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UNITED\nSTATES

SECURITIES\nAND EXCHANGE COMMISSION

WASHINGTON,\nD.C. 20549

FORM\n20-F

(Mark\nOne)

\n \n \n \n

☐	REGISTRATION\n STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

\n \n \n \n

☒	ANNUAL\n REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For\nthe fiscal year ended June 30, 2026.

\n \n \n \n

☐	TRANSITION\n REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

\n \n \n \n

☐	SHELL\n COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date\nof event requiring this shell company report

For\nthe transition period from to

Commission\nfile number:001-42535

STAK\nInc.

(Exact\nname of Registrant as specified in its charter)

N/A

(Translation\nof Registrant’s name into English)

Cayman\nIslands

(Jurisdiction\nof incorporation or organization)

Building\n11, 8th Floor, No. 6 Beitanghe East Road

Tianning\nDistrict, Changzhou, Jiangsu

People’s\nRepublic of China, 213000

(Address\nof principal executive offices)

Chuanbo\nJiang

Telephone:\n+86 519 8880 2609

Chief\nExecutive Officer and Chairman of the Board

Building\n11, 8th Floor, No. 6 Beitanghe East Road

Tianning\nDistrict, Changzhou, Jiangsu

People’s\nRepublic of China, 213000

(Name,\nTelephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities\nregistered or to be registered pursuant to Section 12(b) of the Act.

\n \n \n \n \n \n \n \n \n \n \n \n \n

Title\n of each class		Trading\n Symbol		Name\n of each exchange on which registered
Class\n A Ordinary Shares, par value US$0.001 per share		STAK		Nasdaq\n Capital Market

Securities\nregistered or to be registered pursuant to Section 12(g) of the Act.

None

(Title\nof Class)

Securities\nfor which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title\nof Class)

Indicate\nthe number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered\nby the annual report:

As\nof June 30, 2026, there were 19,210,349 ordinary shares of par value of US$0.001 each, being the sum of 10,010,349 Class A ordinary shares\nof par value of US$0.001 each, and 9,200,000 Class B ordinary shares of par value of US$0.001 each.

请通过勾选方框表明该注册人是否为根据《证券法》第405条定义的知名资深发行人。

是\n☐ 否 ☒

如果本报告是年度报告或过渡报告，请通过勾选方框表明该注册人是否根据《1934年证券交易法》第13条或第15(d)条无需提交报告。

是\n☐ 否 ☒

注意\n- 勾选上方方框不会免除根据《1934年证券交易法》第13条或第15(d)条必须提交报告的注册人根据这些条款应尽的义务。

请通过勾选方框表明该注册人（1）在过去12个月（或注册人需提交此类报告的较短期间）是否已提交了根据《1934年证券交易法》第13条或第15(d)条应提交的所有报告，以及（2）是否在过去90天内一直受这些提交要求的约束。

是\n☒ 否 ☐

请通过勾选方框表明该注册人是否在前12个月（或注册人需提交此类文件的较短期间）内已通过勾选方框提交了根据规章S-T第405条（本章第232.405条）应提交的每一份交互式数据文件。

是\n☒ 否 ☐

请通过勾选方框表明该注册人是否为大型加速提交者、加速提交者、非加速提交者或新兴成长公司。请参见《交易法》第12b-2条中“大型加速提交者”、“加速提交者”和“新兴成长公司”的定义。

\n \n \n \n \n \n \n \n \n \n

大型\n 加速提交者

☐

加速\n 提交者

☐

非加速\n 提交者

☒

新兴\n 成长公司

☒

如果为新兴成长公司且其财务报表按照美国通用会计准则（U.S. GAAP）编制，请通过勾选方框表明该注册人是否已选择不使用《交易法》第13(a)条规定的任何新修订财务会计标准的延长过渡期 †。 ☐

\n \n \n \n

†	“新修订的财务会计标准”一词指自2012年4月5日以来由财务会计准则委员会对其会计准则汇编发布的任何更新。

请通过勾选方框表明该注册人是否已由为其编制或出具审计报告的注册公众会计师事务所根据《萨班斯-奥克斯利法案》（15 U.S.C. 7262(b)）第404(b)条提交了关于其管理层对财务报告内部控制有效性评估的报告和鉴证报告。 ☐

如果证券根据《法案》第12(b)条注册，请通过勾选方框表明该注册人提交的文件中包含的财务报表是否反映了对先前已发布财务报表的更正。 ☐

请通过勾选方框表明这些更正中的任何一项是否为需要根据 §240.10D-1(b) 对注册人高管在相关追回期内收到的基于激励的薪酬进行追回分析的重述。 ☐

请通过勾选方框表明该注册人用于编制本文件中包含的财务报表的会计基础：

\n \n \n \n \n \n \n \n

美国通用会计准则

☒

国际财务报告准则，由国际会计准则理事会发布

☐

其他

☐

如果在对上一个问题的回答中勾选了“其他”，请用复选标记表明注册人选择遵循的财务报表项目。

☐ 项目 17 ☐ 项目 18

如果这是年度报告，请用复选标记表明注册人是否为壳公司（根据《交易法》第 12b-2 条的定义）。

是 ☐ 否 ☒

（仅适用于过去五年内涉及破产程序的发行人）

请用复选标记表明注册人是否已提交根据《1934 年证券交易法》第 12、13 或 15(d) 条规定，在法院确认计划下分发证券后应提交的所有文件和报告。

是 ☐ 否 ☐

引言	1
前瞻性信息	2
第一部分	3
项目\n 1。	董事、高级管理人员和顾问的身份	3
项目\n 2。	发行统计数据和预期时间表	3
项目\n 3。	关键信息	3
项目\n 4。	公司信息	33
项目\n 4A。	未解决的工作人员意见	61
项目\n 5。	经营和财务回顾与前景	61
项目\n 6。	董事、高级管理人员和员工	75
项目\n 7。	主要股东和关联方交易	83
项目\n 8。	财务信息	85
项目\n 9。	本次发行和上市	85
项目\n 10。	附加信息	86
项目\n 11。	关于市场风险的定量和定性披露	101
项目\n 12。	其他权益证券的描述	101
第二部分	102
项目\n 13。	违约、股息拖欠和违约情况	102
项目\n 14。	对证券持有人权利的重大修改和收益使用	102
项目\n 15。	控制和程序	102
项目\n 16。	[保留]	103
项目\n 16A。	审计委员会财务专家	103
项目\n 16B。	道德准则	103
项目\n 16C。	主要会计师费用和业务	104
项目\n 16D。	审计委员会的上市标准豁免	104
项目\n 16E。	发行人和关联购买者购买权益证券	104
项目\n 16F。	注册人认证会计师的变更	104
项目\n 16G。	公司治理	104
项目\n 16H。	矿山安全披露	105
项目\n 16I。	关于阻止检查的外国司法管辖区的披露	105
项目\n 16J。	内部交易政策	105
项目\n 16K。	网络安全	105
第三部分	107
项目\n 17。	财务报表	107
项目\n 18。	财务报表	107
项目\n 19。	附录	107

引言

除上下文另有要求外，并且仅限于本年度报告的目的：

\n \n \n \n \n

●

“CAGR”\n 指复合年增长率；

\n \n \n \n \n

●

“常州中山” 指常州中山智能装备有限公司，我们的一家中国子公司。

\n \n \n \n \n

●

“中国”\n 或“PRC”，在每种情况下，指中华人民共和国；

\n \n \n \n \n

●

“A类普通股” 指STAK Inc.的A类普通股，每股面值为0.001美元；

\n \n \n \n \n

●

“B类普通股” 指STAK Inc.的B类普通股，每股面值为0.001美元；

\n \n \n \n \n

●

“香港” 指中华人民共和国的香港特别行政区；

\n \n \n \n \n

●

“中国大陆” 指中华人民共和国，仅在本年度报告的目的下，不包括香港、澳门和台湾。为本年度报告的目的，“中国大陆”一词具有相应的含义；

\n \n \n \n \n

●

“中国大陆子公司” 指公司在中华人民共和国注册的子公司，包括STAK（常州）智能科技有限公司、YLAN科技（常州）有限公司和常州中山智能装备有限公司；

\n \n \n \n \n

●

“人民币”\n 或“人民币”指中国的法定货币；

\n \n \n \n \n

●

“SEC”\n 指证券交易委员会；

\n \n \n \n \n

●

“普通股” 指STAK Inc.的A类普通股和B类普通股，合称；

\n \n \n \n \n

●

“我们”、“我们”、“我们”、“公司”和“集团”指STAK Inc.，一家开曼群岛免税公司，作为一个集团与其子公司一起；

\n \n \n \n \n

●

“美国子公司” 指STAK Vision Energy Inc.，公司的美国子公司；

\n \n \n \n \n

●

“美元”、“美元”、“USD”或“US$”指美国的法定货币；\n 以及

\n \n \n \n \n

●

“YLAN”\n 指YLAN科技（常州）有限公司，作为STAK Inc.在中国大陆的运营实体。

由于四舍五入，本年度报告中列出的数字可能无法精确加总到提供的总数，百分比可能无法准确反映绝对数值。

前瞻性信息

本20-F表格年度报告包含涉及风险和不确定性的前瞻性声明。除当前或历史事实的陈述外，所有陈述均为前瞻性声明。这些声明涉及已知和未知的风险、不确定性和其他因素，包括“风险因素”中列出的，这些因素可能导致我们的实际结果、表现或成就与前瞻性声明中表达或暗示的有重大差异。

在某些情况下，您可以通过“可能”、“将”、“预期”、“预计”、“旨在”、“估计”、“潜在”、“打算”、“计划”、“相信”、“很可能”等词语或短语来识别这些前瞻性声明。我们这些前瞻性声明主要基于我们对可能影响我们财务状况、经营成果、业务策略和财务需求的未来事件和财务趋势的当前预期和预测。这些前瞻性声明包括以下内容：

\n \n \n \n \n

●

政治、社会和经济状况的变化，我们开展业务或预期开展业务的司法管辖区的监管环境、法律法规及其解释；

\n \n \n \n \n

●

我们可能无法实现预期的增长策略和预期的内部增长的风险；

\n \n \n \n \n

●

我们运营所需专业人员的可用性和成本的变化；

\n \n \n \n \n

●

客户偏好和需求的变化；

\n \n \n \n \n

●

竞争状况的变化以及我们在这种状况下竞争的能力；

\n \n \n \n \n

●

我们未来资本需求的变化以及融资和资本的可用性以满足这些需求；

\n \n \n \n \n

●

汇率或利率的变化；

\n \n \n \n \n

●

收入、利润、收益、资本结构和其他财务项目的预测；

\n \n \n \n \n

●

我们进入某些新业务领域的计划的变化；以及

\n \n \n \n \n

●

其他我们无法控制的因素。

您应理解，我们实际的未来结果可能与我们的预期有重大差异且更差，因此应阅读本年度报告以及我们在本年度报告中引用的文件。本年度报告的其他部分还包含可能对我们的业务和财务表现产生不利影响的其他因素。此外，我们处于不断变化的环境中。新的风险因素和不确定性会不断出现，我们的管理层无法预测所有风险因素和不确定性，也无法评估所有因素对我们的业务的影响程度，或这些因素或其组合可能使实际结果与任何前瞻性声明中包含的内容产生重大差异的程度。我们通过这些警示性陈述来限定我们所有的前瞻性声明。

您不应将前瞻性声明视为对未来事件的预测。本年度报告中作出的前瞻性声明仅针对本年度报告中声明时的事件或信息。除法律要求外，我们不承担更新或修订任何前瞻性声明的义务，无论是否因新信息、未来事件或其他原因。您应完整阅读本年度报告以及我们在本年度报告中引用并作为附录提交的文件，并理解我们的实际未来结果可能与我们的预期有重大差异。

本年度报告还包含我们从行业出版物和政府或第三方市场情报提供商发布的报告中获得的统计数据和估计值。尽管我们未独立验证这些数据，但我们认为这些出版物和报告是可靠的。

PART\nI

\n \n \n \n

ITEM\n 1.

董事、高级管理人员及顾问的资料

不适用。

\n \n \n \n

ITEM\n 2.

发行统计及预期时间表

不适用。

\n \n \n \n

ITEM\n 3.

关键信息

我们的公司结构

我们的公司STAK Inc.是一家控股公司，自身没有实质性的业务运营。我们通过以下子公司开展业务：(i) 中国，主要通过YLAN，该公司从事油田专用生产设备和维护设备的研究、开发、制造和销售；(ii) 美国，即STAK Vision Energy Inc.，该公司从事模块化燃气发电系统（用于AI数据中心和其他高能耗应用）的开发和商业化。因此，我们支付股息的能力取决于我们中国子公司和美国子公司的股息支付。如果我们的现有子公司或任何新成立的子公司将来以自己的名义承担债务，其债务工具可能会限制它们向我们支付股息的能力。此外，我们在中国大陆的子公司只能根据中国会计准则和法规确定的留存收益（如有）向我们支付股息。根据中国法律，我们在中国大陆的每个子公司每年必须至少提取10%的税后利润，如果有的话，用于资助某些法定储备金，直到这些储备金达到其注册资本的50%。此外，我们在中国大陆的子公司可根据中国会计准则，自行决定将部分税后利润分配至企业扩展基金和员工奖金及福利基金。法定储备金和自主基金不得作为现金股息分配。外商独资公司从中国大陆汇出股息需经国家外汇管理局指定的银行审查。自该日期以来，中国子公司未分配股息，也没有进一步计划向我们支付股息，除非它们已产生足够的累计利润并满足法定储备金的要求。

以下图表说明了本年度报告日期的公司结构。

$\"\"$

我们业务运营所需的中国当局许可

我们没有持有中国工业和信息化部要求的特殊车辆生产许可，因此我们依赖协作外包模式向客户提供最终产品。虽然这种方法减少了在大型固定资产上的初始运营投资，但也带来了政策风险和业务扩展瓶颈。如果政府不允许外包，或者我们的业务需求超过外包工厂的产能，这将严重限制我们的增长，并对您的投资价值产生不利影响。

向外国投资者发行证券所需的中国当局批准

中国政府最近的声明表明，有意加强对在海外进行的业务和/或对内地发行人进行的外国投资的监督和控制。2021年7月6日，中国共产党中央委员会办公厅和国务院办公厅联合发布了一份文件，以打击证券市场中的非法活动并促进资本市场高质量发展，该文件要求相关政府机构加强跨境执法和司法合作的监督，加强对在内地上市的公司的监督，并建立和完善中国证券法的域外适用制度。

此外，2021年12月28日，国家互联网信息办公室（CAC）、国家发展和改革委员会（NDRC）及其他几个部门联合发布了修订后的《网络安全审查办法》，或称“修订审查办法”，该办法于2022年2月15日生效并取代了现有的《网络安全审查办法》。根据修订审查办法，如果“网络平台运营者”掌握超过一百万用户的个人数据并计划在外国上市，必须申请网络安全审查。2022年7月7日，国家互联网信息办公室发布了《数据出境安全评估办法》，该办法于2022年9月1日生效。我们不从个人终端用户处收集或存储任何个人数据（包括某些个人信息）。截至本年度报告日期，我们尚未从个人终端用户处收集或存储个人信息。因此，我们被国家互联网信息办公室审查的可能性极低。鉴于《数据出境安全评估办法》的最近发布，目前普遍存在指导不足，且在该办法的解释和实施方面存在重大不确定性。此外，2024年9月24日，国务院颁布了《网络数据安全管理规定》，该规定于2025年1月1日生效。根据该规定，从事可能或可能影响国家安全的网络数据处理活动的网络数据处理者，应根据国家规定进行国家安全审查。

2023年2月17日，中国证券监督管理委员会（CSRC）发布了《境内企业境外发行证券和上市管理办法》及五项配套指引，自2023年3月31日起生效（“境外上市规定”）。根据境外上市规定，如果一家在境外上市的发行人打算在境外股票市场进行后续发行，它应通过其在中国境内设立的主要运营实体，在发行完成后三个工作日内向中国证券监督管理委员会提交备案材料。所需备案材料包括但不限于（1）备案报告及相关承诺函和（2）境内法律意见书。我们无法保证我们能够及时完成此类备案，甚至可能无法完成。境外上市规定可能会在未来使我们面临额外的合规要求，我们无法保证我们能够及时或根本无法获得境外上市规定下的备案程序的批准或清关。我们未能完全遵守新的监管要求可能会显著限制或完全阻碍我们提供或继续提供普通股的能力，导致我们业务运营的重大中断，并严重损害我们的声誉，这将对我们的财务状况和经营成果产生重大不利影响，并导致我们的普通股价值大幅下跌或变得一文不值。

我们无法保证我们能够及时或根本无法完全遵守这些意见的新监管要求，或任何未来实施规则。如果我们未来受到需要从中国证券监督管理委员会（CSRC）、国家互联网信息办公室（CAC）或其他中国监管机构获得批准或清关的额外要求，但未能获得此类批准或清关，我们将无法继续进行未来的发行。参见“风险因素—在中国经营的风险—我们需按照与后续证券发行相关的中国证券监督管理委员会备案程序进行备案。国家互联网信息办公室和其他合规程序可能与后续证券发行相关，如果需要，我们无法预测我们是否能够获得此类批准或清关。”

我们组织中的现金和资产流动

截至2026年6月30日的财年，STAK Inc. 通过其中间控股公司并未向STAK（常州）智能科技有限公司或外商独资企业（WFOE）进行任何资本出资。资金在我们的中国境内子公司之间转移，用于营运资金目的，主要在YLAN（我们的主要运营子公司）及其子公司之间进行。公司之间的资金转移受《最高人民法院关于审理民间借贷案件适用法律若干问题的规定》（2020年修订）（“民间借贷案件规定”）的约束，该规定于2020年8月20日实施，用于规范自然人、法人和非法人组织之间的融资活动。截至2026年和2025年6月30日的财年，未从子公司向STAK Inc.或其他投资者进行任何资金转移、股息或分配。根据我们的中国法律顾问德恒律师事务所（深圳）的建议，民间借贷案件规定并未禁止使用一家子公司的现金流来资助另一家子公司的运营。我们尚未收到任何可能限制我们中国境内子公司在子公司之间转移现金的其他限制通知。

《外国公司问责法》

《外国公司问责法》（HFCA Act）于2020年12月18日颁布。该法规定，如果证券交易委员会（SEC）认定一家公司提交的审计报告是由一家注册公共会计公司出具的，而该会计公司自2021年起连续三年未接受美国公众公司会计监督委员会（PCAOB）的检查，SEC应禁止此类普通股在美国全国性证券交易所或场外交易市场交易。2022年12月23日，《加快外国公司问责法》（“AHFCA Act”）颁布，该法案通过修改HFCA Act，要求SEC在公司的审计机构连续两年未接受PCAOB检查时，禁止该发行人证券在美国任何股票交易所交易，而不是之前的三年。因此，我们的普通股可能被禁止交易或退市的时间段相应缩短。

2021年3月24日，美国证券交易委员会（SEC）制定了临时最终规则，以实施《外国公司问责法》（HFCA Act）规定的某些披露和文件要求。如果SEC根据随后建立的程序将某公司确定为“无法检查”年份，该公司将需要遵守这些规则。2021年9月22日，公众公司会计监督委员会（PCAOB）制定了最终规则，以实施《外国公司问责法》（HFCA Act），该规则为PCAOB在根据《外国公司问责法》确定其无法完全检查或调查位于外国司法管辖区的注册公众会计公司时提供了框架，原因是该司法管辖区的一个或多个当局采取了立场。2021年12月2日，SEC发布了修正案，以最终确定实施《外国公司问责法》提交和披露要求的规则。这些规则适用于SEC确定的公司，这些公司向SEC提交了包含由位于外国司法管辖区的注册公众会计公司出具的审计报告的年度报告，并且PCAOB由于外国司法管辖区当局的立场而无法完全检查或调查这些公司。2021年12月16日，PCAOB发布了《确定性报告》，发现PCAOB无法完全检查或调查总部位于：（i）中国大陆，以及（ii）香港的注册公众会计公司。我们的审计机构总部不在中国大陆或香港，且未在该报告中被确定为受PCAOB确定影响的公司。

此外，各种基于股权的研究机构最近在审查了中国大陆公司的公司治理实践、关联方交易、销售实践和财务报表后，发布了有关这些公司的报告，这些报告导致了美国全国性交易所的特别调查和上市暂停。无论此类审查是否合理，任何类似的审查都可能导致我们的普通股市场价格下跌，分散管理层的资源和精力，使我们不得不花费费用来应对谣言，并增加我们为董事和高管保险支付的保费。

我们的审计机构HTL International, LLC是一家独立的注册公众会计公司，其出具的审计报告包含在本年度报告的其他部分中，作为在美国公开交易公司的审计机构，以及一家在PCAOB注册的公司，根据美国法律，PCAOB定期对其进行检查，以评估其是否符合适用的专业标准。HTL International, LLC总部位于德克萨斯州休斯顿，目前定期接受PCAOB的检查。PCAOB目前有权检查我们审计机构的工作底稿。然而，最近的发展可能会给我们后续的发行带来不确定性，我们无法保证纳斯达克资本市场（“纳斯达克”）或监管机构在考虑我们审计机构的审计程序和质量控制程序的有效性、人员和培训的充分性、资源的充足性、地理覆盖范围或经验，以及与我们财务报表审计相关的情况后，是否会对我们实施更多和更严格的标准。

如果我们的审计机构不受PCAOB检查，美国证券交易委员会（SEC）可能会提出额外的规则或指导，这可能会影响我们。例如，2020年8月6日，美国总统金融市场工作组（PWG）向时任美国总统发布了《保护美国投资者免受中国公司重大风险的报告》。该报告建议SEC实施五项建议，以应对那些不向PCAOB提供足够访问权限以履行其法定职责的司法管辖区的公司。这些建议中的一些概念已通过《HFCA法案》的实施而得到落实。然而，其中一些建议比《HFCA法案》更严格。例如，如果一家公司的审计机构不受PCAOB检查，该报告建议该公司被摘牌前的过渡期将于2022年1月1日结束。

2022年8月26日，中国证券监督管理委员会（CSRC）、中华人民共和国财政部和PCAOB签署了一份协议（以下简称“协议”），规定了对位于中国大陆和香港的审计公司的检查和调查。根据该协议，PCAOB有权独立选择任何发行人审计进行检查或调查，并有权不受限制地将信息传递给SEC。然而，仍存在不确定性，即该框架是否会被完全遵守，这可能导致我们普通股的市场价格受到重大不利影响，我们的证券可能比《HFCA法案》要求的更早被摘牌并禁止在国家证券交易所交易。如果到那时我们的证券无法在另一家证券交易所上市，这种摘牌将大大损害您在希望时出售或购买我们普通股的能力，潜在摘牌的风险和不确定性将对我们的普通股价格产生负面影响。2022年12月15日，PCAOB发布了一份决定报告，该报告确定PCAOB（1）能够选择审计项目、审计领域和潜在违规行为进行审查或调查，（2）能够及时获取并保留和使用PCAOB认为与检查或调查相关的任何文件或信息，（3）能够以符合《法案》规定和PCAOB规则的方式进行检查和调查，这些规则由PCAOB解释和适用。因此，PCAOB得出结论，在目前没有证据表明中国当局正在采取任何措施妨碍PCAOB执行其法定职责的情况下，《HFCA法案》规定PCAOB应撤销2021年的决定。根据《HFCA法案》的要求，如果未来PCAOB认为由于中国当局采取的立场，它无法再完全进行检查或调查，PCAOB将迅速考虑是否应发布新的决定。

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3.A.	[保留]

3.B.	资本化和债务

不适用。

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3.C.

要约的原因和收益用途

不适用。

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3.D.

风险因素

我们的年度报告应结合我们面临的风险、不确定性、费用和困难来考虑，这些是类似公司经常遇到的问题。以下是我们面临的主要风险的摘要，按相关标题分类。这些风险在本项 3.D. “关键信息 — D. 风险因素” 中有更详细的讨论。

与我们的业务和行业相关的风险

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●	我们的经营历史可能无法预示我们未来的增长或财务结果，我们可能无法维持以往的增长率。

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●	我们无法保证我们能够保持盈利。

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●	我们所处的行业波动性很大，石油设备的需求可能会大幅波动，通常与石油和天然气价格相关，这使得投资者难以评估我们的未来前景，我们无法保证我们当前或未来的策略能够成功实施或产生可持续的利润。

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●	我们经营时间有限，并且在专业石油设备和综合解决方案方面经验不足，这使得评估我们的业务变得困难。我们无法保证我们产品的市场会按我们预期发展，也无法保证我们能够维持迄今为止的增长速度。

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●	如果无法维持和扩大我们的客户群或加强客户参与度，可能会对我们的业务和经营成果产生不利影响。

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●	如果无法保持我们产品和服务的质量，可能会对我们的声誉、财务状况和经营成果产生重大不利影响。

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●	我们依赖与供应商的合作。如果这些供应商不再与我们保持关系，或者他们的运营出现问题，我们的业务可能会受到负面影响。

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●	我们可能会面临来自客户的重大责任索赔或投诉、诉讼和监管调查。

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●	我们依赖主要客户。如果我们无法以具有成本效益的方式获取新客户或保留现有客户，我们的业务、财务状况和经营成果可能会受到重大不利影响。

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●	我们的行业竞争激烈。我们可能会面临来自新进入者和资源更丰富的成熟公司的竞争，我们可能无法成功竞争。

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●	我们依赖关键高管和高素质的管理人员，我们无法保证他们能够被保留。

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●	流行病和疫情、自然灾害、恐怖活动、政治动荡和其他疫情可能会扰乱我们的运营，这可能会对我们的业务、财务状况和经营成果产生重大不利影响。

与我们的资本结构相关的风险

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●	我们拥有不同投票权的双层股份结构，这可能会影响 A 类普通股的价值和流动性。

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●	我们具有不同投票权的双层股权结构，以及高管、董事和主要股东之间的股份集中，将限制您对公司的影响力，可能会阻止其他人进行任何控制权变更交易，而这些交易可能是我们A类普通股持有者认为有益的。

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●	未来发行的B类普通股可能会稀释A类普通股持有者的权益。

与中国业务相关的风险

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●	中国法律体系的不确定性和快速变化可能会对我们业务运营产生重大负面影响，降低我们普通股的价值，并限制您和我们可获得的法律保护。

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●	如果中国政府选择对境外发行和/或对内地发行人进行的外国投资实施更多监督和控制，此类行动可能会显著限制或完全阻碍我们向投资者发行或继续发行普通股的能力，并可能导致我们普通股的价值显著下降甚至一文不值。

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●	我们需就后续证券发行向中国证监会（CSRC）提交文件。后续证券发行可能需要中国网信办（CAC）的批准或其他合规程序，且如果需要，我们无法预测是否能够获得此类批准或清关。

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●	我们必须在将后续发行所得资金用于内地业务之前将其汇回内地，我们无法保证能够及时完成所有必要的政府登记程序。

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●	我们可能依赖于我们内地子公司支付的股息和其他股权分配来满足我们可能面临的现金和融资需求，而我们内地子公司向我们支付的能力受到限制，可能会对我们开展业务的能力产生重大不利影响。

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●	中国政府可能随时干预或影响我们的运营，这可能导致我们的运营发生重大变化，并对我们证券的价值产生重大不利影响。

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●	根据离岸控股公司向内地实体提供贷款和直接投资的内地法规以及政府对货币兑换的控制，可能会延迟我们使用后续发行所得资金向内地子公司提供贷款或追加资本金，这可能会对我们流动性以及我们资助和扩展业务的能力产生重大不利影响。

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●	如果PCAOB连续两年无法检查我们的审计师，我们的普通股可能会根据HFCA法案被退市。我们普通股的退市，或退市的威胁，可能会对您的投资价值产生重大不利影响。

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●	中国针对中国居民设立离岸特殊目的公司的规定可能使我们的中国居民受益所有人或中国子公司承担法律责任或受到处罚，限制我们向中国子公司注资的能力，限制我们中国子公司增加注册资本或向我们分配利润的能力，或可能对我们的业务产生其他不利影响。

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●	未能按照中国法规要求向各种员工福利计划进行充分出资，并从员工工资中代扣代缴个人所得税，可能会使我们受到处罚。

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●	我们没有中国工业和信息化部要求的生产特殊车辆的特殊车辆生产许可。如果政府不允许外包或未来我们的业务需求超过外包工厂的产能，这将严重限制我们的增长，并对您的投资价值产生不利影响。

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●	我们面临关于非中国控股公司对中国居民企业股权权益进行间接转让的不确定性。

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●	您可能在根据外国法律对中国或本年度报告中提到的我们的管理层提起诉讼或执行外国判决时遇到困难。

与普通股相关的风险

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●	如果我们无法继续满足纳斯达克的上市要求，我们的A类普通股将被退市。

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●	A类普通股的市场价格可能波动较大。

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●	我们的管理团队在管理上市公司方面经验有限。

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●	如果证券或行业分析师不发布有关我们业务的研究或报告，或者他们对我们A类普通股的推荐意见发生不利变化，我们的A类普通股市场价格和交易量可能会下降。

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●	由于我们预计在可预见的未来不会支付股息，您必须依靠A类普通股的价格上涨来获得投资回报。

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●	未来A类普通股在公开市场的大规模出售或潜在出售可能造成A类普通股价格下跌。

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●	我们可能需要额外资金，并可能出售额外的普通股或其他股权证券或增加债务，这可能导致我们的股东进一步被稀释或增加我们的债务偿还义务。

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●	某些现有股东对我们公司有重大影响力，他们的利益可能与我们其他股东的利益不一致。

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●	根据《证券法》的定义，我们是一家新兴成长公司，并可能利用某些减少的报告要求。

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●	我们是一家外国私人发行人，根据《交易法》的规定，我们免于适用于美国国内上市公司的某些规定。

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●	我们未来可能会失去外国私人发行人地位，这可能导致显著的额外成本和费用。

与我们业务和行业相关的风险

我们的\n运营历史可能无法反映我们未来的增长或财务结果，我们可能无法维持历史增长\n速度。

我们的\n运营历史可能无法反映我们未来的增长或财务结果。我们无法保证未来期间能够增加\n我们的收入。我们的增长速度可能因各种原因而下降，其中一些原因超出我们的控制，\n包括客户需求减少、竞争加剧、营销行业整体增长放缓、替代商业模式的出现，或政府政策或一般经济状况的变化。我们将继续扩展我们的销售网络和产品\n选择，以更好地为客户提供便利，并增加我们的客户基础和交易数量。然而，我们扩展计划的执行存在不确定性，由于上述原因，售出的商品总数和交易客户数量可能不会以我们预期的速度增长。如果我们的增长速度下降，投资者对我们业务和前景的看法\n可能会受到不利影响，我们普通股的市场价格可能会下跌。

我们\n无法保证我们能够保持盈利。

我们\n截至2026年6月30日和2025年6月30日的财年分别实现了0.4百万美元的净利润和5.7百万美元的净亏损。我们可能无法恢复或保持我们的盈利水平。如果我们的营运资金不足以支持我们未来的发展，我们可能会筹集额外的营运资金。此外，作为一家上市公司，我们将产生会计、法律和其他费用。这些支出可能会使我们继续筹集额外的营运资金。我们扩大业务的努力可能比我们预期的更昂贵，我们可能无法产生足够的收入来抵消我们增加的运营费用。由于各种原因，我们未来可能会再次出现亏损，包括意外费用、困难、复杂性和延误以及其他未知事件。因此，我们无法保证在我们继续扩展业务并实施增长计划的过程中，我们能够保持运营利润。

我们\n所处的行业波动性较大，石油设备的需求可能会大幅波动，通常与石油和天然气价格相关，这使得投资者难以评估我们的未来前景，我们无法保证我们当前或未来的策略能够成功实施或产生可持续的利润。

我们是一家快速发展的公司，专注于油田专用生产设备和维护设备的研发、开发、制造和销售。我们设计和制造油田专用生产设备和维护设备，然后与合格的专用车辆制造公司合作，将设备集成到车辆底盘上，生产用于销售的油田专用车辆。此外，我们还销售油田专用设备部件、相关产品，并提供自动化解决方案。我们客户所处的市场可能会大幅波动，通常与石油和天然气价格相关，行业可能不会按我们的预期发展。随着我们的业务随着油价和市场竞争而发展，我们可能需要实施更严格的风控体系和政策，这可能对我们的业务增长产生负面影响。我们业务模式的任何重大变化可能无法达到预期效果，并可能对我们的财务状况和经营成果产生重大不利影响。因此，我们前景的预测非常困难。

我们经营历史较短，且在油田专用设备和集成解决方案方面经验有限，这使得难以评估我们的业务。我们无法保证我们的产品市场会按我们预期发展，也无法保证我们能够维持至今所经历的增长率。

2020年初，我们开始专注于油田专用和维护设备的生产，由此成立了我们的运营子公司YLAN。从那时起，我们在客户基础和收入方面实现了快速增长。截至2026年6月30日和2025年6月30日的财年，我们油田专用设备的收入分别占总收入的19.5%和48.0%。然而，我们在提供油田专用设备和集成解决方案方面的有限经营历史可能无法预示我们未来的增长或财务结果。我们无法保证在未来期间能够维持历史增长速度。在考虑我们的增长前景时，应考虑到快速增长的公司，尤其是我们在行业中经营历史和经验有限的公司可能遇到的风险和不确定性，包括但不限于以下风险和不确定性：

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扩展我们的产品和服务种类；

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留住现有客户并吸引新客户；

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为油田维护和服务公司的整个生命周期提供定制和全面的服务；

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	●	成功与目前或未来进入我们行业或类似行业的其他公司竞争；

	●	获得专用车辆制造许可；以及

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关注并制定最新市场趋势的战略。

所有这些努力都涉及风险，并需要大量分配管理及员工资源。我们无法保证您能有效管理我们的增长或有效实施我们的业务策略。如果我们的服务市场未能如我们预期那样发展，或者我们未能满足这个动态市场的需求，我们的业务、经营成果和财务状况将受到重大不利影响。

我们拓展模块化燃气发电系统业务可能不会成功。

我们正在开发主要基于燃气内燃机和发电机组技术的模块化燃气发电系统，目标是北美地区的AI数据中心和其他高能耗应用。该业务代表了我们运营的新领域，我们在开发、营销和商业化这些应用的发电系统方面经验有限。我们成功开发和扩展该业务的能力将取决于多种因素，包括我们系统的发展和性能、客户需求、合适燃料供应的可用性和成本、适用的法规和环境要求、融资、供应链管理，以及我们获得客户和成功执行项目的能力。此外，在产生有意义的收入之前，我们可能会在开发和商业化该业务方面产生重大成本。我们无法保证您能成功开发或商业化这些系统，获得足够的市场接受度，或从该业务中获得预期的收入或利润。

我们拓展模块化燃气发电系统业务可能需要大量资本和其他资源。

我们模块化燃气发电系统的发展、测试、商业化和部署可能需要大量资本支出和其他资源，包括产品开发、设备、人员、供应链管理、项目执行以及销售和营销的支出。在从该业务中产生有意义的收入之前，我们可能需要继续对该业务进行大量资金和其他资源的投资。此类投资的金额和时间可能超过预期，我们可能无法从该业务中获得足够的收入或现金流以收回我们的投资。如果我们无法获得或分配足够的资本和其他资源，我们开发、商业化和扩展该业务的能力可能会受到不利影响，这可能对我们的业务、财务状况和经营成果产生重大不利影响。

我们的模块化燃气发电系统需符合适用的法规和环境要求，此类要求的变化或未能保持合规可能对我们的业务产生不利影响。

我们已获得当前商业化活动所需的适用环境许可。然而，我们模块化油气发电系统的运营和进一步部署可能仍需持续遵守适用的美国环境保护局（“EPA”）要求和州级环境法规，以及随着我们业务扩展或监管要求变化而可能适用的任何额外认证、许可或批准。我们无法保证能够及时满足所有适用要求或获得任何额外的认证、许可或批准。适用法律或法规的变化、额外的监管要求，或维持合规性相关的延迟或成本可能会增加我们的运营成本，或延迟或限制我们系统的进一步商业化和部署。

无法维持和扩大我们的客户群或加强客户参与可能会对我们的业务和经营成果产生不利影响。

我们的收入增长取决于我们维持和扩大客户群并加强客户参与的能力，从而使更多的油田服务公司用我们的产品和服务取代我们竞争对手的产品和服务，这将有助于我们的收入增长。一旦客户的现有合同到期，或他们可能不会从我们这里购买更多解决方案。在转换服务或产品供应商成本较低的情况下，这种风险尤为明显。我们维持和扩大客户群并加强客户参与的能力将取决于许多因素，其中一些因素是我们无法控制的，包括：

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我们根据不断变化的客户需求和期望以及激烈的市场竞争，持续创新解决方案的能力；

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我们为不同的油田维护和服务公司定制解决方案的能力；

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客户对我们产品（包括我们可能开发的任何油田专用维护和服务车辆）的满意度，以及我们油田专用设备的竞争力；以及

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我们的解决方案在帮助客户提高油田维护效率、提升服务质量以及降低运营或维修成本方面的有效性。

无法保持产品质量和服务水平可能对我们的声誉、财务状况和经营成果产生重大不利影响。

The\nquality of our products and services is critical to our success. We pay close attention to quality control, monitoring our products and\nservices. Yet, maintaining consistent product and service quality depends significantly on the effectiveness of our quality control system,\nwhich in turn depends on a number of factors, including but not limited to the design of our quality control system, employee training\nto ensure that our employees adhere to and implement our quality control policies and procedures and the effectiveness of monitoring\nany potential violation of our quality control policies and procedures. There can be no assurance that our quality control system will\nalways prove to be effective. Furthermore, given that we do not have permits to manufacture specialized vehicles in mainland China, we\ncooperate with the qualified manufactures to assemble the oilfield-specialized vehicles. Therefore, we may not have sufficient controls\nover the quality of the final products to be delivered to the end-users. In the event that our qualified manufacturers cannot meet our\nrequirement or standard, our clients may not purchase our products and our reputation will suffer.

In\naddition, the quality of the materials provided by our suppliers is subject to factors beyond our control, including the effectiveness\nand efficiency of their quality control system, among others. There can be no assurance that our suppliers may always be able to adopt\nappropriate quality control systems and meet our quality control requirements in respect of the services they provide. Any failure of\nour business partners to provide satisfactory services could harm our reputation and adversely impact our operations. In addition, we\nmay be unable to receive sufficient compensation from business partners for the losses caused by them.

We\ndepend on our cooperation with our suppliers. Our business may be negatively affected if such suppliers do not continue their relationship\nwith us or if their operations fail.

We\ncooperate with various suppliers when conducting our business. We have four and four suppliers who accounted for more than 10% of\nthe Company’s purchase for the years ended June 30, 2026 and 2025, respectively. If we are not able to retain our existing suppliers, the\nquality of our products and services may decline, which will hinder our business growth. The occurrence of any of these\ncircumstances may significantly hinder our ability to carry out our business operations and increase the customer base we can reach,\nand may significantly increase our expense and thus our business, financial condition, results of operation, and prospects may be\nmaterially and adversely affected.

Furthermore,\nour oilfield vehicles business relies on qualified vehicles manufacturers in mainland China to assemble the oilfield-specialized vehicles\nby using the oilfield maintenance equipment manufactured by us. However, we may not have sufficient controls over the quality of the\nfinal products assembled by the qualified vehicles manufacturers. In the event that the qualified vehicles manufacturers cannot meet\nour requirements or standards, our clients may not purchase our products and our reputation will suffer.

We\nmay experience significant liability claims or complaints from customers, litigation and regulatory investigations and proceedings.

Any\ncomplaints or claims against us, even if meritless and unsuccessful, may divert management attention and other resources from our business\nand adversely affect our business and operations. Customers may lose confidence in us and our brand, which may adversely affect our business\nand results of operations. Furthermore, negative publicity including but not limited to negative online reviews on social media and crowd-sourced\nreview platforms, whether or not accurate, and whether or not concerning our services, can adversely affect our business, results of\noperations and reputation.

We\nmay face exposure to claims and lawsuits arising from our products and services. These claims could divert management time and attention\naway from our business and result in significant costs to investigate and defend, regardless of the merits of the claims. In some instances,\nwe may elect or be forced to pay substantial damages if we are unsuccessful in our efforts to defend against these claims, which could\nharm our business, financial condition and results of operations. In addition, our directors, management and employees may from time\nto time be subject to litigation and regulatory investigations and proceedings or otherwise face potential liability and expense in relation\nto commercial, labor, employment, securities or other matters, which could adversely affect our reputation and results of operations.

As\nof the date of this annual report, we are not aware of any warning, investigations, prosecutions, disputes, claims or other proceedings\nin respect of customer rights protection, nor have we been punished or can foresee any punishment to be made by any government authorities\nof the PRC or any in any overseas jurisdiction.

We\nare dependent on our top customers. If we fail to acquire new customers or retain existing customers in a cost-effective manner, our\nbusiness, financial condition and results of operations may be materially and adversely affected.

Maintaining\nexisting customers and developing new customers are essential to our success. We are heavily dependent on our top customers, who are\ndealers that purchase our products and resell to the downstream end-users, oilfield service companies. For the year ended June 30, 2026,\nour top three customers contributed approximately 50% to our revenue. We do not maintain long-term agreements with the top customers\nand the services agreements with the top customers are made on a per-project basis. Therefore, we cannot be certain that our revenues\nfrom the top customers will continue.

Our\nability to cost-effectively attract new customers and retain existing customers, especially our top customers, is crucial to driving\nnet income growth and achieving profitability. We promote and attract new customers who are our customers that promote our products to\nthe downstream end-users, oilfield service companies, through methods including cultivating positive word-to-mouth referrals within the\nindustry and proactively expanding our business through our sales team. We also expect to continue to invest significantly to acquire\nnew customers and retain existing ones, especially our top customers. There can be no assurance that new customers will stay with us,\nor the net revenues from new customers we acquire will ultimately exceed the cost of acquiring those customers. In addition, if our existing\ncustomers, especially our existing top customers no longer find our services appealing, or if our competitors offer more attractive prices,\ndiscounts or better customer products, our existing customers may lose interest in us, decrease their orders or even stop ordering from\nus. If we are unable to retain our existing customers, especially our top customers or to acquire new customers in a cost-effective manner,\nour revenues may decrease and our results of operations will be significantly affected. If our top customers reduce their budgets for\nthe purchase of oilfield specialized equipment or change its way to operate, our revenues may decrease significantly and affect the profitability\nof our business as a result. Furthermore, if we experience difficulties in the collection of our accounts receivable from our major customers,\nour results of operation may be materially and adversely affected.

Our\nindustry is intensely competitive. We may face competition from, and we may be unable to compete successfully against, new entrants and\nestablished companies with greater resources.

The\noilfield maintenance industry is intensely competitive and includes thousands of companies both domestically and internationally. We\nface increasing competitive pressures to grow our business in order to maintain our competitive position, and we may encounter competition\nfrom, and lose customers to, other companies with design, technological and manufacturing capabilities similar to ours. Some of our potential\ncompetitors may have special vehicles manufacture permits, and therefore, they can design and manufacture oil pumping trucks by themselves,\nand have a pricing advantage compared to us. Some of our potential competitors may also have greater name recognition, greater operating\nrevenues, larger customer bases, longer customer relationships and greater financial, technical, personnel and marketing resources than\nwe have. If we are unsuccessful in competing with our competitors for our existing and prospective customers’ business, our financial\nconditions and results of operation may be adversely affected.

Furthermore,\nincreased competition may reduce our market share and profitability and require us to increase our sales and marketing efforts and capital\ncommitment in the future, which could negatively affect our results of operations or force us to incur further losses. Although we have\naccumulated some and continuously growing our customer base, there is no assurance that we will be able to continue to do so in the future\nagainst current or future competitors, and such competitive pressures may have a material adverse effect on our business, financial condition\nand results of operations.

If\nwe are not able to implement our strategies to achieve our business objectives, our business operations and financial performance will\nbe adversely affected.

Our\ngrowth strategy is based on currently prevailing circumstances and the assumption that certain circumstances will or will not occur,\nas well as the inherent risks and uncertainties involved in various stages of development. However, there is no assurance that we will\nbe successful in implementing our strategies including (i) continued research on oilfield-specialized production and maintenance equipment,\n(ii) maintaining our brand, (iii) our rapid response to meet our customers and market demands, and (iv) future new sales model by integrating\nsupply chain finance. If we are not able to successfully implement our strategies, our business operations and financial performance\nwill be adversely affected.

We\nare dependent upon key executives and highly qualified managers and we cannot assure their retention.

Our\nsuccess depends, in part, upon the continued services of key members of our management. Our executives’ and managers’ knowledge\nof technologies, market, our business and our Company represents a key strength of our business, which cannot be easily replicated. The\nsuccess of our business strategy and our future growth also depend on our ability to attract, train, retain and motivate skilled managerial,\nsales, administration, development and operating personnel.

We\nbelieve that the extensive experience of our management team, their industry knowledge, in-depth understanding of the market and well-established\nrelationships with our customers, suppliers and business associates, enable us to assess the market trends and requirements of our customers,\nas well as to evaluate and manage our customers efficiently. Our future success will depend on the continued involvement, efforts, performance\nand abilities of our key personnel as a whole. Although we have employment agreements with our key personnel, there can be no assurance\nthat we will be able to retain the services of our key personnel and to continually leverage their leadership skills. If we are unable\nto retain our key personnel or attract and engage suitable personnel on a timely and commercially viable basis, it may result in the\nloss of strategic leadership, disruption or delay to our business operations, which could have a material adverse effect on our business,\noperations and financial conditions.

Changes\nto our payment terms with both customers and suppliers may materially adversely affect our operating cash flows.

We\nmay experience significant pressure from our suppliers to reduce the number of days of our accounts payable. At the same time, we may\nexperience pressure from our customers to extend the number of days before paying our accounts receivable. Any failure to manage our\naccounts payable and accounts receivable may have a material adverse effect on our business, financial condition and results of operations.

If\nwe are unable to collect account receivables from our customers, our results of operations and cash flows could be adversely affected.

Our\nbusiness depends on our ability to successfully obtain payment from customers for the amounts they owe us for our products and services.\nAs of June 30, 2026 and 2025, our accounts receivable balance amounted to approximately $2.8 million and $2.0 million, respectively.\nIf we are unable to timely collect our accounts receivable on a timely and consistent basis, however, our cash flows and access to operating\ncapital could be adversely affected.

Adverse\ngeneral economic, business and industry conditions could have a material adverse effect on the Company’s results of operations\nand cash flow.

The\ndemand for energy, including crude oil, nature gas liquids (“NGL”) and natural gas, is generally linked to broad-based economic\nactivities. If there is a slowdown in economic growth, an economic downturn or recession or other adverse economic or political development\nin the US, Europe, or Asia, there could be a significant adverse effect on global financial markets and commodity prices. In addition,\nhostilities in the Middle East and Ukraine and the occurrence or threat of terrorist attacks in the US or other countries could adversely\naffect the global economy. Global or national health concerns, including the outbreak of pandemic or contagious diseases may adversely\naffect the Company by (i) reducing global economic activity thereby resulting in lower demand for crude oil, NGL and natural gas, (ii)\nimpairing its supply chain, for example, by limiting the manufacturing of materials or the supply of goods and services used in the Company’s\noperations, and (iii) affecting the health of its workforce, rendering employees unable to work or travel. These and other factors that\naffect the demand for crude oil, NGLs and natural gas, and the Company’s business and industry, could ultimately have an adverse\nimpact on the Company’s results of operations and cash flows.

Changes\nto the demand for oil and the rise of petroleum alternatives may negatively affect the Company’s financial condition, results of\noperations and cash flow.

Fuel\nconservation measures, alternative fuel requirements, increasing consumer demand for alternatives to oil and natural gas and technological\nadvances in fuel economy and renewable energy generation systems could reduce the demand for oil. Recently, certain jurisdictions have\nimplemented policies or incentives to decrease the use of hydrocarbons and encourage the use of renewable fuel alternatives, which may\nlessen the demand for petroleum products and put downward pressure on commodity prices. Advancements in energy efficient products have\na similar effect on the demand for oil. The Company cannot predict the impact of changing demand for oil, and any major changes may have\na material adverse effect on the Company’s oilfield equipment and integrated solutions business, financial condition, results of\noperations and cash flow by decreasing the Company’s profitability, increasing its costs, limiting its access to capital and decreasing\nthe value of its assets.

If\nwe fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations,\nmeet our reporting obligations or prevent fraud, and investor confidence and the market price of our shares may be materially and adversely\naffected.

Prior\nto our initial public offering on the Nasdaq, we were a private company with limited accounting personnel and other resources with which\nto address our internal control over financial reporting. In connection with the audits of our consolidated financial statements included\nin this annual report, we and our independent registered public accounting firm identified material weaknesses in our internal control\nover financial reporting. As defined in the standards established by the PCAOB, a “material weakness” is a deficiency, or\na combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material\nmisstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.

As\nof June 30, 2026, one material weakness that has been identified related to our lack of sufficient financial reporting and accounting\npersonnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address complex U.S. GAAP accounting issues\nand to prepare and review our consolidated financial statements and related disclosures to fulfill U.S. GAAP and SEC financial reporting\nrequirements.

Following\nthe identification of the material weaknesses and other deficiencies, we have taken measures and plan to continue to take measures to\nremediate these control deficiencies. However, the implementation of these measures may not fully address the material weaknesses and\nother deficiencies in our internal control over financial reporting, and we cannot conclude that they have been fully remediated. Our\nfailure to correct the material weaknesses and other deficiencies or our failure to discover and address any other deficiencies could\nresult in inaccuracies in our financial statements and impair our ability to comply with applicable financial reporting requirements\nand related regulatory filings on a timely basis. Moreover, ineffective internal control over financial reporting could significantly\nhinder our ability to prevent fraud.

If\nwe are not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, or if we are unable to maintain\nthe adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to\ntime, we may not be able to produce timely and accurate financial statements and may not be able to conclude on an ongoing basis that\nwe have effective internal control over financial reporting in accordance with Section 404. If that were to happen, we could suffer material\nmisstatements in our financial statements and fail to meet our reporting obligations, which could lead to a decline in the market price\nof our Ordinary Shares and we could be subject to sanctions or investigations by the SEC or other regulatory authorities. We may also\nbe required to restate our financial statements for prior periods.

We\nmay incur liabilities that are not covered by insurance.

While\nwe seek to maintain appropriate levels of insurance, not all claims are insurable and we may experience major incidents of a nature that\nare not covered by insurance. We provide social security insurance including pension, medical insurance, unemployment insurance, maternity\ninsurance, on-the-job injury insurance and housing fund plans through a PRC government-mandated benefit contribution plan for our employees.

However,\nwe do not maintain any insurance covering our properties, equipment, inventory or employees, and we do not carry any business interruption\nor product liability insurance or any third-party liability insurance to cover claims in respect of personal injuries or any damages\narising from accidents on our properties or in relation to our operations. The occurrence of certain incidents including severe weather,\nearthquake, fire, war, power outages, flooding and the consequences resulting from them may not be covered by our insurance policies\nadequately, or at all. If we were subject to substantial liabilities, we could incur costs and losses that could materially and adversely\naffect our results of operations and financial condition.

If\nwe do not obtain substantial additional financing, our ability to execute our strategies as outlined in this annual report will be impaired.

Our\nplans for business expansion and development are dependent upon our raising additional capital. Our plans call for new investments in\nresearch and development, marketing, expanded service capacity, and working capital and other items. Although we expect the proceeds\nof subsequent offerings and our net earnings to substantially fund our planned growth and development, our management will be required\nto properly and carefully administer and allocate these funds. Should our capital needs be higher than estimated, or should additional\ncapital be required, we may seek additional investments, loans or debt financing to fully pursue our strategies. Such additional investment\nmay not be available to us on terms which are favorable or acceptable. Should we be unable to meet our full capital needs, our ability\nto fully implement our strategies will be impaired.

Pandemics\nand epidemics, natural disasters, terrorist activities, political unrest, and other outbreaks could disrupt our operations, which could\nmaterially and adversely affect our business, financial condition, and results of operations.

