a balance of cash and restricted cash of $7.4 million, compared with a balance of $10.0 million as of June 30, 2024.

• Net cash used in operating activities was $9.2 million for the six months ended December 31, 2024, compared to net cash provided by operating activities of $3.5 million for the same period in 2023, representing a $12.8 million decrease in the net cash inflow provided by operating activities.

• Net cash used in investing activities was $1.0 million for the six months ended December 31, 2024, primarily attributable to $2.1 million cash used for the purchase of property and equipment, $1.0 million cash used for loans extended to others, and $2.0 million proceeds received from loan repayments.

• Net cash provided from financing activities was $7.7 million for the six months ended December 31, 2024, which was primarily attributable to the net effects of: (i) $0.4 million lent to related parties; (ii) $8.1 million of proceeds from advance payment from the Standby Equity Purchase Agreement (described below).

Operational Highlights

Warehouse Expansion & Facilities

• Expanded trucking department through increased staffing and equipment to serve major clients, including Amazon

• Leased a new 60,000 sq ft warehouse in City of Industry, CA, to support trucking operations and partnership with Massimo Group.

• Opened SAV1 warehouse at Port of Savannah, which quickly became the Company's busiest facility with 70% occupancy

• Leased 480,000 sq ft warehouse in Ontario, CA, with 46 dock doors and advanced logistics technology

Technology & Operations

• Incorporated a fleet of electric forklifts across California warehouses as part of the Low Carbon Fuel Standard program

• Implemented PortPro transportation management software for trucking operations

• Enhanced warehousing management system to optimize inventory management and warehouse operations

• Upgraded application programming interface to version 3.5 and integrated with Temu platform, handling over 3,000 orders daily

Financing Arrangements

• Entered into a $50 million Standby Equity Purchase Agreement (SEPA) with YA II PN, Ltd and up to $21 million in convertible promissory notes, closing two $5 million tranches of pre-paid advances under the SEPA

Management Commentary

Aidy Chou, Chairman and Chief Executive Officer of Armlogi, commented, “While our significant warehouse expansion and enhanced operational capabilities demonstrate our commitment to long-term growth, we experienced challenges this quarter from increased UPS surcharges and underutilization of our newer facilities. We expect the expansion of our footprint to 3.5 million square feet and our presence in key logistics hubs to position us well for the future, but we intend to focus intently on optimizing our operations and improving facility utilization rates in the near term. Our investments in electric fleets, warehouse management systems, and new transportation partnerships underscore our commitment to sustainable, technology-driven growth. Looking ahead, we anticipate taking decisive steps to address our margin compression while continuing to build the infrastructure needed to serve our growing customer base.”

Conference Call & Audio Webcast

Armlogi’s management team will hold an earnings conference call at 8:00 AM Pacific Time (11:00 AM Eastern Time) on Friday, February 14, 2025, to discuss the Company’s financial results and provide an overview of the Company’s operations. Aidy Chou, Chairman and Chief Executive Officer, and Scott Hsu, Chief Financial Officer, will lead the conference call with other company executives available to answer questions.

To access the call by phone, please dial 1-800- 445-7795 (international callers, please dial 1-785-424-1699) approximately 10 minutes before the start of the call. Refer to conference ID: ARMLOGI. **NOTE: THIS CONFERENCE ID WILL BE REQUIRED FOR ENTRY

A live audio conference call webcast will be available online at https://viavid.webcasts.com/starthere.jsp?ei=1707817&tp_key=62a55be146.

About Armlogi Holding Corp.

Armlogi Holding Corp., based in Walnut, CA, is a U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment. The Company caters to cross-border e-commerce merchants looking to establish overseas warehouses in the U.S. market. With eleven warehouses covering over three and a half million square feet, the Company offers comprehensive one-stop warehousing and logistics services. The Company’s warehouses are equipped with facilities and technology for handling and storing large and bulky items. For more information, please visit www.armlogi.com.

