NOTE 18 — STOCKHOLDERS’ EQUITY

Common Stocks

The Company was incorporated under the laws of the State of Nevada on August 28, 2023. In accordance with the Company’s Articles of Incorporation, the Company is authorized to issue 50,000 shares of common stock with par value of $0.0001. 50,000 shares of common stocks of the Company were issued on August 28, 2023.

On October 25, 2023, the Company amended its Articles of Incorporation to increase its number of authorized common stocks from 50,000 shares to 200,000,000 shares.

On March 29, 2024, a 120-for-1 share split was conducted by the Company. After the share split, the issued share capital of the Company consists of $600 divided into 6,000,000 common shares, par value of $0.0001 each.

On July 1, 2024, the Company closed its IPO of 1,500,000 shares of its common stock at an IPO price of $4.50 per share for aggregate gross proceeds of approximately $6.75 million from the offering. The total net proceeds to the Company from the IPO, after deducting discounts, expense allowance, and issuance expenses of a total of $1.0 million, were approximately $5.35 million.

Private offering

On June 24, 2025, the Company entered into a Securities Purchase Agreement with certain investors for the issuance and sale of an aggregate of 3,000,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $1.00 per share, resulting in total gross proceeds of approximately $3,000,000. Upon closing of the private offering, the Company issued 3,000,000 common shares and recorded as an increase to common stock of $300 and additional paid-in capital of $2,999,700 on the consolidated balance sheet.

On July 16, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 2,000,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.75 per share, resulting in total gross proceeds of approximately $1,500,000. Upon closing of the private offering, the Company issued 2,000,000 common shares and recorded as an increase to common stock of $200 and additional paid-in capital of $1,499,800 on the consolidated balance sheet.

On August 4, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 1,807,229 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.83 per share, resulting in total gross proceeds of approximately $1,500,000. Upon closing of the private offering, the Company issued 1,807,229 common shares and recorded as an increase to common stock of $181 and additional paid-in capital of $1,499,819 on the consolidated balance sheet.

On December 15, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 8,400,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.70 per share, resulting in total gross proceeds of approximately $5,880,000. Upon closing of the private offering, the Company issued 8,400,000 common shares. As of June 30, 2026, a total of $1,427,769 of the gross proceeds related to these shares had not yet been received by the Company. Therefore, the Company recorded as an increase to common stock of $840, additional paid-in capital of $5,879,160 and subscription receivable of $1,427,769 on the consolidated balance sheet in connection with this private offering. 

On December 29, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 5,600,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.14 per share, resulting in total gross proceeds of approximately $784,000. Upon closing of the private offering, the Company issued 5,600,000 common shares and recorded as an increase to common stock of $560 and additional paid-in capital of $783,440 on the consolidated balance sheet. The issuance price was agreed upon through commercial negotiations between the Company and the investors, and this overall issuance has been ratified by the 2026 Annual Meeting of Stockholders held on February 12, 2026.

Convertible debts conversion

During the year ended June 30, 2026, holders of the Company’s convertible notes elected to convert an aggregate principal amount of $661,536 into 820,330 shares of the Company’s common stock pursuant to the original terms of the note agreements. The conversions resulted in a reduction of the carrying amount of convertible debt by $512,733, which was reclassified to stockholders’ equity. Accordingly, the Company recorded an increase to common stock of $82 (reflecting the par value of shares issued) and an increase to additional paid-in capital of $512,651.

Common Shares Issued for Service

On July 4, 2025, the Company signed a consulting agreement (the “Consulting Agreement”) with FirsTrust China Ltd. (“FirsTrust”) to provide professional consulting and advisory services to the Company for twelve months from July 7, 2025 in exchange for 600,000 shares of the Company’s common stock.

On July 4, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with SNC Investment Group Limited (“SNC”), under which SNC will provide strategic planning and corporate communication services to the Company for a twelve-month period beginning August 7, 2025. As compensation for these services, the Company agreed to issue 600,000 shares of its common stock in settlement of the service fees.

On July 21, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with China PINX International Investment Group Limited (“China PINX”) to provide merger and acquisition consulting and other related service to the Company for a period from July 21, 2025 to June 30, 2026. Upon signing the agreement, the Company issued 500,000 restricted common shares, valued at the closing price on the issuance date.