Global\npandemics, epidemics in China or elsewhere in the world, or fear of spread of contagious diseases, such as Ebola virus disease (EVD),\ncoronavirus disease 2019 (COVID-19), Middle East respiratory syndrome (MERS), severe acute respiratory syndrome (SARS), H1N1 flu, H7N9\nflu, and avian flu, as well as hurricanes, earthquakes, tsunamis, or other natural disasters could disrupt our business operations, reduce\nor restrict our supply of products and services, incur significant costs to protect our employees and facilities, or result in regional\nor global economic distress, which may materially and adversely affect our business, financial condition, and results of operations.\nActual or threatened war, terrorist activities, political unrest, civil strife, and other geopolitical uncertainty could have a similar\nadverse effect on our business, financial condition, and results of operations. Any one or more of these events may impede our production\nand delivery efforts and adversely affect our sales results, or even for a prolonged period of time, which could materially and adversely\naffect our business, financial condition, and results of operations.

We\nare also vulnerable to natural disasters and other calamities. We cannot assure you that we are adequately protected from the effects\nof fire, floods, typhoons, earthquakes, power loss, telecommunications failures, break-ins, war, riots, terrorist attacks, or similar\nevents. Any of the foregoing events may give rise to interruptions, damage to our property, delays in production, breakdowns, system\nfailures, technology platform failures, or internet failures, which could cause the loss or corruption of data or malfunctions of our\nmanufacturing facility as well as adversely affect our business, financial condition, and results of operations.

Our\ndirectors and officers currently own an aggregate of approximately 96.5% of the total voting power.

Currently,\nour directors and officers collectively own an aggregate of approximately 96.5% of the total voting power. These beneficial owners could\nhave significant influence on determining the outcome of any corporate transaction or other matter submitted to the shareholders for\napproval, including mergers, consolidations, the election of directors and other significant corporate actions. In cases where their\ninterests are aligned and they vote together, these beneficial owners will also have the power to prevent or cause a change in control.\nWithout the consent of some or all of these shareholders, we may be prevented from entering into transactions that could be beneficial\nto us or our minority shareholders. The interests of these beneficial owners may differ from the interests of our other shareholders.\nThe concentration in the ownership of our Ordinary Shares may cause a material decline in the value thereof.

As\na “controlled company” under the rules of the Nasdaq Capital Market, we may choose to exempt our company from certain corporate\ngovernance requirements that could have an adverse effect on our public shareholders.

We\nare a “controlled company” as defined under the Nasdaq Stock Market Rules because Mr. Chuanbo Jiang, our CEO and Chairman\nof the board, is beneficially own 83.7% of our issued and outstanding Class B Ordinary Shares, representing approximately 80.8% of the\ntotal voting power.

As\nlong as our officers and directors, either individually or in the aggregate, own at least 50% of the voting power of our Company, we\nare a “controlled company” as defined under Nasdaq Market Place Rules. For so long as we are a controlled company under that\ndefinition, we are permitted to elect to rely, and may rely, on certain exemptions from corporate governance rules, including:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	an\n exemption from the rule that a majority of our board of directors must be independent directors;

	●	an\n exemption from the rule that the compensation of our CEO must be determined or recommended solely by independent directors; and

	●	an\n exemption from the rule that our director nominees must be selected or recommended solely by independent directors.

As\na result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

Although\nwe do not intend to rely on the “controlled company” exemption under the Nasdaq listing rules after our initial public offering,\nwe could elect to rely on this exemption in the future. If we elect to rely on the “controlled company” exemption, a majority\nof the members of our board of directors might not be independent and our nominating and corporate governance and compensation committees\nmight not consist entirely of independent directors.

You\nmay face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because\nwe are incorporated under Cayman Islands law.

We\nare an exempted company incorporated under the laws of the Cayman Islands. Our corporate affairs are governed by our memorandum and articles\nof association, as amended and restated from time to time, the Companies Act (Revised) of the Cayman Islands (the “Companies Act”)\nand the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders\nand the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman\nIslands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands\nas well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court\nin the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly\nestablished as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman\nIslands have a less developed body of securities laws than the United States. Some states in the United States, such as Delaware, have\nmore fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies\nmay not have standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders\nof Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records (save for the\nmemorandum and articles of association, register of mortgages and charges, and the special resolutions passed by shareholders) or to\nobtain copies of the register of members of these companies. Under Cayman Islands law, the names of current directors of our Company\ncan be obtained from a search conducted at the Registrar of Companies in the Cayman Islands. No member (other than a director) shall\nhave any right of inspecting any account or book or document of the Company except as conferred by the Companies Act or as authorized\nby the directors or by ordinary resolution. This may make it more difficult for you to obtain the information needed to establish any\nfacts necessary for a shareholder resolution or to solicit proxies from other shareholders in connection with a proxy contest.

Certain\ncorporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies\nincorporated in other jurisdictions such as the United States. To the extent we choose to follow home country practice with respect to\ncorporate governance matters, our shareholders may be afforded less protection than they otherwise would under rules and regulations\napplicable to U.S. domestic issuers.

As\na result of all of the above, our public shareholders may have more difficulty in protecting their interests in the face of actions taken\nby management, members of the board of directors or controlling shareholder than they would as public shareholders of a company incorporated\nin the United States.

You\nmay be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.

Cayman\nIslands law provides shareholders with only limited rights to convene a general meeting and does not provide shareholders with any right\nto put any proposal before a general meeting. However, these rights may be provided in a company’s articles of association. Our\ncurrently effective memorandum and articles of association allow our shareholders holding shares representing in aggregate not less than\n10 percent of the rights to vote at such general meeting, to convene a general meeting of our shareholders, in which case our directors\nare obliged to call such meeting. Advance notice of at least 7 clear days is required for the convening of our general meetings. A quorum\nrequired for a general meeting is one or more holders holding shares that represent not less than one-third of the issued and outstanding\nshares of the Company carrying the right to vote at such general meeting. For these purposes, “clear days” means that period\nexcluding (a) the day when the notice is given or deemed to be given and (b) the day for which it is given or on which it is to take\neffect.

Recently\nintroduced economic substance legislation of the Cayman Islands may impact the Company or its operations.

Pursuant\nto the International Tax Cooperation (Economic Substance) Act (Revised) of the Cayman Islands, or the ES Act, that came into force on\nJanuary 1, 2019, a “relevant entity” is required to satisfy the economic substance test set out in the ES Act. A “relevant\nentity” includes a company incorporated in the Cayman Islands as is our Company. Based on the current interpretation of the ES\nAct, we believe that our Company is a pure equity holding company since it only holds equity participation in other entities and only\nearns dividends and capital gains. Accordingly, for so long as our Company is a “pure equity holding company,” it is only\nsubject to the minimum substance requirements, which require us to (i) comply with all applicable filing requirements under the Companies\nAct; and (ii) has adequate human resources and adequate premises in the Cayman Islands for holding and managing equity participations\nin other entities. However, there can be no assurance that we will not be subject to more requirements under the ES Act. Uncertainties\nover the interpretation and implementation of the ES Act may have an adverse impact on our business and operations.

Certain\njudgments obtained against us by our shareholders may not be enforceable.

We\nare a Cayman Islands company and substantially all of our assets are located outside of the United States. Substantially all of our current\noperations are conducted in the PRC. In addition, our current officers are nationals and residents of countries other than the United\nStates. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible\nfor you to bring an action against us or against these individuals in the United States in the event that you believe that your rights\nhave been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind,\nthe laws of the Cayman Islands and of the PRC may render you unable to enforce a judgment against our assets or the assets of our directors\nand officers.

Risks\nRelating to Our Capital Structure

Our\ndual class share structure with different voting rights may adversely affect the value and liquidity of the Class A Ordinary Shares.

We\ncannot predict whether our dual class share structure with different voting rights will result in a lower or more volatile market price\nof the Class A Ordinary Shares, in adverse publicity, or other adverse consequences. Certain index providers have announced restrictions\non including companies with multiple class share structures in certain of their indices. Because of our dual class structure, we will\nlikely be excluded from these indices and other stock indices that take similar actions. Given the sustained flow of investment funds\ninto passive strategies that seek to track certain indices, exclusion from certain stock indices would likely preclude investment by\nmany of these funds and could make the Class A Ordinary Shares less attractive to investors. In addition, several shareholder advisory\nfirms have announced their opposition to the use of a multiple class structure and our dual class structure may cause shareholder advisory\nfirms to publish negative commentary about our corporate governance, in which case, the market price and liquidity of the Class A Ordinary\nShares could be adversely affected.

Our\ndual class share structure with different voting rights, as well as the concentration of our share ownership among executive officers,\ndirectors and principal shareholders, will limit your ability to influence corporate matters and could discourage others from pursuing\nany change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.

We\nhave adopted a dual class share structure such that our Ordinary Shares consist of Class A Ordinary Shares and Class B Ordinary Shares.\nIn respect of matters requiring the votes of shareholders, each Class A Ordinary Share is entitled to one (1) vote and each Class B Ordinary\nShare is entitled to thirty (30) votes. Each Class B Ordinary Share is convertible into one Class A Ordinary share at any time by the\nholder thereof. Our Class A Ordinary Shares are not convertible into our Class B Ordinary Shares under any circumstances. Only our Class\nA Ordinary Shares are listed on Nasdaq.

As\nof the date of this annual report, Mr. Chuanbo Jiang, our CEO and Chairman of the board, and Ms. Huyun Gao, our COO, collectively\nbeneficially owned all of our issued and outstanding Class B Ordinary Shares, which will constitute approximately 96.5% of the total voting\npower. As a result of this dual class share structure and the concentration of control, as of the date of this annual report, Mr. Chuanbo\nJiang and Ms. Huyun Gao have significant influence over our business, including decisions regarding mergers, consolidations, liquidations\nand the sale of all or substantially all of our assets, election of directors and other significant corporate actions. In addition, our\nexecutive officers, directors, and principal shareholders and their affiliated entities together beneficially own approximately 96.5%\nof the total voting power as of the date of this annual report. These shareholders may take actions that are not in the best interest\nof us or our other shareholders. This concentration of control may discourage, delay or prevent a change in control of our company, which\ncould have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale\nof our company and may reduce the price of our Class A Ordinary Shares. This voting structure will also limit your ability to influence\ncorporate matters and could discourage investors from pursuing any change of control transactions that holders of our Class A Ordinary\nShares may view as beneficial.

Future\nissuances of Class B Ordinary Shares may be dilutive to holders of Class A Ordinary Shares.

We\nmay issue additional Class B Ordinary Shares in the future in connection with future financings, strategic transactions, equity incentive\nplans, or otherwise. Any such issuance could result in dilution to existing holders of our Class A Ordinary Shares.

In\naddition, since Class B Ordinary Shares carry greater voting rights than Class A Ordinary Shares, any future issuances of Class B Ordinary\nShares could have the effect of further concentrating voting power in certain shareholders. This may reduce the influence of Class A\nOrdinary Shareholders over matters requiring shareholder approval.

There\ncan be no assurance as to when or if we will issue additional Class B Ordinary Shares, or the terms of any such issuance. However, any\nsuch future issuances could materially and adversely affect the market price of our Class A Ordinary Shares and dilute the interests\nof existing Class A Ordinary Shareholders.

Risks\nRelated to Doing Business in China

Uncertainties\nand quick changes in the PRC legal system could result in a material and negative impact on our business operations, decrease the value\nof our Ordinary Shares and limit the legal protections available to you and us.

The\nPRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions may be cited for\nreference but have limited precedential value. Our PRC Subsidiaries are foreign-invested enterprises and are subject to laws and regulations\napplicable to foreign-invested enterprises as well as various Chinese laws and regulations generally applicable to companies incorporated\nin mainland China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve,\nthe interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involves\nuncertainties.

From\ntime to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since the PRC administrative\nand court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult\nto evaluate the outcome of administrative and court proceedings and the level of protection we enjoy than in more developed legal systems.\nFurthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely\nbasis or at all, and which may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies\nand rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual,\nproperty (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment\nin mainland China could materially and adversely affect our business and impede our ability to continue our operations.

If\nthe Chinese government chooses to exert more oversight and control over offerings that are conducted overseas and/or foreign investment\nin mainland China-based issuers, such action may significantly limit or completely hinder our ability to offer or continue to offer Ordinary\nShares to investors and cause the value of our Ordinary Shares to significantly decline or be worthless.

Recent\nstatements by the Chinese government have indicated an intent to exert more oversight and control over offerings that are conducted overseas\nand/or foreign investments in mainland China-based issuers. On July 6, 2021, the General Office of the Communist Party of China Central\nCommittee and the General Office of the State Council jointly issued a document to crack down on illegal activities in the securities\nmarket and promote the high-quality development of the capital market, which, among other things, requires the relevant governmental\nauthorities to strengthen cross-border oversight of law enforcement and judicial cooperation, to enhance supervision over mainland China-based\ncompanies listed overseas, and to establish and improve the system of extraterritorial application of the PRC securities laws.

Furthermore,\non December 28, 2021, the CAC, the NDRC and several other administrations jointly issued the Revised Review Measures, which became effective\nand replaced the existing Measures for Cybersecurity Review on February 15, 2022. According to the Revised Review Measures, if an “online\nplatform operator” that is in possession of personal data of more than one million users intends to list in a foreign country,\nit must apply for a cybersecurity review. Moreover, on July 7, 2022, the CAC released the Measures for the Security Assessment of Cross-Border\nData, which became effective on September 1, 2022. Given the recent issuance of the Measures for the Security Assessment of Cross-Border\nData, there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation.\nOn September 24, 2024, the State Council promulgated the Regulation on Network Data Security Management, which became effective on January\n1, 2025. According to such regulations, network data processors conducting network data processing activities that may affect or potentially\naffect national security shall conduct national security reviews in accordance with national regulations.

We\nmanufacture and sell our products and services in mainland China. Our subsidiaries in mainland China do not collect or store any data\n(including certain personal information) from our individual end-users, who may be PRC individuals. As of the date of this annual report,\nwe have not collected and stored personal information from our individual end-users. As a result, the likelihood of us being subject\nto the review of the CAC is remote. Uncertainties still exist, however, due to the possibility that laws, regulations, or policies in\nmainland China could change rapidly in the future. Any future action by the PRC government expanding the categories of industries and\ncompanies whose foreign securities offerings are subject to review by the CAC could significantly limit or completely hinder our ability\nto offer or continue to offer securities to investors and could cause the value of such securities to significantly decline or be worthless.

We\nare subject to the filing procedures with the CSRC in connection with subsequent securities offerings. The approval of or clearance by\nthe CAC and other compliance procedures may be required in connection with subsequent securities offerings, and, if required, we cannot\npredict whether we will be able to obtain such approval or clearance.

The\nRegulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, require an overseas special\npurpose vehicle that is controlled by PRC companies or individuals formed for the purpose of seeking a public listing on an overseas\nstock exchange through acquisitions of PRC domestic companies using shares of such special purpose vehicle or held by its shareholders\nas considerations to obtain the approval of the CSRC, prior to the listing and trading of such special purpose vehicle’s securities\non an overseas stock exchange. However, the application of the M&A Rules remains unclear. If CSRC approval in connection with the\nM&A Rules is required, it is uncertain whether it would be possible for us to obtain the approval. Any failure to obtain or delay\nin obtaining such CSRC approval for subsequent offerings would subject us to sanctions imposed by the CSRC and other PRC regulators.

While\nthe application of the M&A Rules remains unclear, we believe that the CSRC approval is not required in connection with the M&A\nRules, because (1) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings under this annual\nreport are subject to the M&A Rules; (2) our PRC Subsidiaries were not established by merger with or acquisition of PRC domestic\ncompanies as defined under the M&A Rules; and (3) we have completed filing procedures with the CSRC for our initial public offering\npursuant to the requirements of the Overseas Listing Regulations that recently came into effect and provided clearer guidance for such\nrequirements. However, uncertainties still exist as to how the M&A Rules will be interpreted and implemented, and the opinion of\nour PRC counsel is subject to any new laws, rules, and regulations or detailed implementations and interpretations in any form relating\nto the M&A Rules. We cannot assure you that the relevant PRC government agencies, including the CSRC, would reach the same conclusion\nas our PRC counsel. If the CSRC or other PRC regulatory body subsequently determines that we need to obtain the CSRC’s approval\nfor subsequent offerings or if the CSRC or any other PRC government authorities promulgates any interpretation or implements rules that\nwould require us to obtain CSRC or other governmental approvals for any such offering, we may face adverse actions or sanctions by the\nCSRC or other PRC regulatory agencies, which may include fines and penalties on our operations in mainland China, limitations on our\noperating privileges in mainland China, delays in or restrictions on the repatriation of the proceeds from any such offering into mainland\nChina, restrictions on or prohibition of the payments or remittance of dividends by our subsidiaries in mainland China, or other actions\nthat could have a material and adverse effect on our business, reputation, financial condition, results of operations, prospects, as\nwell as the trading price of our Ordinary Shares. The CSRC or other PRC regulatory agencies may also take actions requiring us, or making\nit advisable for us, to halt any such offering before the settlement and delivery of the Ordinary Shares that we are offering. In addition,\nif the CSRC or other regulatory agencies later promulgate new rules or explanations requiring that we obtain their approvals for subsequent\nofferings, we may be unable to obtain a waiver of such approval requirements.

The\nGeneral Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the\nOpinions on Severe and Lawful Crackdown on Illegal Securities Activities, which were made available to the public on July 6, 2021. These\nopinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings\nby mainland China-based companies. These opinions proposed to take effective measures, such as promoting the construction of relevant\nregulatory systems, to deal with the risks and incidents facing mainland China-based overseas-listed companies and the demand for cybersecurity\nand data privacy protection. Moreover, on December 28, 2021, the CAC and other ministries and commissions (including the CSRC) announced\nthe adoption of the Cybersecurity Review Measures, which became effective on February 15, 2022 and provide that network platform operators\npossessing personal information of more than one million individual users must undergo a cybersecurity review by the CAC when they seek\nto have their securities listed on a foreign stock exchange. These policies and any related implementation rules to be enacted may subject\nus to additional compliance requirements. As of the date of this annual report, no official guidance or related implementation rules\nhave been issued in relation to these recently issued opinions, and the interpretation and implementation of these opinions remain unclear\nat this stage.

On\nFebruary 17, 2023, the CSRC issued the Overseas Listing Regulations. The Overseas Listing Regulations require that a PRC domestic enterprise\nseeking to issue and list its shares overseas shall complete the filing procedures with the CSRC. The required filing materials shall\ninclude but not be limited to: (1) filing report and relevant commitments; and (2) domestic legal opinions. According to the Overseas\nListing Regulations, we need to submit the required filing materials to the CSRC within three business days after our initial filing\nof the application for subsequent offerings to the SEC, and shall complete the filing procedures with CSRC before our listing on U.S.\nexchanges. We have completed the filing with the CSRC in connection with our initial public offering and our listing on the Nasdaq Capital\nMarket, and the CSRC published the notification of its approval of our completion of the required filing procedures on August 9, 2024.\nThe CSRC Filing Rules state that, any post-listing follow-on offering by an issuer in the same overseas market, including issuance of\nshares, convertible notes and other similar securities, shall be subject to filing requirement within three business days after the completion\nof the offering. Therefore, any of our future offering and listing of our securities in an overseas market shall be subject to the filing\nrequirements under the Overseas Listing Regulations.

Except\nfor the CSRC approval for our initial public offering, which we have obtained, no effective laws or regulations in the PRC explicitly\nrequire us to seek approval from any other PRC governmental authorities for our overseas listing plan, nor has our company or any of\nour subsidiaries received any inquiry, notice, warning or sanctions regarding our planned overseas listing from the CSRC or any other\nPRC governmental authorities.

We\ncannot assure you that we will remain fully compliant with all new regulatory requirements of these opinions or any future implementation\nrules on a timely basis, or at all. If we are subject to additional requirements that we obtain the approval or clearance from either\nthe CSRC, the CAC or any other regulators in mainland China for subsequent offerings but fail to obtain such approval or clearance, we\nwill not be able to pursue subsequent offerings any further. If we attempt to pursue subsequent offerings without obtaining such approval\nor clearance from regulators in mainland China, even if it is rejected or granted, but later rescinded, or if we inadvertently conclude\nthat such approvals are not required, we may face severe and expansive sanctions imposed by regulators in mainland China, including fines\nand penalties on our operations in mainland China, limitations on our operating privileges in mainland China, delays in or restrictions\non the repatriation of the proceeds from subsequent offerings into the PRC, restrictions on or prohibition of the payments or remittance\nof dividends by our subsidiaries in mainland China, forced delisting of the Ordinary Shares, or other actions that could have a material\nand adverse effect on our business, financial condition, results of operations, reputation and prospects, as well as the trading price\nof the Ordinary Shares. The CSRC or other regulators in mainland China may also take actions requiring us, or making it advisable for\nus, to halt subsequent offerings before the settlement and delivery of the Ordinary Shares that we are offering. Consequently, if you\nengage in market trading or other activities in anticipation of and prior to the settlement and delivery of the Ordinary Shares we are\noffering, you would be doing so at the risk that the settlement and delivery may not occur. In addition, if the CSRC or other regulators\nin mainland China later promulgate new rules or explanations requiring that we obtain their approvals for subsequent offerings, we may\nbe unable to obtain a waiver of such approval requirements.

The\nChinese government may intervene in or influence our operations at any time, which could result in a material change in our operations\nand significantly and adversely impact the value of our securities.

The\nPRC government has significant authority to exert influence on our operations in mainland China. Therefore, uncertainties in the PRC\nlegal system and the interpretation and enforcement of PRC laws and regulations could limit the legal protection available to you and\nus, hinder our ability to offer or continue to offer the Ordinary Shares, result in a material adverse effect on our business operations,\nand damage our reputation, which might further cause the Ordinary Shares to significantly decline in value or become worthless. Changes\nin China’s economic, political or social conditions, or government policies could materially and adversely affect our business,\nfinancial condition, and results of operations. The economic, political and social conditions in the PRC differ from those in more developed\ncountries in many respects, including structure, government involvement, level of development, growth rate, control of foreign exchange,\ncapital reinvestment, allocation of resources, rate of inflation and trade balance position. Before the adoption of its reform and opening\nup policies in 1978, the PRC was primarily a planned economy. In recent years, the PRC government has been reforming the PRC economic\nsystem and government structure. For example, the PRC government has implemented economic reform and measures emphasizing the utilization\nof market forces in the development of the PRC economy in the past three decades. These reforms have resulted in significant economic\ngrowth and social prospects. Economic reform measures, however, may be adjusted, modified or applied inconsistently from industry to\nindustry or across different regions of the country.

We\ncannot predict whether the resulting changes will have any adverse effect on our current or future business, financial condition or results\nof operations. Despite these economic reforms and measures, the PRC government continues to play a significant role in regulating industrial\ndevelopment, allocation of natural and other resources, production, pricing and management of currency, and there can be no assurance\nthat the PRC government will continue to pursue a policy of economic reform or that the direction of reform will continue to be market\nfriendly. Our ability to successfully expand business operations in the PRC depends on a number of factors, including macro-economic\nand other market conditions. Demand for our future products in the Chinese market and our business, financial condition and results of\noperations may be materially and adversely affected by the following factors:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	changes\n in political or social conditions of the PRC;

	●	changes\n in laws, regulations, and administrative directives or the interpretation thereof;

	●	measures\n which may be introduced to control inflation or deflation; and

	●	changes\n in the rate or method of taxation.

These\nfactors are affected by a number of variables which are beyond our control.

We\nmust remit subsequent offerings proceeds to mainland China before they may be used to benefit our business in mainland China, and we\ncannot assure that we can finish all necessary governmental registration processes in a timely manner.

The\nproceeds of our subsequent offerings must be sent back to mainland China, and the process for sending such proceeds back to mainland\nChina may take several months after the closing of subsequent offerings. In utilizing the proceeds of subsequent offerings as an offshore\nholding company of our PRC Subsidiaries, we may make loans to our PRC Subsidiaries, or we may make additional capital contributions to\nour PRC Subsidiaries. Any shareholder loan or additional capital contribution are subject to PRC regulations. For example, loans by us\nor making additional capital contribution to our subsidiaries in mainland China, which are foreign-invested enterprises, or FIEs, to\nfinance their activities cannot exceed statutory limits, while the shareholder loan must be also registered with the State Administration\nof Foreign Exchange, or SAFE. The statutory limit for the total amount of foreign debts of a foreign-invested company is the difference\nbetween the amount of total investment as approved by MOFCOM or its local counterpart and the amount of registered capital of such foreign-invested\ncompany.

To\nremit the proceeds of subsequent offerings, we must take the steps legally required under the PRC laws. In light of the various requirements\nimposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding companies, we cannot assure you that\nwe will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if\nat all, with respect to future loans by us to our PRC Subsidiaries or with respect to future capital contributions by us to our PRC Subsidiaries.\nIf we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from subsequent offerings and to\ncapitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity,\nour ability to fund and expand our business and our Ordinary Shares.

We\nmay rely on dividends and other distributions on equity paid by our PRC Subsidiaries to fund any cash and financing requirements we may\nhave, and any limitation on the ability of our PRC Subsidiaries to make payments to us could have a material and adverse effect on our\nability to conduct our business.

We\nrely principally on dividends and other distributions on equity from our PRC Subsidiaries for our cash requirements, including for services\nof any debt we may incur.

Our\nPRC Subsidiaries’ ability to distribute dividends is based upon their distributable earnings. Current PRC regulations permit our\nPRC Subsidiaries to pay dividends to their respective shareholders only out of their accumulated profits, if any, determined in accordance\nwith PRC accounting standards and regulations. In addition, each of our PRC Subsidiaries, as an FIE, is required to draw 10% of its after-tax\nprofits each year, if any, to fund a common reserve, which may stop drawing its after-tax profits if the aggregate balance of the common\nreserve has already accounted for over 50 percent of its registered capital. These reserves are not distributable as cash dividends.\nIf our PRC Subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to\npay dividends or make other payments to us. Any limitation on the ability of our PRC Subsidiaries to distribute dividends or other payments\nto their respective shareholders could materially and adversely limit our ability to grow, make investments or acquisitions that could\nbe beneficial to our business, pay dividends or otherwise fund and conduct our business.

In\naddition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax rate of up to 10% will be applicable\nto dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties\nor arrangements between the PRC central government and governments of other countries or regions where the non-PRC resident enterprises\nare incorporated.

PRC\nregulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion\nmay delay us from using the proceeds of our subsequent offerings to make loans or additional capital contributions to our PRC Subsidiaries,\nwhich could materially and adversely affect our liquidity and our ability to fund and expand our business.

Any\nfunds we transfer to our PRC Subsidiaries, either as a shareholder loan or as an increase in registered capital, are subject to approval\nby or registration with relevant governmental authorities in China. According to the relevant PRC regulations on FIEs, in China, capital\ncontributions to our PRC Subsidiaries are subject to the approval of or filing with the Ministry of Commerce, or MOFCOM or its local\nbranches and registration with a local bank authorized by the SAFE. In addition, (i) a foreign loan of less one year duration procured\nby our PRC Subsidiaries is required to be registered with SAFE or its local branches and (ii) a foreign loan of one year duration or\nmore procured by our PRC Subsidiaries is required to be applied to the NDRC in advance for undergoing recordation registration formalities.\nAny medium or long-term loan to be provided by us to our PRC Subsidiaries must be registered with the NDRC and the SAFE or its local\nbranches. We may not be able to complete such registrations on a timely basis, with respect to future capital contributions or foreign\nloans by us to our PRC Subsidiaries. If we fail to complete such registrations, our ability to use the proceeds of our subsequent offerings\nand to capitalize our PRC operations may be negatively affected, which could adversely affect our liquidity and our ability to fund and\nexpand our business.

On\nMarch 30, 2015, the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement\nof Foreign-Invested Enterprises, or SAFE Circular 19, which took effect as of June 1, 2015. SAFE Circular 19 launched a nationwide reform\nof the administration of the settlement of the foreign exchange capitals of FIEs and allows FIEs to settle their foreign exchange capital\nat their discretion, but continues to prohibit FIEs from using the Renminbi fund converted from their foreign exchange capital for expenditure\nbeyond their business scopes, providing entrusted loans or repaying loans between nonfinancial enterprises. The SAFE issued the Circular\non Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or SAFE Circular 16, effective\nin June 2016. Pursuant to SAFE Circular 16, enterprises registered in China may also convert their foreign debts from foreign currency\nto Renminbi on a self-discretionary basis. SAFE Circular 16 provides an integrated standard for conversion of foreign exchange under\ncapital account items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies\nto all enterprises registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated\ncapital of a company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations,\nwhile such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular is relatively new, there\nremains uncertainty as to its interpretation and application and any other future foreign exchange related rules. Violations of these\nCirculars could result in severe monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability\nto use Renminbi converted from the net proceeds of our subsequent offerings to fund our PRC operating subsidiary, to invest in or acquire\nany other PRC companies through our PRC Subsidiaries, which may adversely affect our business, financial condition and results of operations.

Our\nOrdinary Shares may be delisted under the HFCA Act if the PCAOB is unable to inspect our auditors for two consecutive years. The delisting\nof our Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.

The\nHFCA Act was enacted on December 18, 2020. The HFCA Act states if the SEC determines that a company has filed audit reports issued by\na registered public accounting firm that has not been subject to inspection by the PCAOB for three consecutive years beginning in 2021,\nthe SEC shall prohibit such Ordinary Shares from being traded on a national securities exchange or in the over the counter trading market\nin the U.S. On December 23, 2022, the Accelerating Holding Foreign Companies Accountable Act (“AHFCA Act”) was enacted, which\namended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor\nis not subject to PCAOB inspections for two consecutive years instead of three. As a result, the time period before our Ordinary Shares\nmay be prohibited from trading or delisted has been reduced accordingly.

On\nMarch 24, 2021, the SEC adopted interim final rules relating to the implementation of certain disclosure and documentation requirements\nof the HFCA Act. A company will be required to comply with these rules if the SEC identifies it as having a “non-inspection”\nyear under a process to be subsequently established by the SEC. On September 22, 2021, the PCAOB adopted a final rule implementing the\nHFCA Act, which provides a framework for the PCAOB to use when determining, as contemplated under the HFCA Act, whether the PCAOB is\nunable to inspect or investigate completely registered public accounting firms located in a foreign jurisdiction because of a position\ntaken by one or more authorities in that jurisdiction. On December 2, 2021, the SEC issued amendments to finalize rules implementing\nthe submission and disclosure requirements in the HFCA Act. The rules apply to registrants that the SEC identifies as having filed an\nannual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB\nis unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. On December 16,\n2021, the PCAOB issued a Determination Report which found that the PCAOB was unable to inspect or investigate completely registered public\naccounting firms headquartered in: (i) mainland China, and (ii) Hong Kong. Our auditor is not headquartered in mainland China or Hong\nKong and was not identified in this report as a firm subject to the PCAOB’s determination.

Furthermore,\nvarious equity-based research organizations have recently published reports on mainland China-based companies after examining their corporate\ngovernance practices, related party transactions, sales practices and financial statements, and these reports have led to special investigations\nand listing suspensions on U.S. national exchanges. Any similar scrutiny on us, regardless of its lack of merit, could cause the market\nprice of our Ordinary Shares to fall, divert management resources and energy, cause us to incur expenses in defending ourselves against\nrumors, and increase the premiums we pay for director and officer insurance.

Our\nauditor, HTL International, LLC, the independent registered public accounting firm that issues the audit report included elsewhere in\nthis annual report, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is\nsubject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable\nprofessional standards. HTL International, LLC is headquartered in Houston, Texas, it is currently subject to inspection by the PCAOB\non a regular basis The PCAOB currently has access to inspect the working papers of our auditor. However, the recent developments would\nadd uncertainties to our subsequent offerings and we cannot assure you whether Nasdaq or regulatory authorities would apply additional\nand more stringent criteria to us after considering the effectiveness of our auditor’s audit procedures and quality control procedures,\nadequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial\nstatements.

The\nSEC may propose additional rules or guidance that could impact us if our auditor is not subject to PCAOB inspection. For example, on\nAugust 6, 2020, the President’s Working Group on Financial Markets, or the PWG, issued the Report on Protecting United States Investors\nfrom Significant Risks from Chinese Companies to the then President of the United States. This report recommended the SEC implement five\nrecommendations to address companies from jurisdictions that do not provide the PCAOB with sufficient access to fulfil its statutory\nmandate. Some of the concepts of these recommendations were implemented with the enactment of the HFCA Act. However, some of the recommendations\nwere more stringent than the HFCA Act. For example, if a company’s auditor was not subject to PCAOB inspection, the report recommended\nthat the transition period before a company would be delisted would end on January 1, 2022.

On\nAugust 26, 2022, the CSRC, the Ministry of Finance of the PRC, and PCAOB signed a Statement of Protocol, or the Protocol, governing inspections\nand investigations of audit firms based in mainland China and Hong Kong. Pursuant to the Protocol, the PCAOB has independent discretion\nto select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. However,\nuncertainties still exist whether the framework will be fully complied, which could cause the market price of our Ordinary Shares to\nbe materially and adversely affected, and our securities could be delisted and prohibited from being traded on the national securities\nexchange earlier than would be required by the HFCA Act. If our securities are unable to be listed on another securities exchange by\nthen, such a delisting would substantially impair your ability to sell or purchase our Ordinary Shares when you wish to do so, and the\nrisk and uncertainty associated with a potential delisting would have a negative impact on the price of our Ordinary Shares. On December\n15, 2022, the PCAOB issued a Determination Report which determined that the PCAOB (1) is able to select engagements, audit areas, and\npotential violations to be reviewed or investigated, (2) has timely access to, and the ability to retain and use, any document or information\nthat the PCAOB considers relevant to an inspection or investigation, and (3) is able to conduct inspections and investigations in a manner\nconsistent with the provisions of the Act and the rules of the PCAOB, as interpreted and applied by the PCAOB. Consequently, the PCAOB\nconcluded that in the absence of any evidence that authorities in the PRC currently are taking any positions to impair the PCAOB’s\nability to execute its statutory mandate with respect to inspections or investigations, the HFCA Act dictates that the PCAOB vacate the\n2021 Determinations. As required by the HFCA Act, if in the future the PCAOB determines it no longer can inspect or investigate completely\nbecause of a position taken by an authority in the PRC, the PCAOB will act expeditiously to consider whether the PCAOB should issue a\nnew determination.

Fluctuations\nin exchange rates could have a material and adverse effect on our results of operations and the value of your investment.

The\nvalue of the Renminbi against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political\nand economic conditions and the foreign exchange policy adopted by the PRC government. It is difficult to predict how long such appreciation\nof RMB against the U.S. dollar may last and when and how the relationship between the RMB and the U.S. dollar may change again. All of\nour revenues and substantially all of our costs are denominated in Renminbi. We rely on dividends paid by our operating subsidiaries\nin mainland China for our cash needs. Any significant revaluation of Renminbi may materially and adversely affect our results of operations\nand financial position reported in Renminbi when translated into U.S. dollars, and the value of, and any dividends payable on, the Ordinary\nShares in U.S. dollars. To the extent that we need to convert U.S. dollars into Renminbi for our operations, appreciation of the Renminbi\nagainst the U.S. dollar would have an adverse effect on the Renminbi amount we would receive. Conversely, if we decide to convert our\nRenminbi into U.S. dollars for the purpose of making payments for dividends on our Ordinary Shares or for other business purposes, appreciation\nof the U.S. dollar against the Renminbi would have a negative effect on the U.S. dollar amount.

PRC\nregulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident beneficial\nowners or our PRC subsidiary to liability or penalties, limit our ability to inject capital into our PRC subsidiary, limit our PRC subsidiary’s\nability to increase their registered capital or distribute profits to us, or may otherwise adversely affect us.

On\nJuly 4, 2014, SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip\nInvestment through Special Purpose Vehicles, or SAFE Circular 37. On February 13, 2015, SAFE further promulgated the Circular on Further\nSimplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment, or SAFE Circular 13, which took effect\non June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified\nbanks rather than SAFE or its local branch in connection with their direct establishment or indirect control of an offshore entity established\nfor the purpose of overseas investment or financing with such PRC residents’ legally owned assets or equity interests in domestic\nenterprises or offshore assets or interests. Qualified local banks will examine and handle foreign exchange registration for overseas\ndirect investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 since June\n1, 2015.

According\nto Circular 37 and Circular 13, our shareholders or beneficial owners who are PRC residents are subject to Circular 37 or other foreign\nexchange administrative regulations in respect of their investment in our Company. If our shareholders who are PRC residents or entities\ndo not complete their registration with the local SAFE branches, our PRC Subsidiaries may be prohibited from distributing their profits\nand any proceeds from any reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute\nadditional capital to our PRC Subsidiaries. Moreover, failure to comply with SAFE registration requirements could result in liability\nunder PRC laws for evasion of applicable foreign exchange restrictions.

To\nthe best of our knowledge, our PRC resident shareholders who: (i) directly or indirectly hold shares in our Cayman Islands holding company\nand (ii) are known to us, have completed the application for foreign exchange registrations for their foreign investment in our company\nin accordance with Circular 37 and Circular 13.

Failure\nto make adequate contributions to various employee benefit plans and withhold individual income tax on employees’ salaries as required\nby PRC regulations may subject us to penalties.

Companies\noperating in mainland China are required to participate in various government-mandated employee benefit contribution plans, including\ncertain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal\nto certain percentages of salaries, including bonuses and allowances, of our employees up to a maximum amount specified by the local\ngovernment from time to time at locations where we operate our businesses. The requirement of employee benefit contribution plans has\nnot been implemented consistently by the local governments in mainland China given the different levels of economic development in different\nlocations. Companies operating in mainland China are also required to withhold individual income tax on employees’ salaries based\non the actual salary of each employee upon payment. Should we fail to make adequate contributions to employee benefit plans or under-withhold\nindividual income tax, we may be subject to late fees and fines and our financial condition and results of operations may be adversely\naffected.

Failure\nto timely register a branch office for business activities as required by PRC regulations may subject us to penalties.

Starting\nfrom June 2021, we leased facilities and employed staff in Shiyan, China, to carry out warehousing, assembly, testing, coordination with\ncontract manufacturers, and related operations. However, due to various external factors, including disruptions to our daily operations\ncaused by the COVID-19 pandemic, we did not establish a legally registered branch office for our operations in Shiyan, China, until September\n2024. This non-compliance may expose us to potential administrative penalties and tax liabilities. Chinese local regulations require\nbusiness operating within its jurisdictions to comply with all applicable registration procedures and maintain proper licensing. Our\nfailure to adhere to these requirements could lead to fines, interest charges on any unpaid taxes, as well as potential operational restrictions\nimposed by the authorities. We have taken steps to rectify this situation by registering our branch office in Shiyan, China, and ensuring\nfull compliance moving forward. Nonetheless, such failure may subject us to late fees and fines and our financial condition and results\nof operations may be adversely affected. Based on the advice of our PRC counsel, DeHeng Law Offices (Shenzhen), the likelihood of incurring\npenalties or tax liabilities is remote due to the relatively minor nature of the violations and our proactive measures to address the\nsituation.

We\ndo not hold a special vehicle production permission to produce special vehicles as requested by the Chinese Ministry of Industry and\nInformation Technology. If the government does not allow outsourcing or if our business demand exceeds the outsourcing factory’s\ncapacity in the future, it could severely restrict our growth and adversely affect the value of your investment.

We\ndo not hold a special vehicle production permission to produce special vehicles as requested by the Chinese Ministry of Industry and\nInformation Technology, so we rely on a collaborative outsourcing model to provide final products to customers. While this approach reduces\nthe initial operational investment in large fixed assets, it also brings policy risks and business expansion bottlenecks. If the government\ndoes not allow outsourcing or if our business demand exceeds the outsourcing factory’s capacity in the future, it could severely\nrestrict our growth and adversely affect the value of your investment.

We\nface uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

On\nFebruary 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties\nby Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin 7 extends its tax jurisdiction to transactions involving the transfer\nof taxable assets through offshore transfer of a foreign intermediate holding company. In addition, SAT Bulletin 7 has introduced safe\nharbors for internal group restructurings and the purchase and sale of equity through a public securities market. SAT Bulletin 7 also\nbrings challenges to both foreign transferor and transferee (or other person who is obligated to pay for the transfer) of taxable assets,\nas such persons need to determine whether their transactions are subject to these rules and whether any withholding obligation applies.

On\nOctober 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Issues Concerning the Withholding of Non-resident\nEnterprise Income Tax at Source, or SAT Bulletin 37, which came into effect on December 1, 2017. The SAT Bulletin 37 further clarifies\nthe practice and procedure of the withholding of non-resident enterprise income tax.

Where\na non-resident enterprise transfers taxable assets indirectly by disposing of the equity interests of an overseas holding company, which\nis an “Indirect Transfer,” the non-resident enterprise as either transferor or transferee, or the PRC entity that directly\nowns the taxable assets, may report such Indirect Transfer to the relevant tax authority. Using a “substance over form” principle,\nthe PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was\nestablished for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be\nsubject to PRC enterprise income tax, and the transferee or other person who pays for the transfer is obligated to withhold the applicable\ntaxes currently at a rate of 10% for the transfer of equity interests in a PRC resident enterprise. Both the transferor and the transferee\nmay be subject to penalties under PRC tax laws if the transferee fails to withhold the taxes and the transferor fails to pay the taxes.

We\nface uncertainties as to the reporting and other implications of certain past and future transactions where PRC taxable assets are involved,\nsuch as offshore restructuring, sale of the Shares in our offshore subsidiaries and investments. Our Company may be subject to filing\nobligations or taxed if our company is transferor in such transactions, and may be subject to withholding obligations if our company\nis transferee in such transactions, under SAT Bulletin 7 and/or SAT Bulletin 37. For transfer of shares in our company by investors who\nare non-PRC resident enterprises, our PRC Subsidiaries may be requested to assist in the filing under SAT Bulletin 7 and/or SAT Bulletin\n37. As a result, we may be required to expend valuable resources to comply with SAT Bulletin 7 and/or SAT Bulletin 37 or to request the\nrelevant transferors from whom we purchase taxable assets to comply with these circulars, or to establish that our company should not\nbe taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

You\nmay experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against\nus or our management named in this annual report based on foreign laws.

We conduct substantially all of our historical operations in mainland China, and substantially all of our operating assets are located\nin mainland China. In addition, our current officers reside within mainland China and are PRC nationals. As a result, it may be difficult or impossible for investors to effect\nservice of process on us inside mainland China. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S.\ncourts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors. Moreover,\nthere is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons\npredicated upon the civil liability provisions of the securities laws of the United States or any state.

The\nrecognition and enforcement of foreign judgments are provided for under the PRC Civil Procedures Law. PRC courts may recognize and enforce\nforeign judgments in accordance with the requirements of the PRC Civil Procedures Law based either on treaties between China and the\ncountry where the judgment is made or on principles of reciprocity between jurisdictions. China does not have any treaties or other forms\nof written arrangement with the United States that provide for the reciprocal recognition and enforcement of foreign judgments. In addition,\naccording to the PRC Civil Procedures Law, the PRC courts will not enforce a foreign judgment against us or our directors and officers\nif they decide that the judgment violates the basic principles of PRC laws or national sovereignty, security or public interest. As a\nresult, it is uncertain whether and on what basis a PRC court would enforce a judgment rendered by a court in the United States or in\nthe Cayman Islands. In addition, it will be difficult for U.S. shareholders to originate actions against us in China in accordance with\nPRC laws because we are incorporated under the laws of the Cayman Islands and it will be difficult for U.S. shareholders, by virtue only\nof holding our Ordinary Shares, to establish a connection to the PRC for a PRC court to have jurisdiction as required under the PRC Civil\nProcedures Law.

Risks\nRelated to Ordinary Shares

If\nwe are unable to continue to meet the listing requirements of Nasdaq, our Class A Ordinary Shares will be delisted.

On\nOctober 15, 2025, we received a notice from the Nasdaq Stock Market LLC, stating that our ordinary shares fail to comply with the minimum\nbid price requirement for continued listing on Nasdaq in accordance with Nasdaq Listing Rule 5550(a)(2) based upon the closing bid price\nof the ordinary shares for the 30 consecutive business days prior to the date of the notice, and we were given an initial compliance\nperiod of 180 calendar days, or until April 13, 2026, to regain compliance. On April 13, 2026, we received another notification letter\nfrom the Nasdaq Stock Market LLC confirming that we had regained compliance. For the last 10 consecutive business days, from March 27,\n2026 through April 10, 2026, the closing bid price of our Class A Ordinary Shares had been above $1.00 per share. Accordingly, we have\nregained compliance and our ordinary shares are no longer subject to delisting.

There\ncan be no assurance that we will be able to maintain compliance with the minimum bid price requirement or other applicable Nasdaq continued\nlisting standards in the future. If our Class A Ordinary Shares are delisted from Nasdaq and we are unable to list our securities on\nanother national securities exchange, trading of our Class A Ordinary Shares would likely occur on an over-the-counter market. In such\nevent, liquidity for our securities could be materially reduced, price volatility could increase, and it could become more difficult\nfor investors to sell their shares or obtain accurate market quotations, any of which could adversely affect the market price of our\nClass A Ordinary Shares and our ability to raise capital.

The\nmarket price for our Class A Ordinary Shares may be volatile.

The\ntrading prices of our Class A Ordinary Shares are likely to be volatile and could fluctuate widely due to factors beyond our control.\nThis may happen because of broad market and industry factors, like the performance and fluctuation in the market prices or the underperformance\nor deteriorating financial results of internet or other companies based in mainland China that have listed their securities in the United\nStates in recent years. The securities of some of these companies have experienced significant volatility since their initial public\nofferings, including, in some cases, substantial price declines in their trading prices. The trading performances of other Chinese companies’\nsecurities after their offerings, including internet and e-commerce companies, may affect the attitudes of investors toward Chinese companies\nlisted in the United States, which consequently may impact the trading performance of the Class A Ordinary Shares, regardless of our\nactual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent\naccounting, corporate structure or other matters of other Chinese companies may also negatively affect the attitudes of investors towards\nChinese companies in general, including us, regardless of whether we have conducted any inappropriate activities. In addition, securities\nmarkets may from time to time experience significant price and volume fluctuations that are not related to our operating performance.

In\naddition to the above factors, the price and trading volume of our Class A Ordinary Shares may be highly volatile due to multiple factors,\nincluding the following:

	●	regulatory\n developments affecting us, our consumers or our industry;

	●	conditions\n in the global demand for oil which may directly affect on our business;

	●	announcements\n of studies and reports relating to the quality of our product and service offerings or those of our competitors;

	●	changes\n in the economic performance or market valuations of other oilfield automation machinery services businesses;

	●	actual\n or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;

	●	changes\n in financial estimates by securities research analysts;

	●	announcements\n by us or our competitors of new product and service offerings, acquisitions, strategic relationships, joint ventures or capital commitments;

	●	additions\n to or departures of our senior management;

	●	detrimental\n negative publicity about us, our management or our industry;

	●	fluctuations\n of exchange rates between the Renminbi and the U.S. dollar;

	●	release\n or expiry of lock-up or other transfer restrictions on our outstanding Ordinary Shares; and

	●	sales\n or perceived potential sales of additional Ordinary Shares.

The\ntrading market for the Class A Ordinary Shares will depend in part on the research and reports that securities or industry analysts publish\nabout us or our business. If research analysts do not establish and maintain adequate research coverage or if one or more of the analysts\nwho cover us downgrade the Class A Ordinary Shares or publish inaccurate or unfavorable research about our business, the market price\nfor our Class A Ordinary Shares would likely decline. If one or more of these analysts cease coverage of our company or fail to publish\nreports on us regularly, we could lose visibility in the financial markets, which, in turn, could cause the market price or trading volume\nfor the Class A Ordinary Shares to decline.

Our\nmanagement team has limited experience managing a public company.

Most\nof the members of our management team have limited experience managing a publicly traded company, interacting with public company investors,\nand complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently\nmanage their new roles and responsibilities. As a public company, we are subject to significant regulatory oversight and reporting obligations\nunder the U.S. federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents\nrequire significant attention from our senior management and could divert their attention away from the day-to-day management of our\nbusiness, which could adversely affect our business, financial condition, and operating results.

If\nsecurities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations\nregarding our Class A Ordinary Shares, the market price for our Class A Ordinary Shares and trading volume could decline.

The\ntrading market for our Class A Ordinary Shares will be influenced by research or reports that industry or securities analysts publish\nabout our business. If industry or securities analysts decide to cover us and in the future downgrade our Class A Ordinary Shares, the\nmarket price for our Class A Ordinary Shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly\npublish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume\nfor our Class A Ordinary Shares to decline.

Because\nwe do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of the Class A Ordinary Shares for return\non your investment.

We\ncurrently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our\nbusiness. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment\nin the Class A Ordinary Shares as a source for any future dividend income.

Our\nboard of directors has complete discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands\nlaw. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by\nour board of directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend either out of profit or share premium account,\nprovided that in no circumstances may a dividend be paid if the dividend payment would result in the company being unable to pay its\ndebts as they fall due in the ordinary course of business. Even if our board of directors decides to declare and pay dividends, the timing,\namount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our\ncapital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition,\ncontractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our\nClass A Ordinary Shares will likely depend entirely upon any future price appreciation of our Class A Ordinary Shares. There is no guarantee\nthat our Class A Ordinary Shares will appreciate in value or even maintain the price at which you purchased the Class A Ordinary Shares.\nYou may not realize a return on your investment in our Class A Ordinary Shares and you may even lose your entire investment in our Class\nA Ordinary Shares.

Substantial\nfuture sales or perceived potential sales of Class A Ordinary Shares in the public market could cause the price of the Class A Ordinary\nShares to decline.

Sales\nof substantial amounts of our Class A Ordinary Shares in the public market, or the perception that these sales could occur, could adversely\naffect the market price of our Class A Ordinary Shares and could materially impair our ability to raise capital through equity offerings\nin the future. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder\nor the availability of these securities for future sale will have on the market price of our ordinary shares. In addition, if we issue\nadditional Class A Ordinary Shares, either through private transactions or in the public markets in the United States or other jurisdiction,\nyour ownership interests in our company would be diluted and this, in turn, would have an adverse effect on the price of our ordinary\nshares. Moreover, the perceived risk of this potential dilution could cause shareholders to attempt to sell their shares and investors\nto short our Class A Ordinary Shares. These sales also may make it more difficult for us to sell equity or equity-related securities\nin the future at a time and price that we deem reasonable or appropriate.

We\nmay need additional capital and may sell additional Ordinary Shares or other equity securities or incur indebtedness, which could result\nin additional dilution to our shareholders or increase our debt service obligations.

We\nmay require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions\nwe may decide to pursue. If our cash resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity\nor debt securities or obtain a credit facility. The sale of additional equity securities or equity-linked debt securities could result\nin additional dilution to our shareholders. The incurrence of indebtedness would result in debt service obligations and could result\nin operating and financing covenants that would restrict our operations. We cannot assure you that financing will be available in amounts\nor terms acceptable to us, if at all.

Certain\nexisting shareholders have substantial influence over our company and their interests may not be aligned with the interests of our other\nshareholders.

As\nof the date of this annual report, our directors and officers collectively own an aggregate of 96.5% of the total voting power of our\noutstanding Ordinary Shares. As a result, they have substantial influence over our business, including significant corporate actions\nsuch as mergers, consolidations, election of directors and other significant corporate actions.

They\nmay take actions that are not in the best interest of us or our other shareholders. This concentration of ownership may discourage, delay\nor prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their\nshares as part of a sale of our company and may reduce the price of the Ordinary Shares. These actions may be taken even if they are\nopposed by our other shareholders, including those who purchase Ordinary Shares in our initial public offering and subsequent offerings.\nIn addition, the significant concentration of share ownership may adversely affect the trading price of the Ordinary Shares due to investors’\nperception that conflicts of interest may exist or arise.

