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Leases

9 Months Ended

Mar. 31, 2026

7. Leases

As of March 31, 2026, the Company had operating and finance leases for office space, warehouse space, and forklifts. Lease terms expire at various dates from June 2026 through November 2034 with options to renew for varying terms at the Company’s sole discretion. The Company has not included these options to extend or terminate in the calculation of ROU assets or lease liabilities, as there is no reasonable certainty, that these options will be exercised. The Company had certain sublease contracts and recognized US$272,500 and US$1,093,104 lease income, recorded in other income, during the nine months ended March 31, 2026 and 2025, respectively.

During the nine months ended March 31, 2026, the Company recognized additional operating lease liabilities of US$4,605,476, as a result of entering into two new operating lease agreements. The ROU assets were recognized at the discount rate of 10.35%, resulting in US$4,605,476 on the commencement date.

During the nine months ended March 31, 2026, the Company recognized additional finance lease liabilities of US$1,137,192. The ROU assets were recognized at the discount rate of 9.0%, resulting in US$1,137,192 on the commencement date.

The components of lease expenses were as follows:

	For the nine months ended March 31, 2026		For the nine months ended March 31, 2025
	US$		US$
Operating:
Operating lease expenses		27,721,236		25,279,522

Financing:
Accretion		101,588		22,457
Amortization – included in costs of services		473,985		108,483
Total		575,573		130,940

Cash paid for amounts included in the measurement of liabilities:
Operating cash flows used in operating leases		23,525,110		19,181,671
Operating cash flows used in finance leases		101,588		22,457
Financing cash flows used in finance leases		458,892		108,935
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases		4,605,476		28,685,914
Finance leases		1,137,192		-
Increase (decrease) in right-of-use assets due to remeasurement of lease terms		63,896		(884,394	)

The Company recorded operating lease expenses of US$9,315,783 and US$9,421,215 during the three months ended March 31, 2026 and 2025, respectively. Specifically, US$9,122,572 and US$8,337,256 of operating lease expenses were recorded in costs of services for the three months ended March 31, 2026 and 2025, respectively. US$193,211 and US$1,083,959 of operating lease expenses were recorded in general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively.

The Company recorded operating lease expenses of US$27,721,236 and US$25,279,522 during the nine months ended March 31, 2026 and 2025, respectively. Specifically, US$26,715,880 and US$23,539,448 of operating lease expenses were recorded in costs of services for the nine months ended March 31, 2026 and 2025, respectively. US$1,005,356 and US$1,343,420 of operating lease expenses were recorded in general and administrative expenses for the nine months ended March 31, 2026 and 2025, respectively. US$Nil and US$396,654 of operating lease expenses were recorded in other expenses for the nine months ended March 31, 2026 and 2025, respectively.

As of March 31, 2026, maturities of lease liabilities for each of the following fiscal years ending June 30 and thereafter were as follows:

	Operating			Finance
	US$			US$
2026		8,723,297			209,022
2027		38,396,649			745,248
2028		38,851,414			510,186
2029		26,251,319			155,590
2030 and beyond		41,226,447			8,090
Total minimum lease payment		153,449,126			1,628,136
Less: imputed interest		(34,275,417	)		(165,817	)
Total lease liabilities		119,173,709			1,462,319
Less: current potion		(35,351,135	)		(759,787	)
Non-current portion		83,822,574			702,532

Weighted average remaining lease term:

Operating leases			4.64 years
Finance leases			2.28 years

Weighted average discount rate:

Operating leases			10.35	%
Finance leases			9.49	%