| RELATED PARTY TRANSACTIONS |
NOTE
12. RELATED PARTY TRANSACTIONS
| a) | The table below sets forth the major related parties and their relationships with the Company: |
| Name of related parties and Relationship with the Company | | - Tuanfang Liu is the Co-Chief Executive Officer and Chairman of the Company. | | - Jiangyan Zhu is the wife of Tuanfang Liu and a director of the Company. | | - Eigate (Hong Kong) Technology Co., Limited (“Eigate”) is a wholly-owned and controlled by the Company’s Chairman. | | - Aspire Global is a company controlled by the Chairman of the Company. | | - Aspire International Hong Kong Limited is a wholly-owned subsidiary of Aspire Global. | | - Shenzhen Yi Jia, a Chinese company that is 95% owned by the Company’s Chairman and 5% by the Chairman’s cousin. | | - IKE Tech LLC, a joint venture that the Company has 40% membership interests. |
| b) | Tuanfang Liu is also Aspire Global’s chief executive officer and a director of both the Company and Aspire Global, and his wife, Jiangyan Zhu, is also a director of both companies. As of June 30, 2025, Mr. Liu and Ms. Zhu beneficially own 66.5% and 5.0%, respectively, of the outstanding shares of Aspire Global. As of June 30, 2025, Mr. Liu and Ms. Zhu beneficially own 58.1% and 4.4%, respectively, of the outstanding shares of the Company. |
| c) | For both years ended June 30, 2025 and 2024, the majority of the Company’s tobacco and cannabis vaping products were purchased from Shenzhen Yi Jia. As of June 30, 2025 and 2024, the accounts payable – related party was $52,420,256 and $67,046,472, respectively, which was payable to Shenzhen Yi Jia. There are no fixed payment terms regarding these balances and they are classified as current liabilities. For the years ended June 30, 2025 and 2024, the purchases from Shenzhen Yi Jia were $94,657,848 and $91,324,614, respectively. |
| d) |
The balances due to a related party at June 30, 2025 and 2024 represent amounts due to Shenzhen Yi Jia of $25,000,000 and $0, respectively. The balance of $25,000,000 as of June 30, 2025 was reclassified from accounts payable – related party as Shenzhen Yijia agreed not to seek repayment of this balance for twelve months starting from September 30, 2025. The balances are non-interest bearing and unsecured. |
| e) | As of June 30, 2025 and 2024, the Company had total accounts receivable of $75,147 and $17,280 due from IKE. For the years ended June 30, 2025 and 2024, the Company recorded $109,349 and $0 in other income from IKE from charging administrative fees. |
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