We\nare an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

We\nare an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various\nrequirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required\nto comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 so long as we are an emerging growth\ncompany. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain\ninformation they may deem important.

In\naddition, under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as\nthose standards apply to private companies. We have elected to avail ourselves of an exemption that allows us to delay adopting new or\nrevised accounting standards until such time as those standards apply to private companies. As a result, we will not be subject to the\nsame new or revised accounting standards as other public companies that comply with the public company effective dates. We have also\nelected to take advantage of certain of the reduced disclosure obligations in this annual report and may elect to take advantage of other\nreduced reporting requirements in future filings. As a result of these elections, the information that we provide to our shareholders\nmay be different than you might receive from other public reporting companies.

We\nare a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions\napplicable to U.S. domestic public companies.

Because\nwe qualify as a foreign private issuer under the Exchange Act, we are exempt from certain provisions of the securities rules and regulations\nin the United States that are applicable to U.S. domestic issuers, including:

\n \n \n \n \n\n\n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	the\n rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K;

	●	the\n sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered\n under the Exchange Act;

	●	the\n sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability\n for insiders who profit from trades made in a short period of time; and

	●	the\n selective disclosure rules by issuers of material nonpublic information under Regulation FD.

We\nwill be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish\nour results on a semi-annual basis as press releases, distributed pursuant to the rules and regulations of the Nasdaq Capital Market.\nPress releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information\nwe are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with\nthe SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available\nto you were you investing in a U.S. domestic issuer.

As\nan exempted company incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate\ngovernance matters that differ significantly from the Nasdaq Capital Market corporate governance requirements; these practices may afford\nless protection to shareholders than they would enjoy if we complied fully with the Nasdaq Capital Market corporate governance requirements.

We\nmay lose our foreign private issuer status in the future, which could result in significant additional costs and expenses.

As\ndiscussed above, we are a foreign private issuer, and therefore, we are not required to comply with all of the periodic disclosure and\ncurrent reporting requirements of the Exchange Act. The determination of foreign private issuer status is made annually on the last business\nday of an issuer’s most recently completed second fiscal quarter. We would lose our foreign private issuer status if, for example,\nmore than 50% of our Ordinary Shares are directly or indirectly held by residents of the U.S. and we fail to meet additional requirements\nnecessary to maintain our foreign private issuer status. In the future, if we lose our foreign private issuer status as of the last date\nof our second fiscal quarter, we would be required to file with the SEC periodic reports and registration statements on U.S. domestic\nissuer forms beginning on the following January 1, which are more detailed and extensive than the forms available to a foreign private\nissuer. We would also have to mandatorily comply with U.S. federal proxy requirements, and our officers, directors and principal shareholders\nwould become subject to the short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act. In addition, we\nwould lose our ability to rely upon exemptions from certain corporate governance requirements under the Nasdaq Capital Market listing\nrules. As a U.S. listed public company that is not a foreign private issuer, we would incur significant additional legal, accounting\nand other expenses that we will not incur as a foreign private issuer, and accounting, reporting and other expenses in order to maintain\na listing on a U.S. securities exchange.

We\nwill incur increased costs as a result of being a public company.

Upon\ncompletion of our initial public offering, we became a public company and expect to incur significant legal, accounting and other expenses\nthat we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and\nthe Nasdaq Capital Market, impose various requirements on the corporate governance practices of public companies. As a company with less\nthan US$1.235 billion in net revenues for our last fiscal year, we qualify as an “emerging growth company” pursuant to the\nJOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable\ngenerally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley\nAct of 2002 in the assessment of the emerging growth company’s internal control over financial reporting.

We\nexpect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming\nand costly. We expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements\nof Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For example, as a result of becoming\na public company, we will need to increase the number of independent directors and adopt policies regarding internal controls and disclosure\ncontrols and procedures. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain\ndirector and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially\nhigher costs to obtain the same or similar coverage. In addition, we will incur additional costs associated with our public company reporting\nrequirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers.\nWe are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate\nwith any degree of certainty the amount of additional costs we may incur or the timing of such costs.

In\nthe past, shareholders of a public company often brought securities class action suits against the company following periods of instability\nin the market price of that company’s securities. If we were involved in a class action suit, it could divert a significant amount\nof our management’s attention and other resources from our business and operations, which could harm our results of operations\nand require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our\nreputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be\nrequired to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

There\ncan be no assurance that we will not be a passive foreign investment company, or PFIC, for United States federal income tax purposes\nfor any taxable year, which could subject United States investors in the Ordinary Shares to significant adverse United States income\ntax consequences.

In\ngeneral, we will be treated as a passive foreign investment company (“PFIC”) for any taxable year in which either (1) at\nleast 75% of our gross income (looking through certain 25% or more-owned subsidiaries) is passive income or (2) at least 50% of the average\nvalue of our assets (looking through certain 25% or more-owned subsidiaries) is attributable to assets that produce, or are held for\nthe production of, passive income. Passive income generally includes, without limitation, dividends, interest, rents, royalties, and\ngains from the disposition of passive assets. If we are determined to be a PFIC for any taxable year (or portion thereof) that is included\nin the holding period of a U.S. Holder (as defined in the section of this annual report captioned “Certain United States Federal\nIncome Tax Considerations”) of our securities, the U.S. Holder may be subject to increased U.S. federal income tax liability\nand may be subject to additional reporting requirements. The determination of whether we are a PFIC is a fact-intensive determination\nmade on an annual basis applying principles and methodologies that in some circumstances are unclear and subject to varying interpretation.\nOur actual PFIC status for any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can\nbe no assurance with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. We urge U.S. Holders\nto consult their own tax advisors regarding the possible application of the PFIC rules in light of their individual circumstances.

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ITEM\n 4.

INFORMATION\n ON THE COMPANY

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4.A.

History\n and Development of the Company

Corporate\nHistory

We\nare a holding company incorporated in the Cayman Islands and conduct our operations in mainland China through our PRC Subsidiaries. We\nbegan our operations in June 2020 when YLAN was founded in Changzhou, China.

With\nthe growth of our business and in order to facilitate international capital raising, we underwent an offshore reorganization in 2023.\nIn May 2023, STAK Inc. was incorporated in the Cayman Islands as our offshore holding company. Shortly after its incorporation, STAK\nInc. incorporated a wholly-owned subsidiary in Hong Kong, namely, STAK Holdings Limited, or STAK HK. In August 2023, STAK HK established\nSTAK (Changzhou) Intelligent Technology Co., Ltd, or WFOE, as a wholly foreign owned entity in the PRC. WFOE acquired 100% equity interest\nin YLAN in September 2023, and STAK Inc. became the ultimate holding company of our operating subsidiaries, YLAN and Changzhou Zhongshan,\na wholly-owned subsidiary of YLAN, which was established in April 2022 in mainland China. YLAN also established two registered branch\noffices for its operations in Shiyan, Hubei Province and Guiyang, Guizhou Province in September 2024 and January 2025, respectively.\nThe Guiyang branch office was subsequently deregistered due to adjustments to our business operations.

Our\nClass A Ordinary Shares began trading on the Nasdaq under the symbol “STAK” on February 26, 2025. On February 27, 2025, the\nCompany closed its initial public offering (the “IPO”) of 1,250,000 ordinary shares at a public offering price of $4.00 per\nordinary share. On March 4, 2025, the underwriters for the IPO partially exercised their over-allotment option to purchase an additional\n160,349 ordinary shares at a public offering price of $4.00 per ordinary share. The total gross proceeds received from the IPO, including\nproceeds from the exercise of the over-allotment option, were $5.6 million.

On\nFebruary 27, 2025, the Company issued warrants to the Kingswood Capital Partners, LLC, the representative of the underwriters in the\nIPO, to purchase an aggregate of 70,517 ordinary shares (the “Representative’s Warrants”). Such Representative’s\nWarrants have an exercise price of $4.80 per share. The Representative’s Warrants may be exercised in cash or on a cashless basis,\nand are exercisable for five years from February 27, 2025 to 5:00 p.m., Eastern time, February 25, 2030. The Representative’s Warrants\nare not redeemable by the Company. As of the date of this annual report,·70,517 ordinary shares were reserved and no shares were\nexercised.

On\nJune 5, 2025, the Company by way of resolution of shareholders passed at the extraordinary general meeting of the Company (i) re-designated\nand re-classified 37,500,000 ordinary shares as 37,500,000 Class A Ordinary Shares of par value of US$0.001 each, cancelled 12,500,000\nordinary shares and created a new share class of 12,500,000 Class B Ordinary Shares of par value US$0.001 each; (ii) immediately after\nsuch implementation of dual class structure, increased the Company’s authorized share capital to US$100,000 divided into (a) 75,000,000\nClass A Ordinary Shares of a par value of US$0.001 each and (b) 25,000,000 Class B Ordinary Shares of par value of US$0.001 each, by\ncreation of an additional 37,500,000 Class A Ordinary Shares and 12,500,000 Class B Ordinary Shares; (iii) immediately after such implementation\nof dual class structure and the increase of authorized share capital, adopted the second amended and restated memorandum and articles\nof association of the Company to reflect the changes of the authorized share capital and the rights of Class B Ordinary Shares; and (iv)\nsubject to such implementation of dual class structure, the increase of authorized share capital and the effectiveness of the second\namended and restated memorandum and articles of association, approved that repurchase of certain Class A Ordinary Shares held by certain\nshareholders and issuance of Class B Ordinary Shares thereto. Subsequently, the Company repurchased 7,700,000 and 1,500,000 Class A Ordinary\nShares from two shareholders, Lanying Capital Limited and MT. Yang Holding Ltd, respectively, and issued a corresponding number of Class\nB Ordinary Shares to such shareholders.

On\nJanuary 8, 2026, the Company closed a registered direct offering of 6,000,000 units (the “Units”) at a public offering price\nof US$0.38 per Unit, for aggregate gross process of approximately US$2.3 million. Each Unit consists of (i) one Class A Ordinary Share\nof par value of $0.001 per share, and (ii) one and one-half warrants (each, a “Warrant”), each whole warrant to purchase\none Class A Ordinary Share. A total of 6,000,000 Class A Ordinary Shares were issued as part of the Units, and up to 9,000,000 Class\nA Ordinary Shares may be issued upon the exercise of the Warrants. The Warrants have a three-year term and are exercisable beginning\non the second anniversary of issuance, subject to adjustment in accordance with the terms of the Warrant and applicable laws, at an initial\nexercise price equal to 120% of the public offering price of the Units (US$0.46 per share).

As\nour business continued to expand, we further reorganized our offshore corporate structure in 2026. In June 2026, STAK Inc. established\nSTAK Group Ltd. as its wholly-owned subsidiary in the British Virgin Islands, or BVI. From June to September 2026, STAK Group Ltd. established\nSTAK Vision Ltd., STAK Horizon Ltd., STAK Matrix Ltd. and STAK Terra Ltd., each as its wholly-owned subsidiary in the BVI. In September\n2026, STAK Vision Ltd. established STAK Vision Energy Inc., a joint venture in Delaware, the United States, in which STAK Vision Ltd.\nholds a 60% equity interest. In September 2026, STAK Vision Energy Inc. established STAK Industry Energy Ltd. as its wholly-owned subsidiary\nin Texas, the United States. In September 2026, STAK Horizon Ltd. established STAK Horizon Energy Ltd. as its wholly-owned subsidiary\nin Hong Kong, and STAK Matrix Ltd. established STAK Matrix Energy Ltd. as its wholly-owned subsidiary in Hong Kong in the same month.

On\nOctober 9, 2026, our shareholders passed resolutions at an extraordinary general meeting approving: (i) an increase in the voting rights\nattached to each Class B Ordinary Share from thirty (30) votes to one hundred (100) votes per share; (ii) a reduction in the par value\nof each issued Class A Ordinary Share and Class B Ordinary Share from US$0.001 to US$0.0000001, a subdivision of each authorized but\nunissued Class A Ordinary Share and Class B Ordinary Share into 10,000 shares of the corresponding class, and the cancellation of certain\nexcess authorized but unissued shares, such that, upon effectiveness of the foregoing, the authorized share capital of the Company would\nbe US$10 divided into 75,000,000 Class A Ordinary Shares and 25,000,000 Class B Ordinary Shares, each with a par value of US$0.0000001;\n(iii) an increase in the authorized share capital of the Company from US$10 to US$100,000, divided into (a) 750,000,000,000 Class A Ordinary\nShares and (b) 250,000,000,000 Class B Ordinary Shares, each with a par value of US$0.0000001, by the creation of an additional 749,925,000,000\nClass A Ordinary Shares and 249,975,000,000 Class B Ordinary Shares; and (iv) the adoption of the third amended and restated memorandum\nand articles of association of the Company to reflect the foregoing changes. All of the foregoing changes will become effective simultaneously\nupon completion of the relevant filings and registrations with the Registrar of Companies in the Cayman Islands. As of the date of this\nannual report, such filings and registrations had not been completed and, accordingly, none of the foregoing changes had become effective.

Historic\nMilestones

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Corporate\nInformation

Our\nprincipal executive office is located at Floor 8, Block 11, The Industry Park of Intelligent Auto Parts. No. 6 Bei Tang He East Rd.,\nTianning District, Changzhou City, Jiangsu Province, People’s Republic of China, and our phone number is +86 519 88802609. Our\nregistered office in the Cayman Islands is located at the offices of Ascentium (Cayman) Limited, 4th Floor, Harbour Place, 103 South\nChurch Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands. We have appointed Puglisi & Associates, located at 850 Library\nAvenue, Suite 204, Newark, Delaware 19711, as our agent upon whom process may be served in any action brought against us under the securities\nlaws of the United States.

The\nSEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding registrants\nthat make electronic filings with the SEC using its EDGAR system. Such information can also be found on our investor relations website\nat https://www.stakindustry.com/ir/.

\n \n \n \n

4.B.

Business\n Overview

We\nare an industrial equipment company focused on the research and development, manufacturing and sale of specialized industrial equipment,\nautomation control systems and integrated solutions. Our existing business primarily comprises the research and development, manufacturing\nand sale of oilfield-specialized production and maintenance equipment, as well as the sale of related equipment components, integration\nof specialized oilfield vehicles and provision of automation solutions. Leveraging our accumulated engineering experience, supply chain\nmanagement capabilities and on-site delivery capabilities, we are expanding into the modular gas-to-electricity power generation systems\nbusiness, with a focus on providing rapidly deployable on-site power generation solutions for AI data centers and other energy-intensive\napplications across North America.

Our\nexisting business continues to comprise the production and sale of specialized oilfield vehicles and related equipment, including oil\npumping trucks, oil-well repair trucks, fracking trucks, well flushing and wax-removal trucks and boiler trucks, as well as specialized\nequipment and components for oil-well repair and maintenance, fracking operations, oil well cleaning and wax removal, oil pumping and\nboiler operations. These products and services have formed the foundation of our historical operations and engineering experience.

As\na new area of our business, we are developing modular gas-to-electricity power generation systems leveraging gas-fired internal combustion\nengines and generator set technologies as the underlying technical foundation. The systems are designed in modular, containerized or\nother configurations to facilitate deployment at customer sites. Depending on project requirements and available fuel sources, the systems\nmay utilize natural gas, associated gas or other gaseous fuels. The systems are intended for applications where grid interconnection\nmay require an extended period of time, power demand is expected to increase, or on-site baseload power is required.

Our\nvision is to become a provider of modular gas-to-electricity power generation solutions for AI data centers and other energy-intensive\napplications. Under our business proposition, “Power for AI, Without the Wait,” we seek to provide more timely power generation\nsolutions for computing infrastructure and energy-intensive applications through rapidly deployable modular gas-to-electricity power\ngeneration systems.

STAK\nInc. is a holding company incorporated in the Cayman Islands. We conduct our existing oilfield-specialized equipment and automation solutions\nbusiness through our operating entities in mainland China, primarily through YLAN. We are also developing a modular gas-to-electricity\npower generation business in the United States through STAK Vision Energy Inc., a majority-owned subsidiary, and its wholly-owned subsidiary\nin Texas. The business focuses on the development, marketing and commercialization of modular gas-to-electricity power generation systems\nfor AI data centers and other energy-intensive applications across North America.

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Our\nProducts and Solutions

We\nprovide specially designed and configured vehicles and equipment for oilfield development and operations. These vehicles and equipment\nplay a crucial role in cost reduction and efficiency improvement during exploration, extraction, transportation, and production processes\nin oilfields. Our main products currently include oil pumping trucks, oil-well repair trucks, fracking trucks, well flushing-wax removal\ntrucks, boiler trucks, and other maintenance vehicles. We manufacture the equipment for oilfield development and operations and outsource\nthe final vehicle assembly work to manufacturers holding special vehicle production permission.

Below\nare images of our main products, which may contain logos from other companies that supply the vehicle chassis for our specialized vehicles\nused in oil fields.

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List\n of Our Products
Item	Name	Picture	Dimension
1	Type\n 350 Oil Field Workover Rig	$\"\"$	Environmental\n Information Disclosure: WP8.350E61 \n Wheelbase:\n 2100+4575+1400, 2100+4375+1400 \n Total\n Weight/Curb Weight/Rated Load Weight: 41000*40870, 40805 \n Engine\n Model: WP8.350E61 \n Dimensions:\n Length: 15100 Width: 2550 Height: 4000

2	60-ton\n Oil Field Workover Rig	$\"\"$	Environmental\n Information Disclosure: WP8.350E61 \n Wheelbase:\n 2100+4575+1400 \n Total\n Weight/Curb Weight/Rated Load Weight: 31000/30870 \n Engine\n Model: WP8.350E61 \n Dimensions:\n 18200, 15800/2550/3995

3	Type\n 450 Oil Field Workover Rig	$\"\"$	Dimensions:\n 12560×2550×3990(mm) \n Gross\n Weight: 27600(Kg) Curb Weight: 27470, 27405(Kg) \n Approach/Departure\n Angle: 18/8(°) Front/Rear Overhang: 1460/3500(mm) \n Axle\n Load: 6500/10550/10550 Wheelbase: 4700+1350(mm)

4	Oil\n Field Fracturing Truck	$\"\"$	Environmental\n Information Disclosure: WP10H400E62 Wheelbase: 1800+3775+1400 Total Weight/Curb Weight/Rated Load Weight: 31000/30870, 30805 Engine\n Model: WP9H350E62 WP10H375E62 Dimensions: 11550×2550×3420

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8	Oil\n Field Well Washing Truck	$\"\"$	Environmental\n Information Disclosure: MC07.27-60 Wheelbase: 5000 Total Weight/Curb Weight/Rated Load Weight: 17000/16870 Engine Model: MC07.27-60\n Dimensions: 9100/2550/3000

9	Oil\n Field Rescue Vehicle	$\"\"$	Dimensions:\n 708020112735 (mm) Gross Weight: 5000 (kg) Anti-lock Braking System: Yes Engine: F1CE8481K Displacement: 2998 (ml)

10	Oil\n Field Liquid Nitrogen Pump Truck	$\"\"$	Dimensions:\n 12000×2500×3960(mm) Gross Weight: 31000(Kg) Load Utilization Coefficient: Curb Weight: 30870(Kg) Approach/Departure Angle:\n 18/10(°) Front/Rear Overhang: 1300/2900(mm) Axle Load: 6560/6560/17880 (tandem axle)

11	Oil\n Field Logging Truck	$\"\"$	Gross\n Weight: 20400(Kg) Curb Weight: 20270(Kg) Approach/Departure Angle: 17/11(°) Front/Rear Overhang: 1515/2630(mm) Axle Load: 6000/7200/7200\n Wheelbase: 4450+1450, 3800+1450, 5050+1450(mm) Tire Specification: 12.00R20 16PR

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12	Oil\n Field Well Completion Assembly Equipment	$\"\"$	Nominal\n Minor Repair Depth (m): 7000 (2-7/8″ Tubing) Nominal Major Repair Depth (m): 5800 (2-7/8″ Drill Pipe) Rated Hook Load\n (kN): 1000 Maximum Hook Load (kN): 1350 (150 short tons)

13	Oil\n Field Fracturing Assembly Equipment	$\"\"$	Maximum\n Operating Pressure (MPa): 65 Maximum Operating Flow Rate (L/min): 1580 Maximum Input Power of the plunger pump (kW): 670 Wheelbase\n (mm): 5050+1450 Maximum Input Power: 503 kW (675hp) Maximum Input Speed: 2500r/min

14	Oil\n Field Cementing Assembly Equipment	$\"\"$	Chassis\n Engine Power: 404 kW (550HP) Cementing Pump Plunger Diameter (mm): Φ115+Φ127 Maximum Operating Pressure (Mpa): 45+40 Maximum\n Displacement (L/min): 1794+2188 Metering Tank Capacity: 4m³

15	Oil\n Field Oil Production Assembly Equipment	$\"\"$	Maximum\n Oil Extraction Depth: 2350m Maximum Hoisting Load: 120kN Operation Line: 0.5-2.55m/s Full Power Takeoff: Speed Ratio 1.17 Reducer:\n Cylindrical, Conical Gear Transmission: Speed Ratio 1.65 Terminal Drive Adopts Chain Transmission: Speed Ratio 2.762

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

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19	Oil\n Field Liquid Nitrogen Pump Assembly Equipment	$\"\"$	Exterior:\n Cold-rolled steel plate, interior aluminum alloy plate, insulated with fire-resistant material in between. There are rainproof natural\n ventilation windows on the top sides of the compartment. The bottom is covered with flame-retardant and static dissipative rubber\n board. Fixed loops are installed on the side of the compartment. Inside the compartment: Smoke sensor installed on the top, anti-theft\n device above the door frame, equipped with two fire extinguishers.

20	Oil\n Field Logging Assembly Equipment	$\"\"$	Both\n sides are protected by a skirt instead, with the rear skirt 540mm above the ground; Optional height without air conditioning cover\n is 3945mm; Structure, ABS model/manufacturer: 486 106/KNORR; Net engine power is 353KW; Optional appearance with signal lights above\n both sides of the compartment.

In\naddition to our existing oilfield-specialized equipment and related solutions, we are developing modular gas-to-electricity power generation\nsystems designed for on-site power generation at customer facilities. The systems are primarily based on a gas-fired internal combustion\nengine coupled with a generator set, with each deployment unit designed to generate up to 1.4 megawatts of electrical output within a\nstandard ISO-compliant container footprint. Multiple units may be configured and scaled to support power requirements ranging from individual\ncommercial or industrial facilities to larger-scale AI data center campuses. The systems are designed to accommodate multiple gaseous\nfuel inputs, including natural gas and associated gas, subject to the applicable project requirements and fuel availability.

Research\nand Development

In\nthe fiscal years 2026 and 2025, our continuous expenditures on research and development were approximately $3.5 million and $3.3 million,\nrespectively.

Research\nManagement with Academic and Institutional Collaboration

As\na small company with limited resources and capabilities, we will continue to leverage social and academic resources. In March 2023, we\npartnered with Dalian University of Technology Jiangsu Research Institute to jointly establish the Smart Oilfield Specialty Vehicle Research\nCenter. The institute dispatched 10 research and development experts to work full-time at the center, including four with doctoral degrees\nand four with master’s degrees. The institute integrates technology research and development, outcome transformation, and talent\ndevelopment, focusing on the efficient, energy-saving, and environmentally friendly automation equipment urgently needed in the oil production\nand enhancement fields, which helps the company move towards the high-end and cutting-edge of the manufacturing value chain.

In\nMarch 2022, we entered into a 3-year industry-academic research agreement with Jiangsu University to collaborate on research and development\nrelated to smart devices, driver assistance system, and autonomous driving system.

We\nbelieve that by collaborating with academic institutions, we can meet our research and development needs and control our research and\ndevelopment costs. We also engage in joint development with research partners to develop new models and next generation oilfield-specialized\nproductions and maintenance equipment. We share costs in joint development to manage risks and costs effectively.

Research\nDirections and Priorities

Currently,\nwe consider the automation upgrade of our products as an essential means of our differentiation and competitive strategy. We attach great\nimportance to the automation upgrade of oilfield specialty vehicles and equipment, with the following key research and development priorities:

Intelligence:\nWith the continuous advancement of artificial intelligence technology, oilfield specialty equipment will become more intelligent, automated,\nand digitized. For example, real-time monitoring, warning, and intelligent control of wellhead processes and equipment can be achieved\nthrough the use of sensors and data analysis technology.

Lightweighting:\nOilfield specialty heavy equipment will become lighter, smaller, and more convenient to adapt to increasingly complex and diversified\noilfield operation requirements. For example, the use of new materials and structural designs can significantly reduce the weight and\nsize of equipment while improving reliability and durability.

Safety:\nOilfield specialty equipment will increasingly focus on personnel safety and environmental protection. For example, strengthening the\ndesign and evaluation of equipment and processes to withstand harsh weather and oilfield environments to ensure personnel safety and\nhealth.

Environmental\nProtection: With the growing environmental awareness, oilfield specialty equipment will pay more attention to environmental performance.\nFor example, adopting energy-efficient, low-emission power systems and using renewable energy sources to reduce environmental impact.

Internet\nConnectivity: Oilfield specialty equipment will increasingly use internet technology to enable data sharing and interaction between\ndevices. For example, analyzing and optimizing equipment and processes through cloud computing and big data technology to improve exploration\nand production efficiency, reduce costs, and risks.

Intellectual\nProperty and Certificates

We\nregard our patents, copyrights, trademarks, trade secrets and other intellectual property rights as critical to our success. We rely\non a combination of patent, copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property\nrights. Our intellectual property portfolio included the following:

Patents:\nAs of the date of this annual report, we have 66 registered patents in China. The term for invention patents in China is 20 years from\nthe date of filing, for utility model patents is 10 years from the filing date, and the term for design patents is 15 years from the\nfiling date. Our patents cover various areas, including a kind of support of oilfield workover designed to prevent secondary collapse,\nan intelligent drilling monitoring device, an integrated oil-field workover platform a new type of oil extraction vehicle petroleum well\nworkover platforms, fully automated underground operation vehicles, new types of oil recovery vehicles, and fully automated intelligent\nhydraulic well workover vehicles and etc. We borrowed approximately $0.73 million from the bank and pledged three patents as collateral.

Software\ncopyrights: As of the date of this annual report, we have 48 software copyrights registered in China.

Trademarks:\nAs of the date of this annual report, we own 18 trademarks including “STAKINC,” “STAKIND,” “STAK INDUSTRY”\nstylized or graphic trademarks for the categories of transportation, mechanic manufactures, and advertisement sales.

Any\nenterprise engaged in the production of specialized vehicles in the PRC must meet the corresponding requirements and obtain the qualification\nfor specialized vehicle production through approval from the Ministry of Industry and Information Technology. Currently, we do not possess\nthe qualifications for manufacturing specialized vehicles. Our products require qualified manufacturers to assemble them on our behalf\nand apply for announcements with the Ministry of Industry and Information Technology. During our cooperation with our qualified manufacturers,\nthey applied for 77 announcements from the Ministry of Industry and Information Technology for our specialized vehicles in China.

Certificates:\nAs of the date of this annual report, we have ISO 14001 environment system certificate, ISO 45001 occupational health and safety system\ncertificate, ISO9001 quality system certification and CE certification.

Domain\nnames: currently, we own eight domain names (including stakindustry.com, stakindustry.cn, stakindustry.net, stakindustry.top, stakinc.net,\nstakinc.cn, stakinc.com.cn and stakinc.top).

Our\nSupply Chain

Our\ndiversified procurement strategy helps us establish a more resilient supply chain and provide flexibility in procurement. Our supply\nchain is built based on outsourcing and contract manufacturing models to ensure the high quality and efficiency of specialized vehicle\nproduction.

Our\nbusiness focuses on core functions such as design, research and development, and final assembly of specialized equipment. Due to the\nlack of specialized vehicle production qualifications, we outsource specialized vehicle production. To ensure a stable supply chain,\nwe have established strategic partnerships with a range of reliable suppliers and contract manufacturers to ensure the stability and\nflexibility of our supply chain.

Firstly,\nwe have established good relationships with specialized vehicle chassis suppliers. These suppliers provide various specialized vehicle\nchassis required for production. We maintain close communication and collaboration with them to ensure a stable supply to meet our needs.

Secondly,\nour specialized equipment manufacturing process is similar to that of the machinery manufacturing industry, where most components are\nprocured or outsourced, and we perform assembly and processing using our integrated technology. Except for a few key components and self-made\nparts involving core technology, a large number of components are procured or outsourced. External procurement refers to standard components\ncommonly used in production, and we purchase them from professional manufacturers. External outsourcing refers to non-standard components\nwith a large production input and relatively simple processing that are specific to our products. We provide technical drawings to suppliers\nfor production, which is exclusively used by us.

We\nhave established partnerships with suppliers who are responsible for the production of non-core components. These suppliers have advanced\nproduction equipment and technology and extensive experience in manufacturing and assembling non-core components of oilfield specialty\nvehicles. We collaborate with them to define product specifications and technical requirements and provide assembly guidance. We have\nestablished long-term cooperative relationships with subcontractors to ensure product quality, delivery times, and cost control.

Our\nspecific manufacturing process for oilfield specialty equipment is as follows:

$\"\"$

We\nhave entered into framework cooperation agreements with two manufacturers which hold specialized vehicle production qualifications to\nobtain announcements from the Chinese Ministry of Industry and Information Technology. The framework cooperation agreements expired on\nDecember 31, 2025 and were subsequently renewed in 2026. Pursuant to the framework cooperation agreements, we submit vehicle announcements\nto the manufacturers, including model details, parameters, and other relevant data. Order quantities, fees, and payment details will\nbe specified with each order placed. Manufacturers must deliver work according to national standards, or our requirements when no national\nstandard exists. The announcements are necessary permits for conducting specialized vehicle production in China and confirm the legality\nof our collaboration with manufacturers and their ability to comply with industry standards. We have established strong partnerships\nwith these specialized vehicle manufacturers, jointly committed to producing high-quality specialized vehicle products in line with industry\nstandards. In our collaboration with specialized vehicle manufacturers, we place orders and provide assembly oilfield equipment to the\nmanufacturers and closely cooperate with them to ensure that specialized vehicle design, production, assembly, and other processes comply\nwith the requirements specified by the Ministry of Industry and Information Technology. Through rigorous quality control and compliance\ninspections, our specialized vehicle products meet national standards and receive the necessary announcements, allowing us to offer legal\nand competitive products in the Chinese specialized vehicle market. This collaboration provides us with a stable supply chain and enables\nefficient and reliable specialized vehicle production. By partnering with manufacturers holding specialized vehicle production qualifications,\nwe can concentrate resources on core activities such as research and development and marketing while reducing production costs and risks,\nall while ensuring compliance. Additionally, we have established a robust supply chain management team to oversee and coordinate the\nentire supply chain. This team is responsible for maintaining strong relationships with suppliers and contract manufacturers, procuring\nnecessary raw materials, monitoring production processes, coordinating logistics and distribution, and addressing any supply chain issues.

We\nprovide a manufacturer’s standard warranty on all products sold, including specialized oilfield equipment and vehicles. As of June\n30, 2026, we had not received any claim for products; therefore we do not recognize related warranty liability bases on the best estimation.

Marketing

Our\nmarketing activities currently rely on a network of specialized vehicle customership within the industry and word-of-mouth promotion\namong end-users, as well as bulk purchases from cost-conscious corporate customers.

Leveraging\nSpecialized Vehicle Customership Networks

We\nconduct sales through specialized vehicle customers within the industry, especially for oilfield specialty vehicles. These customers\nhave mature sales networks and markets in their respective regions, and we offer models that better meet user needs and are more cost-effective,\nallowing us to reach their customer base and promote and distribute our vehicles.

Cultivating\nPositive Word-of-Mouth Recommendations within the Industry

Given\nthat our personalized customization process for end-users provides a comfortable service experience, and our oilfield specialty vehicles\nindeed improve customer operational efficiency and address some pain points, we aim to cultivate positive word-of-mouth recommendations\nwithin the oilfield industry. This approach enables us to generate organic interest and build a good reputation in the market.

Building\nthe Company’s Brand through Quality and Service

Our\nbusiness development follows the fundamental principle of market demand orientation. On one hand, we continuously enhance the functionality\nand performance of existing products, increase product technological content, and focus on perfecting products. On the other hand, we\ntrack the latest information in the oil and natural gas industry, use our existing technology to independently develop high-tech products\nthat meet market demands, and update key product technologies to maintain our core competitive advantages.

We\nwill establish several maintenance service bases across the oilfields nationwide based on the distribution of oilfields. We aim to establish\na complete service network to provide convenient on-site maintenance, sales, and after-sales services for oilfield users across the country,\nenhancing the company’s market responsiveness, winning customer trust with excellent service, and gaining more market share.

Our\nCustomers

We\nsell our products to our customers, who are the dealers and resell the products to end-users, oilfield service companies. We manufacture\nthe ordered equipment or collaborate with qualified vehicles manufacturer to manufacture the ordered vehicles. The delivery period is\nagreed upon in the contract and varies for equipment and vehicles, typically ranging from three to six months. The customers make final\npayment settlement once they receive our products. For the year ended June 30, 2026, our top three customers contributed approximately\n50% to our revenue.

Regulation

Our\nbusiness operations are primarily in the PRC and primarily subject to PRC laws and regulations. The following is a summary of the most\nmaterial PRC laws and regulations relevant to our business and operations.

Regulations\non Company

The\nCompany Law of PRC (the “Company Law”) was promulgated on December 29, 1993, which became effective on July 1, 1994, and\nwas subsequently amended in 1999, 2004, 2005, 2013, 2018, 2023 and 2024 respectively. All companies established in the PRC are subject\nto the Company Law. The Company Law regulates the establishment, operation, corporate structure, and management of corporate entities\nin China and classifies companies into limited liability companies and companies limited by shares. Foreign-invested companies are also\nsubject to the Company Law, except as otherwise provided in the foreign investment laws. Under the latest amended Company Law, which\nbecame effective on July 1, 2024, there are several noteworthy changes, including (i) shareholders of a limited liability company are\nrequired to fully contribute their subscribed capital within five years from the establishment of the company; (ii) shareholders seeking\nto transfer equity need only furnish written notification to other shareholders, specifying quantity, price, payment method, and time\nlimit for such and the other shareholders may buy the equity before any third-party buyer acquires it on those terms; (iii) a company\ncan establish an audit committee comprised of an unspecified number of directors of the board and responsible for supervising the company’s\nfinancial and accounting matters; and (iv) where a shareholder leveraging control over two or more companies attempts to evade debts\nand infringe upon creditors’ rights by exploiting the independent legal personality of the company and the limited liability of\nshareholders, each involved company shall have joint and several liability for the debts incurred by either entity.

Regulations\nRelating to Foreign Investment

On\nMarch 15, 2019, the Foreign Investment Law of the PRC was promulgated by the National People’s Congress and came into effect on\nJanuary 1, 2020. According to the Foreign Investment Law of the PRC, foreign investment refers to any investment activity directly or\nindirectly carried out by foreign natural persons, enterprises or other organizations (hereinafter “Foreign Investors”).\nUnder the Foreign Investment Law, the PRC government implements a system of pre-entry national treatment plus a negative list for the\nadministration of foreign investments, and gives national treatment to foreign investments beyond the negative list. The Implementing\nRegulations for the Foreign Investment Law, which was promulgated by the State Council on December 26, 2019 and came into effect on January\n1, 2020, provides implementing measures and detailed rules to ensure the effective implementation of the Foreign Investment Law.

The\ncurrent regulation regime of foreign investment in the PRC, setting aside special arrangements adopted in pilot free trade zones, preliminarily\nconsists of three principal legal documents, i.e. the Catalog of Industries for Encouraging Foreign Investment (2025 Edition) (the “2025\nCatalog”), which was promulgated by the Ministry of Commerce (“MOFCOM”), and the NDRC, on December 15, 2025 and took\neffect on February1, 2026, and the Special Administrative Measures for Access of Foreign Investment, (the “2024 Negative List”),\nwhich was promulgated by the MOFCOM and the NDRC on September 6, 2024 and took effect on November 1, 2024 and the Provisions Guiding\nForeign Investment Direction, which was promulgated by the State Council on February 11, 2002 and came into effect on April 1, 2002.\nThese three legal documents collectively classify all foreign investment projects into four categories: (1) encouraged projects, (2)\npermitted projects, (3) restricted projects, and (4) prohibited projects. If the industry in which the investment is to occur falls into\nthe encouraged category, foreign investment, in certain cases, may receive preferential policies or benefits. If it falls into the restricted\ncategory, foreign investment may be conducted in accordance with applicable legal and regulatory restrictions. If falls into the prohibited\ncategory, foreign investment of any kind will not be allowed.

The\n2025 Catalog and 2024 Negative List govern investment activities in the PRC by foreign investors and classify industries into three categories\nwith regard to foreign investment: “encouraged”, “restricted” and “prohibited”. Industries not listed\nin the Catalog are generally deemed as falling into a fourth category, “permitted”, unless specifically restricted by other\nPRC laws. For some restricted industries, foreign investors can only conduct investment activities through equity or contractual joint\nventures, while in other cases PRC partners are required to hold the majority interests in such joint ventures. In addition, some projects\nin the restricted category are subject to higher-level governmental approvals. Foreign investors are not allowed to invest in industries\nin the prohibited category.

Measures\non Reporting of Foreign Investment Information was promulgated by the MOFCOM and State Administration for Market Regulation (“SAMR”)\non December 30, 2019 and took effect on January 1, 2020, which repealed the Provisional Methods for Filing Management. According to the\nMeasures on Reporting of Foreign Investment Information, foreign investors or foreign-invested enterprises shall submit investment information\nthrough submission of initial reports, change reports, deregistration reports, annual reports etc. Such investment information shall\nbe submitted to the commerce administrative authorities through the Enterprise Registration System and the National Enterprise Credit\nInformation Publicity System. The market regulatory authorities shall promptly forward the aforesaid investment information submitted\nby foreign investors and foreign-invested enterprises to the commerce administrative authorities.

Regulations\non Production of Oilfield Specialized Vehicles and Equipment

The\nadministrative authority for specialized vehicle and equipment industry is the Ministry of Industry and Information Technology (“MIIT”)\nwhich is responsible for implementing licenses for specialized vehicle manufacturing enterprises and their products, and issuing the\nAnnouncement on On-Road Motor Vehicle Manufacturing Enterprises and Products for specialized vehicle enterprises and products. The SAMR,\nthe Ministry of Emergency Management, the Ministry of Ecology and Environment, and other departments are respectively responsible for\nregulatory work related to quality, safety, environmental protection, and other aspects.

The\ncurrent principal legal basis is the Administrative Measures for the Access of Road Motor Vehicle Manufacturing Enterprises and Products\n(Order No. 50 of the MIIT, promulgated 27 November 2018, effective 1 June 2019). Article 2 provides for classified access management\ncovering six categories: passenger cars, trucks, buses (divided into complete-vehicle and modification), specialized vehicles, motorcycles\nand trailers. The corresponding implementation documents are the Requirements for the Access Review of Road Motor Vehicle Manufacturing\nEnterprises and the Requirements for the Access Review of Road Motor Vehicle Products, originally issued by MIIT Announcement No. 1 of\n2019 (effective 1 June 2019) and subsequently revised by MIIT Announcement No. 1 of 2026, effective 1 January 2027.

Enterprise-level\naccess requires legal person status, completion of the relevant investment project procedures and construction, and premises, capital,\npersonnel and capabilities (design and development, production, production-consistency assurance and after-sales service) commensurate\nwith the enterprise’s activities. Product-level access requires prior enterprise-level access and compliance with applicable safety,\nenvironmental, energy-saving and anti-theft standards and MIIT safety technical conditions. Access obtained in accordance with law may\nnot be leased, lent, sold or otherwise illegally transferred.

The\nindustry standard is QC/T 739-2023, General Technical Conditions for Oilfield Specialized Vehicles, effective 1 November 2023, replacing\nQC/T 739-2005, and remains the current version. Key changes include revised and additional definitions (including “special-type”\nand “conventional-type” oilfield specialized operating vehicles), classification by dimensional and mass parameters in place\nof gross mass, revised overall dimension limits and axle-load/mass parameters, revised turning-circle, specific power, exterior noise\nand braking requirements, deletion of the ABS requirement for specialized operating trailers and of the road-driving test requirement,\nand addition of coupling device, specialized operating device and engine exhaust pollutant test requirements.

Regulations\non Production Safety

In\naccordance with the Law on Production Safety of the PRC (the “Production Safety Law”), which was promulgated on June 29,\n2002, became effective on November 1, 2002 and was amended on August 27, 2009, August 31, 2014 and June 10, 2021, respectively, entities\nengaging in production are required to implement production safety measures specified in the Production Safety Law and other relevant\nlaws, administrative regulations, national standards and industry standards. Any entity that does not implement such measures for safe\nproduction is prohibited from engaging in production and business operation activities. Entities are required to provide their employees\nwith education and training in production safety. Entities shall also provide their employees with protective gear that meets national\nand industry standards as well as supervision and proper training to ensure their correct utilization.

Regulations\non Product Quality

According\nto the Civil Code of the PRC, which was promulgated in May 2020 and became effective in January 2021, a defective product which causes\nproperty damage or physical injury to any person may subject the manufacturer or vendor of such product to civil liability for such damage\nor injury.

The\nProduct Quality Law of the PRC was promulgated on February 22, 1993, amended on July 8, 2000, August 27, 2009 and December 29, 2018,\nrespectively. The Product Quality Law applies to anyone who manufactures or sells any product within the territory of the PRC. It is\nprohibited from producing or selling counterfeit products in any form, including counterfeit brands, or providing false information about\nthe product manufacturers. Violation of national or industrial standards may result in civil liability and administrative penalties such\nas compensation, fines, suspension of business and confiscation of illegal income, and serious violations may result in criminal liabilities.

Regulations\nRelating to Environmental Protection

Enterprises\nconducting manufacturing activities in China are subject to provisions under the PRC environmental laws and regulations on noise, wastewater,\nair emission and other industrial waste. The major governing environmental laws and regulations consist of the Environmental Protection\nLaw of the PRC, which was most recently amended on April 24, 2014 and became effective on January 1, 2015, the Law of the PRC on the\nPrevention and Control of Water Pollution, which was most recently amended on June 27, 2017 and became effective on January 1, 2018,\nthe Law of the PRC on the Prevention and Control of Air Pollution, which was most recently amended and became effective on October 26,\n2018, the Law of the PRC on the Prevention and Control of Solid Waste Pollution, which was most recently amended on April 29, 2020 and\nbecame effective on the September 1, 2020 and the Law of the PRC on the Prevention and Control of Noise Pollution, which was promulgated\non December 24, 2021 and became effective on June 5, 2022 (collectively the “Environmental Laws”). Pursuant to the Environmental\nLaws, PRC enterprises shall build requisite environmental treatment facilities affiliating to the manufacturing facilities, where waste\nair, wastewater and waste solids generated can be treated properly in accordance with the relevant provisions.

Pursuant\nto the Law of the PRC on Evaluation of Environment Effects, which was promulgated on October 28, 2002 and was amended on July 2, 2016\nand on December 29, 2018, the Administrative Regulations on Environmental Protection for Construction Projects, which was promulgated\non November 29, 1998 and amended on July 16, 2017 and became effective on October 1, 2017, and the Interim Measures for the Acceptance\nInspections for Environment Protection upon Completion of Construction Projects, which was promulgated by the Ministry of Environmental\nProtection of the PRC on November 20, 2017, enterprises that are planning construction projects should provide assessment reports, statement\nor registration form on the environmental impact of such projects. The assessment reports and statements must be approved by the competent\nenvironmental protection authorities prior to commencement of any construction work, while the registration forms shall be filed with\nthem. Unless otherwise stipulated by laws and regulations, enterprises which are required to provide assessment reports and statements\nshall undertake the responsibility of acceptance inspections of the environmental protection facilities by itself upon the completion\nof the construction project. A construction project may be formally put into production or use only if the corresponding environmental\nprotection facilities have passed the acceptance inspection. The competent authorities may carry out spot check and supervision on the\nimplementation of the environmental protection facilities.

Regulations\non Consumer Protection

The\nPRC Consumer Protection Law, as amended on October 25, 2013 and effective on March 15, 2014, sets out the obligations of business operators\nand the rights and interests of the consumers. Pursuant to this law, business operators must guarantee that the commodities they sell\nsatisfy the requirements for personal or property safety, provide consumers with authentic information about the commodities, and guarantee\nthe quality, function, usage and term of validity, etc. of the commodities. Failure to comply with the Consumer Protection Law may subject\nbusiness operators to civil liabilities such as refunding purchase prices, exchange of commodities, repairing, ceasing damages, compensation,\nand restoring reputation, and even subject the business operators or the responsible individuals to criminal penalties if business operators\ncommit crimes by infringing the legitimate rights and interests of consumers. The amended PRC Consumer Protection Law further strengthens\nthe protection of consumers and imposes more stringent requirements and obligations on business operators, especially on the business\noperators through the Internet. For example, the consumers are entitled to return the goods (except for certain specific goods) within\nseven days upon receipt without any reasons when they purchase the goods from business operators via the Internet. The consumers whose\ninterests have been damaged due to their purchase of goods or acceptance of services on online marketplace platforms may claim damages\nfrom sellers or service providers.

Regulations\nRelating to Intellectual Property Rights

Patent

Pursuant\nto the Patent Law of the PRC (the “Patent Law”), promulgated on March 12, 1984 with the last amendment effective from June\n1, 2021, and the Implementing Regulations of the Patent Law of the PRC promulgated on June 15, 2001 with the last amendment effective\nfrom January 20, 2024, respectively, an inventor or a designer may apply to the State Intellectual Property Office (“SIPO”)\nfor the grant of an invention patent, a utility model patent or a design patent. According to the Patent Law, the right to apply for\na patent (a patent application) and of registered patent can be transferred upon completion of registration with SIPO. The patent right\nduration is 20 years for invention, 10 years for utility model and 15 years for design, starting from the date of application. A patentee\nis obligated to pay annual fee beginning with the year in which the patent right is granted. Failure to pay the annual fee may result\nin a termination of the patent right duration.

Copyright

Pursuant\nto the PRC Copyright Law amended on February 26, 2010, became effective on April 1, 2010, and latest amended on November 11, 2020 and\ntook effect on June 1, 2021 and the Implementing Regulations of the PRC Copyright Law promulgated by the State Council on August 2, 2002,\nlast amended on January 30, 2013 and became effective on March 1, 2013, the PRC citizens, legal persons, and other organizations shall,\nenjoy copyright in their works, whether published or not, which include, among others, works of literature, art, natural science, social\nscience, engineering technology and computer software. The term of protection for copyrighted software is 50 years.

Trademark

The\nTrademark Law of the PRC was promulgated on August 23, 1982 with the last amendment effective from November 1, 2019. The implementing\nregulations of Trademark Law of the PRC were promulgated on August 3, 2002 by the State Council and amended on April 29, 2014 and became\neffective on May 1, 2014. These current effective laws and regulations provide the basic legal framework for the regulations of trademarks\nin China, covering registered trademarks including commodity trademarks, service trademarks, collective marks and certificate marks.\nThe Trademark Office of the China National Intellectual Property Administration or “CNIPA” is responsible for the registration\nand administration of trademarks in China. Trademarks are granted on a term of 10 years commencing on its registration date. Six months\nprior to the expiration of the 10-year term, an application may renew the trademark for another 10 years.

Domain\nnames

Domain\nnames are mainly protected under the Administrative Measures on the Internet Domain Names promulgated by the MIIT in August 2017 and\nbecame effective in November 2017. The MIIT is the major regulatory body responsible for the administration of domain names, under supervision\nof which the China Internet Network Information Centre is responsible for the daily administration of .cn domain names and Chinese domain\nnames. MIIT adopts the “first to file” principle with respect to the registration of domain names. Domain name registrations\nare handled through domain name service agencies established under the relevant regulations, and applicants become domain name holders\nupon successful registration.

Regulations\non Employment and Social Welfare

Labor\nLaws

Companies\nin the PRC are subject to the PRC Labor Law (the “PRC Labor Law”) which was promulgated on 5 July 1994, became effective\non 1 January 1995 and was further amended on 27 August 2009 and 29 December 2018, the PRC Labor Contract Law (the “PRC Labor Contract\nLaw”) which was promulgated on 29 June 2007, became effective on 1 January 2008 and was further amended on 28 December 2012, and\nthe Implementation Regulations of the PRC Labor Contract Law which was promulgated by the State Council on 18 September 2008 and became\neffective on the same date, as well as other related regulations, rules and provisions promulgated by the relevant government authorities\nfrom time to time. Compared to previous PRC Laws and regulations, the PRC Labor Contract Law imposes stricter requirements in such respects\nas signing of labor contracts with employees, stipulation of probation period and violation penalties, termination of labor contracts,\npayment of remuneration and economic compensation, use of labor dispatches as well as social security premiums.

According\nto the PRC Labor Law and the PRC Labor Contract Law, a labor contract in writing shall be concluded when a labor relationship is to be\nestablished between an employer and an employee. An employer shall pay an employee two times of his salary for each month in the circumstance\nwhere he fails to enter a written labor contract with the employee for more than a month but less than a year; where such period exceeds\none year, the parties are deemed to have entered an unfixed-term labor contract. Employers shall pay wages that are not lower than the\nlocal minimum wage standards to the employees. Employers are also required to establish labor safety and sanitation systems in compliance\nwith PRC rules and standards, and to provide relevant training to the employees.

Social\nInsurance and Housing Provident Funds

The\nPRC social insurance system is mainly governed by the Social Insurance Law of the PRC (the “Social Insurance Law”). The Social\nInsurance Law was promulgated by the SCNPC on 28 October 2010, became effective on July 1, 2011 and was amended on December 29, 2018.\nAccording to the Social Insurance Law, the Decision of the State Council on the Establishment of the Medical Insurance Program for Urban\nWorkers (effective from December 14, 1998), the Regulation of Insurance for Work-Related Injuries (effective from January 1, 2004 and\namended on December 20, 2010), Trial Measures for Maternity Insurance of the Staff and Workers in Enterprises (effective from January\n1, 1995), the Regulations on Unemployment Insurance (effective from January 22, 1999), the Interim Regulations on the Collection and\nPayment of Social Insurance Premiums(effective from January 22, 1999 and most recently amended on March 24, 2019), employers in the PRC\nshall make social insurance registration with the competent authorities, and pay five basic types of social insurance premiums for their\nemployees, or rather, basic pension insurance, basic medical insurance, work-related injury insurance, unemployment insurance and maternity\ninsurance. According to the Social Insurance Law, if an employing entity does not pay the full amount of social insurance premiums as\nscheduled or required, the social insurance premium collection institution shall order it to make the payment or make up the difference\nwithin the stipulated period and impose a daily fine equivalent to 0.05% of the overdue payment from the day on which the payment is\noverdue. If the payment is not made within the prescribed time, the social insurance authority shall impose a fine ranging from one to\nthree times of the overdue payment amount.

According\nto the Regulations on Management of Housing Provident Funds which was promulgated by the State Council and came into effect on April\n3, 1999 and was amended on March 24, 2002 and March 24, 2019, all business entities (including foreign invested enterprises) are required\nto register with the local housing provident funds management center and then maintain housing provident fund accounts and pay the related\nfunds for their employees. In addition, for both employees and employers, the payment rate for housing provident fund shall not be less\nthan 5% of the average monthly salary of the employees in the previous year. The payment rate may be raised if the employer desires so.\nWhere an entity fails to deposit the housing provident fund in full within the time limit, it shall be ordered by the housing provident\nfund management center to deposit the fund within a time limit; if it still fails to deposit the fund within the time limit, the housing\nprovident fund management center may apply to the People’s Court for enforcement.

