Armlogi Holding Corp. SEC 10-K Report

Armlogi Holding Corp., a key player in the warehousing and logistics industry, has released its annual 10-K report, providing a comprehensive overview of its financial and operational performance for the fiscal year. The report highlights significant growth in revenue, strategic expansions, and the challenges faced in a competitive and evolving market.

Financial Highlights

Revenue: $190.4 million, increased by $23.4 million or 14.0% from the previous year due to the addition of new warehouse locations and increased shipment volume.

Gross (loss) profit: $(3.0) million, a decrease from a gross profit of $18.1 million in the previous year, primarily due to increased lease expenses, temporary labor expenses for new warehouses, and UPS expenses.

(Loss) Income from operations: $(17.7) million, compared to an income of $8.1 million in the previous year, reflecting higher operating costs and expenses.

Net (loss) income: $(15.3) million, a decrease from a net income of $7.4 million in the previous year, driven by increased costs and a decline in gross profit margin.

Basic & diluted net (loss) earnings per share: $(0.37), compared to $0.19 in the previous year, reflecting the overall decline in net income.

Business Highlights

Revenue Segments: The company provides warehousing and logistics services, with revenue primarily generated from transportation services, warehousing services, and other services such as customs brokerage. Transportation services accounted for the largest portion of revenue, followed by warehousing services.

Geographical Performance: The company operates ten warehouses across the United States, strategically located near major ports and customer bases, including the West Coast, Midwest, and East Coast. A significant portion of revenue is generated from PRC-based customers, highlighting the company's strong presence in the Chinese market.

Sales Units: The company experienced an increase in shipment volume due to the addition of new warehouse locations, contributing to the growth in transportation services revenue.

New Product Launches: In January 2023, the company launched international ocean freight services, expanding its logistics offerings and enhancing supply chain efficiency for customers.

New Production Launches: The company expanded its operations by opening two new warehouses in the fiscal year ended June 30, 2025, including a new facility in Illinois, which required additional labor and resources.

Future Outlook: The company plans to expand its customer base in China and Southeast Asia, including Vietnam, Thailand, Indonesia, and the Philippines, as well as Mexico. It also aims to enhance supply chain efficiency by expanding the breadth and depth of its solutions and services, and further invest in supply chain technologies to drive sustainable growth.

Strategic Initiatives

Standby Equity Purchase Agreement (SEPA): The company has entered into a SEPA with YA II PN, Ltd., allowing it to sell up to $50 million of its common stock, providing flexibility in raising capital.

Capital Management: The company issued convertible notes with a principal amount of up to $21 million, subject to a 10% original issue discount, to support its capital needs. It also engaged in equity financing activities, issuing shares under the SEPA to raise $950,000. The company has been actively managing its lease obligations, with significant operating and finance lease liabilities for its facilities and equipment.

Future Outlook: The company anticipates that its current cash, along with cash generated from operating and financing activities, will be sufficient to meet its working capital requirements and capital expenditures for at least the next 12 months. It plans to continue leveraging the SEPA for additional capital as needed and will focus on optimizing its cost structure to improve profitability.

Challenges and Risks

Economic, Political, and Market Risks: The company faces significant competition in the U.S. warehousing and logistics market, which could lead to reduced margins and loss of market share. The ongoing U.S.-China trade conflicts and potential changes in trade policies pose risks to the company's revenue, as a substantial portion of its business is derived from PRC customers. Additionally, geopolitical tensions, such as the Russia-Ukraine conflict, could disrupt global markets and supply chains, adversely affecting the company's operations.

Operational Risks: The company relies heavily on third-party logistics providers, such as FedEx and UPS, for transportation services. Any disruptions in these services could negatively impact the company's ability to meet customer demands. Furthermore, the company is exposed to risks related to labor actions, such as port strikes, which could disrupt the U.S. transportation network and affect the company's business.

Regulatory Risks: The company is subject to numerous U.S. federal and state regulations applicable to the warehousing and logistics industry. Non-compliance with these regulations could result in penalties and disruptions to the company's operations. Additionally, changes in PRC government policies, such as restrictions on currency convertibility, could impact the company's ability to receive payments from PRC customers.

New and Emerging Risks: The company is facing new challenges due to inflationary pressures, which have led to increased costs for transportation, commodities, and labor. These pressures could impact the company's profitability if it is unable to pass on the increased costs to customers. Additionally, the potential for a recession could reduce consumer spending power in the U.S., affecting demand for the company's services.

Management Strategies: Management acknowledges the challenges posed by geopolitical tensions and trade conflicts, and is focused on diversifying its customer base and expanding its geographic footprint to mitigate these risks. The company plans to expand its warehousing network in key U.S. markets and explore opportunities in Southeast Asia and Mexico to reduce reliance on PRC customers.

Market Risks: The company is exposed to market risks related to foreign currency exchange rate fluctuations, which could impact its financial results. Additionally, the company faces risks associated with changes in interest rates and capital costs, which could affect its ability to finance operations and growth initiatives.

SEC Filing: Armlogi Holding Corp. [ BTOC ] - 10-K - Sep. 25, 2025