Annual Report for Fiscal Year Ending June 30, 2025 (Form 20-F)

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes included elsewhere in this annual report. This discussion contains forward-looking statements reflecting our current expectations that involve risks and uncertainties. See "Disclosure Regarding Forward-Looking Statements" for a discussion of the uncertainties, risks, and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under "Risk Factors" and elsewhere in this annual report.

Overview

We are an offshore holding company incorporated in the Cayman Islands, conducting all of our operation in through our wholly owned subsidiaries established in China and Hong Kong.

We conducted a substantial majority of our operations through our wholly owned subsidiaries established in China. We operate through two B2B online platforms, www.iczoom.com and www.iczoomex.com. The two platforms have substantially the same features and functions, provide the same information and services and are both accessible by customers from any countries and regions, while the latter one, with the server and data located and stored in Singapore, is primarily serving overseas customers. ICZOOM Shenzhen maintains and operate www.iczoom.com with an EDI license. Our platform www.iczoomex.com is operated and managed by ICZOOM HK, who is not required by PRC law to obtain and ICP license to maintain and operate this platform, and its server and data are located and stored in Singapore.

We are a technology-driven company running an e-commerce trading platform and are primarily engaged in sales of electronic component products to customers in the PRC. Major electronic component products we sold to customers through our online e-commerce platform fall into two broad product categories: semiconductor products (such as integrated circuit, power/circuit protection, discretes, passive components, optoelectronics/-electromechanical, etc.) and equipment, tools and other electronic component products (such as MRO, and various design tools, etc.). These products are primarily used by customers in the consumer electronic industry, IoT, automotive electronics, industry control segment with primary target customers being SMEs in China. In addition to sales of electronic component products, we also provide services to customers to earn service commission fees, such services include, but not limit to, order fulfilment, temporary warehousing, logistic and shipping, and customs clearance, etc.

Built upon our proprietary industry knowledge and coupled with our SaaS suite, we are committed to working with our clients to understand their needs and challenges and offering suitable products and services to help them meet their respective needs. Our mission is to transform the traditional electronic component distribution business by offering SME customers integrated solutions and help them introduce innovative products, reduce their time to market, and enhance their overall competitiveness.

We primarily generate revenue from sales of electronic components products to customers. In addition, we have certain amount of revenue from service commission fee for services provided to our customers including, but not limit to, customs clearance, warehousing and product shipping and delivery services.

For the fiscal years ended June 30, 2025, 2024 and 2023, we made purchases from a total of 768, 821 and 836 suppliers, respectively.

For the fiscal years ended June 30, 2025, 2024 and 2023, we generated revenue from a total of 762, 805 and 813 customers, respectively.

Our Organization

The Company, together with its wholly owned subsidiaries, is effectively controlled by the same shareholders before and after the Reorganization and therefore the Reorganization is considered as a recapitalization of entities under common control. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements.

Our revenues increased by $9,114,801 or 5.1% from $177,933,890 for the fiscal year ended June 30, 2024 to $187,048,691 for the fiscal year ended June 30, 2025. Our revenues decreased by $36,471,336 or 17.0% from $214,405,226 for the fiscal year ended June 30, 2023 to $177,933,890 for the fiscal year ended June 30, 2024. Revenues from sales of electronic component products accounted for 98.7%, 98.5% and 98.5% of our total revenues for the fiscal years ended June 30, 2025, 2024 and 2023, respectively. Revenues from service commission fees accounted for1.3%, 1.5% and 1.5% of our total revenues for the fiscal years ended June 30, 2025, 2024 and 2023, respectively.

The following tables illustrate the amount and percentage of our revenue for the years ended June 30, 2025, 2024 and 2023, respectively:

		For the years ended June 30,
		2025				2024				2023
		Amount				Amount				Amount
Revenues
Sales of electronic components		$	184,529,681			$	175,320,895			$	211,123,155
Service commission fee			2,519,010				2,612,995				3,282,071
Total revenue		$	187,048,691			$	177,933,890			$	214,405,226

		For the years ended June 30,
		2025				2024				2023
		% of total revenue				% of total revenue				% of total revenue %
Revenues
Sales of electronic components			98.7	%			98.5	%			98.5	%
Service commission fee			1.3	%			1.5	%			1.5	%
Total revenue			100.0	%			100.0	%			100	%

For a detailed description of the comparison of our revenues for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Key Factors That Affect Our Results of Operations

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

Effectiveness of Risk Management

The success of our business relies heavily on our ability to effectively evaluate customers' credit profiles and the likelihood of default. We have devised and implemented a systematic credit assessment model and disciplined risk management approach to minimize customers' default risk and mitigate the impact of default. Specifically, our assessment model and risk management capabilities enable us to select high-quality SME customers whose financial conditions and background meet our selection criteria. There can be no assurance that our risk management measures will allow us to identify or appropriately assess whether customer payments due will be collected when due. If our risk management approach is ineffective, or if we otherwise fail or are perceived to fail to manage the impact of default, our reputation and market share could be materially and adversely affected, which would severely impact our business and results of operations.