Regulations\non Foreign Exchange

The\nRegulation of the PRC on Foreign Exchange Control, promulgated by the State Council on January 29, 1996 and most recently amended on\nAugust 5, 2008, is the principal regulation on foreign exchange in the PRC. According to such regulation, Renminbi is freely convertible\nfor current account items after due process, including distribution of dividends, trade-related foreign exchange transactions and service-related\nforeign exchange transactions, whereas foreign exchange for capital account items, such as direct investments or loans, requires prior\napproval of and registration with the SAFE.

On\nNovember 19, 2012, the SAFE promulgated the Circular of Further Improving and Adjusting Foreign Exchange Administration Policies on Foreign\nDirect Investment which substantially amends and simplifies the current foreign exchange procedure. Pursuant to this circular, the opening\nof various special purpose foreign exchange accounts (e.g., pre-establishment expenses accounts, foreign exchange capital accounts and\nguarantee accounts), the reinvestment of lawful incomes derived by foreign investors in China (e.g., profit, proceeds of equity transfer,\ncapital reduction, liquidation and early repatriation of investment), and purchase and remittance of foreign exchange as a result of\ncapital reduction, liquidation, early repatriation or share transfer in a foreign-invested enterprise no longer require the SAFE approval,\nand multiple capital accounts for the same entity may be opened in different provinces, which was not possible before. In addition, the\nSAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment\nby Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by the SAFE or its local branches\nover direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange\nbusiness relating to the direct investment in China based on the registration information provided by the SAFE and its branches.

On\nJanuary 26, 2017, SAFE promulgated the Circular on Further Improving the Reform of Foreign Exchange Administration and Optimizing Genuineness\nand Compliance Verification (the “Circular 3”), which became effective on the same date and stipulates several capital control\nmeasures with respect to the outbound remittance of profit from domestic entities to offshore entities, including: to process outbound\nremittance of profits in an amount equivalent to above USD 50,000 for domestic entities (i) banks shall, under the principle of genuine\ntransaction, check board resolutions regarding profit distribution, the original version of tax filing records and audited financial\nstatements, and affix seals on the original version of the tax filing records to indicate the amount and the date of the outbound remittance;\nand (ii) domestic entities shall use profits to make up for previous years’ losses before remitting the profits. Further, pursuant\nto the Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide\nboard resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

On\nOctober 23, 2019, the SAFE issued the Circular Regarding Further Promotion of the Facilitation of Cross-Border Trade and Investment,\npursuant to which all foreign-invested enterprises can make domestic equity investments with their capital funds in accordance with the\nlaw. On April 10, 2020, the SAFE promulgated the Notice of the SAFE on Optimizing Foreign Exchange Administration to Support the Development\nof Foreign-related Business, according to which, under the prerequisite of ensuring true and compliant use of funds and compliance with\nthe prevailing administrative provisions on use of income under the capital account, enterprises which satisfy the criteria are allowed\nto use income under the capital account, such as capital funds, foreign debt and overseas listing, etc. for domestic payment, without\nprior provision of proof materials for veracity to the bank for each transaction.

Regulations\non Foreign Exchange Registration of Overseas Investment by PRC Residents

On\nJuly 4, 2014, the SAFE promulgated the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and\nRoundtrip Investment through Special Purpose Vehicles (the “Circular 37”). On February 13, 2015, SAFE further promulgated\nthe Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment (the “Circular\n13”), which took effect on June 1, 2015. Circular 13 has amended Circular 37 by requiring PRC residents or entities to register\nwith qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established\nfor the purpose of overseas investment or financing.

These\ncirculars require PRC residents to register with qualified banks in connection with their direct establishment or indirect control of\nan offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity\ninterests in domestic enterprises or offshore assets or interests, which is referred to in Circular 37 as a “special purpose vehicle.”\nThese circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose\nvehicle, such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other\nmaterial events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE\nregistration, the PRC subsidiary of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent\nand from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability\nto contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the various SAFE registration requirements\ndescribed above could result in liability under PRC law for evasion of foreign exchange controls.

Regulations\non Dividend Distribution

The\nprincipal laws, rules and regulations governing dividend distribution by foreign-invested enterprises in the PRC are the Company Law\nof the PRC, as amended. Under these laws, rules and regulations, foreign-invested enterprises may pay dividends only out of their accumulated\nprofit, if any, as determined in accordance with PRC accounting standards and regulations. Both PRC domestic companies and wholly-foreign\nowned PRC enterprises are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount\nof such reserves reaches 50% of their registered capital. A PRC company is not permitted to distribute any profits until any losses from\nprior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits\nfrom the current fiscal year.

Regulations\non Tax

PRC\nEnterprise Income Tax

PRC\nenterprise income tax is calculated based on taxable income, which is determined under (i) the PRC Enterprise Income Tax Law (the “EIT\nLaw”), which was promulgated on March 16, 2007, and was most recently amended and became effective on December 29, 2018, and (ii)\nthe Implementing Regulations of the EIT Law (the “EIT Regulation”) promulgated by the State Council on December 6, 2007 and\nimplemented on January 1, 2008 and most recently amended on December 6, 2024. The EIT Law imposes a uniform enterprise income tax rate\nof 25% on all PRC resident enterprises, including foreign-invested enterprises, unless they are qualified for certain exceptions. The\nenterprise income tax is calculated based on the PRC resident enterprise’s global income as determined under PRC tax laws and accounting\nstandards.

The\nEIT Law also provides that enterprises established under the laws of foreign jurisdictions with “de facto management body”\nlocated in PRC are treated as “resident enterprises” for PRC tax purposes, and will be subjected to PRC income tax on their\nworldwide income. Under the EIT Regulation, a “de facto management body” is defined as a body that has real and overall management\ncontrol over the business, personnel, accounts and properties of an enterprise.

PRC\nDividend Withholding Tax

Pursuant\nto the Enterprise Income Tax Law and its implementation rules, dividends generated after January 1, 2008 and payable by a foreign-invested\nenterprise in China to its foreign enterprise investors are subject to a 10% withholding tax, unless any such foreign investor’s\njurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. Under the China-HK Taxation\nArrangement, income tax on dividends payable to a company resident in Hong Kong that holds more than a 25% equity interest in a PRC resident\nenterprise may be reduced to a rate of 5%. In February 2018, the State Administration of Taxation (the “SAT”) issued the\nAnnouncement on Issues concerning Beneficial Owners in Tax Treaties (the “Circular 9”), effective on April 1, 2018, to replace\nthe Circular of the State Administration of Taxation on the Interpretation and the Determination of the Beneficial Owners in the Tax\nTreaties, effective from October 2009, and the Announcement of State Administration of Taxation on Recognition of “Beneficial Owner”\nin Tax Treaties, effective on June 29, 2012. Circular 9 provides a more flexible guidance to determine whether the applicant engages\nin substantive business activities. Furthermore, under the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under\nTax Treaties, non-resident taxpayers qualified to enjoy tax treaty benefits may, at the time of tax declaration or withholding declaration\nthrough a withholding agent, enjoy the tax treaty benefits, and be subject to follow-up administration by the tax authorities. Where\nthe non-resident taxpayer does not apply to the withholding agent to claim the tax treaty benefits, or materials and information provided\nto the withholding agent do not meet the criteria for enjoying tax treaty benefits, the withholding agent shall withhold tax pursuant\nto the provisions of PRC tax laws. In addition, according to a tax circular issued by SAT in February 2009, if the main purpose of an\noffshore arrangement is to obtain preferential tax treatments, the PRC tax authorities will have the discretion to adjust the preferential\ntax rate enjoyed by the relevant offshore entity.

PRC\nValue-Added Tax

Pursuant\nto the Interim Regulations on Value-Added Tax of the People’s Republic of China, which was promulgated by the State Council on\nDecember 13, 1993 and amended on November 10, 2008, February 6, 2016 and November 19, 2017, and the Implementation Rules for the Interim\nRegulations on Value-Added Tax of the People’s Republic of China, which was promulgated by the MOF on December 25, 1993 and amended\non December 15, 2008 and October 28, 2011, entities or individuals engaging in sale of goods, provision of processing services, repairs\nand replacement services or import of goods within the territory of the PRC shall pay value-added tax (the “VAT”). Unless\nprovided otherwise, the rate of VAT is 17% on sales and 6% on the services. The Value-Added Tax Law of the PRC was promulgated on December\n25, 2024 and came into effect on January 1, 2026.

On\nMarch 23, 2016, the Ministry of Finance (the “MOF”) and SAT, jointly issued the Circular on the Pilot Program for Overall\nImplementation of the Collection of Value Added Tax Instead of Business Tax, (the “Circular 36”), which took effect on May\n1, 2016. Pursuant to the Circular 36, all companies operating in construction, real estate, finance, modern service or other sectors\nobligated to pay business tax are required to pay VAT, in lieu of business tax. The VAT rate is 6%, except that a rate of 11% applies\nto real estate sale, land use right transferring and providing service of transportation, postal sector, basic telecommunications, construction,\nreal estate lease, and a rate of 17% applies to providing lease service of tangible property, and a rate of zero for specific cross-bond\nactivities.

On\nApril 4, 2018, the MOF and the SAT jointly promulgated the Circular of the SAT on Adjustment of Value-Added Tax Rates (the “Circular\n32”), according to which, (i) for VAT taxable sales or importation of goods originally subject to VAT rates of 17% and 11% respectively,\napplicable tax rates shall be adjusted to 16% and 10%, respectively; (ii) for purchase of agricultural products originally subject to\ndeduction rate of 11%, applicable rate is be adjusted to 10%; (iii) for purchase of agricultural products for the purpose of production\nand sales or consigned processing of goods originally subject to a tax rate of 16%, applicable rate is adjusted to 12%; (iv) for exported\ngoods originally subject to a tax rate of 17% and an export tax refund rate of 17%, the export tax refund rate is adjusted to 16%; and\n(v) for exported goods and cross-border taxable acts originally subject to a tax rate of 11% and an export tax refund rate of 11%, the\nexport tax refund rate is adjusted to 10%. Circular 32 became effective on May 1, 2018 and supersedes any previously existing provisions\nin case of inconsistency.

On\nMarch 20, 2019, the MOF, the SAT and the General Administration of Customs jointly issued the Announcement on Policies for Deepening\nthe VAT Reform (the “Announcement 39”), to further lower VAT rates. According to the Announcement 39, (i) for general VAT\npayers’ sales activities or imports that are subject to an existing VAT rate of 16% or 10%, the VAT rate is adjusted to 13% or\n9%, respectively; (ii) for the agricultural products purchased by taxpayers to which an existing 10% deduction rate is applicable, the\nrate is adjusted to 9%; (iii) for the agricultural products purchased by taxpayers for production or commissioned processing, which are\nsubject to an existing VAT rate of 13%, the input VAT will be calculated at a 10% deduction rate; (iv) for the exportation of goods or\nlabor services that are subject to an existing VAT rate of 16%, with the applicable export refund at the same rate, the export refund\nrate is adjusted to 13%; and (v) for the exportation of goods or cross-border taxable activities subject to an existing VAT rate of 10%,\nwith the same export refund rate, the export refund rate is adjusted to 9%. The Announcement 39 came into effect on April 1, 2019 and\nshall prevail in case of any conflict with existing provisions.

Regulations\non M&A Rules and Overseas Listings

On\nAugust 8, 2006, six PRC regulatory agencies, namely, the MOFCOM, the State Assets Supervision and Administration Commission, the SAT,\nthe former State Administration of Industry and Commerce, the China Securities Regulatory Commission (the “CSRC”) and the\nSAFE, jointly adopted the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rules”),\nwhich became effective on September 8, 2006 and were amended on June 22, 2009. The M&A Rules purport, among other things, to require\nthat offshore special purpose vehicles that are controlled by PRC companies or individuals and that have been formed for overseas listing\npurposes through acquisitions of PRC domestic interest held by such PRC companies or individuals, to obtain the approval of the CSRC\nprior to publicly listing their securities on an overseas stock exchange.

While\nthe application of the M&A Rules remains unclear, we believe, based on the advice of our PRC counsel, DeHeng Law Offices (Shenzhen),\nthat CSRC approval is not required in the context of our initial public offering because: (a) our PRC Subsidiaries were not incorporated\nby merger or acquisition of equity interest or assets of a PRC domestic company owned by PRC companies or individuals as defined under\nthe M&A Rules; (b) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings under this\nannual report are subject to the M&A Rules; and (c) we have completed filing procedures with the CSRC for our initial public offering\npursuant to the requirements of the Overseas Listing Regulations that recently came into effect and provided clearer guidance for such\nrequirements.. However, as there has been no official interpretation or clarification of the M&A Rules, there is uncertainty as to\nhow this regulation will be interpreted or implemented.

On\nFebruary 17, 2023, the CSRC issued the Trial Measures for the Administration of Overseas Issuance and Listing of Securities by Domestic\nEnterprises and five supporting guidelines, which became effective on March 31, 2023 (the “Overseas Listing Regulations”).\nThe Overseas Listing Regulations are applicable to overseas securities offerings and/or listings conducted by issuers who are (i) companies\nincorporated in the PRC (“PRC domestic companies”) and (ii) companies incorporated overseas with substantial operations in\nthe PRC. Among other things, if an overseas listed issuer intends to implement any offering in an overseas market, it should, through\nits major operating entity incorporated in the PRC, submit filing materials to the CSRC within three working days after the completion\nof the offering. The required filing materials shall include but not be limited to: (1) filing report and relevant commitments; and (2)\ndomestic legal opinions. If domestic enterprises fail to comply with the Overseas Listing Regulations, they will be required to correct\ntheir behaviors, facing warnings and fines which amount will range from RMB1,000,000 to RMB10,000,000, and directly responsible personnel\nwill also be warned and fined which amount will range from RMB500,000 to RMB5,000,000.

On\nFebruary 24, 2023, the CSRC, together with the MOF, National Administration of State Secrets Protection and National Archives Administration\nof China, revised the Provisions on Strengthening Confidentiality and Archives Administration for Overseas Securities Offering and Listing,\nwhich were issued by the CSRC and National Administration of State Secrets Protection and National Archives Administration of China in\n2009 (the “Provisions”). The revised Provisions were issued under the title the “Provisions on Strengthening Confidentiality\nand Archives Administration of Overseas Securities Offering and Listing by Domestic Companies”, and came into effect on March 31,\n2023, together with the Overseas Listing Regulations. One of the major revisions to the revised Provisions is expanding their application\nto cover indirect overseas offering and listing, as is consistent with the Overseas Listing Regulations. The revised Provisions require\nthat, among other things, (a) a domestic company that plans to, either directly or indirectly through its overseas listed entity, publicly\ndisclose or provide to relevant individuals or entities including securities companies, securities service providers and overseas regulators,\nany documents and materials that contain state secrets or working secrets of government agencies, shall first obtain approval from competent\nauthorities according to law, and file with the secrecy administrative department at the same level; and (b) a domestic company that\nplans to, either directly or indirectly through its overseas listed entity, publicly disclose or provide to relevant individuals and\nentities including securities companies, securities service providers and overseas regulators, any other documents and materials that,\nif leaked, will be detrimental to national security or public interest, shall strictly fulfill relevant procedures stipulated by applicable\nnational regulations. Any failure or perceived failure by our Company or our PRC Subsidiaries to comply with the above confidentiality\nand archives administration requirements under the revised Provisions and other PRC laws and regulations may result in the relevant entities\nbeing held legally liable by competent authorities and referred to the judicial organ to be investigated for criminal liability if suspected\nof committing a crime.

\n \n \n \n

4.C.

Organizational\n Structure

The\nfollowing diagram illustrates our corporate structure as of the date of this annual report.

$\"\"$

\n \n \n \n

4.D.

Property,\n Plant and Equipment

Our headquarters and research and development office are located at the\nIndustry Park of Intelligent Auto Parts, No. 6 Beitanghe East Road, Tianning District, Changzhou, Jiangsu Province, PRC, with a leased\ngross floor area of approximately 1,500 square meters. Our manufacturing center is located at Liuliping Ganghe Industrial Park, Danjiangkou\nCity, Shiyan, Hubei Province, PRC, with a leased gross floor area of approximately 7,000 square meters. As of the date of this annual\nreport, we did not own any real property and leased properties with an aggregate gross floor area of approximately 8,500 square meters.\nWe do not expect difficulties in renewing any leases when they expire. If we need additional space, we can obtain additional space on\ncommercially reasonable terms. To control costs, we can terminate lease agreements in advance or choose not to renew them after they expire\nwhile maintaining a reasonable layout of production capacity.

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\n \n \n \n

ITEM\n 4A.

UNRESOLVED\n STAFF COMMENTS

None.

\n \n \n \n

ITEM\n 5.

OPERATING\n AND FINANCIAL REVIEW AND PROSPECTS

You\nshould read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated\nfinancial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements\nthat involve risks and uncertainties about our business and operations. Our actual results and the timing of selected events may differ\nmaterially from those anticipated in these forward-looking statements as a result of various factors, including those we describe under\n“Item 3. Key Information—3.D. Risk Factors” and elsewhere in this annual report.

\n \n \n \n

5.A.

Operating\n Results

Overview

We\nare a holding company with operating subsidiaries, and with most of our operations and assets in mainland China. We are an industrial\nequipment company focused on the research and development, manufacturing and sale of specialized industrial equipment, automation control\nsystems and integrated solutions. Our existing business primarily comprises the research and development, manufacturing and sale of oilfield-specialized\nproduction and maintenance equipment, as well as the sale of related equipment components, integration of specialized oilfield vehicles\nand provision of automation solutions. Leveraging our accumulated engineering experience, supply chain management capabilities and on-site\ndelivery capabilities, we are expanding into the modular gas-to-electricity power generation systems business, with a focus on providing\nrapidly deployable on-site power generation solutions for AI data centers, industrial parks, oil and gas fields and other energy-intensive\napplications.

Our\ntotal revenue increased from $24.9 million for the year ended June 30, 2025 to $28.2 million for the year ended June 30, 2026, representing\na year-on-year growth rate of 13.21%. The increase in revenues was mainly driven by the increase in sales of specialized oilfield vehicle\nof $11.3 million, partially offset by the decrease of specialized oilfield equipment of $6.5 million and service income from automation\nsolutions of $1.8 million. Gross profit margin decreased from 30.86% for the year ended June 30, 2025 to 26.43% for the year ended June\n30, 2026.

Our\ntotal revenue increased from $18.9 million for the year ended June 30, 2024 to $24.9 million for the year ended June 30, 2025, representing\na year-on-year growth rate of 31.69%. The increase in revenues was mainly driven by the increase in sales of specialized oilfield vehicle\nof $5.5 million and sales of specialized oilfield equipment of $3.1 million, partially offset by the decrease of other revenue of $2.6\nmillion. Gross profit margin remained steady with a slight increased from 29.99% for the year ended June 30, 2024 to 30.86% for the year\nended June 30, 2025.

Key\nFactors Affecting Our Results of Operations

We\nbelieve the following key factors may affect our financial condition and results of operations:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	our\n ability to maintain our major customers;
	●	our\n ability to attract new customers and to increase our revenue per customer;
	●	our\n ability to enhance our operational efficiency; and
	●	our\n ability to acquire sufficient parts and materials and key components from their suppliers in suitable quantity and quality.

Results\nof Operations

The\nfollowing table sets forth a summary of our consolidated statements of income (loss) and comprehensive income (loss) for the years ended\nJune 30, 2026, 2025 and 2024, respectively. This information should be read together with our consolidated financial statements and related\nnotes included elsewhere in this annual report. The results of operations in any period are not necessarily indicative of our future\ntrends.

	For the Years Ended June 30,
	2026			2025		2024
	USD			%		USD		%		USD			%
Revenues	$	28,206,019			100.00	%	$	24,914,618			100.00	%		$	18,918,847		100.00	%
Cost of revenues		(20,752,326	)		(73.57	)%		(17,224,749	)		(69.14	)%			(13,245,171	)	(70.01	)%
Gross profit		7,453,693			26.43	%		7,689,869			30.86	%			5,673,676		29.99	%

Operating expenses:
Selling and marketing expenses		(898,008	)		(3.18	)%		(746,119	)		(2.99	)%			(653,218	)	(3.45	)%
General and administrative expenses		(2,001,457	)		(7.10	)%		(6,800,745	)		(27.30	)%			(544,304	)	(2.88	)%
Research and development expenses		(3,475,397	)		(12.32	)%		(3,269,086	)		(13.12	)%			(1,677,456	)	(8.87	)%
Total operating expenses		(6,374,862	)		(22.60	)%		(10,815,950	)		(43.41	)%			(2,874,978	)	(15.20	)%

Operating income (loss)		1,078,831			3.83	%		(3,126,081	)		(12.55	)%			2,798,698		14.79	%

Other (expense) income
Interest expenses, net		(238,393	)		(0.85	)%		(167,146	)		(0.67	)%			(126,373	)	(0.67	)%
Government subsidies		6,196			0.02	%		18,994			0.08	%			45,638		0.24	%
Other income/(expenses), net		70,419			0.25	%		(73,182	)		(0.29	)%			-		-
Loss from sale of Equipment		-			-			(1,538,023	)		(6.17	)%			-		-
Loss from sale of accounts receivable		-			-			(1,097,204	)		(4.40	)%			-		-
Total other expense, net		(161,778	)		(0.58	)%		(2,856,561	)		(11.45	)%			(80,735	)	(0.43	)%

Income (loss) before income tax		917,053			3.25	%		(5,982,642	)		(24.00	)%			2,717,963		14.36	%
Income tax (expense) benefit		(491,512	)		(1.74	)%		269,962			1.08	%			(276,189	)	(1.46	)%

Net income (loss)	$	425,541			1.51	%	$	(5,712,680	)		(22.92	)%		$	2,441,774		12.90	%

Comparison\nof Years Ended June 30, 2026 and 2025

Revenues

A\ndetailed breakdown of revenues for the years ended June 30, 2026 and 2025 is set forth below:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For the Years Ended June 30,		Variance
	2026		2025			Amount		%
Sales of specialized oilfield equipment	$	5,511,628		$	11,952,061		$	(6,440,433	)	(53.89	)%
Sales of specialized oilfield vehicle		22,184,226			10,909,211			11,275,015		103.35	%
Service income from automation solutions		-			1,762,092			(1,762,092	)	(100.00	)%
Others		510,165			291,254			218,911		75.16	%
Total	$	28,206,019		$	24,914,618		$	3,291,401		13.21	%

Our\nrevenues for the years ended June 30, 2026 and 2025 were $28.2 million and $24.9 million, respectively. The 13.21% increase in\nrevenues was mainly attributable to increase in specialized oilfield vehicles, driven by increased demand and average sales price,\npartially offset by a decreased revenue from specialized oilfield equipment and automation solutions due to decrease in customer\ndemand.

Sales\nof specialized oilfield equipment decreased by $6.5 million, or 53.89%, to $5.5 million for the year ended June 30, 2026 from $12.0 million\nfor the year ended June 30, 2025. The decrease was mainly due to our decision to expand production capacity of higher-pricing specialized\noilfield equipment in order to allocate more resources towards research and development for our new specialized oilfield equipment products,\ngiven that all specialized oilfield equipment shares the same production facilities. Such transformation resulted in a 64.94% decrease\nin the sales volume and a 31.51% increase in the average sales price of specialized oilfield equipment for the year ended June 30, 2026,\ncompared to the same period for the year ended June 30, 2025.

We\ndesign and manufacture the equipment and components, then outsource them to qualified specialized vehicle manufacturing companies to\nintegrate and produce specialized oilfield vehicles, and the vehicles are sold by us externally. Sales of specialized oilfield vehicles\nincreased by $11.3 million, or 103.35%, to $22.2 million for the year ended June 30, 2026 from $10.9 million for the year ended June\n30, 2025. The increase was mainly due to our decision to optimize product portfolio. We used to produce and sell large quantities of\nlower unit price vehicles to improve our efficiency of inventories’ turnover for the year ended June 30, 2025. While for the year\nended June 30, 2026, we keep focusing on producing and selling vehicles with higher price. We produced higher selling price specialized\noilfield vehicles, resulting in the average unit sales price of specialized oilfield vehicles increased from $29,564 to $41,936, or 41.85%\nfor the year ended June 30, 2026.

We\nprovide customers with automation solutions services, including software development or customized function development on customers’\nsystem, testing, debugging and other automation solutions services with respect to specialized equipment used in the oilfield. The service\nrevenue decreased to nil for the year ended June 30, 2026, from $1.8 million for the year ended June 30, 2025. This decrease was primarily\ndue to our decision to focus our research and development efforts on our own specialized oilfield vehicle products.

Other\nrevenue derives primarily from sales of parts and materials, such as power units and integrated circuits, etc. Our revenue generated\nfrom others increased by $0.2 million, or 75.16%, to $0.5 million for the year ended June 30, 2026 from $0.3 million for the year ended\nJune 30, 2025. We planned the sales was in one-time and unsustainable based on our customer’s demand for the years ended June 30,\n2026 and 2025.

Cost\nof revenues

Cost\nof revenues consists primarily of manufacturing and purchase cost of raw materials, depreciation, maintenance, and other overhead expenses.\nOur cost of revenues increased by $3.6 million, or 20.48%, to $20.8 million for the year ended June 30, 2026 from $17.2 million for the\nyear ended June 30, 2025. The increase in cost of revenues is primarily due to the manufacture of higher-pricing specialized oilfield\nequipment and oilfield vehicles, which carry higher unit costs.

Gross\nprofit and gross profit margin

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For\n the year ended June 30, 2026			For\nthe year ended June 30, 2025
	Gross profit			Gross profit margin		Gross profit		Gross profit margin
Sales of specialized oilfield equipment	$	1,659,512			30.11	%	$	3,760,783		31.47	%
Sales of specialized oilfield vehicles		5,881,775			26.51	%		3,434,999		31.49	%
Service income from automation solutions		-			-			596,336		33.84	%
Others		(87,594	)		(17.17	)%		(102,249	)	(35.11	)%
Total gross profit	$	7,453,693			26.43	%	$	7,689,869		30.86	%

Gross\nprofit decreased by $0.2 million, or 3.07%, to $7.5 million for the year ended June 30, 2026 from $7.7 million for the year ended June\n30, 2025. Gross profit margin decreased from 30.86% for the year ended June 30, 2025 to 26.43% for the year ended June 30, 2026. The\ndecrease in gross profit and gross profit margin was mainly attributable to a change in product portfolio toward higher-priced specialized\noilfield vehicles. These products sale at higher selling prices and also incurred higher unit costs, which resulted in a lower gross\nprofit margin.

Selling\nand marketing expenses

Our\nselling and marketing expenses consist primarily of commission.

Our\nselling and marketing expenses increased by 0.2 million, or 20.36%, to$0.9 million for the year ended June 30, 2026 from $0.7 million\nfor the years ended June 30, 2025. We expanded sales of our higher-priced products during the year, which generates increase in revenue\nand a corresponding increase in sales commission expenses and resulting in increase in selling and marketing expenses.

General\nand administrative expenses

Our\ngeneral and administrative expenses consist primarily of share-based compensation expenses, professional fees, provision for credit losses,\nsalaries and welfare expenses, depreciation and amortization expenses and rental expenses.

Our\ngeneral and administrative expenses decreased by $4.8 million, or 70.57%, to $2.0 million for the year ended June 30, 2026 from $6.8\nmillion for the year ended June 30, 2025. No share-based compensation expense incurred for the year ended June 30, 2026. The decrease\nin general and administrative expense was attributable to a decrease in share-based compensation expense of $3.9 million, a decrease\nin professional fees of $0.5 million and a decrease in provision for credit losses $0.4 million.

Research\nand development expenses

Our\nresearch and development expenses consist primarily of (i) parts and materials in relation to testing materials; and (ii) design and\ndevelopment expenses, with new technology, materials and suppliers and other research and development related expenses for designing\nand testing.

Research\nand development expenses increased by $0.2 million, or 6.31%, to $3.5 million for the year ended June 30, 2026 from $3.3 million for\nthe year ended June 30, 2025, attributed to the increase of design and development expenses to develop new products and refine existing\nproducts. The research and development expenses are mainly driven by the stage and scale of our equipment development.

Other income/(expenses), net

Our\nother income/(expenses), net consists primarily of (i) loss from sale of equipment, (ii) loss from sale of accounts receivable, (iii)\ninterest expense, net, (iv) government subsidies, and (v) other expenses.

Other\nincome/(expenses), net decreased by $2.7 million, or 94.34%, to $0.2 million for the year ended June 30, 2026 from $2.9 million for the year ended\nJune 30, 2025, primarily attributable to the loss from sale of equipment of $1.5 million due to the relocation of the production\nfactory, and the loss from sale of accounts receivable of $1.1 million due to our operating cash acceleration during the year ended June\n30, 2025, as there were no such expenses incurred for the year ended June 30, 2026.

Income\ntax (expense) benefit

The\nPRC EIT is calculated based on the taxable income determined under the applicable EIT Law and its implementation rules. Our income tax\nexpense of $0.5 million for the year ended June 30, 2026 changed from an income tax benefit of $0.3 million for the year ended June 30,\n2025. The change resulted from the change in our taxable income as a result of the above fluctuation.

Net\nincome (loss)

As\na result of the foregoing, we recorded net income of $0.4 million for the year ended June 30, 2026 and a net loss of $5.7 million for\nthe year ended June 30, 2025.

Comparison\nof Years Ended June 30, 2025 and 2024

Revenues

A\ndetailed breakdown of revenues for the years ended June 30, 2025 and 2024 is set forth below:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For the Years Ended June 30,		Variance
	2025		2024			Amount		%
Sales of specialized oilfield equipment	$	11,952,061		$	8,877,804		$	3,074,257		34.63	%
Sales of specialized oilfield vehicle		10,909,211			5,406,586			5,502,625		101.78	%
Service income from automation solutions		1,762,092			1,763,018			(926	)	(0.05	)%
Others		291,254			2,871,439			(2,580,185	)	(89.86	)%
Total	$	24,914,618		$	18,918,847		$	5,995,771		31.69	%

Our\nrevenues for the years ended June 30, 2025 and 2024 were $24.9 million and $18.9 million, respectively. The 31.69% increase in revenues\nwas mainly driven by the increase in demand and average sales price for specialized oilfield equipment and increase in average sales\nprice for specialized oilfield vehicles and partially offset by the decrease in demand for sales of raw materials and parts.

Sales\nof specialized oilfield equipment increased by $3.1 million, or 34.63%, to $12.0 million for the year ended June 30, 2025 from $8.9 million\nfor the year ended June 30, 2024. The increase was mainly due to our decision to expand production capacity of higher-pricing specialized\noilfield equipment in order to allocate more resources towards research and development for our new specialized oilfield equipment products\nwith higher profit margins, given that all specialized oilfield equipment shares the same production facilities. Such transformation\nresulted in a 12.35% increase in the sales volume and a 19.83% increase in the average sales price of specialized oilfield equipment\nfor the year ended June 30, 2025, compared to the same period for the year ended June 30, 2024.

We\ndesign and manufacture the equipment and components, then outsource them to qualified specialized vehicle manufacturing companies to\nintegrate and produce specialized oilfield vehicles, and the vehicles are sold by us externally. Sales of specialized oilfield vehicles\nincreased by $5.5 million, or 101.78%, to $10.9 million for the year ended June 30, 2025 from $5.4 million for the year ended June 30,\n2024. The increase was mainly due to our decision to optimize product portfolio. We used to produce and sell large quantities of lower\nunit price vehicles to improve our efficiency of inventories’ turnover for the year ended June 30, 2024. While for the year ended\nJune 30, 2025, we keep focusing on producing and selling vehicles with higher price, which resulted in the declining sales volume. We\nproduced higher selling price and higher margin specialized oilfield vehicles, resulting in the average unit sales price of specialized\noilfield vehicles increased from $2,368 to $29,564, or 1,148.48% for the year ended June 30, 2025.

We\nprovide customers with automation solutions services, including software development or customized function development on customers’\nsystem, testing, debugging and other automation solutions services with respect to specialized equipment used in the oilfield. The service\nrevenue remained stable at $1.8 million for both the years ended June 30, 2025 and 2024. Because we earned cultivate positive word-of-mouth\nrecommendations within the oilfield industry and a good reputation in the market. We have potential to keep the revenue relatively stable.\nBut we still are not expecting to achieve such trend in service income from automation solutions continuously as we are going to focus\nour research and development efforts on our own vehicle products.

Other\nrevenue derives primarily from sales of parts and materials, such as power units and integrated circuits, etc. Our revenue generated\nfrom others decreased by $2.6 million, or 89.86%, to $0.3 million for the year ended June 30, 2025 from $2.9 million for the year ended\nJune 30, 2024. We sold chassis parts of $2.8 million for the year ended June 30, 2024. We planned the sales was in one-time and unsustainable\nbased on our customer’s demand for the years ended June 30, 2025 and 2024.

Cost\nof revenues

Cost\nof revenues consists primarily of manufacturing and purchase cost of raw materials, depreciation, maintenance, and other overhead expenses.\nOur cost of revenues increased by $4.0 million, or 30.05%, to $17.2 million for the year ended June 30, 2025 from $13.2 million for the\nyear ended June 30, 2024. The increase in cost was mainly due to the increase in revenues of 31.69%.

Gross\nprofit and gross profit margin

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For\n the year ended June 30, 2025			For\nthe year ended June 30, 2024
	Gross profit			Gross profit margin		Gross profit		Gross profit margin
Sales of specialized oilfield equipment	$	3,760,783			31.47	%	$	2,982,107	33.59	%
Sales of specialized oilfield vehicles		3,434,999			31.49	%		1,522,957	28.17	%
Service income from automation solutions		596,336			33.84	%		796,042	45.15	%
Others		(102,249	)		(35.11	)%		372,570	12.98	%
Total gross profit	$	7,689,869			30.86	%	$	5,673,676	29.99	%

Gross\nprofit increased by $2.0 million, or 35.54%, to $7.7 million for the year ended June 30, 2025 from $5.7 million for the year ended June\n30, 2024. Gross profit margin remained steady with a slightly increased from 29.99% for the year ended June 30, 2024 to 30.86% for the\nyear ended June 30, 2025. The increase in both gross profit and gross profit margin was mainly driven by higher margin achieved in sales\nof specialized oilfield vehicles, which was partially offset by the decreasing sales of specialized oilfield equipment.

Selling\nand marketing expenses

Our\nselling and marketing expenses consist primarily of commission.

Our\nselling and marketing expenses have been steadily maintained at $0.7 million for the years ended June 30, 2025 and 2024. The observed\nrevenue expansion reflects our management team’s direct business development efforts rather than commission-based sales channels,\nthereby maintaining stable commission expenditures.

General\nand administrative expenses

Our\ngeneral and administrative expenses increased by $6.3 million, or 1,149.44%, to $6.8 million for the year ended June 30, 2025 from $0.5\nmillion for the year ended June 30, 2024, which attributed to the increase in share-based compensation expenses of $3.9 million, professional\nfees of $1.6 million and provision for credit losses $0.5 million.

Research\nand development expenses

Research\nand development expenses increased by $1.6 million, or 94.88%, to $3.3 million for the year ended June 30, 2025 from $1.7 million for\nthe year ended June 30, 2024, attributed to the increase of design and development expenses to develop new products and refine existing\nproducts. The research and development expenses are mainly driven by the stage and scale of our equipment development.

Other\nincome/(expenses), net

Our\nother (expense) income consists primarily of (i) loss from sale of equipment, (ii) loss from sale of accounts receivable,\n(iii) interest expense, net, (iv) government subsidies, and (v) other expense.

Other\nincome/(expenses), net was $2.9 million for the year ended June 30, 2025, primarily as a result from loss from sale of equipment of\n$1.5 million due to relocation of production factory, and loss from sale of accounts receivable of $1.1 million due to our demand exchange\nof on accelerate cash consideration collection and optimize operating cashflow. Interest expense, net subsidies increased by $0.04 million\nto $0.17 million for the year ended June 30, 2025 from $0.13 million for the year ended June 30, 2024 due to increase in bank borrowings.\nWhile government subsidies decreased by $26,644, or 58.38%, to $18,994 for the year ended June 30, 2025 from $45,638 for the year ended\nJune 30, 2024. Our government subsidies received in cash were not contingent upon our further actions or performance. We are not expecting\nto receive government subsidies continuously.

Income\ntax benefit (expense)

The\nPRC EIT is calculated based on the taxable income determined under the applicable EIT Law and its implementation rules. Our income tax\nbenefit of $0.3 million for the year ended June 30, 2025 changed from an income tax expense of $0.3 million for the year ended June 30,\n2024. The change resulted from the change in our taxable income.

Net\n(loss) income

As\na result of the foregoing, we recorded net loss of $5.7 million for the year ended June 30, 2025 and a net income of $2.4 million for\nthe year ended June 30, 2024.

Cash\nFlows

Years\nEnded June 30, 2026, 2025 and 2024

The\nfollowing table summarizes our cash flows for the periods indicated:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For the years ended June 30,
	2026			2025			2024
Net cash used in operating activities	$	(2,728,158	)		$	(2,878,901	)	$	(2,735,297	)
Net cash used in investing activities		(219,540	)			(2,439,997	)		(273,213	)
Net cash provided by financing activities		6,836,946				5,716,615			3,074,304
Effect of exchange rate changes		(11,215	)			(33,246	)		(839	)
Net increase in cash, cash equivalents and restricted cash	$	3,878,033			$	364,471		$	64,955
Cash, cash equivalents and restricted cash at beginning of the year	$	1,022,625			$	658,154		$	593,199
Cash, cash equivalents and restricted cash at the end of the year	$	4,900,658			$	1,022,625		$	658,154

Operating\nActivities

Net\ncash used in operating activities was $2.7 million for the year ended June 30, 2026, primarily derived from (i) net income of $0.4\nmillion, (ii) an adjustment of added non-cash items of a net amount of $0.7 million, mainly inclusive of deferred income tax,\namortization of intangible assets and operating lease right-of-use assets, depreciation of equipment and provision for credit\nlosses; deducted by (iii) an increase of advances to suppliers of $3.5 million of purchase prepayments from suppliers, (iv) a\ndecrease of contract liabilities of $1.1 million, primarily due to the timely delivery of specialized oilfield equipment and\nvehicles, (v) an increase of inventories of $1.0 million in relation to materials for volume production and finished goods that we\ncapitalized on the depressed material prices to lock in favorable costs for our future production and research and development\nneeds, (vi) an increase of accounts receivable of $0.7 million, primarily driven by revenue growth and (vii) partially offset by an increase\nof accounts payable of $1.2 million, (viii) a decrease of prepayments and other current\nassets of $1.0 million, primarily due to the collection of other receivables during the period.

Net\ncash used in operating activities was $2.9 million for the year ended June 30, 2025, primarily derived from (i) net loss of $5.7 million,\n(ii) an adjustment of added non-cash items of a net amount of $7.1 million, inclusive of share-based compensation expenses of $3.9 million,\nloss on sale of equipment of $1.5 million, loss on sale of accounts receivable of $1.1 million and other non-cash items;\ndeducted by (iii) an increase of inventories of $8.6 million in relation to materials for volume production and finished goods that we\ncapitalized on the depressed material prices to lock in favorable costs for our future production and research and development needs,\n(iv) an increase of prepayments and other current asset of $0.8 million, because of the outstanding receivable related to the sale\nof accounts receivable and equipment, and (v) partially offset by an increase of accounts payable of $2.9 million, (vi)\nan increase of contract liabilities of $1.2 million, and (vii) an decrease of advances to suppliers of $0.9 million.

Net\ncash used in operating activities was $2.7 million for the year ended June 30, 2024, primarily derived from (i) net income of $2.4 million,\n(ii) an increase of accounts receivable of $0.5 million; deducted by (iii) an decrease of accounts payables of $2.6 million with respect\nto the repayment to our suppliers, (iv) an increase of inventories of $2.1 million in relation to materials for volume production and\nfinished goods; and (v) an increase of advances to suppliers of $0.9 million.

Investing\nActivities

For\nthe year ended June 30, 2026, net cash used in investing activities was $0.2 million, which was mainly due to purchases of intangible\nassets of $0.9 million and loans to third parties of $1.9 million, offset by the collection of loans to third parties of $2.0 million, and proceeds from sale of equipment of $0.6 million.

For\nthe year ended June 30, 2025, net cash used in investing activities was $2.4 million, which was mainly due to purchases of intangible\nassets of $2.0 million and net proceeds to independent third parties of $0.4 million.

For\nthe year ended June 30, 2024, net cash used in investing activities was $0.3 million, which was mainly due to loans to independent third\nparties.

Financing\nActivities

For\nthe year ended June 30, 2026, net cash provided by financing activities was $6.8 million, which was mainly due to net proceeds from bank\nloans of $4.0 million and third parties of $2.4 million, and initial public offering proceeds from escrow account of $0.4 million.

For\nthe year ended June 30, 2025, net cash provided by financing activities was $5.7 million, which was mainly due to net proceeds from initial\npublic offering of $4.2 million and bank loans of $1.5 million.

For\nthe year ended June 30, 2024, net cash provided by financing activities was $3.1 million, which was mainly due to net proceeds from bank\nloans.

Taxation

Cayman\nIslands Taxation

Payments\nof dividends and capital in respect of our Ordinary Shares will not be subject to taxation in the Cayman Islands and no withholding tax\nwill be required on the payment of a dividend or capital to any holder of the Ordinary Shares nor will gains derived from the disposal\nof the Ordinary Shares be subject to Cayman Islands income or corporation tax.

The\nCayman Islands currently levies no taxes on individuals or corporations based on profits, income, gains or appreciation and there is\nno taxation in the nature of inheritance tax or estate duty. There are no other taxes likely to be material to us levied by the government\nof the Cayman Islands except for stamp duties which may be applicable on instruments executed in, or, after execution, brought within\nthe jurisdiction or produced before a court of the Cayman Islands. The Cayman Islands is a party to a double tax treaty entered with\nthe United Kingdom in 2010 but is otherwise not a party to any double tax treaties that are applicable to any payments made to or by\nour company. There are no exchange control regulations or currency restrictions in the Cayman Islands.

The\nCayman Islands enacted the International Tax Co-operation (Economic Substance) Act (Revised) together with the Guidance Notes published\nby the Cayman Islands Tax Information Authority from time to time. We are required to comply with the economic substance requirements\nfrom July 1, 2019 and make an annual report in the Cayman Islands as to whether or not we are carrying on any relevant activities and\nif we are, we must satisfy an economic substance test.

Hong\nKong Taxation

The\nfollowing summary of certain relevant taxation provisions under the laws of Hong Kong is based on current law and practice and is subject\nto changes therein. This summary does not purport to address all possible tax consequences relating to purchasing, holding or selling\nthe Ordinary Shares, and does not take into account the specific circumstances of any particular investors, some of whom may be subject\nto special rules. Accordingly, holders or prospective purchasers (particularly those subject to special tax rules, such as banks, dealers,\ninsurance companies and tax-exempt entities) should consult their own tax advisors regarding the tax consequences of purchasing, holding\nor selling the Ordinary Shares. Under the current laws of Hong Kong:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	No\n profit tax is imposed in Hong Kong in respect of capital gains from the sale of the Ordinary Shares.

	●	Revenue\n gains from the sale of Ordinary Shares by persons carrying on a trade, profession or business in Hong Kong where the gains are derived\n from or arise in Hong Kong from the trade, profession or business will be chargeable to Hong Kong profits tax, which is currently\n imposed at the rate of 16.5% on corporations and at a maximum rate of 15% on individuals and unincorporated businesses.

	●	Gains\n arising from the sale of Ordinary Shares, where the purchases and sales of Ordinary Shares are effected outside of Hong Kong such\n as, for example, on Nasdaq, should not be subject to Hong Kong profits tax.

According\nto the current tax practice of the Hong Kong Inland Revenue Department, dividends paid on the Ordinary Shares would not be subject to\nany Hong Kong tax.

No\nHong Kong stamp duty is payable on the purchase and sale of the Ordinary Shares.

People’s\nRepublic of China Taxation

According\nto the Enterprise Income Tax Law of the PRC (the “Income Tax Law”) and the Implementation Regulations of Enterprise Income\nTax Law of the PRC, the enterprise income tax for both domestic and foreign-invested enterprises are unified at 25%.

According\nto the Income Tax Law, income such as dividends, rental, interest and royalty from the PRC derived by a non-resident enterprise which\nhas no establishment in the PRC or has establishment but the income has no relationship with such establishment is subject to a 10% withholding\ntax, which may be reduced if the foreign jurisdiction of incorporation has a tax treaty with the PRC that provides for a different withholding\narrangement, unless the relevant income is specifically exempted from tax under the applicable income tax laws, regulations, notices\nand decisions which relate to foreign invested enterprises and their investors.

According\nto the arrangement between mainland China and Hong Kong, the withholding tax rate for dividends paid by a PRC resident enterprise to\na Hong Kong resident enterprise is 5%, if the Hong Kong enterprise owns at least 25% of the PRC enterprise. According to the Notice of\nthe State Administration of Taxation on Issues Relating to the Administration of the Dividend Provision in Tax Treaties, the corporate\nrecipients of dividends distributed by PRC enterprises must satisfy the direct ownership thresholds at all times during the twelve (12)\nconsecutive months preceding the receipt of the dividends.

\n \n \n \n

5.B.

Liquidity\n and Capital Resources

Material\nCash Requirements

To\ndate, the primary sources of liquidity consist of cash flows from the PRC Subsidiaries’ operating activities, capital contributions\nfrom shareholders and loans from banks. We have financed our operations primarily through capital contributions and revenue from operations.\nAs of June 30, 2026, we had cash, cash equivalents and restricted cash of $4.9 million and a total working capital surplus of $14.1 million. For the next\n12 months from the date of this Annual Report, we plan to implement measures to meet the cash requirements, including: (i) strictly controlling\nand reducing expenses; (ii) seeking additional credit facilities; and (iii) seeking equity financing from shareholders. We believe the\nabove measures will be adequate to meet the operation requirements in the next 12 months from the date of this Annual Report.

We\nbelieve our current working capital is sufficient to support our operations for the next twelve months from the date of this Annual Report.\nWe may, however, need additional cash resources in the future if we experience changes in business conditions or other developments,\nor if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar actions. If we determine that\nour cash requirements exceed the amount of cash, cash equivalents and restricted cash we have on hand at the time, we may seek to issue equity or debt\nsecurities or obtain credit facilities. The issuance and sale of additional equity would result in further dilution to our shareholders.\nThe incurrence of indebtedness would result in increased fixed obligations and could result in operating covenants that would restrict\nour operations. Our obligation to bear credit risk for certain financing transactions we facilitate may also strain our operating cash\nflow. We cannot assure you that financing will be available in amounts or on terms acceptable to us, if at all.

Current\nforeign exchange and other regulations in the PRC may restrict our PRC entities in their ability to transfer their net assets to us and\nour subsidiaries in Hong Kong. However, as of the date of this Annual Report, these restrictions have no impact on the ability of these\nPRC entities to transfer funds to us as we do not anticipate declaring or paying any dividends in the foreseeable future, as we plan\nto retain our retained earnings to continue to grow our business. In addition, these restrictions have no impact on the ability for us\nto meet our cash obligations.

To\nutilize proceeds from our securities offerings, we may make additional loans or capital contributions to our PRC Subsidiaries. PRC\nlaws and regulations allow an offshore holding company to provide funding to our PRC Subsidiaries only through loans or capital\ncontributions, subject to the filing or approval of government authorities and limits on the amount of capital contributions and\nloans. Subject to satisfaction of applicable government registration and approval requirements, we may extend inter-company loans to\nour PRC Subsidiaries or make additional capital contributions to fund their capital expenditures or working capital. For an increase\nof registered capital, our PRC Subsidiaries need to file such change of registered capital with the State Administration for Market\nRegulation (the “SAMR”) or its local counterparts through the enterprise registration system and the national enterprise\ncredit information publicity system, and the SAMR or its local counterparts will then push such information to the China’s\nMinistry of Commerce or its local counterparts. If the holding company provides funding to our PRC Subsidiaries through loans, (i)\nin the event that the foreign debt management mechanism as provided in the Measures for Foreign Debts Registration and\nAdministration and other relevant rules applies, the balance of such loans cannot exceed the difference between the total investment\nand the registered capital of the subsidiaries and we will need to register such loans with the SAFE or its local branches, or (ii)\nin the event that the mechanism as provided in the Notice of the People’s Bank of China on Matters concerning the\nMacro-Prudential Management of Full-Covered Cross-Border Financing, or PBOC Notice No. 9, applies, the balance of such loans will be\nsubject to the risk-weighted approach and the net asset limits and we will need to file the loans with the SAFE in its information\nsystem pursuant to applicable requirements and guidelines issued by the SAFE or its local branches. While we currently see no\nmaterial obstacles to completing the filing and registration procedures with respect to future capital contributions to our PRC\nSubsidiaries and loans to our PRC Subsidiaries, we cannot assure that we will be able to complete these filings and registrations on\na timely basis, or at all. See “Risk Factors—Risks Related to Doing Business in China—PRC regulation of loans\nto and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay us\nfrom using the proceeds of our subsequent offerings to make loans or additional capital contributions to our PRC Subsidiaries, which\ncould materially and adversely affect our liquidity and our ability to fund and expand our business.”

We\nexpect the net proceeds from our initial public offering to be used in the PRC and will be in the form of Renminbi and, therefore, our\nPRC Subsidiaries will need to convert any capital contributions or loans from U.S. dollars into Renminbi in accordance with applicable\nPRC laws and regulations.

Capital\nExpenditures

Our\ncapital expenditures are primarily incurred for the purpose of acquisition of equipment, and intangible assets. Our capital\nexpenditures were $0.9 million, $2.1 million and $0.02 million for the years ended June 30, 2026, 2025 and 2024, respectively.

Off-Balance\nSheet Arrangements

We\ndid not have during the periods presented, and we do not currently have, any off-balance sheet financing arrangements or any relationships\nwith unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose\nentities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited\npurposes.

Holding\nCompany Structure

Our\nCompany, STAK Inc., is a holding company with no material operations of its own. We conduct our operations through the PRC Subsidiaries\nin mainland China. As a result, our ability to pay dividends depends upon dividends paid by the PRC Subsidiaries. If our existing PRC\nSubsidiaries or any newly formed ones incur debt on their own behalf in the future, the instruments governing their debt may restrict\ntheir ability to pay dividends to us. In addition, our subsidiaries in mainland China are permitted to pay dividends to us only out of\nits retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Under PRC law, each of our\nsubsidiaries in mainland China are required to set aside at least 10% of its after-tax profits each year, if any, to fund certain statutory\nreserve funds until such reserve funds reach 50% of their registered capital. In addition, our subsidiaries in mainland China may allocate\na portion of their after-tax profits based on PRC accounting standards to enterprise expansion funds and staff bonus and welfare funds\nat their discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Remittance of dividends\nby a wholly foreign-owned company out of mainland China is subject to examination by the banks designated by SAFE. The PRC Subsidiaries\ndidn’t distribute dividends and have made no further plans to pay dividends since such date and do not expect to do so unless and\nuntil they have generated sufficient accumulated profits and have met the requirements for statutory reserve funds.

Tabular\nDisclosure of Contractual Obligations

The\nfollowing table sets forth our contractual obligations as of June 30, 2026:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Payments due by period
	Total		Within 1 year			Within 1-2 years		Over 2 years
Bank borrowings	$	12,962,226		$	11,370,503		$	884,290	$	707,433
Loan from third parties		2,476,014			2,476,014			-		-
Loans from related parties		351,503			78,506			272,997		-
Total	$	15,789,743		$	13,925,023		$	1,157,287	$	707,433

Other\nthan those shown above, we did not have any significant capital and other commitments, long-term obligations, or guarantees as of June\n30, 2026.

Holding\nCompany Structure

See\n“Item 3. Key Information—Our Company Structure.”

\n \n \n \n

5.C.

Research\n and Development

See\n“Item 4. Information on The Company—4.B. Business Overview—Intellectual Property and Certificates.”

\n \n \n \n

5.D.

Trend\n Information

We\nare not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our\nnet revenues, net income, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily\nto be indicative of future operating results or financial condition.

\n \n \n \n

5.E.