Safe Harbor StatementThis press release contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us.

Company Contact:info@armlogi.com

Investor Relations Contact:Matthew Abenante, IRCPresidentStrategic Investor Relations, LLC Tel: 347-947-2093Email: matthew@strategic-ir.com

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ARMLOGI HOLDING CORP.CONDENSED CONSOLIDATED BALANCE SHEETSAS OF DECEMBER 31, 2024 AND JUNE 30, 2024(US$, except share data, or otherwise noted)
	December 31,2024				June 30,2024
	US$				US$
	Unaudited				Audited
Assets
Current assets
Cash		5,118,815				7,888,711
Accounts receivable and other receivable, net		31,204,112				25,465,044
Other current assets		1,905,457				1,624,611
Prepaid expenses		879,768				1,129,435
Loan receivables		3,812,293				1,877,131
Total current assets		42,920,445				37,984,932
Non-current assets
Restricted cash		2,259,932				2,061,673
Long-term loan receivables		—				2,908,636
Property and equipment, net		11,796,130				11,010,407
Intangible assets, net		75,051				92,708
Right-of-use assets – operating leases		105,512,506				111,955,448
Right-of-use assets – finance leases		235,447				309,496
Other non-current assets		915,199				711,556
Total assets		163,714,710				167,034,856
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Current liabilities
Accounts payable and accrued liabilities		5,533,126				7,502,339
Contract liabilities		1,248,844				276,463
Income taxes payable		—				57,589
Due to related parties		—				350,209
Accrued payroll liabilities		389,070				405,250
Commitment fee payable		250,000				—
Convertible notes		7,664,657				—
Operating lease liabilities – current		25,021,785				24,216,446
Finance lease liabilities – current		117,500				155,625
Total current liabilities		40,224,982				32,963,921
Non-current liabilities
Operating lease liabilities – non-current		90,172,693				93,126,092
Finance lease liabilities – non-current		135,441				169,683
Deferred income tax liabilities		—				1,536,455
Total liabilities		130,533,116				127,796,151
Commitments and contingencies
Stockholders’ equity
Common stock, US$0.00001 par value, 100,000,000 shares authorized, 41,677,147 and 41,634,000 issued and outstanding as of December 31 and June 30, 2024, respectively		417				416
Additional paid-in capital		15,718,863				15,468,864
Retained earnings		17,462,314				23,769,425
Total stockholders’ equity		33,181,594				39,238,705
Total liabilities and stockholders’ equity		163,714,710				167,034,856

ARMLOGI HOLDING CORP.CONDENSED CONSOLIDATED STATEMENTSOF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023(US$, except share data, or otherwise noted)
	Three MonthsEndedDecember 31,2024				Three MonthsEndedDecember 31,2023				Six MonthsEndedDecember 31,2024				Six MonthsEndedDecember 31,2023
	US$				US$				US$				US$
	Unaudited				Unaudited				Unaudited				Unaudited
Revenue		51,143,682				42,004,083				93,625,578				83,249,928
Costs of sales		50,660,690				34,326,234				96,749,376				70,345,647
Gross profit (loss)		482,992				7,677,849				(3,123,798	)			12,904,281
Operating costs and expenses:
General and administrative		2,659,156				2,919,547				6,327,981				4,827,703
Total operating costs and expenses		2,659,156				2,919,547				6,327,981				4,827,703
Income (loss) from operations		(2,176,164	)			4,758,302				(9,451,779	)			8,076,578
Other (income) expenses:
Other income, net		(564,656	)			(446,179	)			(1,770,321	)			(988,394	)
Loss on disposal of assets		43,625				—				43,625				—
Finance costs		79,989				13,351				88,997				26,738
Total other (income) expenses		(441,042	)			(432,828	)			(1,637,699	)			(961,656	)
Income (loss) before provision for income taxes		(1,735,122	)			5,191,130				(7,814,080	)			9,038,234
Current income tax expense		—				1,229,121				—				1,878,426
Deferred income tax (recovery) expense		(75,882	)			217,184				(1,506,969	)			660,207
Total income tax (recovery) expenses		(75,882	)			1,446,305				(1,506,969	)			2,538,633
Net income (loss)		(1,659,240	)			3,744,825				(6,307,111	)			6,499,601
Total comprehensive (loss) income		(1,659,240	)			3,744,825				(6,307,111	)			6,499,601
Basic & diluted net (loss) earnings per share		(0.04	)			0.09				(0.15	)			0.16
Weighted average number of shares of common stock-basic and diluted		41,642,442				40,000,000				41,638,221				40,000,000