On August 1, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with Jolly Good River Group Limited (“Jolly”) to provide strategic consulting services to the Company for a twelve-month period beginning August 1, 2025. As compensation for these services, the Company agreed to issue 600,000 shares of its common stock in settlement of an annual service fee.

On December 13, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with Nan Zhang to provide management consulting and advisory services to the Company for a twelve-month period beginning December 13, 2025. As compensation for these services, the Company agreed to issue 750,000 shares of its common stock and pay $200,000 cash in settlement of the service fee.

On December 15, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with Zhixin Li to provide business expansion, merger and acquisition consulting services to the Company for a twelve-month period beginning December 15, 2025. As compensation for these services, the Company agreed to issue 750,000 shares of its common stock in settlement of the service fee.

On December 23, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with Shengrong Venture Limited (“Shengrong”) to provide general operating advisory services to the Company for a twelve-month period beginning December 23, 2025. As compensation for these services, the Company agreed to issue 500,000 shares of its common stock in settlement of the service fee.

On December 23, 2025, the Company entered into a consulting agreement (the “Consulting Agreement”) with SNC Investment Group Limited (“SNC”) to provide capital markets advisory services and guidance to the Company for a twelve-month period beginning December 23, 2025. As compensation for these services, the Company agreed to issue 1,000,000 shares of its common stock in settlement of the service fees.

For the year ended June 30, 2026, the Company issued 5,300,000 shares of its common stock in connection with consulting agreements. In connection with these issuances, the Company recognized consulting expense of $3,254,580, recorded prepaid consulting services of $1,168,120, and increased additional paid-in capital by $4,422,170 during the period.

As of June 30, 2026 and 2025, 34,427,559 and 10,500,000 common shares were issued and outstanding, respectively, with par value of $0.0001.

Representative’s Warrants

Pursuant to the Underwriting Agreement, the Company issued to the Representative and its designee warrants (the “Representative’s Warrants”) to purchase 75,000 shares of common stock. The Representative’s Warrants are exercisable at a per share exercise price of $4.50 equal to IPO price and are exercisable at any time and from time to time, in whole or in part, during the period commencing on December 30, 2024 and terminating on June 30, 2029. Neither the Representative’s Warrants nor any of the shares issued upon exercise of the Representative’s Warrants may be sold, transferred, assigned, pledged or hypothecated, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities by any person, for a period of six months immediately following the commencement of sales of the offering.

Management determined that these warrants meet the requirements for equity classification under ASC 815-40 because they are indexed to their own shares and meet the requirements for equity classification. The warrants were recorded at their fair value on the date of grant as a component of shareholders’ equity. The fair value of these warrants was $159,000, which was considered a direct cost of IPO and included in additional paid-in capital. The fair value has been estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $4.00, risk free rate of 4.3%, expected term of five years; exercise price of the warrants of $4.5, volatility of 61%; and expected future dividends of nil.

As of June 30, 2026, 75,000 warrants in connection with IPO funding was outstanding, with an exercise price of $4.5 and remaining life of 3.00 years.

Common stock purchase warrants

Pursuant to the Securities Purchase Agreement, the Company agreed to issue, upon the consummation of the closing of each tranche, common stock purchase warrants (“Warrants”) to the Investor (see Note 12).

As of June 30, 2026, 318,827 warrants in connection with the first closing of the first tranche of the Notes were outstanding, with an exercise price of $1.9098 and remaining life of 3.68 years.

As of June 30, 2026, 202,082 warrants in connection with the second closing of the first tranche of the Notes were outstanding, with an exercise price of $1.929 and remaining life of 3.81 years.

Subscription receivable

During the year ended June 30, 2026, the Company entered into a private placement agreement. As of June 30, 2026, a total of $1,427,769 of the gross proceeds related to these shares had not yet been received by the Company.

This amount is recorded as Subscription Receivable and is presented as a deduction from Shareholders’ Equity in the accompanying Consolidated Balance Sheets. The Company expects to collect the full outstanding balance during the next quarter.

Statutory reserves

The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve as determined pursuant to PRC statutory laws totaled approximately $63,416 and $63,416 as of June 30, 2026 and 2025, respectively.