Critical\n Accounting policy and estimates

The\npreparation of the consolidated financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions\nthat affect the reported amounts of assets and liabilities at the balance sheet date and revenues and expenses during the reporting periods.\nOur significant accounting policies are more fully described in Note 2 to our consolidated financial statements included elsewhere in\nthis annual report. We believe that revenue recognition is the most significantly critical accounting policy affected by judgments and\nassumptions used in the preparation of our consolidated financial statements. Critical accounting estimates include financial instruments\nand current expected credit losses, valuation allowance for deferred tax assets and uncertainty tax position.

Changes in facts and circumstances may result in revised\nestimates. Actual results could differ from those estimates, and as such, differences may be material to the consolidated financial statements.

We\nbelieve the following critical accounting policy and estimates involve a higher degree of judgment and complexity than our other\naccounting policies and estimates. Therefore, these are the policies and estimates we believe are the most critical to understanding\nand evaluating our consolidated financial condition and results of operations.

Critical\naccounting policy

Revenue\nrecognition

We\nadopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of July 1, 2021 using the modified\nretrospective method.

We\ngenerate revenues primarily from sales of specialized oilfield vehicles, sales of specialized oilfield equipment, automation solutions\nservices and others. In accordance with Revenue from Contracts with Customers (“ASC 606”), revenues from contracts with customers\nare recognized when or as the control of the services or goods is transferred to the customer, in an amount that reflects the consideration\nwe expect to be entitled to in exchange for those goods or services net of business tax and value added tax. Revenue recognition policies\nfor each type of revenue stream are as follows:

Sales\nof specialized oilfield vehicles and specialized oilfield equipment

We\nsell specialized oilfield vehicles and specialized oilfield equipment. We design and manufacture the specialized oilfield equipment and\ncomponents of specialized oilfield vehicles. In addition, we also supply our core equipment and components then outsource them to qualified\nspecialized vehicle manufacturing companies to integrate and produce specialized oilfield vehicles, and the final products are sold by\nus externally. We generate revenues from sales of specialized oilfield vehicles and specialized oilfield equipment through contracts\nwith customers. We identify only one performance obligation to provide customers with the specific vehicle or equipment at a fixed price\nstated in the contracts.

We\nprovide standard manufacturer’s warranty promise to general repairs on delivered specialized oilfield vehicles or specialized oilfield\nequipment if it does not perform as expected. We consider the warranty we provided not as an incremental service to customers, but rather\nan assurance of the product’s quality. Therefore, it is an assurance-type warranty, not a separate performance obligation, and\nshould be accounted for in accordance with ASC 460, Guarantees. Because we have not experienced any claim for products, we do not recognize\nassurance-type warranty liability bases on the best estimation. We regularly reevaluate our estimates to assess the adequacy of the recorded\nwarranty liabilities and adjust the amounts as necessary.

The\nrevenue is recognized at a point in time upon the controls of the promised products are transferred to the customers. This occurs when\nthe customers either pick up the products themselves or when the products are delivered to the customers’ designated place and\naccepted by them. Payment terms for product sales are generally 6 months after the control of products is transferred to the customers.\nWe are deemed as the principal, recognizing revenue on a gross basis as we are primarily responsible for fulfilling the contract, bear\nthe inventory risk as the processed specialized oilfield vehicles and equipment are stored in our warehouse before sales and we have\nthe controls and ownership over the products, and have the discretion in establishing the sales price.

Automation\nsolutions services

We\nprovide corporate customers with automation solutions services, with multiple promises in the service contract, including software development,\ntraining, debugging, and other services for oilfield-specialized production and maintenance equipment. The software development, training,\ndebugging, and other services are provided to customers prior to their acceptance of the developed software or function, and are not\ndistinct because they are highly interdependent and interrelated with one another, integrated together as inputs to provide an combined\noutput, that is to provide a well-developed software or function to corporate customers.

Therefore,\nwe identify only one performance obligation to provide corporate customers with the automation solutions services at a fixed price stated\nin the contracts. Corporate customers would not receive and consume the benefits before the delivery of the developed software or function.\nBoth the corporate customers and us have the unilateral right to terminate the contract at any time with compensation, which would be\nfurther agreed by each party upon termination if any. In addition, we would control the source code and script of the software or function\nand would not have the enforceable right to the payment until the delivery of the developed software or function, therefore, the revenue\nis recognized at a point in time upon the corporate customers’ acceptance of the developed software or function. Payment terms\nare generally 6 months after the completion of the service. We are deemed as the principal, recognizing revenue on a gross basis as we\nare primarily responsible for fulfilling the contract, bear the inventory risk, and have the discretion in establishing the sales price.

Others

Other\nrevenue primarily derives from sales of parts and materials, such as power units and integrated circuits, etc. We recognize revenue from\nsales of parts and materials at a point in time upon the customer’s acceptance of the parts and materials.

For\nall the revenue streams, the contract payment is not subject to any refund, sales incentives, cancellation or termination provision.\nNor have we made such payments.

Contract\nBalances

Timing\nof revenue recognition was once we have determined that the customer has obtained control over the product. Accounts receivable represent\nrevenue recognized for the amounts invoiced and/or prior to invoicing when we have satisfied its performance obligation and have an unconditional\nright to the payment.

Contract liability primarily represents our obligation to transfer goods or services to a customer for which we have received consideration.\nThe consideration received remains a contractual liability until goods or services have been provided to the customer.

Critical\naccounting estimates

Financial\ninstruments and current expected credit losses

Effective\nJuly 1, 2021, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326) —Measurement of Credit\nLosses on Financial Instruments,” using the modified retrospective approach for financial assets at amortized cost including accounts\nreceivable, amounts due from a related party and other receivable and loans to a third party in prepayments and other current assets.\nThis guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses”\nto estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable\ninformation to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be\ncollected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the\nnet carrying value at the amount expected to be collected on the financial asset.

Accounts\nreceivable, net are recognized in the period when we have provided services to our customers and when our right to consideration is unconditional.\nOn July 1, 2023, we adopted ASU 2016-13, “Financial Instruments — Credit Losses (Accounting Standards Codification (“ASC”\nTopic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments, transitional guidance\nand other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU 2020-03 (collectively,\nincluding ASU 2016-13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate the allowance for\ncredit losses, which replaces the previous incurred loss impairment model.

In\naccordance with the expected credit loss (“ECL”) model, the Company uses roll-rate method and individual evaluation method\nto estimate the allowance for credit losses. Balances past due beyond the contractual credit period and receivables with higher risk\nidentified by the Company are reviewed individually for collectability. The Company evaluates the expected credit loss of accounts receivable\nbased on historical collection experience, the financial condition of its customers and assumptions for the future movement of different\neconomic drivers and how these drivers will affect each other.

There\nwere $58,416, $43,521 and $93,218 provision for credit losses of accounts receivable as of June 30, 2026, 2025 and 2024, respectively.\nThere were $221,073, $75,490 and $14,448 provision for credit losses of prepayments and other current asset as of June 30, 2026, 2025\nand 2024, respectively. Historically there are no credit losses for amounts due from a related party.

The\nCompany believes that the estimates utilized in preparing its consolidated financial statements are reasonable and prudent. Actual results\ncould differ from these estimates. To the extent that there are material differences between these estimates and the actual results,\nfuture consolidated financial statements will be affected.

Valuation allowance for deferred tax assets

Current\nincome taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. We account for income taxes under the\nasset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are recognized\nfor the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the consolidated\nfinancial statements and their respective tax basis, and operating loss carry-forwards. Deferred tax assets and liabilities are measured\nusing enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered\nor settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive (loss)\nincome in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it\nis considered more likely than not that amount of the deferred tax assets will not be realized.

Recent\nAccounting Pronouncements

A\nlist of recently issued accounting pronouncements that are relevant to us is included in Note 2 to our consolidated financial statements\nincluded elsewhere in this Annual Report.

\n \n \n \n

ITEM\n 6.

DIRECTORS,\n SENIOR MANAGEMENT AND EMPLOYEES

\n \n \n \n

6.A.

Directors\n and Senior Management

The\nfollowing table sets forth information regarding our directors and executive officers as at the date of this annual report:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name	Age	Position
Chuanbo\n Jiang	40	Chief\n Executive Officer and Chairman of the board
Diana\n Li	37	Chief\n Financial Officer
Huyun\n Gao	40	Chief\n Operating Officer
Ke\n Dennis Xu	55	Chief\n Technology Officer
Zhaohui\n Randall Xu	58	Independent\n Director
Yiqin\n Hu	61	Independent\n Director
Johannes\n Antonius Gerardus Beekmans	66	Independent\n Director

The\nbusiness and working experience and areas of responsibility of our directors and executive officers are set out below:

Chuanbo\nJiang was appointed as our Chief Executive Officer and Director in June 2023 and May 11, 2023. Mr. Jiang has approximately 16 years\nof business management and finance related experience. From June 2007 to February 2008, Mr. Jiang worked as an auditor of KPMG Qingdao\noffice. From March 2008 to July 2012, Mr. Jiang served as a regional business supervisor of Qingdao Impulse Health Technology Co. From\nSeptember 2012 to December 2019, Mr. Jiang started his entrepreneurial career as the manager of Liaocheng Yinshang Computer Co. Ltd.\nFrom June 2020 till now, Mr. Jiang has been serving as an executive director, the general manager of YLAN. Mr. Jiang graduated with a\nbachelor’s degree in management from the School of Management of Ocean University of the PRC in June 2007. Mr. Jiang obtained the\ncertificate of intermediate auditor issued by the Audit Office of the People’s Republic of China and the Ministry of Human Resources\nand Social Security in January 2013. Mr. Jiang co-authored Petroleum machinery Series 2H Screw. We believe Mr. Jiang is well qualified\nto serve as our director based on his extensive management experience.

Diana\nLi has been our CFO since November 2023. She has more than 9 years’ experience in accounting, taxation and finance and has\nrich theoretical knowledge and practical experience in taxation and business consulting related to SEC regulations compliance and Nasdaq\nrules. From October 2017 to October 2023, she served as a senior advisor of Guangzhou Jing Tian Enterprise Management Consulting Service\nCo., Ltd, a company mainly focuses on internal audit, taxation, incorporate governance and compliance, where she participated in several\ncross-border enterprise restructure tax planning, tax due diligence, and compliance review projects. From January 2014 to June 2017,\nshe served as a tax advisor of Canuswa Accounting and Tax Services Inc. and was responsible for personal financial and tax consulting,\ncompliance services. Ms. Li is a Chartered Professional Accountant of Canada. She graduated from Simon Fraser University with a bachelor’s\ndegree in business administration (Honors with Distinction) in Accounting and Finance in September 2013.

Huyun\nGao was appointed as our Chief Operating Officer in June 2023. Ms. Gao has approximately 15 years of business management experience.\nMs. Gao has been serving as a deputy general manager of YLAN since June 2020. Prior to joining the Company, Ms. Gao founded Shanghai\nFill-in-the-Blank Culture Communication Co. and served as its chief executive officer between May 2018 and April 2020. Prior to that,\nMs. Gao worked as a senior operation manager at Ctrip (09961.HK) from July 2012 to December 2017. Ms. Gao worked as an advanced project\nmanager for Apax Group Limited from April 2008 to May 2012. Ms. Gao obtained a bachelor’s degree in tourism management from East\nChina Normal University in July 2008.

Ke\nDennis Xu was appointed as our Chief Technology Officer in June 2023. Mr. Xu has approximately 23 years of experience in the computing\nengineering industry. Mr. Xu has been serving as Chief Technology Officer of YLAN, since June 2020. From February 2017 to May 2020, Mr.\nXu served as the chairman and general manager of BigData Resolution LLC, a US data company, where he was responsible for the company’s\ntechnology development. From April 2013 to January 2017, Mr. Xu served as General Manager of RDS Group LLC, a US company focusing on\nhealth management. Mr. Xu obtained a master’s degree in computer science from the Towson University (University of Maryland Towson\nbranch) in June 2001 and a master’s degree in chemical engineering from Washington University at St. Louis in May 1999. Mr. Xu\nalso graduated with a bachelor’s degree in chemical engineering from Zhejiang University in June 1992.

Zhaohui\nRandall Xu serves as our independent director. He is a seasoned expert in financial reporting & management and SEC regulations\ncompliance with rich knowledge and hands-on experience with U.S. securities law and Nasdaq and NYSE rules. He has 33 years of experience\nin business management and finance related experience. He has had experience in mergers & acquisitions transactions, equity and debt\nfinancing. He has been serving as a professor of Accounting at the University of Houston-Clear Lake since September 2007. He served as\nsenior financial advisor to Kaixin Auto Holdings (NASDAQ: KXIN) from November 2019 to December 2021, and has been serving as a Director\nof IR department to Renren Inc. (NYSE: RENN) since November 2020. From May 1994 to May 1999, Mr. Xu served as financial manager with\nDalian Transportation Co. Ltd. From August 1990 to April 1994, he served as business analyst with Jinshi International Trading Co. Ltd.\nFrom August 1986 to July 1990, he studied in Luoyang Foreign Languages Institute and got his bachelor degree majoring in English. He\nreceived his master’s degree in business administration in Tulane University in May 2002. He also obtained his doctoral degree\nin philosophy from the University of Alabama in June 2007. He has obtained his U.S. CPA License from Delaware and Colorado in December\n2002. Professor Xu is a member of Financial Executives International, a member of American Accounting Association and a member of AICPA.\nWe believe Mr. Xu is well qualified to serve as our director based on his employment experience in public companies.

Yiqin\nHu serves as our independent director. Ms. Hu is a scholar in the field of economics. Ms. Hu has been the professor of the School\nof Economics at Zhejiang University of Finance and Economics since December 1999, where she focuses on research and teaching in the fields\nof microeconomics and regional economics. From July 1990 to December 1999, Ms. Hu has been an instructor and associate professor of Hunan\nInstitute of Administration. Ms. Hu obtained her Ph.D. degree in Agricultural Economics and Management from Northwest Agricultural &\nForestry University in 2008. Ms. Hu also graduated with a master’s degree and bachelor’s degree in economics from Beijing\nNormal University in 1990 and 1987, respectively. We believe Ms. Hu is well qualified to serve as our director based on her management\nskills.

Johannes\nAG Beekmans serves as our independent director. Mr. Beekmans has approximately 38 years of experience in the auto industry. Mr. Beekmans\nhas been a project manager at JBD Consultancy & JBDesign since 2015. From 2004 to 2015, he served as the project manager at JBD Trade\nAssist China. From 1995 to 2004, he served as a project manager at BOVA. From 1991 to 1995, he served as a project manager at BERKHOF.\nMr. Beekmans obtained his Ph.D. degree majoring in Logistics Management from University of Eindhoven in 1996. Mr. Beekmans graduated\nfrom the University of Stuttgart with his master’s degree majoring in Tribology in 1987 and from the University of Apeldoorn with\nhis bachelor’s degree majoring in HTS Automotive Engineering in 1984. We believe Mr. Beekmans is well qualified to serve as our\ndirector based on his experience and skills in the manufacturing industry.

\n \n \n \n

6.B.

Compensation

For\nthe years ended June 30, 2026 and 2025, we paid an aggregate of approximately $0.09 million and approximately $0.17 million, respectively\nin cash and benefits in-kind granted to or accrued on behalf of all of our directors and members of senior management for their services,\nin all capacities, and we did not pay any additional compensation to our directors and members of senior management. We have not set\naside or accrued any amount to provide pension, retirement or other similar benefits to our executive officers and directors.

Employment\nAgreements and Director Agreements

We\nhave entered into employment agreements with each of our executive officers, pursuant to which such individuals have agreed to serve\nas our executive officers for a period of three years from the effective date of the registration statement. We may terminate the employment\nfor cause at any time for certain acts, such as conviction or plea of guilty to a felony or any crime involving moral turpitude, negligent\nor dishonest acts to our detriment, or misconduct or a failure to perform agreed duties. We may also terminate the employment without\ncause at any time upon three months’ advance written notice. Each executive officer may resign at any time upon three months’\nadvance written notice.

Each\nexecutive officer has agreed to hold, both during and after the termination or expiry of his employment agreement, in strict confidence\nand not to use, except as required in the performance of his duties in connection with the employment or pursuant to applicable law,\nany of our confidential or proprietary information or the confidential or proprietary information of any third party received by us and\nfor which we have confidential obligations. Each executive officer has also agreed to disclose in confidence to us all inventions, designs\nand trade secrets which he conceives, develops or reduces to practice during his employment with us and to assign all right, title and\ninterest in them to us, and assist us in obtaining and enforcing patents, copyrights and other legal rights for these inventions, designs\nand trade secrets.

In\naddition, each executive officer has agreed to be bound by non-competition and non-solicitation restrictions during the term of employment\nand for one year following the last date of employment. Specifically, each executive officer has agreed not to: (i) engage or assist\nothers in engaging in any business or enterprise that is competitive with our business, (ii) solicit, divert or take away the business\nof our clients, customers or business partners, or (iii) solicit, induce or attempt to induce any employee or independent contractor\nto terminate his or her employment or engagement with us. The employment agreements also contain other customary terms and provisions.

Share\nIncentive Plan

In\nMarch 2025, we adopted the 2025 Share Incentive Plan, or 2025 Plan, to attract and retain the best available personnel, provide additional\nincentives to employees, directors and consultants and promote the success of our business. The maximum aggregate number of shares that\nmay be issued pursuant to all awards under the 2025 Plan is 1,800,000. As of the date of this annual report, awards covering an aggregate\nof 1,800,000 ordinary shares had been granted under the 2025 Plan, all of which had vested and been exercised. Accordingly, no awards\nremained outstanding under the 2025 Plan as of such date.

The\nfollowing paragraphs describe the principal terms of the 2025 Plan.

Types\nof awards. The 2025 Plan permits the awards of options, restricted shares or restricted share units.

Plan\nadministration. Our board of directors or a committee of one or more members of the board of directors administers the 2025 Plan.\nThe committee or the full board of directors, as applicable, will determine the participants to receive awards, the type and number of\nawards to be granted to each participant, and the terms and conditions of each award grant.

Award\nagreement. Awards granted under the 2025 Plan are evidenced by an award agreement that sets forth terms, conditions and limitations\nfor each award, which may include the term of the award, the provisions applicable in the event of the grantee’s employment or\nservice terminates, and our authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind the award.

Eligibility.\nWe may grant awards to our employees, directors and consultants of our company, and other individuals, as determined by the plan\nadministrator. However, we may grant options that are intended to qualify as incentive share options only to our employees and employees\nof our parent companies and subsidiaries.

Vesting\nschedule. In general, the plan administrator determines the vesting schedule, which is specified in the relevant award agreement.

Exercise\nof options. The plan administrator determines the exercise price for each award, which is stated in the award agreement. The\nvested portion of option will expire if not exercised prior to the time as the plan administrator determines at the time of its grant,\nexcept that the maximum exercisable term is ten years from the date of a grant.

\n \n \n \n

6.C.

Board\n Practices

Board\nof Directors

Our\nboard of directors consists of four directors. A director is not required to hold any shares in our Company to qualify to serve as a\ndirector. The Corporate Governance Rules of the Nasdaq generally require that a majority of an issuer’s board of directors consist\nof independent directors.

Our\nboard of directors currently consists of one director and three independent directors. Our board of directors has determined that each\nof Professor Xu, Professor Hu, and Johannes AG Beekmans is an “independent director” as defined under the Nasdaq rules. Our\nboard of directors is composed of a majority of independent directors.

Committees\nof the Board of Directors

We\nhave established an audit committee, a compensation committee and a nomination committee under our board of directors. We have adopted\na charter for each of the three committees. Each committee’s members and functions are described below.

Audit\nCommittee.

Our\nAudit Committee consists of our three independent directors, and is chaired by Zhaohui Randall Xu. We have determined that each member\nof our Audit Committee will satisfy the requirements of Section 303A of the Corporate Governance Rules/ Rule 5605(c)(2) of the Listing\nRules of the Nasdaq and meet the independence standards under Rule 10A-3 under the Exchange Act. We have determined that Zhaohui Randall\nXu qualifies as an “audit committee financial expert.” The Audit Committee oversees our accounting and financial reporting\nprocesses and the audits of the financial statements of our Company. The Audit Committee is responsible for, among other things:

	●	reviewing\n and recommending to our board for approval, the appointment, re-appointment or removal of the independent auditor, after considering\n its annual performance evaluation of the independent auditor;

	●	approving\n the compensation and terms of engagement of the independent auditor and pre-approving all auditing and non-auditing services permitted\n to be performed by our independent auditors at least annually;

	●	reviewing\n with the Independent Registered Public Accounting Firm any audit problems or difficulties and management’s response;

	●	discussing\n with our independent auditor, among other things, the audits of the financial statements, including whether any material information\n should be disclosed, issues regarding accounting and auditing principles and practices;

	●	reviewing\n and approving all proposed related party transactions, as defined in Item 404 of Regulation S-K under the Securities Act;

	●	discussing\n the annual audited financial statements with management and the Independent Registered Public Accounting Firm;

	●	reviewing\n the adequacy and effectiveness of our accounting and internal control policies and procedures and any special steps taken to monitor\n and control major financial risk exposures;

	●	approving\n annual audit plans, and undertaking an annual performance evaluation of the internal audit function;

	●	establishing\n and overseeing procedures for the handling of complaints and whistleblowing; and

	●	meeting\n separately and periodically with management and the Independent Registered Public Accounting Firm.

Compensation\nCommittee.

Our\nCompensation Committee consists of our three independent directors, and is chaired by Professor Hu. We have determined that each member\nof our Compensation Committee will satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of the\nNasdaq. Our Compensation Committee assists the board in reviewing and approving the compensation structure, including all forms of compensation,\nrelating to our Directors and Executive Officers. Our Chief Executive Officer may not be present at any committee meeting during which\ntheir compensation is deliberated upon. Our Compensation Committee is responsible for, among other things:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	overseeing\n the development and implementation of compensation programs in consultation with our management;

	●	at\n least annually, reviewing and approving, or recommending to the board for its approval, the compensation for our Executive Officers;

	●	at\n least annually, reviewing and recommending to the board for determination with respect to the compensation of our non-executive Directors;

	●	at\n least annually, reviewing periodically and approving any incentive compensation or equity plans, programs or other similar arrangements;

	●	reviewing\n Executive Officer and director indemnification and insurance matters; and

	●	overseeing\n our regulatory compliance with respect to compensation matters, including our policies on restrictions on compensation plans and\n loans to Directors and Executive Officers.

Nomination\nCommittee.

Our\nNomination Committee consists of our three independent directors, and is chaired by Johannes AG Beekmans. We have determined that each\nmember of our Nomination Committee will satisfy the “independence” requirements of Rule 5605(a)(2) of the Listing Rules of\nthe Nasdaq. The Nomination Committee assists the board in selecting individuals qualified to become our directors and in determining\nthe composition of the Board and its committees. The Nomination Committee is responsible for, among other things:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	recommending\n nominees to the board of directors for election or re-election to the board of directors, or for appointment to fill any vacancy\n on the board of directors;

	●	reviewing\n annually with the board of directors the current composition of the board of directors with regards to characteristics such as independence,\n knowledge, skills, experience, expertise, diversity and availability of service to us;

	●	developing\n and recommending to our board of directors such policies and procedures with respect to nomination or appointment of members of our\n Board and chairs and members of its committees or other corporate governance matters as may be required pursuant to any SEC or Nasdaq\n rules, or otherwise considered desirable and appropriate;

	●	selecting\n and recommending to the board of directors the names of directors to serve as members of the Audit Committee and the Compensation\n Committee, as well as of the Nomination Committee itself; and

	●	evaluating\n the performance and effectiveness of the board of directors as a whole.

Powers\nand Duties of Directors

Under\nCayman Islands law, our directors owe fiduciary duties to our Company, including a duty of loyalty, a duty to act honestly and a duty\nto act in what they consider in good faith to be in our best interests. Our directors must also exercise their powers only for a proper\npurpose. Our directors also owe to our Company a duty to exercise the skill they actually possess and such care and diligence that a\nreasonably prudent person would exercise in comparable circumstances. It was previously considered that a director need not exhibit in\nthe performance of his duties a greater degree of skill than may reasonably be expected from a person of his knowledge and experience.\nHowever, English and Commonwealth courts have moved towards an objective standard with regard to the required skill and care and these\nauthorities are likely to be followed in the Cayman Islands. In fulfilling their duty of care to us, our directors must ensure compliance\nwith our memorandum and articles of association, as amended and restated from time to time. Our Company has the right to seek damages\nif a duty owed by our directors is breached. In limited exceptional circumstances, a shareholder may have the right to seek damages in\nour name if a duty owed by our directors is breached.

Our\nboard of directors has all the powers necessary for managing, and for directing and supervising, our business affairs. The functions\nand powers of our board of directors include, among others:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	convening\n general meetings at any time;

	●	declaring\n dividends and distributions;

	●	appointing\n officers and determining the term of office of the officers; and

	●	exercising\n all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and assets both present and future\n and uncalled capital, or any part thereof, and to issue debentures and other securities, whether outright or as collateral security\n for any debt, liability or obligation of the Company or its parent undertaking (if any) or any subsidiary undertaking of the Company\n or of any third party..

Terms\nof Directors and Officers

Our\nofficers are elected by the board of directors. A director appointed shall hold office until such time as they are removed or resigned\nin accordance with our memorandum and articles of association, as amended and restated from time to time, unless such director is appointed\non such express terms that he or she shall automatically retire from office (unless he has sooner vacated office) at the next or a subsequent\nannual general meeting or upon any specified event or after any specified period.

A\ndirector may retire from office as a director by giving notice in writing to that effect to the Company at the registered office, which\nnotice shall be effective upon such date as may be specified in the notice, failing which upon delivery to the registered office. Without\nprejudice to the provisions in our Amended and Restated Memorandum and Articles of Association for retirement (by rotation or otherwise),\na director’s office shall be terminated forthwith if: (a) he is prohibited by the law of the Cayman Islands from acting as a director;\nor (b) he is made bankrupt or makes an arrangement or composition with his creditors generally; or (c) he resigns his office by notice\nto the Company; or (d) he only held office as a director for a fixed term and such term expires; or(e) in the opinion of a registered\nmedical practitioner by whom he is being treated he becomes physically or mentally incapable of acting as a director; or (f) he is given\nnotice by the majority of the other directors (not being less than two in number) to vacate office (without prejudice to any claim for\ndamages for breach of any agreement relating to the provision of the services of such director); or (g) he is made subject to any law\nrelating to mental health or incompetence, whether by court order or otherwise; or (h) without the consent of the other directors, he\nis absent from meetings of directors for a continuous period of six months.

\n \n \n \n

6.D.

Employees

As\nof June 30, 2026, we had 45 full-time employees, all of which were located in China.

The\ntable below provides the number of full-time employees divided by function as of June 30, 2026:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Function	Number\n of Full-Time\n Employees
Manufacturing		24
Research and Development		6
Business and Marketing		7
Administrative,\n Human Resources and Finance		8
Total		45

In\naccordance with Chinese law requirements, we participate in various employee social security plans organized by municipal and provincial\ngovernments for Chinese full-time employees, including pension, unemployment insurance, maternity insurance, work-related injury insurance,\nand medical insurance. According to the laws of the People’s Republic of China, we are required to make contributions every month\nbased on the designated percentages of the wages, bonuses, and certain allowances of our Chinese full-time employees, up to the maximum\namount set by local governments.

We\nhave entered into employment contracts and standard confidentiality and intellectual property agreements with key employees. We believe\nthat maintaining good working relationships with employees is crucial, and we have not experienced any labor disputes. We have not established\na labor union.

\n \n \n \n

6.E.

Share\n Ownership

The\nfollowing table sets forth information regarding the beneficial ownership of our Ordinary Shares as of September 30, 2026, by our officers,\ndirectors, and 5% or greater beneficial owners of our Ordinary Shares. There is no other person or group of affiliated persons known\nby us to beneficially own more than 5% of our Ordinary Shares. Holders of our Class A Ordinary Shares and Class B Ordinary Shares are\nentitled to one (1) vote per share and thirty (30) votes per share, respectively, and vote on all matters submitted to a vote of our\nshareholders, except as may otherwise be required by law.

We\nhave determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of\nsecurities to persons who possess sole or shared voting power or investment power with respect to those securities. The person is also\ndeemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Unless\notherwise indicated, the person identified in this table has sole voting and investment power with respect to all shares shown as beneficially\nowned by him, subject to applicable community property laws.

	Ordinary\n Shares Beneficially Owned as of September 30, 2026
	Class\n A Ordinary Shares \n Beneficially\n Owned		Class\n B Ordinary Shares \n Beneficially\n Owned		Voting\n Power
Name\n of Beneficial Owners⁽¹⁾	Number		%		Number	%	%
Directors and Executive\n Officers:
Chuanbo Jiang⁽²⁾		-		-		7,700,000		83.7	80.8
Diana Li		-		-		-		-	-
Huyun Gao⁽³⁾		-		-		1,500,000		16.3	15.7
Ke Dennis Xu		-		-		-		-	-
Zhaohui Randall Xu		-		-		-		-	-
Yiqin Hu		-		-		-		-	-
Johannes AG Beekmans		-		-		-		-	-
All directors and executive\n officers as a group 5% shareholders:		-		-		9,200,000		100.0	96.5
Lanying Capital Ltd⁽²⁾		-		-		7,700,000		83.7	80.8
MT. Yang Holding Ltd⁽⁴⁾		-		-		1,500,000		16.3	15.7
Total		-		-		9,200,000		100.0	96.5

\n \n \n \n

(1)	Unless\n otherwise noted, the business address of each of the following entities or individuals is Building 11, 8th Floor, No. 6 Beitanghe\n East Road, Tianning District, Changzhou, Jiangsu, People’s Republic of China, 213000.

\n \n \n \n \n \n \n \n \n \n

(2)	Chuanbo\n Jiang, our CEO and Chairman of the board, beneficially holds 7,700,000 Class B Ordinary Shares, or 83.7% of the outstanding Class\n B Ordinary Shares through his 100% shareholding of Lanying Capital Ltd. Following the Extraodinary General Meeting held in June 2025,\n the Company repurchased 7,700,000 Class A Ordinary Shares from Lanying Capital Limited and issued a corresponding number of Class\n B Ordinary Shares to such shareholder.

(3)	Huyun\n Gao, our COO, beneficially holds 1,500,000 Class B Ordinary Shares, or 16.3% of the outstanding Class B Ordinary Shares of the Company\n through her 100% shareholding of MT. Yang Holding Ltd. Following the Extraodinary General Meeting held in June 2025, the Company\n repurchased 1,500,000 Class A Ordinary Shares from MT. Yang Holding Ltd and issued a corresponding number of Class B Ordinary Shares\n to such shareholder.

We\nare not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

On\nOctober 9, 2026, our shareholders passed resolutions at an extraordinary general meeting approving, among other things: (i) an\nincrease in the voting rights attached to each Class B Ordinary Share from thirty (30) votes to one hundred (100) votes on all\nmatters subject to vote at general meetings of the Company (the “Change of Voting Rights”); (ii) a reduction in the par\nvalue of each issued Class A Ordinary Share and each issued Class B Ordinary Share from US$0.001 to US$0.0000001, a subdivision of\neach authorized but unissued Class A Ordinary Share and Class B Ordinary Share into 10,000 shares of the corresponding class, and\nthe cancellation of certain excess authorized but unissued shares, such that, upon effectiveness of the foregoing, our authorized\nshare capital would be US$10 divided into 75,000,000 Class A Ordinary Shares and 25,000,000 Class B Ordinary Shares, each with a par\nvalue of US$0.0000001 (the “Share Capital Reduction and Reorganization”); (iii) immediately following the Share Capital\nReduction and Reorganization becoming effective, an increase in our authorized share capital from US$10 to US$100,000, divided into\n750,000,000,000 Class A Ordinary Shares and 250,000,000,000 Class B Ordinary Shares, each with a par value of US$0.0000001, by the\ncreation of an additional 749,925,000,000 Class A Ordinary Shares and 249,975,000,000 Class B Ordinary Shares (the “Share\nCapital Increase”); and (iv) the adoption of the third amended and restated memorandum and articles of association of the\nCompany to reflect the foregoing changes (collectively, the “Share Capital Changes”).

As\nof the date of this annual report, the relevant filings and registrations with the Registrar of Companies in the Cayman Islands had not\nbeen completed and, accordingly, none of the Share Capital Changes had become effective. All of the Share Capital Changes will become\neffective simultaneously upon completion of such filings and registrations. Upon the effectiveness of the Share Capital Changes, our\nauthorized share capital will be US$100,000 divided into 750,000,000,000 Class A Ordinary Shares of a par value of US$0.0000001 each\nand 250,000,000,000 Class B Ordinary Shares of a par value of US$0.0000001 each, and holders of our Class A Ordinary Shares and Class\nB Ordinary Shares will be entitled to one (1) vote per share and one hundred (100) votes per share, respectively.

Enforceability\nof Civil Liabilities

We\nare incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated under the laws\nof the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability,\nan effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions, and the availability\nof professional and support services. The Cayman Islands, however, has a less exhaustive body of securities laws as compared to the United\nStates and these securities laws provide significantly less protection to investors. Additionally, Cayman Islands companies may not have\nstanding to sue before the Federal courts of the United States.

Substantially\nall of our assets are located in the PRC. In addition, most of our directors and officers are nationals or residents of the PRC and all\nor a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect\nservice of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in United States\ncourts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in\nthe United States.

We\nhave appointed Puglisi & Associates, located at 850 Library Avenue, Suite 204, Newark, Delaware 19711, as our agent to receive service\nof process with respect to any action brought against us in the United States District Court for the Southern District of New York under\nthe federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme\nCourt of the State of New York in the County of New York under the securities laws of the State of New York.

We\nhave been advised by Harney Westwood & Riegels that although there is no statutory enforcement in the Cayman Islands of judgments\nobtained in the federal or state courts of the United States (and the Cayman Islands are not a party to any treaties for the reciprocal\nenforcement or recognition of such judgments), the Grand Court of the Cayman Islands will at common law enforce final and conclusive\nin personam judgments of state and/or federal courts of the United States of America, or the “Foreign Court”, of a debt or\ndefinite sum of money against the Company (other than a sum of money payable in respect of taxes or other charges of a like nature, a\nfine or other penalty (which may include a multiple damages judgment in an anti-trust action) or where enforcement would be contrary\nto public policy). The Grand Court of the Cayman Islands may also at common law enforce final and conclusive in personam judgments of\nthe Foreign Court that are non-monetary against the Company, for example, declaratory judgments ruling upon the true legal owner of shares\nin a Cayman Islands company. The Grand Court of the Cayman Islands will exercise its discretion in the enforcement of non-money judgments\nby having regard to the circumstances, such as considering whether the principles of comity apply. To be treated as final and conclusive,\nany relevant judgment must be regarded as res judicata by the Foreign Court. A debt claim on a foreign judgment must be brought within\nsix years of the date of the judgment, and arrears of interest on a judgment debt cannot be recovered after six years from the date on\nwhich the interest was due. The courts of the Cayman Islands are unlikely to enforce a judgment obtained from the Foreign Court under\ncivil liability provisions of U.S. federal securities law if such a judgment is found by the courts of the Cayman Islands to give rise\nto obligations to make payments that are penal or punitive in nature. Such a determination has not yet been made by the Grand Court of\nthe Cayman Islands. A court of the Cayman Islands may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.\nA judgment entered in default of appearance by a defendant who has had notice of the Foreign Court’s intention to proceed may be\nfinal and conclusive notwithstanding that the Foreign Court has power to set aside its own judgment and despite the fact that it may\nbe subject to an appeal the time-limit for which has not yet expired. The Grand Court of the Cayman Islands may safeguard the defendant’s\nrights by granting a stay of execution pending any such appeal and may also grant interim injunctive relief as appropriate for the purpose\nof enforcement.

DeHeng\nLaw Offices (Shenzhen) has further advised us that there are currently no bilateral treaties or multilateral conventions between the\nUnited States and the PRC providing for the mutual recognition and enforcement of court judgments, and the PRC has not ratified any international\nconvention on the recognition and enforcement of foreign judgments. Under the PRC Civil Procedure Law, a foreign judgment cannot be enforced\ndirectly or summarily: a party may apply directly to the competent intermediate people’s court, or the foreign court may request\nrecognition and enforcement pursuant to an applicable international treaty or the principle of reciprocity. The court will review the\napplication under the applicable treaty or the reciprocity principle and, where the judgment does not contravene the basic principles\nof PRC law or prejudice state sovereignty, security or the public interest, will rule that it be recognized, issuing an enforcement order\nwhere enforcement is required. The PRC Civil Procedure Law sets out the grounds for refusal, including: (i) the foreign court lacked\njurisdiction; (ii) the respondent was not lawfully summoned or was not afforded a reasonable opportunity to present its case; (iii) the\njudgment was obtained by fraud; (iv) the people’s court has already ruled on the same dispute or has already recognized a third-country\ncourt’s judgment on the same dispute; or (v) recognition or enforcement would contravene the basic principles of PRC law or prejudice\nstate sovereignty, security or the public interest. In the absence of a treaty or an established reciprocal relationship, the application\nwill generally be dismissed (save for divorce judgments); recognition is a prerequisite, and enforcement then proceeds under the PRC\nCivil Procedure Law rather than by way of fresh proceedings on the merits.

\n \n \n \n

6.F.

Disclosure\n of A Registrant’s Action to Recover Erroneously Awarded Compensation

Not\napplicable.

\n \n \n \n

ITEM\n 7.

MAJOR\n SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

\n \n \n \n

7.A.

Major\n Shareholders

Please\nrefer to “Item 6. Directors, Senior Management and Employees—6.E. Share Ownership.”

\n \n \n \n

7.B.

Related\n Party Transactions

Employment\nAgreements and Director Agreements

See\n“Item 6. Directors, Senior Management and Employees—6.B. Compensation—Employment Agreements and Director Agreements.”

Share\nIncentive Plan

See\n“Item 6. Directors, Senior Management and Employees—6.B. Compensation—Share Incentive Plan.”

Other\nRelated Party Transactions

The\nfollowing is a summary of transactions for the years ended June 30, 2024, 2025 and 2026 to which we have been a party and in which any members of our board of directors,\nany executive officers, or major shareholders had, has or will have a direct or indirect material interest, other than compensation arrangements\nwhich are described under the section of this annual report captioned “Management.”

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Subsequent		For\n the Years Ended June 30,
	Period\n ⁽¹⁾		2026			2025		2024
Shareholder\n contributions ⁽²⁾
Mr. Chuanbo Jiang	$	-		$	-		$	-	$	38,500
Ms. Huyun Gao		-			-			-		7,500
Mr. Huailiang Xu		-			-			-		2,000
Mr. Haoyu Xiong		-			-			-		1,500
Mr. Cheukyin Tai		-			-			-		500
Total	$	-		$	-		$	-	$	50,000

A related party assumed\n the Company’s debt to third parties
Mr. Chuanbo Jiang ⁽³⁾	$	-		$	272,997		$		$	-

\n \n \n \n \n \n \n \n \n \n

(1)	For\n the period from July 1, 2026 through the date of this annual report.
(2)	The\n transaction amount represented the shareholders’ capital contributions to our PRC operating subsidiary YLAN in exchange for\n equity interest of YLAN, and all capital contributions have been received within the corresponding periods. In September 2023, WFOE\n entered into a share transfer agreement with YLAN’s former shareholders to acquire 100% voting equity interests of YLAN at\n the consideration of $0.7 million (RMB5.2 million). The transaction has been treated as a corporate restructuring of entities under\n common control as part of the Reorganization process.
(3)	In\n April 2026, Mr. Chuanbo Jiang, the Company and several third parties entered into tripartite agreements, pursuant to which Mr. Chuanbo\n Jiang agreed to assume the Company’s indebtedness to third parties in the aggregate amount of $272,997. The accrued expenses\n and other current liabilities were converted into interest-free loans from Mr. Chuanbo Jiang to the Company, due on December 31,\n 2027.

Share\nIssuances in May 2023 and Share Splits in May 2024

Upon\nour incorporation in the Cayman Islands in May 2023, we issued 50,000 shares to our initial shareholders at par value $1 per share. We\neffected a one thousand-for-one subdivision of shares to the shareholders in May 2024, whereby increased the total number of issued and\noutstanding ordinary shares from 50,000 to 50,000,000, and decreased the par value of ordinary shares from $1 to $0.001. Then the shareholders\nsurrendered a pro-rata number of ordinary shares of 40,000,000 to the Company for no consideration and thereafter such shares were cancelled.\nFollowing the surrender, the issued and outstanding ordinary shares were 10,000,000 of par value of $0.001 per share. The share numbers\nin this annual report have given effect to the one thousand-for-one subdivision of shares, unless expressly indicated otherwise:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Shareholder	Number\n of Ordinary\n Shares		Consideration
Lanying Capital Ltd		7,700,000		$	38,500
MT. Yang Holding Ltd		1,500,000		$	7,500
Mr. Huailiang Xu		400,000		$	2,000
Mr. Haoyu Xiong		300,000		$	1,500
Mr. Cheukyin Tai		100,000		$	500
Total		10,000,000		$	50,000

We\nhave received consideration of $50,000 as of May 20, 2024.

The\nforegoing issuances were exempt from registration under the Securities Act since they were transactions not involving a public offering.\nNo underwriters were involved in these issuances of ordinary shares. Other than disclosed herein, we did not issue any securities in\nthe past three years.

Policies\nand Procedures for Related Party Transactions

Our\nboard of directors has created an audit committee which will be tasked with review and approval of all related party transactions.

\n \n \n \n

7.C.

Interests\n of Experts and Counsel

Not\napplicable.

\n \n \n \n

ITEM\n 8.

FINANCIAL\n INFORMATION

\n \n \n \n

8.A.

Consolidated\n Statements and Other Financial Information

We\nhave appended consolidated financial statements filed as part of this annual report.

Legal\nProceedings

From\ntime to time, we may be subject to legal proceedings, investigations and claims incidental to the conduct of our business. Currently,\nwe are not a party to, nor are we aware of, any legal proceedings, investigations or claims which, in the opinion of our management,\nare likely to have a material adverse effect on our business, financial condition or results of operations.

Dividend\nPolicy

We\nhave no formal dividend policy. We currently intend to retain all available funds and any future earnings to fund the development and\ngrowth of our business and to repay indebtedness and, therefore, we do not anticipate paying any cash dividends in the foreseeable future.\nAdditionally, our ability to pay dividends on our Class A Ordinary Shares is limited by various factors such as our future financial\nperformance and bank covenants. Any future determination to pay dividends will be at the discretion of our board of directors, subject\nto compliance with covenants in current and future agreements governing our and our subsidiaries’ indebtedness, and will depend\non our results of operations, financial condition, capital requirements and other factors that our board of directors may deem relevant.

\n \n \n \n

8.B.

Significant\n Changes

Except\nas otherwise disclosed in this annual report, we have not experienced any significant changes since the date of our audited consolidated\nfinancial statements included herein.

\n \n \n \n

ITEM\n 9.

THE\n OFFER AND LISTING

\n \n \n \n

9.A.

Offering\n and Listing Details

Our\nClass A Ordinary Shares have been listed on the Nasdaq Capital Market under the symbol “STAK” since February 26, 2025.

\n \n \n \n

9.B.

Plan\n of Distribution

Not\napplicable.

\n \n \n \n

9.C.

Markets

Our\nClass A Ordinary Shares have been listed on the Nasdaq Capital Market under the symbol “STAK” since February 26, 2025.

\n \n \n \n

9.D.

Selling\n Shareholders

Not\napplicable.

\n \n \n \n

9.E.

Dilution

Not\napplicable.

\n \n \n \n

9.F.

Expenses\n of the Issue

Not\napplicable.

\n \n \n \n

ITEM\n 10.

ADDITIONAL\n INFORMATION

\n \n \n \n

10.A.

Share\n Capital

Not\napplicable.

\n \n \n \n

10.B.

Memorandum\n and Articles of Association

On October 9, 2026, our shareholders approved by way of special resolution the adoption of the third amended and\nrestated memorandum and articles of association of the Company, which will become effective upon the Change of Voting Rights,\nthe Share Capital Reduction and Reorganization and the Share Capital Increase (each as defined in the minutes of the extraordinary general\nmeeting held on October 9, 2026). As of the date of this annual report, the relevant filings and registrations with the Registrar of Companies\nin the Cayman Islands had not been completed and, accordingly, the foregoing changes and the third amended and restated memorandum and\narticles of association had not become effective. Until their effectiveness, our currently effective second amended and restated memorandum\nand articles of association will continue to govern the rights attached to our Ordinary Shares.

The\nfollowing are summaries of material provisions of the third amended and restated memorandum and articles of association (referred to\nas the “Amended and Restated Memorandum and Articles of Association”), and of the Companies Act, insofar as they relate\nto the material terms of our shares. Unless otherwise indicated, the descriptions below reflect the provisions\nthat will apply upon the effectiveness of the Amended and Restated Memorandum and Articles of Association.

Objects\nof Our Company. Under our Amended and Restated Memorandum and Articles of Association, the objects of our company are unrestricted\nand we have the full power and authority to carry out any object not prohibited by the law of the Cayman Islands.

Ordinary\nShares. Our Ordinary Shares are issued in registered form and are issued when registered in our register of members. Unless the board\nof directors determine otherwise, each holder of our Ordinary Shares does not receive a certificate in respect of such Ordinary Shares.\nWe may not issue shares to bearer. Our shareholders who are non-residents of the Cayman Islands may freely hold and vote their shares.\nSubject to the provisions of the Companies Act and our Amended and Restated Memorandum and Articles of Association regarding redemption\nand purchase of the shares, the directors have general and unconditional authority to allot (with or without confirming rights of renunciation),\ngrant options over or otherwise deal with any unissued shares to such persons, at such times and on such terms and conditions as they\nmay decide. The directors may deal with unissued shares either at a premium or at par, or with or without preferred, deferred or other\nspecial rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise. No share may be issued at a discount\nexcept in accordance with the provisions of the Companies Act. The directors may refuse to accept any application for shares, and may\naccept any application in whole or in part, for any reason or for no reason.

Share Capital. As of the\ndate of this annual report, our authorized share capital remained US$100,000 divided into (i) 75,000,000 class A ordinary shares of a par value of US$0.001 each and (ii) 25,000,000\nclass B ordinary shares of par value of US$0.001 each. Upon the effectiveness of the Share Capital Reduction and Reorganization,\nthe Share Capital Increase and the Amended and Restated Memorandum and Articles of Association, our authorized share capital will be US$100,000 divided into (i) 750,000,000,000 class A ordinary shares of par value of US$0.0000001 each and (ii) 250,000,000,000\nclass B ordinary shares of par value of US$0.0000001 each.

Dividends.\nSubject to the provisions of the Companies Act and any rights attaching to any class or classes of shares under and in accordance\nwith our Amended and Restated Memorandum and Articles of Association: (a) the directors may declare dividends or distributions out of\nour funds which are lawfully available for that purpose; and (b) our shareholders may, by ordinary resolution, declare dividends but\nno such dividend shall exceed the amount recommended by the directors. Subject to the requirements of the Companies Act regarding the\napplication of a company’s share premium account and with the sanction of an ordinary resolution, dividends may also be declared\nand paid out of any share premium account. If the directors so determine, any resolution declaring a dividend may direct that it shall\nbe satisfied wholly or partly by the distribution of assets. Unless provided for by the rights attached to a share, no dividend or other\nmonies payable by the company in respect of a share shall bear interest.

Voting\nRights. Under our currently effective second amended and restated memorandum and articles of association, a resolution put\nto the vote of the meeting shall be decided on a poll. On a poll, each Class A Ordinary Share is currently entitled to one (1) vote and\neach Class B Ordinary Share is currently entitled to thirty (30) votes on all matters subject to a vote at general meetings of the Company.\nUpon the effectiveness of the Amended and Restated Memorandum and Articles of Association, each Class A Ordinary Share will continue to\nbe entitled to one (1) vote, and each Class B Ordinary Share will be entitled to one hundred (100) votes, on all matters subject to a\nvote at general meetings of the Company. In addition, all shareholders holding shares of a particular class are entitled to vote at a meeting of the\nholders of that class of shares. Votes may be given either personally or by proxy.

General\nMeetings of Shareholders. As a Cayman Islands exempted company, we may, but shall not (unless required by the Nasdaq Rules) be obligated\nto, in each year hold a general meeting as an annual general meeting, which, if held, shall be convened by the board of directors, in\naccordance with our Amended and Restated Memorandum and Articles of Association. Our Amended and Restated Memorandum and Articles of\nAssociation provide that the Company may, but shall not (unless\nrequired by the rules of Nasdaq) be obligated to, in each year hold a general meeting as an annual general meeting, which, if held, shall\nbe convened by the board of directors, in accordance with our Amended and Restated Memorandum and Articles of Association. All general meetings other than annual general meetings shall be called extraordinary general meetings.

The\ndirectors may convene general meetings whenever they think fit. General meetings shall also be convened on the written requisition of\none or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than ten percent of\nthe rights to vote at such general meeting in accordance with the notice provisions in our Amended and Restated Memorandum and Articles\nof Association, specifying the purpose of the meeting and signed by each of the shareholders making the requisition and delivered in\naccordance with the notice provisions. If the directors do not convene such meeting within 21 clear days’ from the date of receipt\nof the written requisition, those shareholders who requested the meeting or any of them may convene the general meeting themselves within\nthree months after the end of such period of 21 clear days in which case reasonable expenses incurred by them as a result of the directors\nfailing to convene a meeting shall be reimbursed by us.

Advance\nnotice of at least 7 clear days is required for the convening of a general meeting shall be given to shareholders entitled to attend\nand vote at such meeting. The notice shall specify, among other things, the place, the date and the hour of the meeting, whether the\nmeeting will be held virtually, at a physical place or both, the general nature of the business to be transacted, and if a resolution\nis proposed as a special resolution, the text of that resolution shall be given to all shareholders. Notice of every general meeting\nshall also be given to the directors, persons entitled to a share in consequence of the death or bankruptcy of a shareholder and our\nauditors.

Subject\nto the Companies Act and with the consent of the shareholders who, individually or collectively, hold at least 90 percent of the voting\nrights of all those who have a right to vote at a general meeting, a general meeting may be convened on shorter notice.

A\nquorum shall consist of the presence (whether in person or represented by proxy) of one or more shareholders holding shares that represent\nnot less than one-third of the outstanding shares carrying the right to vote at such general meeting.

If,\nwithin 15 minutes from the time appointed for the general meeting, or at any time during the meeting, a quorum is not present, the meeting,\nif convened upon the requisition of shareholders, shall be cancelled. In any other case it shall stand adjourned to the same time and\nplace seven days hence or to such other time or place as is determined by the directors.

A\nmeeting may be adjourned, with or without an appointed date for resumption, at any time during the meeting at the discretion of the chairman\nwith the consent of the members constituting a quorum. When a meeting is adjourned for more than seven clear days, shareholders shall\nbe given at least seven clear days’ notice of the date, time and place of the adjourned meeting and the general nature of the business\nto be transacted.

A\nresolution put to the vote of the meeting shall be decided on a poll. In the case of an equality of votes, the chairman of the meeting,\nshall not be entitled to a second or casting vote.

Transfer\nof Ordinary Shares. Subject to any applicable requirements set forth in our Amended and Restated Memorandum and Articles of Association\nand provided that a transfer of Ordinary Shares complies with applicable rules of the Nasdaq Capital Market, a shareholder may transfer\nall or any of his or her Ordinary Shares to another person by completing an instrument of transfer in the common form or in a form prescribed\nby Nasdaq or any other form approved by our board of directors, executed:

\n \n \n \n \n \n \n \n \n \n \n \n \n

	●	where\n the Ordinary Shares are fully paid, by or on behalf of that shareholder; and

	●	where\n the Ordinary Shares are partly paid, by or on behalf of that shareholder and the transferee.

The\ntransferor shall be deemed to remain the holder of an Ordinary Share until the name of the transferee is entered into our register of\nmembers.