ARMLOGI HOLDING CORP.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE SIX MONTHS ENDED DECEMBER 31, 2024 AND 2023 (UNAUDITED)(US$, except share data, or otherwise noted)
	For TheSix MonthsEndedDecember 31,2024				For TheSix MonthsEndedDecember 31,2023
	US$				US$
	Unaudited				Unaudited
Cash Flows from Operating Activities:
Net income (loss)		(6,307,111	)			6,499,601
Net loss from disposal of fixed assets		43,625				6,895
Depreciation of property and equipment and right-of-use financial assets		1,290,471				919,273
Amortization		17,659				17,659
Non-cash operating leases expense		4,358,758				3,155,637
Accretion of convertible note		72,184				—
Current estimated credit loss		228,363				(24,563	)
Deferred income taxes		(1,536,455	)			660,207
Interest income		(63,233	)			(54,374	)
Changes in working capital:
Accounts receivable and other receivables		(5,967,431	)			(7,651,253	)
Other current assets		(280,846	)			(358,368	)
Other non-current assets		(203,643	)			—
Prepaid expenses		249,667				652,335
Accounts payable & accrued liabilities		(1,969,214	)			(2,022,280	)
Contract liabilities		972,381				(244,403	)
Income tax payable		(57,589	)			1,706,868
Accrued payroll liabilities		(16,180	)			231,701
Net changes in derecognized ROU and operating lease liabilities		(63,874	)			—
Net cash (used in) provided from operating activities		(9,232,468	)			3,494,935
Cash Flows from Investing Activities:
Purchase of property and equipment		(2,070,770	)			(2,948,594	)
Loan disbursement		(1,000,000	)			(1,000,000	)
Proceeds from loan repayments		2,036,705				—
Proceeds from sale of property and equipment		25,000				—
Net cash used in investing activities		(1,009,065	)			(3,948,594	)
Cash Flows from Financing Activities:
Proceeds received from related parties		—				1,012,353
Deferred issuance costs for initial public offering		—				(282,742	)
Repayment to related parties		(350,209	)			—
Net proceeds from Standby Equity Purchase		8,092,473				—
Repayment of finance lease liabilities		(72,368	)			(83,196	)
Capital contributions from stockholders		—				265,000
Net cash provided by financing activities		7,669,896				911,415
Net increase (decrease) in cash and restricted cash		(2,571,637	)			457,756
Cash and restricted cash, beginning of year		9,950,384				6,558,099
Cash and restricted cash, end of six months periods		7,378,747				7,015,855
The following table provides a reconciliation of cash and restricted cash reported within the Consolidated Balance Sheets that equal the totals of the same amounts shown in the Consolidated Statements of Cash Flows:
Cash		5,118,815				4,954,182
Restricted cash – non-current		2,259,932				2,061,673
Total cash and restricted cash shown in the Consolidated Balance Sheet		7,378,747				7,015,855
Supplemental Disclosure of Cash Flows Information:
Cash paid for income tax		(87,074	)			(171,559	)
Cash paid for interest		(16,813	)			(26,738	)
Non-cash Transactions:
Right-of-use assets acquired in exchange for operating lease liabilities		6,184,333				37,607,178
Decrease in right-of-use assets due to remeasurement of lease terms		884,394				—
Shares issued to settle commitment fee		250,000				—