Where\nthe Ordinary Shares in question are not listed on or subject to the rules of the Nasdaq Capital Market, our board of directors may, in\nits absolute discretion, decline to register any transfer of any Ordinary Share that is not fully paid up or on which we have a lien.\nOur board of directors may also, but are not required to, decline to register any transfer of such Ordinary Share unless:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	the\n instrument of transfer is lodged with us, accompanied by the certificate for the Ordinary Shares to which it relates and such other\n evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

	●	the\n instrument of transfer is in respect of only one class of shares;

	●	the\n instrument of transfer is properly stamped, if required;

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	the\n Ordinary Share transferred is fully paid and free of any lien in favor of us;

	●	in\n the case of a transfer to joint holders, the number of joint holders to whom the share is to be transferred does not exceed four;\n and

	●	any\n applicable fee of such maximum sum as the Nasdaq Capital Market may determine to be payable or such lesser sum as our directors may\n from time to time require is paid to us in respect thereof.

If\nour directors refuse to register a transfer they shall, within three months after the date on which the instrument of transfer was lodged,\nsend to each of the transferor and the transferee notice of such refusal.

The\nregistration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic\nmeans, be suspended and the register of members closed at such times and for such periods as our board of directors may, in their absolute\ndiscretion, from time to time determine; provided, however, that the registration of transfers shall not be suspended nor the register\nclosed for more than 30 days in any year.

Liquidation.\nIf we are wound up, the shareholders may, subject to our Amended and Restated Memorandum and Articles of Association and any other\nsanction required by the Companies Act, pass a special resolution allowing the liquidator to do either or both of the following: (a)\nto divide in specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine\nhow the division shall be carried out as between the shareholders or different classes of shareholders; and (b) to vest the whole or\nany part of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up. The directors have\nthe authority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of\na resolution passed at a general meeting.

Calls\non Shares and Forfeiture of Shares. Subject to the terms of allotment, the directors may make calls on the shareholders in respect\nof any monies unpaid on their shares including any premium and each shareholder shall (subject to receiving at least 14 clear days’\nnotice specifying when and where payment is to be made), pay to us the amount called on his shares. Shareholders registered as the joint\nholders of a share shall be jointly and severally liable to pay all calls in respect of the share. If a call remains unpaid after it\nhas become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became\ndue and payable until it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or if no rate\nis fixed, at the rate of ten percent per annum. The directors may waive payment of the interest wholly or in part.

We\nhave a first and paramount lien on all shares (whether fully paid up or not) registered in the name of a shareholder (whether solely\nor jointly with others). The lien is for all monies payable to us by the shareholder or the shareholder’s estate: (a) either alone\nor jointly with any other person, whether or not that other person is a shareholder; and (b) whether or not those monies are presently\npayable.

At\nany time the directors may declare any share to be wholly or partly exempt from the lien on shares provisions of our Amended and Restated\nMemorandum and Articles of Association.

We\nmay sell any shares over which it has a lien if all of the following conditions are met: (a) the sum in respect of which the lien exists\nis presently payable; (b) the Company gives notice to the shareholder holding the share (or to the person entitled to it in consequence\nof the death or bankruptcy of that shareholder) demanding payment and stating that if the notice is not complied with the shares may\nbe sold; and (c) that sum is not paid within fourteen (14) clear days after that notice is deemed to be given under our Amended and Restated\nMemorandum and Articles of Association.

Redemption,\nRepurchase, and Surrender of Shares. Subject to the Companies Act and any rights for the time being conferred on the shareholders\nholding a particular class of shares, we may by action of our directors: (a) issue shares that are to be redeemed or liable to be redeemed,\nat our option or the shareholder holding those redeemable shares, on the terms and in the manner our directors determine before the issue\nof those shares; (b) with the consent by special resolution of the shareholders holding shares of a particular class, vary the rights\nattaching to that class of shares so as to provide that those shares are to be redeemed or are liable to be redeemed at our option on\nthe terms and in the manner which the directors determine at the time of such variation; and (c) purchase all or any of our own shares\nof any class including any redeemable shares on the terms and in the manner which the directors determine at the time of such purchase.

We\nmay make a payment in respect of the redemption or purchase of its own shares in any manner authorized by the Companies Act, including\nout of any combination of capital, our profits and the proceeds of a fresh issue of shares.

When\nmaking a payment in respect of the redemption or purchase of shares, the directors may make the payment in cash or in specie (or partly\nin one and partly in the other) if so authorized by the terms of the allotment of those shares or by the terms applying to those shares,\nor otherwise by agreement with the shareholder holding those shares.

Conversion\nRights. Each Class B Ordinary Share is convertible, at the option of the holder thereof, at any time after the date of issuance of\nsuch share and without the payment of any additional sum, into fully paid Class A Ordinary Share on a one-to-one basis subject to adjustments.\na holder of Class A Ordinary Shares shall have no rights to convert Class A Ordinary Shares into Class B Ordinary Shares under any circumstances.

The\nCompany shall at all times reserve and keep available out of the Company’s authorized but unissued Class A Ordinary Shares, such\nnumber of its Class A Ordinary Shares as shall from time to time be sufficient to effect the conversion of all outstanding Class B Ordinary\nShares; and free of all liens, charges, options, mortgages, pledges, claims, equities, encumbrances and other third-party rights of any\nnature, and not subject to any pre-emptive rights, and the Company shall not make any issue, grant or distribution or take any other\naction if the effect would be that on the conversion of the Class B Ordinary Shares to Class A Ordinary Shares it would be required to\nissue Class A Ordinary Shares at a price lower than the par value thereof.

Issuance\nof Additional Shares. Our Amended and Restated Memorandum and Articles of Association authorizes our board of directors to issue\nadditional shares from time to time as our board of directors shall determine, to the extent of available authorized but unissued shares.

Inspection\nof Books and Records. Holders of our shares will have no general right under Cayman Islands law to inspect or obtain copies of our\ncorporate records (except for the memorandum and articles of association of our company, any special resolutions passed by our company\nand the register of mortgages and charges of our company). No shareholder (other than a director) shall have any right of inspecting\nany account or book or document of the Company except as conferred by the Companies Act or as authorized by the directors or by ordinary\nresolution. However, we will provide our shareholders with annual audited financial statements.

Exempted\nCompany. We are an exempted company with limited liability under the Companies Act. The requirements for an exempted company are\nessentially the same as for an ordinary company except that an exempted company:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	is\n a company that conducts its business mainly outside the Cayman Islands;

	●	is\n prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted\n company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise\n in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);

	●	is\n not required to open its register of members for inspection by shareholders of that company;

	●	does\n not have to hold an annual general meeting;

	●	may\n obtain an undertaking against the imposition of any future taxation;

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	may\n register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

	●	may\n register as an exempted limited duration company; and

	●	may\n register as a segregated portfolio company.

“Limited\nliability” means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the\ncompany (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper\npurpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

Differences\nin Corporate Law

The\nCompanies Act is derived, to a large extent, from the older Companies Acts of England and Wales but does not follow recent English statutory\nenactments and, accordingly, there are significant differences between the Companies Act and the current Companies Act of the United\nKingdom. In addition, the Companies Act differs from laws applicable to U.S. corporations and their shareholders. Set forth below is\na summary of certain significant differences between the provisions of the Companies Act applicable to us and the comparable laws applicable\nto companies incorporated in the United States and their shareholders.

Mergers\nand Similar Arrangements. The Companies Act permits mergers and consolidations between Cayman Islands companies and between Cayman\nIslands companies and non-Cayman Islands companies provided that the laws of the foreign jurisdiction permit such merger or consolidation.\nFor these purposes, (i) “merger” means the merging of two or more constituent companies and the vesting of their undertaking,\nproperty, and liabilities in one of such companies as the surviving company, and (ii) a “consolidation” means the combination\nof two or more constituent companies into a new consolidated company and the vesting of the undertaking, property, and liabilities of\nsuch companies to the consolidated company. In order to effect such a merger or consolidation, the directors of each constituent company\nmust approve a written plan of merger or consolidation, which must then be authorized by (a) a special resolution of the shareholders\nof each constituent company, and (b) such other authorization, if any, as may be specified in such constituent company’s articles\nof association. The written plan of merger or consolidation must be filed with the Registrar of Companies in the Cayman Islands together\nwith a declaration as to the solvency of the consolidated or surviving company, a list of the assets and liabilities of each constituent\ncompany, and an undertaking that a copy of the certificate of merger or consolidation will be given to the shareholders and creditors\nof each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette.\nCourt approval is not required for a merger or consolidation that is effected in compliance with these statutory procedures.

A\nmerger between a Cayman parent company and its Cayman subsidiary or subsidiaries does not require authorization by a resolution of shareholders.\nFor this purpose, a subsidiary is a company of which at least 90% of the issued shares entitled to vote are owned by the parent company.

The\nconsent of each holder of a fixed or floating security interest over a constituent company is required unless this requirement is waived\nby a court in the Cayman Islands.

Save\nin certain limited circumstances, a dissenting shareholder of a Cayman constituent is entitled to payment of the fair value of his or\nher shares upon dissenting from a merger or consolidation. The exercise of such dissenter rights will preclude the exercise by the dissenting\nshareholder of any other rights to which he or she might otherwise be entitled by virtue of holding shares, save for the right to seek\nrelief on the grounds that the merger or consolidation is void or unlawful.

In\naddition, there are statutory provisions that facilitate the reconstruction and amalgamation of companies by way of schemes of arrangement,\nprovided that the arrangement is approved by seventy-five percent (75%) in value of the shareholders or class of shareholders, as the\ncase may be, that are present and voting either in person or by proxy at a meeting, or meetings, convened for that purpose. The convening\nof the meetings and subsequently the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder\nhas the right to express to the court the view that the transaction ought not to be approved, the court can be expected to approve the\narrangement if it determines that:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	the\n statutory provisions as to the required majority vote have been met;

	●	the\n shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion\n of the minority to promote interests adverse to those of the class;

	●	the\n arrangement is such that may be reasonably approved by an intelligent and honest person of that class acting in respect of his or\n her interest; and

	●	the\n arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act.

When\na takeover offer is made and accepted by holders of 90.0% of the shares affected within four months, the offeror may, within a two-month\nperiod commencing on the expiration of such four-month period, give notice to require the holders of the remaining shares to transfer\nsuch shares on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed\nin the case of an offer that has been so approved unless there is evidence of fraud, bad faith or collusion.

If\nan arrangement and reconstruction is thus approved, or if a takeover offer is made and accepted, a dissenting shareholder would have\nno rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of Delaware corporations,\nproviding rights to receive payment in cash for the judicially determined value of the shares.

Shareholders’\nSuits. In principle, we will normally be the proper plaintiff to sue for a wrong done to us as a company, and as a general rule,\na derivative action may not be brought by a minority shareholder. However, based on English law authorities, which would in all likelihood\nbe of persuasive authority in the Cayman Islands, the Cayman Islands courts can be expected to follow and apply the common law principles\n(namely the rule in Foss v. Harbottle and the exceptions thereto) so that a non-controlling shareholder may be permitted to commence\na class action against or derivative actions in the name of the company to challenge:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	a\n company acts act illegally or ultra vires with respect to the company and is therefore incapable of ratification by the shareholders;

	●	the\n act which, although not ultra vires, requires authorization by a qualified (or special) majority (that is, more than a simple majority\n vote that has not been obtained; and

	●	those\n who control the company are perpetrating a “fraud on the minority”

Indemnification\nof Directors and Executive Officers and Limitation of Liability. Cayman Islands law does not limit the extent to which a company’s\nmemorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision\nmay be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the\nconsequences of committing a crime, or against the indemnified person’s own fraud or dishonesty. Our Amended and Restated Memorandum\nand Articles of Association provide to the extent permitted by Cayman Islands law, we shall indemnify each existing or former secretary,\ndirector (including alternate director), and any of our other officers (including an investment adviser or an administrator or liquidator)\nand their personal representatives against:

\n \n \n \n \n \n \n \n \n \n \n \n \n

	(a)	all\n actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by the existing or former director\n (including alternate director), secretary or officer in or about the conduct of our business or affairs or in the execution or discharge\n of the existing or former director (including alternate director), secretary’s or officer’s duties, powers, authorities\n or discretions; and

	(b)	without\n limitation to paragraph (a) above, all costs, expenses, losses or liabilities incurred by the existing or former director (including\n alternate director), secretary or officer in defending (whether successfully or otherwise) any civil, criminal, administrative or\n investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether\n in the Cayman Islands or elsewhere.

No\nsuch existing or former director (including alternate director), secretary or officer, however, shall be indemnified in respect of any\nmatter arising out of his own dishonesty.

To\nthe extent permitted by the Companies Act, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise,\nfor any legal costs incurred by an existing or former director (including alternate director), secretary or any of our officers in respect\nof any matter identified in above on condition that the director (including alternate director), secretary or officer must repay the\namount paid by us to the extent that it is ultimately found not liable to indemnify the director (including alternate director), the\nsecretary or that officer for those legal costs. This standard of conduct is generally the same as permitted under the Delaware General\nCorporation Law for a Delaware corporation.

Insofar\nas indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, or persons controlling\nus under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy\nas expressed in the Securities Act and is therefore unenforceable.

Directors’\nFiduciary Duties. Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and\nits shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act\nin good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director\nmust inform himself or herself of, and disclose to shareholders, all material information reasonably available regarding a significant\ntransaction. The duty of loyalty requires that a director acts in a manner he or she reasonably believes to be in the best interests\nof the corporation. He or she must not use his or her corporate position for personal gain or advantage. This duty prohibits self-dealing\nby a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed\nby a director, officer, or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are\npresumed to have been made on an informed basis, in good faith, and in the honest belief that the action taken was in the best interests\nof the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence\nbe presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction and that the\ntransaction was of fair value to the corporation.

As\na matter of Cayman Islands law, a director of a Cayman Islands company owes three types of duties to the company: (i) statutory duties,\n(ii) fiduciary duties, and (iii) common law duties. The Companies Act imposes a number of statutory duties on a director. A Cayman Islands\ndirector’s fiduciary duties are not codified, however the courts of the Cayman Islands have held that a director owes the following\nfiduciary duties (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to\nexercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d)\na duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence\nthat may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company\nand, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have\nwhich enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors\nmust ensure compliance with our memorandum and articles of association, as amended and restated from time to time. We have the right\nto seek damages where certain duties owed by any of our directors are breached.

Shareholder\nAction by Written Resolution. Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to\nact by written consent by amendment to its certificate of incorporation. Cayman Islands law and our Amended and Restated Memorandum and\nArticles of Association provide that our shareholders may approve corporate matters by way of a unanimous written resolution signed by\nor on behalf of all the shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being\nheld.

Shareholder\nProposals. Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual meeting\nof shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board\nof directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special\nmeetings.

The\nCompanies Act does not provide shareholders any right to bring business before a meeting or requisition a general meeting. However, these\nrights may be provided in the company’s memorandum and articles of association, as amended and restated from time to time. Our\nAmended and Restated Memorandum and Articles of Association allow one or more of our shareholders who together hold not less than 10%\nof the rights to vote to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting.\nOther than this right to requisition a shareholders’ meeting, our Amended and Restated Memorandum and Articles of Association do\nnot provide our shareholders with any other right to put proposals before annual general meetings or extraordinary general meetings.\nAs a Cayman Islands exempted company, we may but are not obliged by law to call shareholders’ annual general meetings.

Cumulative\nVoting. Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation’s\ncertificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders\non a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled for a single\ndirector, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions in relation\nto cumulative voting under the laws of the Cayman Islands, but our Amended and Restated Memorandum and Articles of Association do not\nprovide for cumulative voting. As a result, our shareholders are not afforded any less protections or rights on this issue than shareholders\nof a Delaware corporation.

Removal\nof Directors. Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only\nfor cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides\notherwise. Under our Amended and Restated Memorandum and Articles of Association, directors may be removed, by an ordinary resolution\nof our shareholders. In addition, a director’s office shall be vacated if the director (a) is prohibited by the law of the Cayman\nIslands from acting as a director; or (b) is made bankrupt or makes an arrangement or composition with his creditors generally; or (c)\nresigns his office by notice to the Company; or (d) only held office as a director for a fixed term and such term expires; or (e) in\nthe opinion of a registered medical practitioner by whom is being treated he becomes physically or mentally incapable of acting as a\ndirector; or (f) is given notice by the majority of the other directors (not being less than two in number) to vacate office (without\nprejudice to any claim for damages for breach of any agreement relating to the provision of the services of such director); or (g) is\nmade subject to any law relating to mental health or incompetence, whether by court order or otherwise; or (h) without the consent of\nthe other directors, is absent from meetings of directors for a continuous period of six months; or (i) is removed from office pursuant\nto any other provisions of our Amended and Restated Memorandum and Articles of Association.

Transactions\nwith Interested Shareholders. The Delaware General Corporation Law contains a business combination statute applicable to Delaware\ncorporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate\nof incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three\nyears following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group\nwho or which owns or owned 15% or more of the target’s outstanding voting share within the past three years. This has the effect\nof limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated\nequally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder,\nthe board of directors approves either the business combination or the transaction that resulted in the person becoming an interested\nshareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with\nthe target’s board of directors.

Cayman\nIslands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business\ncombination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders,\nit does provide that such transactions must be entered into bona fide in the best interests of the company and not with the effect of\nconstituting a fraud on the minority shareholders.

Dissolution;\nWinding up. Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution\nmust be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the\nboard of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware law allows a Delaware\ncorporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated\nby the board.

If\nwe are wound up, the shareholders may, subject to our Amended and Restated Memorandum and Articles of Association and any other sanction\nrequired by the Companies Act, pass a special resolution allowing the liquidator to do either or both of the following: (a) to divide\nin specie among the shareholders the whole or any part of our assets and, for that purpose, to value any assets and to determine how\nthe division shall be carried out as between the shareholders or different classes of shareholders; and (b) to vest the whole or any\npart of the assets in trustees for the benefit of shareholders and those liable to contribute to the winding up. The directors have the\nauthority to present a petition for our winding up to the Grand Court of the Cayman Islands on our behalf without the sanction of a resolution\npassed at a general meeting.

Variation\nof Rights of Shares. Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the\napproval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under the\nCompanies Act and our Amended and Restated Memorandum and Articles of Association, if the share capital is divided into different\nclasses of shares then, unless the terms on which a class of shares was issued state otherwise, the rights attaching to a class of shares\nmay only be varied if one of the following applies: (a) the members holding not less than two-thirds of the issued shares of that class\nconsent in writing to the variation; or (b) the variation is made with the sanction of a special resolution passed at a separate general\nmeeting of the members holding the issued shares of that class.

Amendment\nof Governing Documents. Under the Delaware General Corporation Law, a corporation’s governing documents may be amended with\nthe approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Under\nthe Companies Act and our Amended and Restated Memorandum and Articles of Association, our memorandum and articles of association may\nonly be amended by a special resolution of our shareholders.

Rights\nof Non-resident or Foreign Shareholders. There are no limitations imposed by our Amended and Restated Memorandum and Articles of\nAssociation on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there\nare no provisions in our Amended and Restated Memorandum and Articles of Association governing the ownership threshold above which shareholder\nownership must be disclosed.

\n \n \n \n

10.C.

Material\n Contracts

We\nhave not entered into any material contracts other than in the ordinary course of business and other than those described in this annual\nreport.

\n \n \n \n

10.D.

Exchange\n Controls

The\nCayman Islands currently has no exchange control regulations or currency restrictions. See “Item 4. Information of the Company—4.B.\nBusiness Overview—Regulation—Regulations on Foreign Exchange.”

\n \n \n \n

10.E.

Taxation

The\nfollowing description is not intended to constitute a complete analysis of all tax considerations relating to the acquisition, ownership,\nand disposition of our securities. You should consult your own tax advisor concerning the tax considerations of your particular situation,\nas well as any tax consequences that may arise under the laws of any state, local, foreign, or other taxing jurisdiction.

Cayman\nIslands Taxation

The\nCayman Islands enacted the International Tax Co-operation (Economic Substance) Act (Revised) together with the Guidance Notes published\nby the Cayman Islands Tax Information Authority from time to time. The Company is required to comply with the economic substance requirements\nfrom July 1, 2019 and make an annual report in the Cayman Islands as to whether or not it is carrying on any relevant activities and\nif it is, it must satisfy an economic substance test.

Hong\nKong Taxation

\n \n \n \n \n

●

No\n profit tax is imposed in Hong Kong in respect of capital gains from the sale of the Ordinary Shares.

\n \n \n \n \n \n \n \n \n \n \n \n \n

	●	Revenue\n gains from the sale of Ordinary Shares by persons carrying on a trade, profession or business in Hong Kong where the gains are derived\n from or arise in Hong Kong from the trade, profession or business will be chargeable to Hong Kong profits tax, which is currently\n imposed at the rate of 16.5% on corporations and at a maximum rate of 15% on individuals and unincorporated businesses.

	●	Gains\n arising from the sale of Ordinary Shares, where the purchases and sales of Ordinary Shares are effected outside of Hong Kong such\n as, for example, on the Nasdaq Capital Market, should not be subject to Hong Kong profits tax.

According\nto the current tax practice of the Hong Kong Inland Revenue Department, dividends paid on the Ordinary Shares would not be subject to\nany Hong Kong tax.

No\nHong Kong stamp duty is payable on the purchase and sale of the Ordinary Shares.

People’s\nRepublic of China Taxation

Certain\nUnited States Federal Income Tax Considerations

The\nfollowing discussion is a summary of U.S. federal income tax considerations generally applicable to U.S. Holders (as defined below) of\nthe ownership and disposition of our Ordinary Shares. This summary applies only to U.S. Holders that hold our Ordinary Shares as capital\nassets (generally, property held for investment) and that have the U.S. dollar as their functional currency. This summary is based on\nU.S. tax laws in effect as of the date of this annual report on U.S. Treasury regulations in effect or, in some cases, proposed as of\nthe date of this annual report, and judicial and administrative interpretations thereof available on or before such date. All of the\nforegoing authorities are subject to change, which could apply retroactively and could affect the tax consequences described below. No\nruling has been sought from the IRS with respect to any U.S. federal income tax considerations described below, and there can be no assurance\nthat the IRS or a court will not take a contrary position. Moreover, this summary does not address the U.S. federal estate, gift, backup\nwithholding, and alternative minimum tax considerations, or any state, local, and non-U.S. tax considerations, relating to the ownership\nand disposition of our Ordinary Shares. The following summary does not address all aspects of U.S. federal income taxation that may be\nimportant to particular investors in light of their individual circumstances or to persons in special tax situations such as:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	financial\n institutions or financial services entities;

	●	underwriters;

	●	insurance\n companies;

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	pension\n plans;

	●	cooperatives;

	●	regulated\n investment companies;

	●	real\n estate investment trusts;

	●	grantor\n trusts;

	●	broker-dealers;

	●	traders\n that elect to use a mark-to-market method of accounting;

	●	governments\n or agencies or instrumentalities thereof;

	●	certain\n former U.S. citizens or long-term residents;

	●	tax-exempt\n entities (including private foundations);

	●	persons\n liable for alternative minimum tax;

	●	persons\n holding stock as part of a straddle, hedging, conversion or other integrated transaction;

	●	persons\n whose functional currency is not the U.S. dollar;

	●	passive\n foreign investment companies;

	●	controlled\n foreign corporations;

	●	persons\n that actually or constructively own 5% or more of the total combined voting power of all classes of our voting stock; or

	●	partnerships\n or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding Ordinary Shares through such entities.

PROSPECTIVE\nINVESTORS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF U.S. FEDERAL TAXATION TO THEIR PARTICULAR CIRCUMSTANCES,\nAND THE STATE, LOCAL, NON-U.S., OR OTHER TAX CONSEQUENCES OF THE OWNERSHIP AND DISPOSITION OF OUR ORDINARY SHARES.

For\npurposes of this discussion, a “U.S. Holder” is a beneficial owner of our Ordinary Shares that is, for U.S. federal income\ntax purposes:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	an\n individual who is a citizen or resident of the United States;

	●	a\n corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) created or organized in the United States\n or under the laws of the United States, any state thereof or the District of Columbia;

	●	an\n estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

	●	a\n trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons\n for all substantial decisions, or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as\n a U.S. person.

If\na partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of our Ordinary Shares,\nthe tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership.\nPartnerships holding our Ordinary Shares and their partners are urged to consult their tax advisors regarding an investment in our Ordinary\nShares.

Taxation\nof Dividends and Other Distributions on Our Ordinary Shares

As\ndiscussed under “Dividend Policy” above, we do not anticipate that any dividends will be paid in the foreseeable future.\nSubject to the PFIC rules discussed below, a U.S. Holder generally will be required to include in gross income, in accordance with such\nU.S. Holder’s method of accounting for United States federal income tax purposes, as dividends the amount of any distribution paid\non the Ordinary Shares to the extent the distribution is paid out of our current or accumulated earnings and profits (as determined under\nUnited States federal income tax principles). Such dividends paid by us will be taxable to a corporate U.S. Holder as dividend income\nand will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received\nfrom other domestic corporations. Dividends received by certain non-corporate U.S. Holders (including individuals) may be “qualified\ndividend income,” which is taxed at the lower capital gains rate, provided that our Ordinary Shares are readily tradable on an\nestablished securities market in the United States and the U.S. Holder satisfies certain holding periods and other requirements. In this\nregard, shares generally are considered to be readily tradable on an established securities market in the United States if they are listed\non Nasdaq, as our Ordinary Shares are.

Distributions\nin excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its Ordinary Shares\n(but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such Ordinary Shares.\nIn the event that we do not maintain calculations of our earnings and profits under United States federal income tax principles, a U.S.\nHolder should expect that all cash distributions will be reported as dividends for United States federal income tax purposes. U.S. Holders\nshould consult their own tax advisors regarding the availability of the lower rate for any cash dividends paid with respect to our Ordinary\nShares.

Dividends\nwill generally be treated as income from foreign sources for U.S. foreign tax credit purposes and will generally constitute passive category\nincome. Depending on the U.S. Holder’s individual facts and circumstances, a U.S. Holder may be eligible, subject to a number of\ncomplex limitations, to claim a foreign tax credit not in excess of any applicable treaty rate in respect of any foreign withholding\ntaxes imposed on dividends received on our Ordinary Shares. A U.S. Holder who does not elect to claim a foreign tax credit for foreign\ntax withheld may instead claim a deduction, for U.S. federal income tax purposes, in respect of such withholding, but only for a year\nin which such U.S. Holder elects to do so for all creditable foreign income taxes. The rules governing the foreign tax credit are complex\nand their outcome depends in large part on the U.S. Holder’s individual facts and circumstances. Accordingly, U.S. Holders are\nurged to consult their tax advisors regarding the availability of the foreign tax credit under their particular circumstances.

Taxation\nof Sale or Other Disposition of Ordinary Shares

Subject\nto the discussion below under “Passive Foreign Investment Company Rules,” a U.S. Holder will generally recognize capital\ngain or loss upon the sale or other disposition of Ordinary Shares in an amount equal to the difference between the amount realized upon\nthe disposition and the U.S. Holder’s adjusted tax basis in such Ordinary Shares. Any capital gain or loss will be long term if\nthe Ordinary Shares have been held for more than one year and will generally be U.S.-source gain or loss for U.S. foreign tax credit\npurposes. Long-term capital gains of non-corporate taxpayers are currently eligible for reduced rates of taxation. The deductibility\nof a capital loss may be subject to limitations. U.S. Holders are urged to consult their tax advisors regarding the tax consequences\nif a foreign tax is imposed on a disposition of our Ordinary Shares, including the availability of the foreign tax credit under their\nparticular circumstances.

Passive\nForeign Investment Company Rules

A\nnon-U.S. corporation, such as our company, will be classified as a PFIC, for U.S. federal income tax purposes for any taxable year, if\neither (i) 75% or more of its gross income for such year consists of certain types of “passive” income or (ii) 50% or more\nof the value of its assets (determined on the basis of a quarterly average) during such year is attributable to assets that produce or\nare held for the production of passive income. For this purpose, cash, cash equivalents and restricted cash are categorized as passive assets. Passive\nincome generally includes, among other things, dividends, interest, rents, royalties, and gains from the disposition of passive assets.\nWe will be treated as owning a proportionate share of the assets and earning a proportionate share of the income of any other corporation\nin which we own, directly or indirectly, at least 25% (by value) of the stock.

No\nassurance can be given as to whether we may be or may become a PFIC, as this is a factual determination made annually that will depend,\nin part, upon the composition of our income and assets. Furthermore, the composition of our income and assets may also be affected by\nhow, and how quickly, we use our liquid assets and the cash raised in our initial public offering. Under circumstances where our revenue\nfrom activities that produce passive income significantly increase relative to our revenue from activities that produce non-passive income,\nor where we determine not to deploy significant amounts of cash for active purposes, our risk of becoming classified as a PFIC may substantially\nincrease. In addition, because there are uncertainties in the application of the relevant rules, it is possible that the Internal Revenue\nService may challenge our classification of certain income and assets as non-passive or our valuation of our tangible and intangible\nassets, each of which may result in our becoming a PFIC for the current or subsequent taxable years. If we were classified as a PFIC\nfor any year during which a U.S. Holder held our Ordinary Shares, we generally would continue to be treated as a PFIC for all succeeding\nyears during which such U.S. Holder held our Ordinary Shares even if we cease to be a PFIC in subsequent years, unless certain elections\nare made. Our U.S. counsel expresses no opinion with respect to our PFIC status for any taxable year.

If\nwe are classified as a PFIC for any taxable year during which a U.S. Holder holds our Ordinary Shares, and unless the U.S. Holder makes\na mark-to-market election (as described below), the U.S. Holder will generally be subject to special tax rules that have a penalizing\neffect, regardless of whether we remain a PFIC, on (i) any excess distribution that we make to the U.S. Holder (which generally means\nthe portion of distributions received by a U.S. Holder during a taxable\nyear that exceeds 125 percent of the average annual distributions received by such U.S. Holder in respect of the Ordinary Shares during the three preceding taxable years or, if shorter, the portion of such U.S. Holder’s holding period before the current\ntaxable year, and (ii) any gain\nrealized on the sale or other disposition of Ordinary Shares. Under these rules,

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	●	the\n U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for the Ordinary\n Shares;

	●	the\n amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable\n year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income;

	●	the\n amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect\n for individuals or corporations, as appropriate, for that year; and

	●	an\n additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed in respect of the tax attributable\n to each prior taxable year, other than a pre-PFIC year, of the U.S. Holder.

If\nwe are treated as a PFIC for any taxable year during which a U.S. Holder holds our Ordinary Shares, or if any of our subsidiaries is\nalso a PFIC, such U.S. Holder would be treated as owning a proportionate amount (by value) of the shares of any lower-tier PFICs for\npurposes of the application of these rules. U.S. Holders are urged to consult their tax advisors regarding the application of the PFIC\nrules to any of our subsidiaries.

As\nan alternative to the foregoing rules, a U.S. Holder of “marketable stock” in a PFIC may make a mark-to-market election with\nrespect to such stock, provided that such stock is “regularly traded” within the meaning of applicable U.S. Treasury regulations.\nIf our Ordinary Shares qualify as being regularly traded, and an election is made, the U.S. Holder will generally (i) include as ordinary\nincome for each taxable year that we are a PFIC the excess, if any, of the fair market value of Ordinary Shares held at the end of the\ntaxable year over the adjusted tax basis of such Ordinary Shares and (ii) deduct as an ordinary loss the excess, if any, of the adjusted\ntax basis of the Ordinary Shares over the fair market value of such Ordinary Shares held at the end of the taxable year, but such deduction\nwill only be allowed to the extent of the amount previously included in income as a result of the mark-to-market election. The U.S. Holder’s\nadjusted tax basis in the Ordinary Shares would be adjusted to reflect any income or loss resulting from the mark-to-market election.\nIf a U.S. Holder makes a mark-to-market election in respect of a corporation classified as a PFIC and such corporation ceases to be classified\nas a PFIC, the U.S. Holder will not be required to take into account the gain or loss described above during any period that such corporation\nis not classified as a PFIC. If a U.S. Holder makes a mark-to-market election, any gain such U.S. Holder recognizes upon the sale or\nother disposition of our Ordinary Shares in a year when we are a PFIC will be treated as ordinary income and any loss will be treated\nas ordinary loss, but such loss will only be treated as ordinary loss to the extent of the net amount previously included in income as\na result of the mark-to-market election.

Because\na mark-to-market election cannot be made for any lower-tier PFICs that we may own, a U.S. Holder may continue to be subject to the PFIC\nrules with respect to such U.S. Holder’s indirect interest in any investments held by us that are treated as an equity interest\nin a PFIC for U.S. federal income tax purposes.

Furthermore,\nas an alternative to the foregoing rules, a U.S. Holder that owns stock of a PFIC generally may make a “qualified electing fund”\nelection regarding such corporation to elect out of the PFIC rules described above regarding excess distributions and recognized gains.\nHowever, we do not intend to provide information necessary for U.S. Holders to make qualified electing fund elections which, if available,\nwould result in tax treatment different from the general tax treatment for PFICs described above.

If\na U.S. Holder owns our Ordinary Shares during any taxable year that we are a PFIC, the U.S. Holder must generally file an annual Internal\nRevenue Service Form 8621 and provide such other information as may be required by the U.S. Treasury Department, whether or not a mark-to-market\nelection is or has been made. If we are or become a PFIC, you should consult your tax advisor regarding any reporting requirements that\nmay apply to you.

You\nshould consult your tax advisors regarding how the PFIC rules apply to your investment in our Ordinary Shares.

Information\nReporting and Backup Withholding

Certain\nU.S. Holders are required to report information to the Internal Revenue Service relating to an interest in “specified foreign financial\nassets,” including shares issued by a non-United States corporation, for any year in which the aggregate value of all specified\nforeign financial assets exceeds $50,000 (or a higher dollar amount prescribed by the Internal Revenue Service), subject to certain exceptions\n(including an exception for shares held in custodial accounts maintained with a U.S. financial institution). These rules also impose\npenalties if a U.S. Holder is required to submit such information to the Internal Revenue Service and fails to do so.

In\naddition, dividend payments with respect to our Ordinary Shares and proceeds from the sale, exchange or redemption of our Ordinary Shares\nmay be subject to additional information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply,\nhowever, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on IRS Form\nW-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must\nprovide such certification on IRS Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S.\ninformation reporting and backup withholding rules.

Backup\nwithholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability,\nand you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund\nwith the IRS and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions\neffected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such\nbrokers or intermediaries may be required by law to withhold such taxes.

THE\nPRECEDING DISCUSSION OF U.S. FEDERAL TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY. IT IS NOT TAX ADVICE. EACH PROSPECTIVE\nINVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF PURCHASING,\nHOLDING AND DISPOSING OF OUR ORDINARY SHARES, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.

\n \n \n \n

10.F.

Dividends\n and Paying Agents

Not\napplicable.

\n \n \n \n

10.G.

Statement\n by Experts

Not\napplicable.

100

\n \n \n \n

10.H.

Documents\n on Display

We\nare subject to the periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers.\nUnder the Exchange Act, we are required to file reports and other information with the SEC. Specifically, we are required to file annually\na Form 20-F within four months after the end of each fiscal year. Copies of reports and other information, when so filed with the SEC,\ncan be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C.\n20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. The public may obtain information\nregarding the Washington, D.C. Public Reference Room by calling the Commission at 1-800-SEC-0330. The SEC also maintains a website at\nwww.sec.gov that contains reports, proxy and information statements, and other information regarding registrants that make electronic\nfilings with the SEC using its EDGAR system. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing\nthe furnishing and content of quarterly reports and proxy statements, and our executive officers, directors and principal shareholders\nare exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we\nare not required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as\nU.S. companies whose securities are registered under the Exchange Act.

\n \n \n \n

10.I.

Subsidiary\n information

Not\napplicable.

\n \n \n \n

10.J.

Annual\n Report to Security Holders

Not\napplicable.

\n \n \n \n

ITEM\n 11.

QUANTITATIVE\n AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We\nare also exposed to liquidity risk that we are unable to provide sufficient capital resources and liquidity to meet our commitments and\nbusiness needs. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary,\nwe will turn to other financial institutions and the shareholders to obtain short-term funding to meet the liquidity shortage.

Inflation\nrisk

Our\ncosts and expenses may also be affected by China’s inflation level. Since our inception, inflation in China has not materially\nimpacted our results of operations. According to the National Bureau of Statistics of China, the year-over-year percent changes in\nthe consumer price index for the fiscal years ended June 30, 2026, 2025 and 2024 were increases of 1.0%, 0.2% and 0.2%,\nrespectively. Although we have not in the past been materially affected by inflation since our inception, we can provide no\nassurance that we will not be affected in the future by higher rates of inflation in China.

Interest\nrate risk

Our\nexposure to interest rate risk primarily relates to the long-term borrowings we have entered into with a bank. We have not been exposed\nto material risks due to changes in interest rates. An increase, however, may raise the cost of any debt we have now or in the future.

Foreign\ncurrency translation and transaction

Substantially\nall of our operating activities and our assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies.\nAll foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”) or other authorized\nfinancial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions\nrequires submitting a payment application form together with suppliers’ invoices and signed contracts. The value of RMB is subject\nto changes in central government policies and to international economic and political developments affecting supply and demand in the\nChina Foreign Exchange Trading System market.

\n \n \n \n

ITEM\n 12.

DESCRIPTION\n OF SECURITIES OTHER THAN EQUITY SECURITIES

\n \n \n \n

12.A.

Debt\n Securities

Not\napplicable.

\n \n \n \n

12.B.

Warrants\n and Rights

Not\napplicable.

\n \n \n \n

12.C.

Other\n Securities

Not\napplicable.

101

PART\nII

\n \n \n \n

ITEM\n 13.

DEFAULTS,\n DIVIDEND ARREARAGES AND DELINQUENCIES

None.

\n \n \n \n

ITEM\n 14.

MATERIAL\n MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

14.A.\n- 14.D. Material Modifications to the Rights of Security Holders

See\n“Item 10. Additional Information” for a description of the rights of shareholders, which remains unchanged.

\n \n \n \n

14.E.

Use\n of Proceeds

The\nfollowing “Use of Proceeds” information relates to the registration statement on Form F-1 (File No. 333-283258), as amended,\nfor our initial public offering, which registered 1,250,000 ordinary shares, and the underwriters’ exercise of their over-allotment\noption to purchase an additional 160,349 ordinary shares, at a public offering price of $4.00 per ordinary share. The registration statement\nwas declared effective by the SEC on February 25, 2025, for our initial public offering, which closed in March 2025. Kingswood Capital\nPartners, LLC was the representative of the underwriters.

The\ntotal gross proceeds received from the IPO, including proceeds from the exercise of the over-allotment option, were US$5.6 million. The\ntotal expenses incurred for our company’s account in connection with our initial public offering were approximately US$1.4 million,\nwhich included US$0.4 million in underwriting discounts and commissions for the initial public offering for our initial public offering.\nNone of the net proceeds we received from the initial public offering were paid, directly or indirectly, to any of our directors or officers\nor their associates, persons owning 10% or more of our equity securities or our affiliates.

For\nthe period from the date that the registration statement on Form F-1 was declared effective by the SEC to June 30, 2026, we used approximately\nUS$2.29 million of the net proceeds from our initial public offering to obtain specialized vehicle permission, research and development\nexpenses and general corporate purposes. There has been no material change in the use of proceeds as described in the registration statement.\nWe still intend to use the remainder of the net proceeds from our initial public offering for purposes as disclosed in our registration\nstatement on Form F-1.

\n \n \n \n

ITEM\n 15.

CONTROLS\n AND PROCEDURES

Disclosure\nControls and Procedures

As\ndefined in the standards established by the PCAOB, a “material weakness” is a deficiency, or combination of deficiencies,\nin internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual\nor interim financial statements will not be prevented or detected on a timely basis.

Under\nthe supervision and with the participation of our management, including our principal executive officer and our principal financial officer,\nwe conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under\nthe Exchange Act. Our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures\nwere not effective as of the end of the period covered by this annual report. This conclusion was based on the material weakness in our\ninternal control over financial reporting further described below.

Internal\nControl Over Financial Reporting

Our\nmanagement is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined\nin Rule 13a-15(f) and 15d-15(f) under the Exchange Act. Our management conducted an assessment of the effectiveness of our internal control\nover financial reporting based on the criteria set forth in “Internal Control - Integrated Framework (2013)” issued by the\nCommittee of Sponsoring Organizations of the Treadway Commission.

102

We\nhave already taken some steps and have continued to implement measures to remediate the material weakness identified, including but not\nlimited to (a) continuing our efforts to set up the internal audit department, and enhance the effectiveness of the internal control\nsystem; (b) pertaining to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions\nof the assets of the company; and (c) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs\nfor our accounting and financial reporting personnel. However, we cannot assure you that we will not identify additional material weaknesses\nor significant deficiencies in the future.

Attestation\nReport of the Registered Public Accounting Firm

We\ndid not include an attestation report of the company’s registered public accounting firm in this annual report on Form 20-F due\nto rules of the SEC where domestic and foreign registrants that are non-accelerated filers, which we are, and “emerging growth\ncompanies” which we also are, are not required to provide the auditor attestation report.

Changes\nin Internal Control over Financial Reporting

Other\nthan those disclosed above, there were no changes in our internal controls over financial reporting during our fiscal year ended June\n30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

\n \n \n \n

ITEM\n 16.

[RESERVED]

\n \n \n \n

ITEM\n 16A.

AUDIT\n COMMITTEE FINANCIAL EXPERT

We\nhave determined that Zhaohui Randall Xu, an independent director and a member of our audit committee, qualifies as an “audit committee\nfinancial expert” within the meaning of the SEC rules and possesses financial sophistication within the meaning of Listing Rules\nof the Nasdaq Stock Market. Mr. Zhaohui Randall Xu satisfies the “independence” requirements of Rule 5605(a)(2) of the Listing\nRules of the Nasdaq Stock Market and Rule 10A-3 under the Exchange Act.

\n \n \n \n

ITEM\n 16B.

CODE\n OF ETHICS

Our\nboard of directors has adopted a code of business conduct and ethics that applies to all of our directors, officers, employees, including\ncertain provisions that specifically apply to our principal executive officer, principal financial officer, principal accounting officer\nor controller and any other persons who perform similar functions for us. We have filed our code of business conduct and ethics as Exhibit\n14.1 of our registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the SEC on November 15, 2024,\nand posted a copy of our code of business conduct and ethics on our website at https://www.stakindustry.com/ir/. We hereby undertake\nto provide to any person without charge, a copy of our code of business conduct and ethics within ten working days after we receive such\nperson’s written request.

103

\n \n \n \n

ITEM\n 16C.

PRINCIPAL\nACCOUNTANT FEES AND SERVICES

The\nfollowing table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered\nby HTL International, LLC, our independent registered public accounting firm, for the periods indicated.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	For\n the Year Ended June\n 30,
	2025		2026
	(US$ in millions)
Audit Fees⁽¹⁾		0.22		0.25

\n \n \n \n

(1)

Audit\n Fees. Audit fees mean the aggregate fees billed or to be billed in each of the fiscal years listed for professional services\n rendered by our auditor for the audit of our annual consolidated financial statements, and review of the interim consolidated\n financial statements. Other services normally provided in connection with statutory and regulatory filings or engagements, including services related to filings\nwith the SEC.

The\npolicy of our audit committee is to pre-approve all audit and non-audit services provided by HTL International, LLC, including audit\nservices, audit-related services, tax services and all other services as described above, other than those for de minimis services which\nare approved by the audit committee prior to the completion of the audit.

\n \n \n \n

ITEM\n 16D.

EXEMPTIONS\n FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not\napplicable.

\n \n \n \n

ITEM\n 16E.

PURCHASES\n OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

\n \n \n \n

ITEM\n 16F.

CHANGE\n IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not\napplicable.

\n \n \n \n

ITEM\n 16G.

CORPORATE\n GOVERNANCE

As\na Cayman Islands exempted company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Stock Market Rules corporate governance\nlisting standards. However, Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices\nof its home country. Certain corporate governance practices in the Cayman Islands, which is our home country, may differ significantly\nfrom the Nasdaq Stock Market Rules.

While\nwe voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage of the exemptions afforded to us and follow\ncertain home country corporate governance practices. We currently follow Cayman Islands corporate governance practices in lieu of the\ncorporate governance requirements of the Nasdaq Capital Market as listed below:

\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n

	●	Rule\n 5605(b), pursuant to which a majority of a company’s board of directors must be independent\n and the independent board members of a company must have regularly scheduled meetings at\n which only independent directors are present;

	●	Rule\n 5620(a) –which requires that a listed company must hold its annual shareholders meeting\n within one year of the company’s fiscal year-end;

	●	Rule\n 5620(c), pursuant to which a company that is not a limited partnership shall provide for\n a quorum as specified in its by-laws for any meeting of holders of common stock; provided,\n however, that in no case shall such quorum be less than 33 1/3% of the outstanding shares\n of the company’s common voting stock;

	●	Rule\n 5635(a) requires shareholder approval prior to the issuance of securities in connection with\n the acquisition of the stock or assets of another company in certain specified circumstances.

	●	Rule\n 5635(b) requires shareholder approval prior to the issuance of securities when the issuance\n or potential issuance will result in a change of control of the Company;

104

\n\n\n\n\n\n

	●	Rule\n 5635(c) requires shareholder approval prior to the issuance of securities when a stock option\n or purchase plan is to be established or materially amended or other equity compensation\n arrangement made or materially amended, pursuant to which stock may be acquired by officers,\n directors, employees, or consultants; and

	●	Rule\n 5635(d) requires shareholder approval for certain issuances or potential issuances, other\n than public offerings, of 20% or more of the outstanding common stock or voting power at\n a price below the Minimum Price, as defined in the Nasdaq Stock Market Rules.

Under\nour home country practices, we do not require a majority of our board of directors to be independent or regularly scheduled meetings\nattended solely by independent directors, and we do not require annual shareholders’ meetings within the timeframe prescribed by\nRule 5620(a). The quorum for general meetings under our currently effective second amended and restated memorandum and articles of association is one or more members\nholding shares that represent not less than one-third of the issued and outstanding shares carrying the right to vote at such general\nmeeting. With respect to the transactions and arrangements covered by Rule 5635, we obtain shareholder approval where required by Cayman\nIslands law and our currently effective second amended and restated memorandum and articles of association, rather than solely because such approval would be required\nunder Rule 5635.

With respect to Rule 5640 and IM-5640, Nasdaq accepts actions or issuances\nrelating to the voting rights structure of a non-U.S. company that either comply with Nasdaq’s requirements for domestic companies\nor are not prohibited by the company’s home country law. Under our currently effective second amended and restated memorandum and\narticles of association, each Class A Ordinary Share shall be entitled to one (1) vote on all matters subject to vote at general meetings\nof the Company, and each Class B Ordinary Share shall be entitled to thirty (30) votes on all matters subject to vote at general meetings\nof the Company.

On October 9, 2026, our\nshareholders approved, among other things, a proposed increase in the voting rights attached to each Class B Ordinary Share from\nthirty (30) votes to one hundred (100) votes per share, and the adoption of the Amended and Restated Memorandum and Articles of\nAssociation reflecting, among others, such increase. As of the date of this annual report, the Amended and Restated Memorandum and\nArticles of Association had not become effective, pending completion of the relevant filings and registrations with the Registrar of\nCompanies in the Cayman Islands. Accordingly, each Class B Ordinary Share continued to be entitled to thirty (30) votes on all\nmatters subject to vote at general meetings of the Company as of the date of this annual report.

Our\nCayman Islands counsel has issued a letter dated August 3, 2026, addressed to Nasdaq, confirming that, subject to the qualifications\nand limitations set forth therein, the Company’s home country practices identified in such letter were not prohibited by Cayman\nIslands law. Other than those described above, there are no significant differences between our corporate governance practices and those\nfollowed by U.S. domestic companies under Nasdaq corporate governance listing standards.

\n \n \n \n

ITEM\n 16H.

MINE\n SAFETY DISCLOSURE

Not\napplicable.

\n \n \n \n

ITEM\n 16I.

DISCLOSURE\n REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not\napplicable.

\n \n \n \n

ITEM\n 16J.

INSIDER\n TRADING POLICIES

We\nhave adopted insider trading policies and procedures governing the purchase, sale, and other dispositions of our securities by directors,\nsenior management, and employees. A copy of the policies was filed as Exhibit 11.2 to our annual report on Form 20-F for the fiscal year\nended June 30, 2025, filed with the SEC on November 5, 2025, and is incorporated herein by reference.

\n \n \n \n

ITEM\n 16K.

CYBERSECURITY

Cybersecurity\nRisk Management

We\nhave developed and implemented a cybersecurity risk management policy designed to protect the confidentiality, integrity, and availability\nof our critical systems and information. The audit committee of the Board of Directors will oversee this policy and will be responsible\nfor the implementation of the Company’s oversight, programs, procedures, and policies related to cybersecurity, cybersecurity risks,\ninformation security, and data privacy.

105

Management\nshall report to the audit committee on the Company’s and its subsidiaries’ strategy, risks, metrics and operations relating\nto cybersecurity and information security matters, including significant cybersecurity and information security-related projects and\ninitiatives and related progress, the integration and alignment of such strategy with the Company’s overall business and strategy,\nand trends that may affect such strategy or operations.

Team\nleads from various departments of the Company have been identified under this policy to report to the Company’s chief financial\nofficer and oversee the strategy of the Company. While these named leaders will oversee the strategy pursuant to this policy, cybersecurity\nis the responsibility of all business stakeholders and requires the cooperation and compliance of all personnel.

All\nemployees shall exercise professional judgement in using computing devices and network resources connected to the cyberspace. All information,\nphysical and intellectual properties stored on electric and computing devices or existing within the cyberspace remain the sole property\nof the Company. Therefore, employees must neither access nor share confidential and proprietary information prior to receiving consent\nfrom management or the Company’s directors and officers.

We\nand certain of our third-party service providers may be subject to cyberattacks and security due to, for example, computer malware, viruses,\ncomputer hacking, credential stuffing, and phishing attacks. We have not identified risks from known cybersecurity threats, including\nas a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including\nour operations, business strategy, results of operations, or financial condition. However, because of our prominence, we believe that\nwe are a particularly attractive target for such attacks, and we expect to experience cyberattacks and security incidents in the future.

Governance

Our\nBoard of Directors considers cybersecurity risk as part of its risk oversight function and has delegated to the audit committee oversight\nof our cybersecurity and data protection program. The audit committee shall report regularly to the Board concerning its matters covered\nunder this policy and advising the Board of any developments that the audit committee believes should have Board of Directors’\nconsideration. The audit committee shall also annually review and assess the adequacy of this policy and recommend any proposed changes\nto the Board of Directors for approval.

106

PART\nIII

\n \n \n \n

ITEM\n 17.

FINANCIAL\n STATEMENTS

We\nhave elected to provide financial statements pursuant to Item 18.

\n \n \n \n

ITEM\n 18.

FINANCIAL\n STATEMENTS

The\nconsolidated financial statements of STAK Inc. are included at the end of this annual report.

\n \n \n \n

ITEM\n 19.

EXHIBITS

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n

Exhibit\n Number		Description\n of Document
1.1**		Second Amended and Restated Memorandum and Articles of Association of the Registrant (incorporated herein by reference to Exhibit 3.1 to the Form 6-K (File No. 001-42535), filed with the Securities and Exchange Commission on June 13, 2025)
1.2**		Third Amended and Restated Memorandum and Articles of Association Adopted by Special Resolution Passed at Extraordinary General Meeting of Shareholders of the Company Held on 9 October 2026 and Effective upon the Change of Voting Rights, the Share Capital Reduction and Reorganization and the Share Capital Increase (incorporated herein by reference to Exhibit 3.1 to the Form 6-K (File No. 001-42535), filed with the Securities and Exchange Commission on October 9, 2026)
2.1**		Specimen Share Certificate (incorporated herein by reference to Exhibit 4.1 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
2.2*		Description of Securities
4.1**		Form of Indemnification Agreement between the Registrant and each of its directors and executive officers (incorporated herein by reference to Exhibit 4.1 to the Annual Report on Form 20-F (File No.001-42535), filed with the Securities and Exchange Commission on November 5, 2025)
4.2**		Form of Officer Employment Agreement (incorporated herein by reference to Exhibit 10.5 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
4.3**		Form of Independent Director Agreement between the Registrant and Independent Directors (incorporated herein by reference to Exhibit 10.6 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
4.4**		2025 Share Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form S-8 (File No. 333-286004), filed with the Securities and Exchange Commission on March 21, 2025)
4.5**†		Translation of Framework Cooperation Agreements entered by YLAN and Baolu Auto Industrial (Shiyan) Limited dated August 10, 2022 (incorporated herein by reference to Exhibit 10.1 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
4.6**†		Translation of Framework Cooperation Agreements entered by YLAN and Yizhuan Auto Limited dated June 30, 2022 (incorporated herein by reference to Exhibit 10.2 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
4.7**†		Translation of Leasing Agreement entered by and among YLAN, Changzhou Hongce Urban Development and Construction Co., Ltd., and Jiangsu Tianing Economic Development Zone dated August 3, 2023 (incorporated herein by reference to Exhibit 10.3 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
4.8**†		Translation of Leasing Agreement entered by and between YLAN and Shiyan Neng Sheng Gong Mao Development Limited (incorporated herein by reference to Exhibit 10.4 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
4.9**		Form of Warrant (incorporated herein by reference to Exhibit 4.2 to the registration statement on Form F-1 (File No. 333-291542), as amended, filed with the Securities and Exchange Commission on December 30, 2025)

107

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

8.1*		List of Significant Subsidiaries of the Registrant
11.1**		Code of Business Conduct and Ethics (incorporated herein by reference to Exhibit 14.1 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
11.2**		Insider Trading Policy (incorporated herein by reference to Exhibit 11.2 to the Annual Report on Form 20-F (File No.001-42535), filed with the Securities and Exchange Commission on November 5, 2025)
12.1*		Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
12.2*		Certification by Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13.1***		Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
13.2***		Certification by Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
15.1*		Consent of DeHeng Law Offices
15.2*		Consent of Harney Westwood & Riegels
15.3*		Consent of HTL International, LLC
97.1**		Form of Clawback Policy (incorporated herein by reference to Exhibit 99.8 to the registration statement on Form F-1 (File No. 333-283258), as amended, initially filed with the Securities and Exchange Commission on November 15, 2024)
101.INS*		Inline\n XBRL Instance Document
101.SCH*		Inline\n XBRL Taxonomy Extension Schema Document
101.CAL*		Inline\n XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline\n XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline\n XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline\n XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover\n Page Interactive Data File (embedded within the Inline XBRL document)

\n \n \n \n \n \n \n \n \n \n

*	Filed\n herewith.
**	Previously\n filed.
***	Furnished herewith.

\n \n \n \n

†	Certain\n confidential portions of this exhibit were omitted by means of marking such portions with brackets and asterisks because the identified\n confidential portions (i) are not material and (ii) would be competitively harmful if publicly disclosed.

108

SIGNATURES

The\nregistrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused\nand authorized the undersigned to sign this annual report on its behalf.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	STAK\n Inc.

	By:	/s/\n Chuanbo Jiang
	Name:	Chuanbo\n Jiang
	Title:	Chief\n Executive Officer and Chairman of the Board

Date:\nOctober 21, 2026

109

INDEX\nTO CONSOLIDATED FINANCIAL STATEMENTS

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Page
CONSOLIDATED\n FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (PCAOB ID: 7000)	F-2
CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2026 AND 2025	F-3
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) FOR THE YEARS ENDED JUNE 30, 2026, 2025 AND 2024	F-4
CONSOLIDATED\n STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED JUNE 30, 2026, 2025 AND 2024	F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JUNE 30, 2026, 2025 AND 2024	F-6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS	F-7\n – F-34

F-1

REPORT\nOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To\nthe Board of Directors and
\nShareholders of STAK INC.

Opinion\non the Consolidated Financial Statements

We\nhave audited the accompanying consolidated balance sheets of STAK INC. (the “Company”) as of June 30, 2026 and 2025, and\nthe related consolidated statements of operations and comprehensive income (loss), changes in shareholders’ equity, and cash flows\nfor each of the years in the three-year period ended June 30, 2026, and the related notes (collectively referred to as the “consolidated\nfinancial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial\nposition of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the\nthree-year period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.

Basis\nfor Opinion

These\nconsolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion\non the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public\nCompany Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance\nwith the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We\nconducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain\nreasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.\nThe Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part\nof our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing\nan opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our\naudits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether\ndue to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence\nregarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles\nused and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.\nWe believe that our audits provide a reasonable basis for our opinion.

/s/ HTL International, LLC

We have served as the Company’s auditor since 2023.

Houston, Texas

October\n21, 2026

F-2

STAK\nINC.

CONSOLIDATED\nBALANCE SHEETS

(Expressed\nin U.S. dollars, except for the number of shares)

	2026		2025
	As\n of June 30,
	2026		2025
Assets
Current assets:
Cash and cash equivalents	$	4,163,749		$	1,022,625
Restricted cash		736,909			-
Stablecoins		2,151			-
Accounts receivable, net		2,834,374			1,988,785
Inventories		18,988,710			17,018,217
Advances to suppliers		4,183,833			562,473
Amounts due from a related party		-			87,472
Prepayments and other\n current assets, net		2,688,256			2,783,842
Total current assets		33,597,982			23,463,414

Non-current assets:
Equipment, net		257,541			293,023
Intangible assets, net		2,886,048			2,022,918
Right-of-use assets, net		19,665			74,562
Deferred tax assets		504,450			785,700
Other non-current assets		177,605			114,888
Total\n non-current assets		3,845,309			3,291,091

Total\n assets	$	37,443,291		$	26,754,505

Liabilities and shareholder’s\n equity

Liabilities
Current liabilities:
Accounts payable	$	2,483,829		$	3,722,525
Short-term borrowings		11,046,263			5,636,831
Long-term borrowings due within one year		324,240			-
Contract liabilities		88,282			1,164,334
Amounts due to related parties, current		78,506			30,222
Accrued expenses and other current liabilities		3,529,957			1,116,014
Operating lease liabilities, current		-			73,530
Income tax payable		1,968,515			1,692,519
Total current liabilities		19,519,592			13,435,975

Non-current liabilities:
Long-term borrowings		1,591,723			418,784
Amounts due to a related\n party, non-current		272,997			-
Total\n non-current liabilities		1,864,720			418,784

Total\n liabilities	$	21,384,312		$	13,854,759

Commitments and contingencies		-

Shareholder’s equity
Class A ordinary shares (par value of $0.001\nper share; 75,000,000\nshares authorized; 10,010,349\nand 4,010,349\nshares issued and outstanding as of June 30, 2026 and 2025, respectively)	$	10,010		$	4,010
Class B ordinary shares (par value of $0.001\nper share; 25,000,000\nshares authorized; 9,200,000\nshares issued and outstanding as of June 30, 2026 and 2025)		9,200			9,200
Ordinary shares		9,200			9,200
Additional paid in capital		14,438,304			12,157,104
Statutory reserve		811,378			672,402
Retained earnings		611,458			324,893
Accumulated other comprehensive\n income (loss)		178,629			(267,863	)
Total\n shareholders’ equity	$	16,058,979		$	12,899,746

Total\n liabilities and shareholder’s equity	$	37,443,291		$	26,754,505

The\naccompanying notes are an integral part of these consolidated financial statements.

F-3

STAK\nINC.

CONSOLIDATED\nSTATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Expressed\nin U.S. dollars, except for number of shares and per share data)

		2026			2025			2024
		For\n the Years Ended June 30,
		2026			2025			2024
Revenues		$	28,206,019			$	24,914,618		$	18,918,847
Cost of revenues			(20,752,326	)			(17,224,749	)		(13,245,171	)
Gross profit			7,453,693				7,689,869			5,673,676

Operating expenses:
Selling and marketing expenses			(898,008	)			(746,119	)		(653,218	)
General and administrative expenses			(2,001,457	)			(6,800,745	)		(544,304	)
Research and development\n expenses			(3,475,397	)			(3,269,086	)		(1,677,456	)
Total\n operating expenses			(6,374,862	)			(10,815,950	)		(2,874,978	)

Operating income (loss)			1,078,831				(3,126,081	)		2,798,698

Other (expenses) income:
Interest expenses, net			(238,393	)			(167,146	)		(126,373	)
Government subsidies			6,196				18,994			45,638
Other income\n (expenses), net			70,419				(73,182	)		-
Loss from sale of equipment			-				(1,538,023	)		-
Loss from sale of accounts receivable			-				(1,097,204	)		-
Total other expenses, net			(161,778	)			(2,856,561	)		(80,735	)

Income (loss) before income\n tax			917,053				(5,982,642	)		2,717,963
Income tax (expenses)\n benefit			(491,512	)			269,962			(276,189	)
Net\n income (loss)			425,541				(5,712,680	)		2,441,774

Net income (loss) per ordinary\n share: *
Basic	*	$	0.03			$	(0.53	)	$	0.24
Diluted	*		0.02				(0.53	)		0.24

Weighted average number\n of shares outstanding used in calculating net income (loss) per ordinary share: *
Basic	*		16,070,623				10,736,359			10,000,000
Diluted	*		19,041,623				10,736,359			10,000,000

Net income (loss)		$	425,541			$	(5,712,680	)	$	2,441,774
Foreign currency translation\n adjustments			446,492				120,680			(31,462	)
Total\n comprehensive income (loss)		$	872,033			$	(5,592,000	)	$	2,410,312

\n \n \n \n

*	The\n shares and per share information are presented on a retroactive basis to reflect the reorganization (Note 1) and share split\n (Note 17).

The\naccompanying notes are an integral part of these consolidated financial statements.

F-4

STAK\nINC.

CONSOLIDATED\nSTATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Expressed\nin U.S. dollars, except for number of shares and per share data)

	Shares*		Amount			subscription		capital		reserves		earnings			loss		equity
	Ordinary\n Shares		Shareholder			Additional\n paid in		Statutory		Retained		Accumulated\n other comprehensive			Total shareholders’
	Shares*		Amount			subscription		capital		reserves		earnings			loss		equity
Balance as of June 30, 2023		10,000,000		$	10,000		$	(10,000	)	$	4,209,517		$	425,924		$	3,842,277		$	(357,081	)	$	8,120,637
Contribution from shareholders		-			-			10,000			40,000			-			-			-			50,000
Net income		-			-			-			-			-			2,441,774			-			2,441,774
Appropriation to statutory reserve		-			-			-			-			246,478			(246,478	)		-			-
Foreign currency translation\n adjustments		-			-			-			-			-			-			(31,462	)		(31,462	)
Balance as of June\n 30, 2024		10,000,000		$	10,000		$	-		$	4,249,517		$	672,402		$	6,037,573		$	(388,543	)	$	10,580,949

	Shares*		Amount			Shares*	Amount	Shares*		Amount		capital		reserves		earnings		loss			equity
	Class\n A \n ordinary\n shares		Class\n B \n ordinary\n shares			Ordinary\n shares	Additional\n paid in	Statutory		Retained		Accumulated\n other comprehensive		Total\n shareholders’
	Shares		Amount			Shares	Amount	Shares		Amount		capital		reserves		earnings		loss			equity
Balance as\n of June 30, 2024		-		$	-		-	$	-		10,000,000		$	10,000		$	4,249,517		$	672,402		$	6,037,573		$	(388,543	)	$	10,580,949
Issuance of ordinary shares upon Initial public\n offering (“IPO”), net of issuance costs		-			-		-		-		1,410,349			1,410			4,003,387			-			-			-			4,004,797
Net loss		-			-		-		-		-			-			-			-			(5,712,680	)		-			(5,712,680	)
Re-designation of ordinary shares into Class\n A Ordinary Shares		2,210,349			2,210		-		-		(2,210,349	)		(2,210	)		-			-			-			-			-
Re-designation of ordinary shares into Class\n B Ordinary Shares		-			-		9,200,000		9,200		(9,200,000	)		(9,200	)		-			-			-			-			-
Share-based compensation		1,800,000			1,800		-		-		-			-			3,904,200			-			-			-			3,906,000
Foreign currency translation\n adjustments		-			-		-		-		-			-			-			-			-			120,680			120,680
Balance as of June\n 30, 2025		4,010,349		$	4,010		9,200,000	$	9,200		-		$	-		$	12,157,104		$	672,402		$	324,893		$	(267,863	)	$	12,899,746

	Shares*		Amount			Shares*	Amount	in\n capital		reserves			earnings		(loss)\n income	equity
	Class\n A \n ordinary\n shares		Class\n B \n ordinary\n shares			Additional\n paid	Statutory	Retained		Accumulated\n other comprehensive			Total\n shareholders’
	Shares		Amount			Shares	Amount	in\n capital		reserves			earnings		(loss)\n income	equity
Balance as\n of June 30, 2025		4,010,349		$	4,010		9,200,000	$	9,200		$	12,157,104		$	672,402	$	324,893		$	(267,863	)	$	12,899,746
Issuance of Class A ordinary shares		6,000,000			6,000		-		-			2,281,200			-		-			-			2,287,200
Net income		-			-		-		-			-			-		425,541			-			425,541
Net income (loss)		-			-		-		-			-			-		425,541			-			425,541
Appropriation to statutory reserves		-			-		-		-			-			138,976		(138,976	)		-			-
Foreign currency translation\n adjustments		-			-		-		-			-			-		-			446,492			446,492
Balance as of June\n 30, 2026		10,010,349		$	10,010		9,200,000	$	9,200		$	14,438,304		$	811,378	$	611,458		$	178,629		$	16,058,979

\n\n

The shares and\nper share information are presented on a retroactive basis to reflect the reorganization (Note 1) and share\nsplit (Note 17).

The\naccompanying notes are an integral part of these consolidated financial statements.

F-5

STAK\nINC.

CONSOLIDATED\nSTATEMENTS OF CASH FLOWS

(Expressed\nin U.S. dollars)

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025			2024
	For\n the Years Ended June 30,
	2026			2025			2024
CASH FLOWS FROM OPERATING\n ACTIVITIES:
Net income (loss)	$	425,541			$	(5,712,680	)	$	2,441,774
Adjustments to reconcile\n net income (loss) to net cash used in operating activities:
Provision (reversal) for credit\n losses		149,399				505,795			(17,508	)
Depreciation of equipment		50,280				284,125			328,563
Amortization of intangible assets		147,855				45,341			5,042
Amortization of operating lease right-of-use\n assets		57,293				36,150			30,271
Loss on sale of accounts receivable		-				1,097,204			-
Loss on sale of equipment		-				1,538,023			-
Deferred income tax		315,319				(269,962	)		(342,875	)
Share-based compensation		-				3,906,000			-
Changes in operating assets\n and liabilities:
Accounts receivable		(724,799	)			(6,320	)		529,647
Advances to suppliers		(3,486,030	)			879,799			(907,610	)
Inventories		(990,650	)			(8,555,643	)		(2,125,531	)
Amounts due from/due to related parties		142,618				34,814			(350,582	)
Prepayments and other current assets		973,171				(802,008	)		(47,884	)
Other non-current assets		(59,931	)			185,799			(299,443	)
Accounts payable		1,227,673				2,944,759			(2,565,379	)
Contract liabilities		(1,106,923	)			1,156,151			(385,941	)
Income tax payable		176,193				(10	)		616,111
Accrued expenses and other current liabilities		50,146				(146,238	)		436,146
Operating lease liabilities, current		(75,313	)			-			(80,098	)
Net\n cash used in operating activities	$	(2,728,158	)		$	(2,878,901	)	$	(2,735,297	)

CASH FLOWS FROM INVESTING\n ACTIVITIES:
Purchases of equipment		-				(61,622	)		(17,427	)
Purchases of intangible assets		(875,728	)			(1,991,345	)		-
Proceeds from sale of equipment		563,337				-			-
Loans to third parties		(1,867,315	)			(989,999	)		(553,649	)
Collection of loans to\n third parties		1,960,166				602,969			297,863
Net\n cash used in investing activities	$	(219,540	)		$	(2,439,997	)	$	(273,213	)

CASH FLOWS FROM FINANCING\n ACTIVITIES:
Contribution from shareholders		-				-			50,000
Net proceeds from initial public offering		-				4,187,707			-
Release of IPO proceeds held in escrow		400,000				-			-
Proceeds from third-party loans		2,402,059				-			-
Proceeds from short-term bank loans		7,670,861				5,597,217			5,501,882
Proceeds from long-term bank loans		1,429,797				415,841			117,650
Repayments of short-term bank loans		(5,065,771	)			(4,366,328	)		(2,595,228	)
Repayments of long-term\n bank loans		-				(117,822	)		-
Net\n cash provided by financing activities	$	6,836,946			$	5,716,615		$	3,074,304

Effect of exchange rate changes on cash, cash\n equivalents and restricted cash		(11,215	)			(33,246	)		(839	)

Net increase in cash, cash equivalents and restricted cash		3,878,033				364,471			64,955
Cash and cash equivalents at beginning of the year		1,022,625				658,154			593,199
Cash, cash equivalents and restricted cash at the end of the year	$	4,900,658			$	1,022,625		$	658,154
Including:
Cash and cash equivalents at the end of the year		4,163,749				1,022,625			658,154
Restricted cash at the end of the year		736,909				-			-
SUPPLEMENTAL DISCLOSURE\n OF CASH FLOWS INFORMATION:
Income taxes paid		-				-			3,058
Interest paid		253,715				183,156			120,602

SUPPLEMENTAL DISCLOSURE\n OF NON-CASH ACTIVITIES:
Addition of right-of-use assets	$	-			$	72,220		$	56,085
Reclassification of accounts payables into\n supplier finance obligations		2,337,718				-			-
Offsetting of loan to third parties and accounts\n payable		293,108				-			-
Stablecoins settlement received for sales of\n accounts receivable		865,000				-			-
Stablecoins used for advance payment to a vendor		865,000				-			-
Issuance of Class A ordinary shares in\n exchange for stablecoins		2,287,200				-			-
Loan to a third party via stablecoins		2,285,049				-			-
Transfer of loan from a third party to a related party		272,997				-			-

The\naccompanying notes are an integral part of these consolidated financial statements.

F-6

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n1 - ORGANIZATION AND PRINCIPAL ACTIVITIES

STAK\nInc. (“STAK”) was incorporated as an exempted holding company under the laws of Cayman Islands on May 9, 2023. STAK does\nnot conduct any substantive operations on its own, but instead conducts its business operations through its wholly-owned subsidiary in\nthe People’s Republic of China (the “PRC”) and the subsidiary of such entity. STAK and its subsidiaries are hereinafter\ncollectively referred to as “the Company”. The Company is engaged in the design, production and sales of oilfield specific\nvehicles and related vehicles components, and provides automatic solution for oilfield specific vehicles in PRC.

Reorganization

In\npreparation for its initial public offering, the Company completed a reorganization on September 19, 2023 (the “Reorganization”),\nwhich involved the following steps:

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

●	on\n May 9, 2023, STAK was established under the laws of Cayman Islands, and is controlled by Mr. Chuanbo Jiang;

●	on\n May 15, 2023, STAK Holdings Limited (“STAK HK”) was incorporated in Hong Kong as a wholly-owned subsidiary of STAK;

●	on\n August 4, 2023, STAK (Changzhou) Intelligent Technology Co., Ltd. (“STAK Changzhou” or “WFOE”) was established\n as a wholly-owned subsidiary of STAK HK in the PRC; and

●	on\n September 19, 2023, WFOE acquired 100% equity interest of YLAN Technology (Changzhou) Co., Ltd. (“YLAN”).

On\nSeptember 19, 2023, WFOE and the shareholders of YLAN entered into a share purchase agreement to purchase 100% equity shares of YLAN.\nImmediately before and after the Reorganization, Mr. Chuanbo Jiang controls over 50% of equity interest of these entities, and the Reorganization\nhas been treated as a corporate restructuring of entities under common control. Thus, the current capital structure has been retroactively\npresented in prior periods as if such structure existed at that time, and the entities are presented on a consolidated basis for all\nperiods to which such entities were under common control.

On\nMay 20, 2024, the Company effected a one thousand-for-one subdivision of shares to shareholders, which increased the total number of\nauthorized and issued ordinary shares from 50,000 to 50,000,000 and decreased the par value of ordinary shares from $1 to $0.001. Then\nthe shareholders surrendered a pro-rata number of ordinary shares of 40,000,000 to the Company for no consideration and thereafter cancelled.\nFollowing the surrender, the issued and outstanding ordinary shares were 10,000,000 of par value of $0.001 per share. All share and per\nshare data in the consolidated financial statements have been retroactively adjusted to reflect the surrender as if it has occurred at\nthe beginning of the earliest period presented.

The\nconsolidated financial statements reflect the activities of STAK and each of the following entities as of June 30, 2026.

SCHEDULE OF ACTIVITIES OF STAK AND ENTITIES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Name	Date\n of Incorporation	Place\n of Incorporation	Percentage\n of effective ownership			Principal\n Activities
STAK Holdings\n Limited (“STAK HK”)	May 15,\n 2023	Hong Kong		100	%		Holding company
STAK (Changzhou) Intelligent\n Technology Co., Ltd. (“STAK Changzhou” or “WFOE”)	August 4, 2023	PRC		100	%		Holding company
YLAN Technology (Changzhou)\n Co., Ltd. (“YLAN”)	June 18, 2020	PRC		100	%		Design, production and\n sales of oilfield-specialized production and maintenance equipment, and provide automatic solutions for them
Changzhou Zhongshan Intelligent\n Equipment Co., Ltd. (“Zhongshan Co”)	April 8, 2022	PRC		100	%		Design, collaboration\n production and sales of specialized oilfield vehicles
STAK Group Ltd.	June 11, 2026	British Virgin Islands		100	%		Holding company
STAK Vision Ltd.	June 24, 2026	British Virgin Islands		100	%		Holding company

F-7

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)\nBasis of presentation

The\nconsolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States\nof America (“U.S. GAAP”). The consolidated financial statements include the financial statements of STAK, and its subsidiaries.\nAll intercompany balances and transactions have been eliminated upon consolidation.

(b)\nUse of estimates

The\npreparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions\nthat affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the\nconsolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. The Company continually\nevaluates these estimates and assumptions based on the most recently available information, historical experience and various other assumptions\nthat the Company believes to be reasonable under the circumstances. Significant accounting estimates reflected in the Company’s\nconsolidated financial statements include, but are not limited to, estimates and judgments applied in determination of allowance for\ncredit losses, lower of cost and net realizable value of inventories, impairment losses for long-lived assets, valuation allowance for\ndeferred tax assets and uncertain tax position. Since the use of estimates is an integral component of the financial reporting process,\nactual results could differ from those estimates.

(c)\nFair value measurement

ASC\n820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy prioritizes\nthe inputs into three levels based on the extent to which inputs used in measuring fair value are observable in the market. These tiers\ninclude:

Level\n1—defined as observable inputs such as quoted prices in active markets;

Level\n2—defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level\n3—defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The\ncarrying amounts of the Company’s financial instruments, approximate their fair values because of their short-term nature. The\nCompany’s financial instruments include cash and cash equivalents, and restricted cash, accounts receivable, other current\nassets, amount due from and due to a related party, short-term borrowings, accounts payable and other current\nliabilities.

All of the Company’s\ncrypto assets are classified within Level 1 of the fair value hierarchy because they were valued using quoted prices in active markets.

(d)\nForeign currency translation and transactions

The\nreporting currency of the Company is the U.S. dollar (“USD” or “$”). The functional currency of subsidiaries\nlocated in China is the Chinese Renminbi (“RMB”), the functional currency of subsidiary located in Hong Kong is the Hong\nKong dollars (“HK$”). For the entities whose functional currency is the RMB and HK$, results of operations and cash flows\nare translated at average exchange rates during the period, assets and liabilities are translated at the unified exchange rate at the\nend of the period, and equity is translated at historical exchange rates. As a result, amounts relating to assets and liabilities reported\non the statements of cash flows may not necessarily agree with the changes in the corresponding balances on the balance sheets. Translation\nadjustments are reported as foreign currency translation adjustment and are shown as a separate component of other comprehensive income\n(loss) in the consolidated statements of operations and comprehensive income (loss).

F-8

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(d)\nForeign currency translation and transactions – continued

Transactions\ndenominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates.\nAssets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing\nat the balance sheet date with any transaction gains and losses that arise from exchange rate fluctuations on transactions denominated\nin a currency other than the functional currency are included in the results of operations as incurred.

The\nconsolidated balance sheets amounts, with the exception of equity, on June 30, 2026 and 2025 were translated at RMB6.7851 to $1.00 and\nRMB7.1636 to $1.00, respectively. Equity accounts were stated at their historical rates. The average translation rates applied to consolidated\nstatements of operations and comprehensive income (loss) and cash flows for the years ended June 30, 2026, 2025 and 2024 were RMB6.9940\nto $1.00, RMB7.2143 to $1.00 and RMB7.2248 to $1.00, respectively.

(e)\nCash and cash equivalents

Cash\nand cash equivalents primarily consist of cash held in banks and deposits with financial institutions which are unrestricted as to withdrawal\nand use. Cash equivalents consist of highly liquid investments that are readily convertible to cash generally with original maturities\nof three months or less.

(f) Restricted cash

Cash balances that\nhave restrictions as to withdrawal or usage under contractual agreement provided by a financial institution are considered restricted\ncash. Cash payments also require financial institution approval under contractual agreement. Restricted cash that will be released to\ncash within the next 12 months is classified as current asset

(g)\nStablecoins

The\nCompany accounts for its holdings of stablecoins in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto\nAssets. Based on its evaluation of the rights and claims associated with stablecoins, the Company determined that its holdings\nof stablecoins do not provide the Company with enforceable rights to redeem the stablecoins for U.S. dollars or other underlying assets\nand otherwise, meeting the scope criteria under ASC 350-60.

The\nCompany initially recognizes stablecoins in accordance with the U.S. GAAP guidance applicable to the underlying transaction and subsequently\nmeasures its USDT holdings at fair value as of each reporting date. Changes in fair value are recognized in earnings in the period in\nwhich they occur. USDT holdings accounted for under ASC 350-60 are not amortized. The Company presents crypto assets separately from\nother intangible assets on its consolidated balance sheets and presents changes in their fair value separately from changes in the carrying\namounts of other intangible assets in its consolidated statements of operations and comprehensive income (loss).

The\nfair value of stablecoins is determined using quoted prices in the principal market accessible to the Company at the measurement date,\nwhen available.

As\nof June 30, 2026, stablecoins were held in Company-controlled digital wallets.

(h)\nAccounts receivable

Accounts\nreceivable are stated at the original amount less an allowance for credit losses. Accounts receivable, net are recognized in the period\nwhen the Company has provided services to its customers and when its right to consideration is unconditional.

On\nJuly 1, 2023, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Accounting Standards Codification\n(“ASC” Topic 326): Measurement on Credit Losses on Financial Instruments”, including certain subsequent amendments,\ntransitional guidance and other interpretive guidance within ASU 2018-19, ASU 2019-04, ASU 2019-05, ASU 2019-11, ASU 2020-02 and ASU\n2020-03 (collectively, including ASU 2016-13, “ASC 326”). ASC 326 introduces an approach based on expected losses to estimate\nthe allowance for credit losses, which replaces the previous incurred loss impairment model.

The\nCompany evaluates its accounts receivable for expected credit losses on a regular basis. The Company maintains an estimated allowance\nfor credit losses to reduce its accounts receivable to the amount that it believes will be collected. The Company’s estimation\nof allowance for credit losses considers factors such as historical credit loss experience, age of receivable balances, current market\nconditions, reasonable and supportable forecasts of future economic conditions, as well as an assessment of receivables due from specific\nidentifiable counterparties to determine whether these receivables are considered at risk or uncollectible. The Company adjusts the allowance\npercentage periodically when there are significant differences between estimated credit losses and actual credit losses. If there is\nstrong evidence indicating that the accounts receivable is likely to be unrecoverable, the Company also makes specific allowance in the\nperiod in which a loss is determined to be probable. Accounts receivable balances are written off after all collection efforts have been\nexhausted.

The\nCompany accounts for transfers of accounts receivable as sales when it has surrendered control over the related assets. Whether control\nhas been relinquished requires, among other things, an evaluation of relevant legal considerations and an assessment of the nature and\nextent of the Company’s continuing involvement with the assets transferred. Gains and losses stemming from transfers reported as\nsales are included in “Loss from sale of accounts receivable” in the consolidated statements of operations and comprehensive\nincome (loss). Assets obtained in connection with transfers reported as sales are initially recognized in the consolidated balance sheets\nat fair value.

F-9

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(i)\nFinancial Instruments and Current Expected Credit Losses

Effective\nJuly 1, 2021, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326) — Measurement of\nCredit Losses on Financial Instruments,” using the modified retrospective approach for financial assets at amortized cost including\naccounts receivable, amounts due from a related party and other receivable and loans to a third party in prepayments and other current\nassets. This guidance replaced the “incurred loss” impairment methodology with an approach based on “expected losses”\nto estimate credit losses on certain types of financial instruments and requires consideration of a broader range of reasonable and supportable\ninformation to inform credit loss estimates. The guidance requires financial assets to be presented at the net amount expected to be\ncollected. The allowance for credit losses is a valuation account that is deducted from the cost of the financial asset to present the\nnet carrying value at the amount expected to be collected on the financial asset.

In\naccordance with the expected credit loss (ECL) model, the Company uses roll-rate method and individual evaluation method to estimate\nthe allowance for credit losses. Balances past due beyond the contractual credit period and receivables with higher risk identified by\nthe Company are reviewed individually for collectability. The Company evaluates the expected credit loss of accounts receivable based\non historical collection experience, the financial condition of its customers and assumptions for the future movement of different economic\ndrivers and how these drivers will affect each other.

(j)\nPrepayments and other current assets, net

Prepayments\nand other current assets, net primarily include loan to third parties, sale of accounts receivable, sale of equipment and\nescrow funds. Prepayments and other current assets, net are stated at the historical carrying amount net of the allowance for credit\nlosses. The Company reviews other receivables on a periodic basis and makes allowances on an individual basis when there is doubt as\nto the collectability. Other receivables are written off after all collection efforts have been exhausted.

(k)\nInventories

Inventories\nare stated at the lower of cost or net realizable value. The cost of raw materials is determined on the basis of weighted average. The\ncost of finished goods is determined on the basis of weighted average and comprises direct materials, direct labor cost and an appropriate\nproportion of overhead.

Net\nrealizable value is based on estimated selling prices less selling expenses and any further costs of completion. Adjustments to reduce\nthe cost of inventory to net realizable value are made, if required, for estimated excess, obsolescence, or impaired balances. Write-downs\nare recorded in the consolidated statements of operations and comprehensive income (loss).

(l)\nEquipment

Equipment are carried at cost less accumulated depreciation and any impairment. Depreciation is calculated over the asset’s\nestimated useful life, using the straight-line method. Estimated useful lives are as follows:

SCHEDULE OF ESTIMATED USEFUL LIVES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

Categories	Estimates\n of \n useful\n lives	Estimates\n of \n residual\n values
Machinery and equipment	10 years		5	%
Transportation equipment	10 years		5	%
Office equipment	3 years		5	%

The\nCompany reassesses the reasonableness of the estimates of useful lives and residual values of long-lived assets when events or changes\nin circumstances indicate that the useful lives and residual values of a major asset or a major category of assets may not be reasonable.\nFactors that the Company considers in deciding when to perform an analysis of useful lives and residual values of long-lived assets include,\nbut are not limited to, significant variance of a business or product line in relation to expectations, significant deviation from industry\nor economic trends, and significant changes or planned changes in the use of the assets. The analysis will be performed at the asset\nor asset category with the reference to the assets’ conditions, current technologies, market, and future plan of usage and the\nuseful lives of major competitors.

F-10

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(l)\nEquipment – continued

The\ncost of maintenance and repair is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

Gains\nand losses on sale of equipment are determined by comparing the proceeds with the carrying amount and are recognized as\n“Loss from sale of equipment” in the consolidated statements of operations and comprehensive income (loss).

(m)\nIntangible assets

Intangible\nassets are carried at cost less accumulated amortization and any recorded impairment. The term for the purchased invention patents is\n20 years from the date of filing, the estimated useful life of these purchased patents, ranging from 10 to 17 years, are determined by the remaining legal period. Intangible assets are amortized using the straight-line approach\nover the estimated economic useful lives of the assets as follows:

SCHEDULE OF INTANGIBLE ASSETS OF ESTIMATED ECONOMIC USEFUL LIVES

\n \n \n \n \n \n \n \n \n

Category		Estimated\n useful life
Patents		10-17\n years

(n)\nImpairment of long-lived assets

The\nCompany evaluates the recoverability of long-lived assets or asset group with determinable useful lives whenever events or changes in\ncircumstances indicate that an asset or a group of assets’ carrying amount may not be recoverable. The Company measures the carrying\namount of long-lived asset against the estimated undiscounted future cash flows expected to result from the use of the assets or asset\ngroup and their eventual disposition. The carrying amount of the long-lived asset or asset group is not recoverable when the sum of the\nundiscounted expected future net cash flows is less than the carrying value of the asset being evaluated. Impairment loss is calculated\nas the amount by which the carrying value of the asset exceeds its fair value. Fair value is generally determined by discounting the\ncash flows expected to be generated by the assets or asset group, when the market prices are not readily available. The adjusted carrying\namount of the assets becomes new cost basis and is depreciated over the assets’ remaining useful lives. Long-lived assets are grouped\nwith other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of\nother assets and liabilities. The impairment test is performed at the asset group level. The Company did not record any impairment charge\nfor the years ended June 30, 2026, 2025 and 2024.

(o) Supplier finance program

The Company accounts\nfor obligations under supplier finance programs according to ASC 405-50 as short-term borrowings. A supplier finance program exists when\nthe Company (a) enters into an agreement with a finance provider or intermediary, (b) confirms supplier invoices as valid to that finance\nprovider or intermediary, and (c) the supplier has the option to request early payment from a party other than the Company for confirmed\ninvoices. A commitment to pay a party other than the supplier without offset, deduction, or any other defenses to payment indicates that\nthe confirmed obligation is a financing liability to the finance provider rather than a trade payable to the supplier.

Accordingly, when\nthe Company confirms invoices as valid under the program, the confirmed amounts are recognized within short-term borrowings, with a corresponding\nreduction in accounts payable, and are subsequently settled with the finance provider or intermediary on the original invoice maturity\ndates. The obligations are measured at the confirmed invoice amount, or amortized cost where applicable, and related program fees are\nexpensed as incurred or included in financing costs, as appropriate.

ASC 405-50 does\nnot change the recognition, measurement, or financial statement presentation of these obligations; however, the Company discloses the\nprogram’s key terms, the outstanding confirmed amount included in short-term borrowings, the balance sheet line item.

(p)\nRelated party transactions

The\nCompany identifies related parties, and accounts for and discloses related party transactions in accordance with ASC 850, Related Party\nDisclosures, and other relevant ASC standards.

Parties,\nwhich can be a corporation or individual, are considered to be related if they have the ability, directly or indirectly, to control the\nother party or exercise significant influence over the other party in making financial and operational decisions. Entities are also considered\nto be related if they are subject to common control or common significant influence.

Transactions\ninvolving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,\nfree market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related\nparty transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations\ncan be substantiated.

F-11

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(p)\nRelated party transactions – continued

The\nCompany reviews amounts due from a related party on a periodic basis and makes allowances on an individual basis when there is doubt\nas to the collectability. Amounts due from a related party is written off after all collection efforts have been exhausted.

(q)\nRevenue recognition

The\nCompany adopted ASC Topic 606 Revenue from Contracts with Customers with a date of the initial application of July 1, 2021 using the\nmodified retrospective method.

The\nCompany generates revenues primarily from sales of specialized oilfield vehicles, sales of specialized oilfield equipment, automation\nsolutions service and others. In accordance with Revenue from Contracts with Customers (“ASC 606”), revenues from contracts\nwith customers are recognized when or as the control of the services or goods is transferred to the customer, in an amount that reflects\nthe consideration the Company expects to be entitled to in exchange for those goods or services net of business tax and value added tax.\nRevenue recognition policies for each type of revenue stream are as follows:

Sales\nof specialized oilfield vehicles and specialized oilfield equipment

The\nCompany sells products of specialized oilfield equipment and specialized oilfield vehicles. Among which the equipment and components\nof specialized oilfield vehicles are designed and manufactured by the Company; the vehicles are outsourced to qualified specialized vehicle\nmanufacturing companies for integration and production of the Company’s produced core equipment and components. The Company generates\nrevenues from sales of specialized oilfield vehicles and specialized oilfield equipment through contracts with customers. The Company\nidentifies only one performance obligation to provide customers with the specific vehicle or equipment at a fixed price stated in the\ncontracts.

The\nCompany provides standard manufacturer’s warranty promise to general repairs on delivered specialized oilfield vehicles or specialized\noilfield equipment if it does not perform as expected. The Company considers the warranty it provided not as an incremental service to\ncustomers, but rather an assurance of the product’s quality. Therefore, it is an assurance-type warrant, not a separate performance\nobligation, and should be accounted for in accordance with ASC 460, Guarantees. Because the Company has not experienced any claim for\nproducts, the Company does not recognize assurance-type warranty liability bases on the best estimation. The Company regularly reevaluates\nthe estimates to assess the adequacy of the recorded warranty liabilities and adjust the amounts as necessary.

The\nrevenue is recognized at a point in time upon the controls of the promised products are transferred to the customers. This occurs when\nthe customers either pick up the products themselves or when the products are delivered to the customers’ designated place and\naccepted by them. Payment terms for product sales are generally 3-6 months after the control of products is transferred to the customers.\nThe Company is deemed as the principal, recognizing revenue on a gross basis as the Company is primarily responsible for fulfilling the\ncontract, bears the inventory risk as the processed specialized oilfield vehicles and equipment are stored in the Company’s warehouse\nbefore sales and it has the controls and ownership over the products, and has the discretion in establishing the sales price.

F-12

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(q)\nRevenue recognition – continued

Service\nincome from automation solutions

The\nCompany provides corporate customers with automation solutions services, with multiple promises in the service contract, including software\ndevelopment, training, debugging, and other services for oilfield-specialized production and maintenance equipment. The software development,\ntraining, debugging, and other services are provided to customers prior to their acceptance of the developed software or function, and\nare not distinct because they are highly interdependent and interrelated with one another, integrated together as inputs to provide an\ncombined output, that is to provide a well-developed software or function to corporate customers.

Therefore,\nthe Company identifies only one performance obligation to provide corporate customers with the automation solutions services at a fixed\nprice stated in the contracts. Corporate customers would not receive and consume the benefits before the delivery of the developed software\nor function. Both the corporate customers and the Company have the unilateral right to terminate the contract at any time with compensation,\nwhich would be further agreed by each party upon termination if any. In addition, the Company would control the source code and script\nof the software or function and would not have the enforceable right to the payment until the delivery of the developed software or function,\ntherefore, the revenue is recognized at a point in time upon the corporate customers’ acceptance of the developed software or function.\nPayment terms are generally set at 3-6 months after the completion of the service. The Company is deemed as the principal, recognizing\nrevenue on a gross basis as the Company is primarily responsible for fulfilling the contract, bears the inventory risk, and has the discretion\nin establishing the sales price.

Others

Other\nrevenue primarily derives from sales of parts and materials, such as integrated circuits, box iron and backlight panels, etc. Payment\nterms for sales of parts and materials are generally 4 months after the control of products is transferred to the customers. The Company\nevaluates if it is a principal or an agent in a transaction to determine whether revenue should be recorded on a gross or net basis.\nGenerally, the Company is deemed as the principal when it is primarily responsible for fulfilling the contract, bears the inventory risk,\nand has the discretion in establishing the sales price, and revenue is recognized on a gross basis. The Company is acting as the agent\nif it is not primarily responsible for fulfilling the contract, does not bear the inventory risk, and does not have the discretion in\nestablishing the sales price, and revenue is recognize on a net basis. The Company recognizes revenue from sales of parts and materials\nat a point in time upon the customer’s acceptance of the parts and materials.

For\nall the revenue streams, the contract payment is not subject to any refund, sales incentives, cancellation or termination provision.\nNor has the Company makes such payments.

The\nfollowing table disaggregates the Company’s revenues by product line for the years ended June 30, 2026, 2025 and 2024:

SCHEDULE OF DISAGGREGATION REVENUES

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025			2024
	For\n the Years Ended June 30,
	2026		2025			2024
Sales of specialized oilfield equipment	$	5,511,628		$	11,952,061		$	8,877,804
Sales of specialized oilfield vehicles		22,184,226			10,909,211			5,406,586
Service income from automation solutions		-			1,762,092			1,763,018
Others		510,165			291,254			2,871,439
Net\n revenues	$	28,206,019		$	24,914,618		$	18,918,847

F-13

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(q)\nRevenue recognition - continued

Contract\nBalances

Timing\nof revenue recognition was once the Company has determined that the customer has obtained control over the product. Accounts receivable\nrepresent revenues recognized for the amounts invoiced and/or prior to invoicing when the Company has satisfied its performance obligation\nand has an unconditional right to the payment.

Contract\nliabilities primarily represents the Company’s obligation to transfer goods or services to a customer for which the\nCompany has received consideration. The consideration received remains a contractual liability until goods or services have been\nprovided to the customer. The amount of revenue recognized for the years ended June 30, 2026, 2025 and 2024 that was previously\nincluded in the contract liabilities as of June 30, 2025, 2024 and 2023 was $1,164,334, nil\nand $384,532,\nrespectively.

(r)\nCost of revenues

Cost\nof revenues mainly consists of manufacturing and purchase cost of raw materials, depreciation and other overhead expenses.

(s)\nSelling and marketing expenses

Selling\nand marketing expenses mainly consist of commission. Selling and marketing expenses are expensed as incurred.

(t)\nGeneral and administrative expenses

General\nand administrative expenses mainly consist of (i) salaries and welfare expenses, (ii) allowance for credit losses and (iii) professional\nfees.

(u)\nResearch and development expenses

The\nCompany’s research and development (“R&D”) expenses primarily consist of (i) materials in relation to testing materials;\nand (ii) design and development expenses, which primarily include fees payable to third-party suppliers for designing and testing. The\nresearch and development expenses are mainly driven by the stage and scale of our equipment development. The Company follows the guidance\nin FASB ASC 730-10.

(v)\nEmployee benefits

The\nCompany’s subsidiaries incorporated in the PRC participate in a government mandated, multiemployer, defined contribution plan,\npursuant to which certain retirement, medical, housing, and other welfare benefits are provided to employees. PRC labor laws require\nthe entities incorporated in the PRC to pay to the local labor bureau a monthly contribution calculated at a stated contribution rate\non the monthly basic compensation of qualified employees. The Company has no further commitments beyond its monthly contribution. Employee\nsocial benefits included in the accompanying consolidated statements of operations and comprehensive income (loss) amounted to $144,314\n$126,894 and $112,387 for the years ended June 30, 2026, 2025 and 2024, respectively.

F-14

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(w)\nGovernment subsidies

The\nCompany’s PRC based subsidiaries received government subsidies from certain local governments. The Company’s government subsidies\nare the subsidies that the local government has not specified its purpose for and are not tied to future trends or performance of the\nCompany, receipt of such subsidy income is not contingent upon any further actions or performance of the Company and the amounts do not\nhave to be refunded under any circumstances.

Government\nsubsidies are recognized as other income upon receipt as further performance by the Company is not required.

(x)\nShare-based compensation

The\nCompany has granted share-based awards in the form of share options to certain consultants and management. The Company applies ASC 718,\nCompensation—Stock Compensation (“ASC 718”), to account for all of its share-based payments. In accordance with ASC\n718, share-based awards granted are measured at the grant date fair value of the awards and recognized as expenses at grant date with\nno performance conditions and exercise prices. The fair value of shares is determined based on the market price of ordinary shares on\nthe grant date.

(y)\nWarrants

The\naccounting treatment of warrants issued is determined pursuant to the guidance provided by ASC 470, Debt (“ASC 470”), ASC\n480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”), as\napplicable. Each feature of freestanding financial instruments including, without limitation, any rights relating to subsequent dilutive\nissuances, equity sales, rights offerings, conversions, optional redemptions and dividends are assessed with determinations made regarding\nthe proper classification in the Company’s consolidated financial statements.

(z)\nIncome taxes

Current\nincome taxes are recorded in accordance with the regulations of the relevant tax jurisdiction. The Company accounts for income taxes\nunder the asset and liability method in accordance with ASC 740, Income Tax. Under this method, deferred tax assets and liabilities are\nrecognized for the tax consequences attributable to differences between carrying amounts of existing assets and liabilities in the consolidated\nfinancial statements and their respective tax basis, and operating loss carry-forwards. Deferred tax assets and liabilities are measured\nusing enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered\nor settled. The effect on deferred taxes of a change in tax rates is recognized in the consolidated statements of comprehensive income\n(loss) in the period of change. Valuation allowances are established when necessary to reduce the amount of deferred tax assets if it\nis considered more likely than not that amount of the deferred tax assets will not be realized.

Uncertain\ntax positions

The\nguidance on accounting for uncertainties in income taxes prescribes a more likely than not threshold for financial statement recognition\nand measurement of a tax position taken or expected to be taken in a tax return. Guidance was also provided on derecognition of income\ntax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties\nassociated with tax positions, accounting for income taxes in interim periods, and income tax disclosures. The Company recognizes interests\nand penalties, if any, under accrued expenses and other current liabilities on its consolidated balance sheets and under other expenses\nin its consolidated statements of comprehensive income (loss). The Company did not recognize any significant interest and penalties associated\nwith uncertain tax positions for the years ended June 30, 2026, 2025 and 2024. As of June 30, 2026 and 2025, the Company did not have\nany significant unrecognized uncertain tax positions.

F-15

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(aa)\nValue added tax (“VAT”)

The\nCompany is subject to VAT and related surcharges on revenues generated from sales of products and revenues earned for services. The Company\nrecords revenues net of VAT. Entities that are VAT general taxpayers are allowed to offset qualified input VAT, paid to suppliers against\ntheir output VAT liabilities. The applicable PRC VAT rates are 13% for selling products and 6% for service income for the years ended\nJune 30, 2026, 2025 and 2024.

(bb)\nComprehensive income (loss)

Comprehensive\nincome (loss) includes all changes in equity except those resulting from investments by owners and distributions to owners. Among other\ndisclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income (loss)\nare required to be reported in a financial statement that is presented with the same prominence as other financial statements. For the\nyears presented, comprehensive income (loss) includes net income (loss) and the foreign currency translation changes.

(cc)\nIncome(loss) per share

Class A\nand Class B ordinary shares have the same rights with regard to dividends and distributions upon liquidation of the Company.\nNet income/(loss) is allocated on a pro rata basis to the\nClass A and Class B ordinary shares to the extent that each class shares in income for the period. Basic earnings per\nshare for each class of ordinary shares is computed by dividing net income attributable to that class by the weighted average number\nof ordinary shares outstanding of that class for the period. Diluted earnings per share is calculated by dividing net income\nattributable to the Class A and Class B ordinary shares as adjusted for the effect of dilutive ordinary equivalent shares,\nif any, by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Diluted\nearnings per share is computed using the treasury stock method for warrants. Under the treasury stock method, incremental shares are calculated\nbased on assumed purchases of ordinary shares using the average market price during the outstanding period of issued warrants.\nOrdinary share equivalents are excluded from the computation of diluted per share if their effects would be\nanti-dilutive.

(dd)\nSegment

In\naccordance with ASC 280-10, Segment Reporting, the Company’s chief operating decision maker (“CODM”), identified as\nthe Company’s Chief Executive Officer, relies upon the consolidated results of operations as a whole when making decisions about\nallocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one\nreportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting.

The Company concluded that consolidated net income reported in the consolidated statements of comprehensive income\nis the measure of segment profitability, and consolidated total assets reported in the consolidated balance sheets is the measure of segment\nassets. The CODM refer to consolidated operating results and financial condition when addressing strategic and operational matters and\nallocating resources. Significant expense categories regularly provided to and reviewed by the CODM are those presented in the consolidated\nstatements of comprehensive income.

As\nthe Company’s long-lived assets are substantially all located in the PRC and all of the Company’s revenues and expenses are\nderived from within the PRC, no geographical segments are presented.

(ee)\nOperating lease

The\nCompany adopted the new lease accounting standard, ASC Topic 842, Leases (“ASC 842”). For all operating leases except for short-term leases, the Company recognized\noperating right-of-use assets and operating lease liabilities. Leases with an initial term of 12 months or less were short-term leases\nand not recognized as right-of-use assets and lease liabilities on the consolidated balance sheets.

Right-of-use\nassets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the\nCompany’s obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized\nat the commencement date based on the present value of the remaining future minimum lease payments. As the interest rate implicit in\nthe Company’s leases is not readily determinable. The incremental borrowing rate is determined at lease commencement or lease modification and represents the rate\nof interest the Company would have to pay to borrow on a collateralized basis over a similar term and an amount equal to the lease payments\nin a similar economic environment. The operating lease right-of-use assets also include lease payments made before\ncommencement and exclude lease incentives. The Company’s lease agreements did\nnot contain any material residual value guarantees or material restrictive covenants.

F-16

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(ff)\nCommitments and contingencies

In\nthe normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business,\nthat cover a wide range of matters. Liabilities for the contingencies are recorded when it is probable that a liability has been incurred\nand the amount of the liability can be reasonably estimated.

Certain\nconditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company, but\nwhich will only be resolved when one or more future events occur or fail to occur. The Company assesses these contingent liabilities,\nwhich inherently involves judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company\nor unasserted claims that may result in legal proceedings, the Company, in consultation with its legal counsel, evaluates the perceived\nmerits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be\nsought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount\nof the liability can be estimated, the estimated liability would be accrued in the consolidated financial statements. If the assessment\nindicates that a potentially material loss contingency is not probable, or is probable but cannot be estimated, the nature of the contingent\nliability, together with an estimate of the range of the reasonably possible loss, if determinable and material, would be disclosed.

Loss\ncontingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee\nwould be disclosed.

(gg)\nRecently adopted accounting standards pronouncements

In\nNovember 2023, FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires\npublic entities to disclose information about their reportable segments’ significant expenses and other segment items on an interim\nand annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07,\nas well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is\neffective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15,\n2024, with early adoption permitted. The Company adopted this standard since June 30, 2024, which did not have a material impact on the\nconsolidated financial statements but resulted in certain additional disclosures as required by the revised ASU.

In\nDecember 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities,\non an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid\ndisaggregated by jurisdiction. For public business entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2024.\nFor entities other than public business entities, ASU 2023-09 is effective for fiscal years beginning after December 15, 2025, with early\nadoption is permitted. The Company will adopt the ASU on July 1, 2026, in accordance with the delayed adoption practice described below.

(hh)\nRecently issued accounting standards pronouncements

The\nCompany is an “emerging growth company” (“EGC”) as defined in the Jumpstart Our Business Startups Act of 2012\n(the “JOBS Act”). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the\nenactment of the JOBS Act until such time as those standards apply to private companies.

F-17

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(hh)\nRecently issued accounting standards pronouncements – continued

In November 2024, the FASB issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation\nDisclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), and in January 2025, the FASB\nissued ASU No. 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying\nthe Effective Date (“ASU 2025-01”). ASU 2024-03 requires additional disclosure of the nature of expenses included\nin the income statement as well as disclosures about specific types of expenses included in the expense captions presented in the income\nstatement. ASU 2024-03, as clarified by ASU 2025-01, is effective for annual reporting periods beginning after December 15, 2026,\nand interim periods within annual reporting periods beginning after December 15, 2027. Both early adoption and retrospective application\nare permitted. The Company is currently evaluating the impact of adopting\nthe standard.

In\nJuly 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts\nReceivable and Contract Assets (“ASU 2025-05”). The amendments in ASU 2025-05 provide entities with a practical expedient\nto simplify the estimation of expected credit losses on current accounts receivable and current contract assets that arise from transactions\naccounted for under ASC 606, Revenue from Contracts with Customers (“ASC 606”) by allowing the assumption that current conditions\nas of the balance sheet date will not change during the remaining life of the asset. ASU 2025-05 is effective for the Company for its\nannual reporting periods beginning July 1, 2026, and interim reporting periods within those annual reporting periods, with early adoption\npermitted. The Company is currently evaluating the impact ASU 2025-05 will have on its future consolidated financial statements.

In\nDecember 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities\n(“ASU 2025-10”). The amendments establish the accounting for a government grant received by a business entity, including\nguidance for (1) a grant related to an asset and (2) a grant related to income. ASU 2025-10 is effective for annual reporting periods\nbeginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted.\nThe Company is currently evaluating the impact of adopting ASU 2025-10.

In\nDecember 2025, the FASB issued ASU 2025-12, Codification Improvements (“ASU 2025-12”). ASU 2025-12 addresses suggestions\nreceived from stakeholders regarding the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The\nupdate represents changes to the Codification that clarify, correct errors in or make other improvements to a variety of topics that\nare intended to make it easier to understand and apply. ASU 2025-12 is effective for fiscal years beginning after December 15, 2026 and\ninterim periods within those fiscal years. Entities are required to apply the amendments to ASC 260 retrospectively. All other amendments\nmay be applied prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of adopting\nASU 2025-12.

Other\naccounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material\nimpact on the consolidated financial statements upon adoption. The Company does not discuss recent standards that are not anticipated\nto have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows or disclosures.

F-18

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n3 - STABLECOINS

The\nfollowing table provides a roll-forward of stablecoins measured at fair value on a recurring basis for the year ended June 30, 2026:

SCHEDULE\nOF STABLE COINS OF FAIR VALUE MEASURED

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Quantity			Fair\n Value
Balance as of June 30, 2025					$	-
Addition of USDT		3,152,200				3,152,200
Disposal of USDT		(3,150,049	)			(3,150,049	)
Balance as of June 30, 2026		2,151			$	2,151

The\nCompany uses the first-in, first-out method to track the cost basis of USDT. The cost basis of USDT acquired equals the consideration\ntransferred at the date of acquisition. The disposal gain or loss is recognized as the difference between disposal proceeds and the cost\nbasis of the USDT disposed. As of June 30, 2026, the cost of stablecoins held by the Company was $2,151.\nFor nature of the movements, refer\nto Notes 4, 7 and 17.

NOTE\n4 - ACCOUNTS RECEIVABLE, NET

Accounts\nreceivable, net were summarized as follows:

SCHEDULE OF ACCOUNTS RECEIVABLE

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025
	As\n of June 30,
	2026			2025
Accounts receivable	$	2,892,790			$	2,032,306
Less: provision for credit\n losses		(58,416	)			(43,521	)
Accounts\n receivable, net	$	2,834,374			$	1,988,785

The\nchanges in the provision for credit losses were as follows:

SCHEDULE OF PROVISION FOR CREDIT LOSSES

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025			2024
	For\n the Years Ended June 30,
	2026		2025			2024
Balance at beginning of the year	$	43,521		$	93,218		$	97,526
Additions (reversal)		12,095			445,389			(4,118	)
Reduction due to sale of accounts receivable		-			(496,075	)		-
Foreign exchange effect		2,800			989			(190	)
Balance\n at the end of the year	$	58,416		$	43,521		$	93,218

For\nthe year ended June 30, 2026, the Company recognized credit loss of $12,095. For the year ended June 30, 2025, the Company recognized\ncredit loss of $445,389 and reversed credit loss of $496,075 from sale of accounts receivable. For the year ended June 30, 2024, the\nCompany reversed credit loss of $4,118.

In\n2025, the Company sold accounts receivable which have an aggregate gross amount of $2.6\nmillion and provision for credit losses totaling $0.5\nmillion to a third party at consideration of $1.0\nmillion. As of June 30, 2026, the Company has already fully received the proceeds in stablecoins of USDT of $0.9\nmillion and cash of $0.1 million. Loss incurred on the sale was $1.1\nmillion and was reported as loss from sale of accounts receivable in the consolidated statements of operations and comprehensive\nincome (loss) for the year ended June 30, 2025.

F-19

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n5 - INVENTORIES

Inventories\nwere summarized as follows:

SCHEDULE OF INVENTORIES

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025
	As\n of June 30,
	2026		2025
Parts and materials	$	17,253,847		$	13,820,398
Goods in transit		-			1,765,424
Finished goods		1,734,863			1,432,395
Inventories	$	18,988,710		$	17,018,217

For\nthe years ended June 30, 2026, 2025 and 2024, the Company did not recognize any impairment loss for slow-moving inventory with cost lower\nthan net realizable value.

NOTE\n6 – ADVANCES TO SUPPLIERS

The\nadvances to suppliers primarily consist of prepayments for the inventory purchases. Advances to suppliers as of June 30, 2026 of which\n$4.1 million was received as inventory by September 2026.

NOTE\n7 - PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Prepayments\nand other current assets, net consisted of the following:

SCHEDULE OF PREPAYMENTS AND OTHER CURRENT ASSETS

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025
	As\n of June 30,
	2026			2025
Loan to third\n parties ⁽ⁱ⁾	$	2,906,068			$	988,581
Prepaid expenses		368				3,505
Sale of accounts receivable\n ⁽ⁱⁱ⁾		-				865,000
Sale of equipment\n ⁽ⁱⁱⁱ⁾		-				550,000
Escrow fund ^(iv)		-				400,000
Deductible input VAT		-				50,433
Others		2,893				1,813
Total		2,909,329				2,859,332
Less: allowances for credit\n losses		(221,073	)			(75,490	)
Prepayment\n and other current assets, net	$	2,688,256			$	2,783,842

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

(i)	(1)\n In August 2022, the Company entered into an interest-free loan agreement with third party A for its daily operations, under which\n the Company provided loan principal of RMB350,000\n (approximately $51,584).\n The loan matured on July\n 31, 2023 and subsequently overdue. Since the Company assessed recoverability of the loan was extremely low, the Company\n accrued full amount of allowance of the loan in the year ended June 30, 2025. \n \n \n\n (2) In May 2025, the Company entered\ninto an interest-free loan agreement with third party E for its daily operations, under which the Company provided loan principal amount\nof RMB2,000,000 (approximately $279,189). The loan originally matured on May 15, 2026, and was fully repaid in April 2026. \n \n (3)\n In December 2024, the Company entered into an interest-free loan agreement with third party B for its daily operations, under\n which the Company provided loan principal of RMB1,150,000\n (approximately $169,489).\n The loan matured on November\n 30, 2025 and subsequently overdue. Since the Company assessed recoverability of the loan was extremely low, the Company\n accrued full amount of allowance of the loan in the year ended June 30, 2026. \n \n (4)\n In March 2025, the Company provided a loan of $500,000 to third party C, which was due in February 2026. In January, 2026, the\n Company entered into a new loan agreement with third party D, an entity under common control with third party C, for a principal\n amount of $2,684,993. Under the new loan agreement, the Company disbursed $2,284,993\n in stablecoins of USDT, with a fair value of $2,284,993\n at the date of disbursement, and transferred the remaining $400,000 of the loan principal from third party C to third party D.\n Following this transfer, the outstanding principal owned by third party C was reduced to $100,000, which was subsequently repaid in\n February 2026. The loan to third party D bears interest at 4.50%\n per annum and matures on December\n 31, 2026. Third party K, an entity under common control with third party D, provided an unlimited guarantee for the repayment\nof the loan. The loan was used to fund third party D’s research and development activities, and all related outputs from\nthose activities are agreed to be controlled by the target company described below. \n \n The\n agreement includes an embedded conversion feature granting the Company the right to convert the loan’s outstanding principal\n and accrued interest into ordinary shares of a joint venture (the “the target company”) plan to be controlled by the\n Company. The Company could execute its conversion right when the milestone as agreed with third party D is achieved. Third party D\n agreed to contribute all its research and development outputs to the target company and build up solid research foundations and\n technical expertise to support daily operation and business of the target company. If third party D fails to deliver all required\n research and development outputs to the target company and fulfill its obligation under the agreement, the conversion right will\n cease and the Company shall have the right to demand repayment of the outstanding principal and accrued interest under the loan. \n \n \n On\nSeptember 2, 2026, the target company STAK Vision Energy Inc (“STAK Vision Energy”) was incorporated. The Company executed\nits conversion right and the loan principal and interests were converted into consideration of 60% shares of STAK Vision Energy. \n \n \n\n (5) For the year ended June 30, 2026,\nthe Company provided interest-free loans to third party I in the aggregate amount of RMB4.56\nmillion (or $0.65\nmillion), of which RMB2.51\nmillion (or $0.36\nmillion) had been recovered in cash. In June 2026, the Company entered into an offset agreement with third party I, pursuant to which\nthe remained outstanding loan balance of RMB 2.05 million (or\n$0.29 million) was offset against accounts payables to third party I. As a result, the loans due from third party I were received and settled in full as of June 30, 2026. \n\n\n\n (6) During\nfiscal year 2026, the Company provided several interest-free loans to the third party J for its daily operations, with principal amounts\nof RMB8.5 million (approximately $1.2 million). The loans were fully repaid during the year ended June 30, 2026. \n \n The\n Company recognized the loan amount as loan receivable under ASC 310 in consolidated balance sheets and accrued interest annually in\n consolidated statements of operations and comprehensive income (loss). During the years ended June 30, 2026 and 2025, the credit\n losses recorded in the company’s net income (loss) were $137,304\n and $60,406,\n respectively. For the year ended June 30, 2024, the Company reversed credit loss of $13,390. \n

(ii)	On\n June 10, 2025, the Company entered into an agreement with third party F to transfer all rights to the accounts receivable with total\n gross amount of $2.6\n million and allowance of credit losses of $0.5\n million in exchange for consideration of $1.0\n million. As of June 30, 2025, the Company received $135,000\n of the consideration. During the year ended June 30, 2026, the Company collected the remaining consideration in stablecoins of USDT,\n with a fair value of $865,000\n at the settlement date.

(iii)	In\n May 2025, the Company entered into an agreement with third party G to sale part of its equipment with total\n consideration of $0.6 million. These equipment have gross amounts and accumulated depreciation of $3.0 million and $0.9\n million, respectively. As of June 30, 2026, the Company has received full amount of the consideration in cash.

(iv)	On\n Feb 25, 2025, the Company entered into a certain escrow agreement with Nason, Yeager, Gerson, Harris & Fumero, P.A. who act as\n the escrow agent pursuant to which the Company agreed to deposit the aggregated amount of $400,000 upon closing of Initial public\n Offering. The escrow fund has been released on February 25, 2026.

F-20

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n8 - EQUIPMENT, NET

Equipment, net consisted of the following:

SCHEDULE OF PROPERTY AND EQUIPMENT

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025
	As\n of June 30,
	2026			2025
Machinery and equipment	$	393,362			$	372,578
Transportation equipment		77,145				73,069
Office equipment		23,534				22,290
Total		494,041				467,937
Less: accumulated depreciation		(236,500	)			(174,914	)
Equipment, net	$	257,541			$	293,023

Depreciation\nexpenses for the years ended June 30, 2026, 2025 and 2024 were $50,280, $284,125 and $328,563, respectively. The Company did not recognize\nany impairment loss for the years ended June 30, 2026, 2025 and 2024.

In\nMay 2025, the Company sold a batch of equipment to a third party that could not be relocated due to the relocation of its\nproduction facility. These equipment have gross amount and accumulated depreciation of $3.0 million and $0.9 million, respectively.\nFor the year ended June 30, 2025, the Company has derecognized the carrying amount of the aforementioned assets of $2.1 million in exchange\nfor cash consideration of $0.6 million, which resulting in a $1.5 million loss from sale of equipment in the consolidated\nstatements of operations and comprehensive income (loss).

NOTE\n9 – INTANGIBLE ASSETS, NET

Intangible\nassets, net consisted of the following:

SCHEDULE OF INTANGIBLE ASSETS

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025
	As\n of June 30,
	2026			2025
Patents	$	3,095,165			$	2,076,632
Less: accumulated amortization		(209,117	)			(53,714	)
Intangible\n assets, net	$	2,886,048			$	2,022,918

On\nMay 29, 2026, the company acquired new fuel cell preparation systems and methods from an third party supplier to support the production\nof vehicle and equipment. These intangible assets were purchased with a total consideration of $0.9 million and were amortized on a straight-line\nbasis.

On\nJan 24, 2025, the Company acquired certain new energy and intelligent technologies that are presently integrated into production of oilfield\nvehicles and equipment. These intangible assets were purchased with a total consideration of $2.0 million and were amortized on a straight-line\nbasis.

Amortization\nexpense was $147,855, $45,341 and $5,042 for the years ended June 30, 2026, 2025 and 2024, respectively. Future estimated amortization\nexpenses of patents are as follows:

SCHEDULE OF FUTURE ESTIMATED AMORTIZATION EXPENSE

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

For\n the years ended June 30,	Amount
2027	$	204,092
2028		204,092
2029		204,092
2030		204,092
2031		204,092
Thereafter		1,865,588
Total	$	2,886,048

The\nCompany has pledged its intellectual property, with original valued at RMB510,000\n(approximately $75,165),\nas collateral for the loan from July 30, 2024 to July 30, 2027. Refer to Note 11 for details.

NOTE\n10 - OTHER NON-CURRENT ASSETS

As\nof June 30, 2026, other non-current assets consisted of long-term prepayments for joint research and development facility usage fees\nand staff costs. The expense occurred are recognized based on actual amounts invoiced by the customer over contractual\nperiod.

F-21

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares per share data)

NOTE\n11 - SHORT-TERM BORROWINGS

Short-term\nborrowings consisted of the following:

SCHEDULE OF SHORT TERM BORROWINGS

	Annual\n Interest			Maturity		Guarantee		As\n of June 30,
	Rate			Date		Information		2026			2025
Bank\n of Nanjing ⁽ⁱ⁾		3.00	%		August 5,\n 2026		YLAN and\n Mr. Chuanbo Jiang		$	2,409,691		$	-
Bank of Communications		2.80	%		April 15, 2027		Mr. Chuanbo Jiang			1,473,818			-
Agricultural Bank of China		2.70	%		January 22, 2027		Mr. Chuanbo Jiang and\n Jiangsu Changzhou Hi-Tech Credit Financing Guarantee Co., Ltd.			1,473,818			-
Agricultural Bank of China		2.75	%		November 6, 2026		YLAN and Mr. Chuanbo\n Jiang			1,031,672			-
Bank of Communications		2.70	%		January 29, 2027		Mr. Chuanbo Jiang			884,291			-
Industrial and Commercial\n Bank of China		3.00	%		December 2, 2026		No guarantee			736,909			-
Bank of China Limited		2.55	%		May 28, 2027		YLAN and Mr. Chuanbo Jiang and Jiangsu Science and Technology Financing Guarantee Co., Ltd.			736,909			-
China\n Construction Bank ⁽ⁱⁱ⁾		3.95	%		July 29, 2026		Intellectual property			729,540			-
Bank of Suzhou		3.00	%		March 23, 2027		Zhongshan Co and Mr.\n Chuanbo Jiang			589,527			-
Bank of Nanjing		3.30	%		September 11, 2026		Jiangsu Science and\n Technology Financing Guarantee Co., Ltd. and Mr. Chuanbo Jiang			537,943			-
Agricultural Bank of China		2.75	%		January 3, 2027		YLAN and Mr. Chuanbo\n Jiang			442,145			-
Bank of Nanjing		3.20	%		March 25, 2026		Jiangsu Changzhou High-tech\n Credit Financing Guarantee Co., Ltd. & Mr. Chuanbo Jiang			-			1,393,155
Bank of Communications		2.90	%		March 23, 2026		Jiangsu Changzhou High-tech\n Credit Financing Guarantee Co., Ltd. & Mr. Chuanbo Jiang			-			837,568
Bank of Communications		3.20	%		June 5, 2026		YLAN & Mr. Chuanbo\n Jiang			-			837,568
China Construction Bank		3.95	%		July 29, 2025		Intellectual property			-			697,973
Industrial and Commercial Bank of China		3.10	%		December 10, 2025		Changzhou Zhongshan\n Intelligent Equipment Co., Ltd. & Mr. Chuanbo Jiang			-			697,973
Bank of Nanjing		3.80	%		September 12, 2025		Jiangsu Jiangnan Technology\n Financing Guarantee Co., Ltd. & Mr. Chuanbo Jiang			-			614,216
Bank\n of Suzhou		From\n 3.30% to 3.70	%		From\n January 6, 2026 to May 8, 2026		Jiangsu\n Changzhou High-tech Credit Financing Guarantee Co., Ltd. & Mr. Chuanbo Jiang			-			558,378
Total									$	11,046,263		$	5,636,831

\n\n

(i)

On\n November 10, 2025, The Company has entered into a non-recourse supplier finance obligations agreement with the Bank of Nanjing Co.,\n Ltd Changzhou Branch (the “BON Changzhou”), pursuant to which BON Changzhou granted the Company a total credit line of\n RMB16.4 million (approximately $2.4 million), maturing on November\n 9, 2026. Under the arrangement, the bank settles the Company’s supplier invoices early to extinguish the underlying\n accounts payable and the Company should repay to bank based on the maturity dates of the respective validated invoices.\n As of June 30, 2026, the Company has fully utilized the credit line of RMB16.4 million (approximately $2.4 million).\n Subsequently in August 2026, the Company fully repaid this loan of $2.4\n million. As of June 30, 2026, the balance due to the Bank under this arrangement was recorded in short-term borrowings.

\n\n

(ii)

The principal of the borrowing is RMB4,950,000 (approximately $729,540). The Company has pledged its intellectual property, with original valued at RMB510,000 (approximately $75,165), as collateral for the borrowing from July 30, 2024 to July 30, 2027. Subsequently in July 2026, the Company repaid this loan.

The\nchanges in the supplier finance obligation was as follows:

SCHEDULE OF CHANGES IN THE SUPPLIER FINANCE OBLIGATION

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n \n \n

	For\n the year ended \n June\n 30, 2026
Confirmed obligations outstanding at beginning\n of the year	$	-
Obligations confirmed during the\n year		2,337,718
Confirmed obligations\n paid during the year		-
Foreign currency translation difference		71,973
Confirmed\n obligations outstanding at the end of the year	$	2,409,691

\n\n

(ii)

The principal of\nthe borrowing is RMB4,950,000 (approximately $729,540). The Company has pledged its intellectual property, with original value at RMB510,000 (approximately $75,165), as\ncollateral for the borrowing from July 30, 2024 to July 30,\n2027. Subsequently in July 2026, the Company repaid this loan.

Interest\nexpenses for the years ended June 30, 2026, 2025 and 2024 were $253,715, $183,156 and $120,602, respectively.

F-22

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n12 - ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued\nexpenses and other current liabilities consisted of the following:

SCHEDULE OF ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025
	As\n of June 30,
	2026		2025
Loan from third\n parties ⁽ⁱ⁾	$	2,476,014		$	-
VAT payable		556,192			443,833
Payroll payable		492,354			355,182
Accrued expenses		1,490			274,732
Others		3,907			42,267
Total	$	3,529,957		$	1,116,014

\n \n \n \n

(i)	In\n April and May 2026, the Company entered into interest-free loan agreements with third parties, respectively. Each loan agreement\n had a loan amount of $1,179,055 (RMB8,000,000) and $1,296,960 (RMB8,800,000), with maturity dates in October and November 2026, respectively.

NOTE\n13 - LONG-TERM BORROWINGS

Long-term\nborrowings consisted of the following:

SCHEDULE OF LONG TERM BORROWINGS

	Annual\n Interest			Maturity		Guarantee		As\n of June 30,
	Rate			Date		Information		2026			2025
Bank of Jiangsu ⁽ⁱ⁾		2.60	%		June 30, 2027		Mr. Chuanbo Jiang		$	294,764		$	-
Bank of China\n Limited ⁽ⁱⁱ⁾		2.40	%		From November\n 21, 2026 to May 21, 2027		Zhongshan\n Co and Mr. Chuanbo Jiang			14,738			-
Bank\n of China Limited ⁽ⁱⁱⁱ⁾		2.55	%		From\n November 21, 2026 to May 21, 2027		YLAN and Mr. Chuanbo Jiang and Jiangsu Science and Technology Financing Guarantee Co., Ltd.			14,738			-
Total\n current portion									$	324,240		$	-
Bank of China Limited\n ⁽ⁱⁱ⁾		2.40	%		From November 21, 2027\n to June 29, 2028		Zhongshan Co and Mr.\n Chuanbo Jiang		$	722,171		$	-
Bank of China Limited\n ⁽ⁱⁱⁱ⁾		2.55	%		From November 21, 2027\n to May 28, 2029		YLAN and Mr. Chuanbo\n Jiang and Jiangsu Science and Technology Financing Guarantee Co., Ltd.			722,171			-
Bank\n of Jiangsu ⁽ⁱ⁾		From\n 2.60% to 3.75	%		July\n 1, 2027		Mr. Chuanbo Jiang			147,381			418,784
Total\n non-current portion									$	1,591,723		$	418,784
Total									$	1,915,963		$	418,784

\n \n \n \n \n \n \n \n \n \n

(i)	In\n July 2025, the Company was granted the one-year credit facility by Bank of Jiangsu in the amount of RMB3.0 million (approximately\n $418,784) and fully drew the amount. The credit facility was guaranteed by Mr. Chuanbo Jiang. The loan originally matured in July\n 2026 and was renewed on its original maturity date, extending the maturity dates to June 30, 2027 and July 1, 2027. As of June 30,\n 2026, no repayments had been made under the loan agreements. The outstanding balance of the current portion was RMB2.0 million (approximately\n $294,764) due on June 30, 2027 and the non-current portion was RMB1.0 million (approximately $147,381) due on July 1, 2027.
(ii)	On\n May 29, 2026, the Company was granted a two-year credit facility by Bank of China with amount of RMB5.0 million (approximately $736,909)\n and fully drew the amount. The credit facility was guaranteed by Zhongshan Co and Mr. Chuanbo Jiang. As of June 30, 2026, no repayments\n had been made under this loan agreement. The outstanding borrowings are RMB100,000 (approximately $14,738) due on May 21, 2027 and\n RMB4.9 million (approximately $722,171) due on June 29, 2028.
(iii)	On\n May 29, 2026, the Company was granted a three-year credit facility by Bank of China with amount of RMB5.0 million (approximately\n $736,909) and fully drew the amount. The credit facility was guaranteed by YLAN, Mr. Chuanbo Jiang and Jiangsu Science and Technology\n Financing Guarantee Co., Ltd. As of June 30, 2026, no repayments had been made under this loan agreement. The outstanding borrowings\n are RMB100,000 (approximately $14,738) due on May 21, 2027 and RMB4.9 million (approximately $722,171) due on May 28, 2029.

The\nrepayment schedule for the principal of the Company’s long-term borrowings is as follows:

SCHEDULE\nOF REPAYMENT OF LONG TERM BORROWINGS

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

For the fiscal years ended June 30,	Amount
2027	$	324,240
2028		884,290
2029		707,433
Total	$	1,915,963

F-23

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n14 - SHARE-BASED COMPENSATION

On\nMarch 21, 2025, the Board of Directors of the Company announced the 2025 Share Incentive Plan (“the Plan”). On April 22,\n2025, an aggregate of 1,800,000\noptions was granted to certain consultants and management (the “Participants”) under the Plan. These options were granted\nwith no vesting conditions and exercise prices required. The fair value of options is based on the closing price of the underlying\nordinary shares on grant date.

The\nfollowing table summarized the Company’s share-based compensation activities for the year ended June 30, 2025.

SCHEDULE OF SHARE OPTION COMPENSATION ACTIVITIES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Number\n of options			Weighted Average\n Grant Date\n Fair Value
				USD
Outstanding as of July 1, 2024		-			$	-
Granted		1,800,000				2.17
Forfeited		-				-
Vested and exercised		(1,800,000	)			2.17
Outstanding\n as of June 30, 2025		-			$	-

Total\nshare-based compensation expenses for these options for the year ended June 30, 2025 were $3,906,000, which was reported as general and\nadministrative expenses in the consolidated statements of operations and comprehensive income (loss).

There was no share based compensation\nduring the year ended June 30, 2026.

NOTE\n15 - TAXATION

Cayman\nIslands

STAK\nis incorporated in the Cayman Islands. Under the current laws of Cayman Islands, STAK is not subject to income or capital gains taxes.\nIn addition, dividend payments are not subject to withholding tax in Cayman Islands.

Hong\nKong

On\nMarch 21, 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No. 7) Bill 2017 (the “Bill”) which\nintroduces the two-tiered profits tax rates regime. The Bill was signed into law on March 28, 2018 and was announced on the following\nday. Under the two-tiered profits tax rates regime, the first HK$ 2 million of profits of the qualifying group entity will be taxed at\n8.25%, and profits above HK$ 2 million will be taxed at 16.5%. The Company’s Hong Kong subsidiary did not have assessable profits\nthat were derived in Hong Kong for the years ended June 30, 2026, 2025 and 2024. Therefore, no Hong Kong profit tax has been provided\nfor the years ended June 30, 2026, 2025 and 2024.

PRC

The\nCompany’s PRC subsidiaries are subject to the PRC Enterprise Income Tax Law (“EIT Law”) and are taxed at the statutory\nincome tax rate of 25%, unless otherwise specified.

F-24

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and share data)

NOTE\n15 – TAXATION (CONTINUED)

The\nfollowing tables set forth the component of income (loss) before income tax of the Company for the years ended June 30, 2026, 2025 and\n2024:

SCHEDULE OF COMPONENT OF INCOME (LOSS) BEFORE INCOME TAX

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025			2024
	For\n the Years Ended June 30,
	2026			2025			2024
Income (loss) before income\n tax
PRC	$	1,834,445			$	(685,469	)	$	2,718,254
Cayman		(720,686	)			(5,287,741	)		(4,329	)
Hong Kong		(196,706	)			(9,432	)		4,038
Total	$	917,053			$	(5,982,642	)	$	2,717,963

The\ncomponents of the income tax provision consisted of the following:

SCHEDULE OF INCOME TAX PROVISION

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025			2024
	For\n the Years Ended June 30,
	2026		2025			2024
Current income tax expenses	$	176,193		$	-		$	619,064
Deferred income tax expenses\n (benefits)		315,319			(269,962	)		(342,875	)
Total	$	491,512		$	(269,962	)	$	276,189

As\nthe main business operations were concentrated in China, PRC statutory income tax rate was applied. The reconciliations of the PRC statutory\nincome tax rate and the Company’s effective income tax rate were as follows:

SCHEDULE OF EFFECTIVE INCOME TAX RATE PERCENTAGE

	USD		%		USD	%		USD			%
	For\n the Years Ended June 30,
	2026		2025		2024
	USD		%		USD	%		USD			%
PRC statutory income tax rate		229,263		25.0	%	(1,495,660	)		25.0	%		679,491		25.0	%
PRC statutory income tax rate, percentage		229,263		25.0	%	(1,495,660	)		25.0	%		679,491		25.0	%
Foreign Tax Effects
Statutory tax rate difference between Cayman\n and PRC		180,172		19.6	%	1,321,935			(22.1	)%		1,082		0.0	%
Statutory tax rate difference between Cayman\n and PRC, percentage		180,172		19.6	%	1,321,935			(22.1	)%		1,082		0.0	%
Statutory tax rate difference between Hong\n Kong and PRC		16,721		1.9	%	802			0.0	%		(344	)	(0.0	)%
Statutory tax rate difference between Hong\n Kong and PRC, percentage		16,721		1.9	%	802			0.0	%		(344	)	(0.0	)%
Effect of research and development deduction		-		-		(108,471	)		1.8	%		(419,364	)	(15.4	)%
Effect of research and development deduction, percentage		-		-		(108,471	)		1.8	%		(419,364	)	(15.4	)%
Effect of non-deductible expenses		11,998		1.3	%	11,432			(0.2	)%		15,324		0.6	%
Effect of non-deductible expenses, percentage		11,998		1.3	%	11,432			(0.2	)%		15,324		0.6	%
Effect of valuation allowance		53,358		5.8	%	-			-			-		-
Effect of valuation\n allowance, percentage		53,358		5.8	%	-			-			-		-
Effective\n income tax rate		491,512		53.6	%	(269,962	)		4.5	%		276,189		10.2	%
Effective\n income tax rate, percentage		491,512		53.6	%	(269,962	)		4.5	%		276,189		10.2	%

As\nof June 30, 2026 and 2025, the significant components of the deferred tax assets and deferred tax liabilities were summarized below:

SCHEDULE OF DEFERRED TAX ASSETS AND DEFERRED TAX LIABILITIES

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025
	As\n of June 30,
	2026			2025
Deferred tax assets
Tax losses carried forward	$	433,015			$	710,701
Allowance for credit losses		69,872				28,139
Accrued expenses		60,415				47,118
Lease liabilities		-				18,383
Valuation allowance		(53,936	)			-
Total\n deferred tax assets	$	509,366			$	804,341

Deferred tax liability
Right-of-use assets	$	(4,916	)		$	(18,641	)
Total\n deferred tax liability	$	(4,916	)		$	(18,641	)
Deferred\n tax assets, net	$	504,450			$	785,700

F-25

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n15 - TAXATION (CONTINUED)

The\ncurrent PRC EIT Law imposes a 10% withholding income tax for dividends distributed by foreign invested enterprises to their immediate\nholding companies outside the PRC. A lower withholding tax rate will be applied if there is a tax treaty arrangement between the PRC\nand the jurisdiction of the foreign holding company. Distributions to holding companies in Hong Kong that satisfy certain requirements\nspecified by the PRC tax authorities, for example, will be subject to a 5% withholding tax rate.

As\nof June 30, 2026 and 2025, the Company had not recorded any withholding tax on the retained earnings of its foreign invested enterprises\nin the PRC, since the Company intends to reinvest its earnings to further expand its business in the PRC, and its foreign invested enterprises\ndo not intend to declare dividends to their immediate foreign holding companies.

For\nentities incorporated in Hong Kong, net loss can be carried forward indefinitely; for entities incorporated in PRC mainland, net loss\ncan be carried forward for five years. As of June 30, 2026 and 2025, the Company had net operating loss carryforwards of approximately\n$1,593,727 and $2,834,297 for entities incorporated in PRC mainland, respectively. As of June 30, 2026, the net operating loss carryforwards\nfrom PRC will expire, if unused, from 2028 to 2031.

Uncertain\ntax positions

The\nCompany evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical\nmerits, and measures the unrecognized benefits associated with the tax positions. As of June 30, 2026 and 2025, the Company did not have\nany significant unrecognized uncertain tax positions or any unrecognized liabilities, interest or penalties associated with unrecognized\ntax benefits. The Company does not believe that its uncertain tax benefits position will materially change over the next twelve months.

F-26

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares per share data)

NOTE\n16 - LEASES

The\nCompany leases equipment and facility space under non-cancellable operating leases. The Company considers those renewal or termination\noptions that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets\nand lease liabilities. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial\nterm of 12 months or less are not recorded on the balance sheets.

The\nCompany determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification\ncriteria of a finance or operating lease. During the three years period ended June 30, 2026, all of the Company’s\nleases were all operating leases.

A\nsummary of lease cost recognized in the Company’s consolidated statements of operations and comprehensive income (loss) was as\nfollows:

SCHEDULE OF LEASE COST

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025			2024
	For\n the Years Ended June 30,
	2026		2025			2024
Operating leases cost excluding\n short-term rental expense	$	57,293		$	36,150		$	31,725
Short-term rental expense		66,664			66,294			2,284
Total	$	123,957		$	102,444		$	34,009

Lease payments\nfor the years ended June 30, 2026, 2025 and 2024 were $174,195, $39,629 and $81,061, respectively.

A\nsummary of supplemental information related to operating leases was as follows:

SCHEDULE OF RELATED TO OPERATING LEASES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	As\n of June 30,
	2026			2025
Weighted average remaining lease\n term (year)		0.50			1.50
Weighted average discount rate		3.60	%		3.60	%

NOTE\n17 - EQUITY

Ordinary\nshares

STAK\nwas established under the laws of Cayman Islands on May 9, 2023. The authorized number of Ordinary Shares was originally 50,000 with\npar value of $1 per share. The Company issued 50,000 shares to the shareholders at par value of $1 per share in May 2023.

On\nMay 20, 2024, the Company effected a one thousand-for-one subdivision of shares to shareholders, which increased the total number of\nauthorized and issued ordinary shares of 50,000 to 50,000,000 and decreased the par value of ordinary shares from $1 to $0.001. Then\nthe shareholders surrendered a pro-rata number of ordinary shares of 40,000,000 to the Company for no consideration and thereafter cancelled.\nFollowing the surrender, the issued and outstanding ordinary shares were 10,000,000 of par value of $0.001 per share.

F-27

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n17 – EQUITY (CONTINUED)

On\nFebruary 27, 2025 and March 5, 2025, the Company closed its initial public offering (“IPO”) and the sale of the over-allotment\nshares. The Company issued and sold 1,410,349 Ordinary Shares, including 160,349 Ordinary Shares of the over-allotment shares, at $4.00\nper share, for net proceeds of approximately $4.2 million, after (i) deducting underwriting discounts and other related expenses and\n(ii) reimbursements made to PRC subsidiaries for expenses advanced from them in connection with the Company’s IPO.

On\nFebruary 25, 2025, the Company issued warrant to underwriter to purchase such number of ordinary shares equals to 5% of the total amount\nof the Company’s ordinary shares and over-allotment shares issued in IPO, at $4.80\nper share. The warrant shall be exercisable within 5 years\nfrom the closing date of the Company’s IPO. As of the date of this annual report, 70,517\nordinary shares were reserved and no shares were exercised.

On\nMay 10, 2025, the Company issued and granted 1,800,000 ordinary shares through share incentive plan. Refer to Note 14 for details.

On\nJune 5, 2025, the Company’s authorized share capital was increased (the “Increase of Authorized Share Capital”),\nand re-designated and re-classified from $50,000 divided\ninto 50,000,000 ordinary\nshares of par value $0.001 each\nto $100,000 divided\ninto (a) 75,000,000 Class\nA Ordinary Shares of par value $0.001 each,\nwith each Class A Ordinary Share entitled to one vote, and (b) 25,000,000 Class\nB Ordinary Shares of par value $0.001 each,\nwith each Class B Ordinary Share entitled to 30 votes (the “Share Capital Reorganization”); and (ii) the Company\nrepurchased 7,700,000 and 1,500,000 Class\nA Ordinary Shares from two shareholders, Lanying Capital Limited and MT. Yang Holding Ltd, respectively, and issued a corresponding\nnumber of Class B Ordinary Shares to such shareholders (the “Share Repurchase and Issue,” and together with the Increase\nof Authorized Share Capital and the Share Capital Reorganization, the “Dual Class Restructuring”). Class A and Class B ordinary shares have the same rights with regard to dividends and distributions upon\nliquidation of the Company. The Company’s\ndual class share structure with different voting rights, each Class A Ordinary Share shall be entitled to 1 vote and each Class B\nOrdinary Share shall be entitled to 30 votes on all matters subject to vote at general meetings of the Company.

On\nJanuary 8, 2026, the Company closed a registered direct offering of 6,000,000\nunits (each a “Unit,” and collectively, the “Units”) of purchase price of US$0.38\nper Unit, with each Unit consisting of (i) one Class A ordinary share, $0.001\npar value per share (each a “Class A Ordinary Share,” and collectively, the “Class A Ordinary Shares”), and\n(ii) one and one-half warrants, each to purchase one Class A Ordinary Share (each a “Warrant,” and collectively, the\n“Warrants”), at the exercise price of $0.46\nper share, directly to certain investors. The Company offers the Units at an assumed public offering price of $0.38\nper share and the accompanying warrants. The warrant have a three-year term and can only be exercised after January 8, 2027\nwith exercise price of 120%\n(US$0.46\nper share) of the Unit offering price. Both the shares and warrants were classified\nas equity instruments and the related proceeds were recorded in additional-paid in capital in fair value as of June 30, 2026.

As\nof June 30, 2026, the Company received net proceeds of approximately US$2,287,200\nin stablecoins of USDT from this offering, after deducting offering expenses payable by the Company and no warrants were exercised.

The\nsummary of warrant activities for the years ended June 30, 2026 and 2025 were as follows, no activities existed for the years ended June\n30, 2024.

SCHEDULE OF WARRANT ACTIVITIES

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	Ordinary Shares Number Outstanding		Weighted Average Exercise Price			Remained Contractual Life in Years
Warrants Outstanding as of June 30, 2024		-		$	-		-
Warrants Exercisable as of June 30, 2024		-			-		-
Warrant Granted		70,517		$	4.80		5.00
Warrant Exercised		-			-		-
Warrant Expired		-			-		-
Warrants Outstanding as of June 30, 2025		70,517		$	4.80		4.66
Warrants Exercisable as of June 30, 2025		70,517		$	4.80		4.66
Warrant Granted		9,000,000			0.46		3.00
Warrant Exercised		-			-		-
Warrant Expired		-			-		-
Warrants Outstanding as of June 30, 2026		9,070,517		$	0.49		2.54
Warrants Exercisable as of June 30, 2026		70,517		$	4.80		3.66

F-28

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n17 – EQUITY (CONTINUED)

Statutory\nreserve and restricted net assets

A\nsignificant portion of the Company’s operations are conducted through its PRC subsidiaries, the Company’s ability to pay\ndividends is primarily dependent on receiving distributions of funds from subsidiaries. Relevant PRC statutory laws and regulations permit\npayments of dividends by the subsidiaries only out of their retained earnings, if any, as determined in accordance with PRC accounting\nstandards and regulations, and after it has met the PRC requirements for appropriation to statutory reserve. The Company is required\nto make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based\non after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations\nto the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until\nthe reserve is equal to 50% of the entity’s registered capital. Appropriations to the surplus reserve are made at the discretion\nof the shareholders. Paid-in capital of the subsidiaries included in the Company’s consolidated net assets are also non-distributable\nfor dividend purposes.

As\na result of these PRC laws and regulations, the Company’s PRC subsidiaries are restricted in their ability to transfer a\nportion of their net assets to the Company. As of June 30, 2026 and 2025, net assets restricted in the aggregate, which include\npaid-in capital and statutory reserve funds of the Company’s PRC subsidiaries, that are included in the consolidated net\nassets were $5,174,135 and $5,035,159\nas of June 30, 2026 and 2025, respectively.

NOTE\n18 - CONCENTRATIONS

\n \n \n \n

(a)	Concentration\n of customers

The\nfollowing table sets forth information as to each customer that accounted for 10% or more of net revenue for the years ended June 30,\n2026, 2025 and 2024.

SCHEDULE OF CONCENTRATION

	For\n the Years Ended June 30,
Percentage\n of the Company’s revenues	2026			2025		2024
Customer\n A		31	%		-*		-*
Customer\n B		10	%		-*		-*
Customer\n C		-*			36	%	29	%
Customer\n D		-*			13	%	14	%
Customer\n E		-*			13	%	-*
Customer\n F		-*			-*		24	%
Total		41	%		62	%	67	%

F-29

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

The\nfollowing table sets forth information as to each customer that accounted for 10% or more of total gross accounts receivable as of June\n30, 2026 and 2025.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	As\n of June 30,
Percentage\n of the Company’s accounts receivable	2026			2025
Customer A		38	%		-*
Customer B		29	%		-*
Customer G		26	%		-*
Customer H		-*			44	%
Customer I		-*			19	%
Customer J		-*			16	%
Total		93	%		79	%

\n\n

Indicates below\n10%.

\n \n \n \n

(b)	Concentration\n of suppliers

For\nthe years ended June 30, 2026, 2025 and 2024, the Company’s material suppliers, each of whom accounted for more than 10% of the\nCompany’s total purchases, were as follows:

	For\n the Years Ended June 30,
Percentage\n of the Company’s purchase	2026			2025		2024
Supplier\n A		24	%		-*		-*
Supplier\n B		15	%		-*		-*
Supplier\n C		12	%		-*		-*
Supplier\n D		10	%		16	%	-*
Supplier\n E		-*			28	%	-*
Supplier\n F		-*			17	%	-*
Supplier\n G		-*			14	%	39	%
Supplier\n H		-*			-*		11	%
Total		61	%		75	%	50	%

The\nfollowing table sets forth information to each supplier that accounted for 10% or more of total accounts payable as of June 30, 2026\nand 2025.

\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	As\n of June 30,
Percentage\n of the Company’s accounts payable	2026			2025
Supplier\n A		61	%		-*
Supplier\n I		21	%\n		-*
Supplier\n E		-*			73	%
Total		82	%		73	%

\n\n

Indicates below\n10%.

F-30

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n19 - COMMITMENTS AND CONTINGENCIES

Commitments

As\nof June 30, 2026 and 2025, the Company had no material purchase commitments, significant capital commitments, long-term obligations or\nguarantees.

Contingencies

In\nthe ordinary course of business, the Company may be subject to legal proceedings regarding contractual and employment relationships and\na variety of other matters. The Company records contingent liabilities resulting from such claims, when a loss is assessed to be probable,\nand the amount of the loss is reasonably estimable. In the opinion of management, there was no material pending or threatened claims\nand litigation as of the issuance date of these consolidated financial statements.

NOTE\n20 - RELATED PARTY TRANSACTIONS AND BALANCES

The\ntable below sets forth the major related parties and their relationships with the Company:

SCHEDULE OF MAJOR RELATED PARTIES AND THEIR RELATIONSHIPS

\n \n \n \n \n \n \n \n \n \n \n \n \n

Name\n of related party:		Relationship\n with the Company
Mr.\n Chuanbo Jiang		CEO,\n director and significant shareholder of the Company
Ms.\n Huyun Gao		A\n significant shareholder of the Company

The\nfollowing table presents amounts due from a related party as of June 30, 2026 and 2025.

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025
	As\n of June 30,
	2026		2025
Amounts due from a related\n party
Mr.\n Chuanbo Jiang ⁽ⁱ⁾	$	-		$	87,472
Total	$	-		$	87,472
Total Amounts due from a related\n party	$	-		$	87,472

\n \n \n \n

(i)	The\n balance mainly represents due on demand advances made to a related party for the Company’s daily operational purposes.

The\nfollowing table presents amounts due to related parties, current as of June 30, 2026 and 2025.

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025
	As\n of June 30,
	2026		2025
Amounts due to related parties,\n current
Ms. Huyun Gao\n ⁽ⁱ⁾	$	74,498		$	30,222
Mr. Chuanbo\n Jiang ⁽ⁱ⁾		4,008			-
Total	$	78,506		$	30,222
Total Amounts due to related parties,\n current	$	78,506		$	30,222

\n \n \n \n

(i)	The\n balance represented advances from a related party for the Company’s daily operations with no fixed term of repayment and interest.

The\nfollowing table presents amounts due to a related party, non-current as of June 30, 2026 and 2025.

\n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025
	As\n of June 30,
	2026		2025
Amounts due to a related\n party, non-current
Mr.\n Chuanbo Jiang ⁽ⁱ⁾	$	272,997		$	-
Total	$	272,997		$	-
Total Amounts due to a related\n party, non-current	$	272,997		$	-

\n \n \n \n

(i)

In\n April 2026, Mr. Chuanbo Jiang, the Company and several third parties entered into tripartite agreements, pursuant to which Mr. Chuanbo\n Jiang agreed to assume the Company’s indebtedness to third parties in the aggregate amount of $272,997. The accrued expenses\n and other current liabilities were converted into interest-free loans from Mr. Chuanbo Jiang to the Company, due on December 31,\n 2027.

F-31

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n20 - RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED)

For\nthe years ended June 30, 2026, 2025 and 2024, the Company had the following related party transactions.

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026		2025			2024
	For\n the Years Ended June 30,
	2026		2025			2024
Shareholder contribution
Mr. Chuanbo Jiang	$	-		$	-		$	38,500
Ms. Huyun Gao		-			-			7,500
Mr. Huailiang Xu		-			-			2,000
Mr. Haoyu Xiong		-			-			1,500
Mr. Cheukyin Tai		-			-			500
Total	$	-		$	-		$	50,000
Total Shareholder contribution	$	-		$	-		$	50,000

NOTE\n21 - CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY

The\ncondensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted\nnet assets of the subsidiaries of the Company exceed 25% of the consolidated net assets of the Company. The ability of the Company’s\noperating subsidiaries to pay dividends may be restricted due to the restriction of paid in capital, additional paid in capital and statutory\nsurplus reserves of the Company under PRC laws and regulations.

The\ncondensed financial information of the parent company, STAK, has been prepared using the same accounting policies as set out in the Company’s\nconsolidated financial statements except that the parent company has used equity method to account for its investment in its subsidiaries.

STAK\nand its subsidiaries are included in the consolidated financial statements where the inter-company balances and transactions are eliminated\nupon consolidation. For the purpose of STAK’s stand-alone financial statements, its investments in subsidiaries are reported using\nthe equity method of accounting. STAK’s share of income and losses from its subsidiaries is reported as earnings from subsidiaries\nin the accompanying condensed financial information of parent company.

F-32

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares per share data)

NOTE\n21 - CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (CONTINUED)

SCHEDULE OF CONDENSED BALANCE SHEETS

Condensed\nbalance sheets

	2026		2025
	As\n of June 30,
	2026		2025
Assets
Current assets:
Cash	$	108,577		$	25,428
Advances to suppliers		-			135,000
Amounts due from subsidiaries		2,247,207			-
Prepayments and other\n current assets, net		2,684,993			756,585
Total current assets		5,040,777			917,013

Non-current asset:
Investment in subsidiaries		11,492,076			12,405,300
Total\n non-current asset		11,492,076			12,405,300
Total\n assets	$	16,532,853		$	13,322,313

Liabilities
Current liabilities:
Accrued expenses and other current liabilities	$	50,448		$	292,528
Amounts due to related\n parties, current		153,889			130,039
Total current liabilities		204,337			422,567

Non-current liability:
Amounts due to a related\n party, non-current		269,537			-
Total\n non-current liability		269,537			-
Total\n liabilities	$	473,874		$	422,567

Shareholders’ equity
Class A ordinary shares (par value of $0.001 per share; 75,000,000 shares\n authorized; 10,010,349 and 4,010,349 shares issued and outstanding as of June 30, 2026 and 2025, respectively)	$	10,010		$	4,010
Class B ordinary shares (par value of $0.001 per share; 25,000,000 shares\n authorized; 9,200,000 shares issued and outstanding as of June 30, 2026 and 2025)		9,200			9,200
Ordinary shares		9,200			9,200
Additional paid in capital		14,438,304			12,157,104
Retained earnings		1,422,836			997,295
Accumulated other comprehensive\n income (loss)		178,629			(267,863	)
Total\n shareholders’ equity	$	16,058,979		$	12,899,746
Total\n liabilities and shareholders’ equity	$	16,532,853		$	13,322,313

F-33

STAK\nINC.

NOTES\nTO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed\nin U.S. dollars, except for number of shares and per share data)

NOTE\n21 - CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (CONTINUED)

SCHEDULE OF CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

Condensed\nstatements of income (loss) and comprehensive income (loss)

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025			2024
	For\n the Years Ended June 30,
	2026			2025			2024
Operating income (loss)
Equity income (loss) of subsidiaries	$	1,159,390			$	(424,939	)	$	2,446,103
General and administrative\n expenses		(827,325	)			(5,304,727	)		(4,832	)
Total operating income (loss)		332,065				(5,729,666	)		2,441,271

Foreign exchange gain		93,476				16,986			503
Net\n income (loss)	$	425,541			$	(5,712,680	)	$	2,441,774

Other comprehensive income\n (loss)
Foreign currency translation\n adjustment		446,492				120,680			(31,462	)
Total\n comprehensive income (loss)	$	872,033			$	(5,592,000	)	$	2,410,312

SCHEDULE OF CONDENSED STATEMENTS OF CASH FLOWS

Condensed\nstatements of cash flows

\n \n \n \n \n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n

	2026			2025			2024
	For\n the Years Ended June 30,
	2026			2025			2024
Cash flows used in operating activities	$	(220,835	)		$	(1,581,748	)	$	(3,710	)
Cash flows used in investing\n activities		-				(2,617,293	)		-
Cash flows generated from financing\n activities		400,000				4,187,707			50,000
Effect of exchange rate\n changes		(96,016	)			(9,545	)		17
Net increase (decrease)\n in cash		83,149				(20,879	)		46,307
Cash at beginning of the\n year		25,428				46,307			-
Cash\n at the end of the year	$	108,577			$	25,428		$	46,307

NOTE\n22 - SUBSEQUENT EVENTS

The\nCompany has performed an evaluation of subsequent events through October 21, 2026, which was the date of the issuance of the consolidated\nfinancial statements.

On\nOctober 9, 2026, the\nCompany held an extraordinary general meeting of shareholders and a separate class-level meeting for holders of Class A Ordinary\nShares. By special resolutions, shareholders approved the Change of Voting Rights, pursuant to which the voting power per Class B\nOrdinary Share will be (i) increased from 30 votes to 100 votes per share, while each Class A Ordinary Share will continue to carry\n1 vote. (ii) a reduction in the par value of each issued Class A Ordinary Share and Class B Ordinary Share from US$0.001\nto US$0.0000001, a subdivision of each authorized but unissued Class A Ordinary Share and Class B Ordinary Share into 10,000 shares of\nthe corresponding class, and the cancellation of certain excess authorized but unissued shares, such that, upon effectiveness of the foregoing,\nthe authorized share capital of the Company would be US$10 divided into 75,000,000 Class A Ordinary Shares and 25,000,000 Class B Ordinary\nShares, each with a par value of US$0.0000001; (iii) an increase in the authorized share capital of the Company from US$10 to US$100,000,\ndivided into (a) 750,000,000,000 Class A Ordinary Shares and (b) 250,000,000,000 Class B Ordinary Shares, each with a par value of US$0.0000001,\nby the creation of an additional 749,925,000,000 Class A Ordinary Shares and 249,975,000,000 Class B Ordinary Shares; and (iv) the adoption\nof the third amended and restated memorandum and articles of association of the Company to reflect the foregoing changes. All of the foregoing\nchanges will become effective simultaneously upon completion of the relevant filings and registrations with the Registrar of Companies\nin the Cayman Islands. As of the date of issuing this annual report, such filings and registrations had not been completed and, accordingly, none of the foregoing\nchanges had become effective.

There are no subsequent events that would have material impacts on the consolidated financial statements, except\nfor the events disclosed elsewhere in the consolidated financial statements.

F-34

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Oil\n Field Cementing Truck

Environmental\n Information Disclosure: WP12.460E62 Wheelbase: 1800+4575+14001800+4775+1400 Total Weight/Curb Weight/Rated Load Weight: 29430/29300,\n 29235 Engine Model: WP12.460E62 Dimensions: Length: 12000 Width: 2550 Height: 3900

Oil\n Field Oil Extraction Truck

Environmental\n Information Disclosure: YCS06200-60/YCS06245-60A Wheelbase: 5000 Total Weight/Curb Weight/Rated Load Weight: 16500/16370, 16305 Engine\n Model: YCS06200-60 Dimensions: Length: 11600 Width: 2550 Height: 3900

Oil\n Field Boiler Truck

Environmental\n Information Disclosure: B6.2NS6B230 YCS06245-60 Wheelbase: 4500+4200 Total Weight/Curb Weight/Rated Load Weight: 13000/12805, 12870\n Engine Model: B6.2NS6B230 YCS06245-60 Dimensions: 8040×2550×3500