Our Ability to Attract Additional Customers and Increase the Spending Per Customer

Our major customers are China's SMEs running their businesses in the consumer electronic industry, Internet of Things, automotive electronics, and industry control segment, etc. We currently sell our electronic component products to these customers in 22 provinces in China, with significant customers located in Guangdong Province, Sichuan Province, Liaoning Province, Beijing City and Shanghai City in China. We plan to expand our business to extended geographic areas to cover 80% more provinces in China within the next 1-2 years. For the years ended June 30, 2025, 2024 and 2023, we had total 762, 805 and 813 customers, respectively. No single customer accounted for more than 10% of our total revenue in either period. Our top 10 customers in the aggregate accounted for 31.1%, 24.1% and 26.7% of our total revenues for the years ended June 30, 2025, 2024 and 2023, respectively. Our dependence on a small number of larger customers could expose us to the risk of substantial losses if a single large customer stops purchasing our products, purchases fewer of our products or goes out of business and we cannot find substitute customers on equivalent terms. If any of our significant customers reduces the quantity of the products it purchases from us or stops purchasing from us, our net revenues could be materially and adversely affected. Therefore, the success of our business in the future depends on our effective marketing efforts to expand our distribution network in the PRC in an effort to increase our geographic penetration. The success of expansion will depend upon many factors, including our ability to form relationships with, and manage an increasing number of, customers and optimize our distribution network. If our marketing efforts fail to convince customers to accept our products, we may find it difficult to maintain the existing level of sales or to increase such sales. Should this happen, our net revenues would decline and our growth annual report would be severely impaired.

Our Ability to Increase Awareness of Our Brand and Develop Customer Loyalty

Our brand is integral to our sales and marketing efforts. We will promote our company brand to enhance customer recognition of our company brand; at the same time, we will increase our customers' stickiness through our SaaS services. We believe that maintaining and enhancing our brand name recognition in a cost-effective manner is critical to achieving widespread acceptance of our electronic component products and is an important element in our effort to increase our customer base. Successful promotion of our brand name will depend largely on our marketing efforts and ability to provide reliable and quality products at competitive prices. Brand promotion activities may not necessarily yield increased revenue, and even if they do, any increased revenue may not offset the expenses we will incur in marketing activities. If we fail to successfully promote and maintain our brand, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract new customers or retain our existing customers, in which case our business, operating results and financial condition, would be materially adversely affected.

Our ability to establish and retain long-term strategic relationship with suppliers

We source our products from various suppliers, mainly including some of the top brand-name suppliers in electronic component product categories. Maintaining good relationships with these suppliers and procuring products from suppliers on favorable terms are important to the growth of our business. With the growth of our e-commerce platform, we expect we will be able to continuously provide more demand information to our suppliers. However, there can be no assurance that our current suppliers will continue to sell electronic component products to us on terms acceptable to us, or that we will be able to establish new or extend current supplier relationships to ensure a steady supply of electronic component products in a timely and cost-efficient manner. If we are unable to develop and maintain good relationships with suppliers, we may not be able to offer products demanded by our customers, or to offer them in sufficient quantities and at prices acceptable to them. In addition, if our suppliers cease to provide us with favorable pricing or payment terms or exchange privileges, our working capital requirements may increase and our operations may be materially and adversely affected. Any deterioration in our relationship with major suppliers, or a failure to timely resolve disputes with or complaints from our major suppliers, could materially and adversely affect our business, prospects and results of operations.

Our Ability to Control Costs and Expenses and Improve Our Operating Efficiency

Because orders from SMEs are often very complicated and the order amount is small, the cost of serving them for the existing traditional business model is relatively high. We reduce our operating cost through our advanced e-commerce business model and effectively serve SMEs at an effective low cost. Our business growth is dependent on our ability to attract and retain qualified and productive employees, identify business opportunities, secure new contracts with customers and our ability to control costs and expenses to improve our operating efficiency. Our inventory costs (including third-party electronic component product purchase costs, tariffs, inbound freight and shipping costs, warehouse lease and overhead costs and business taxes) have a direct impact on our profitability. The inventory purchase costs are subject to price volatility and other inflationary pressures, which may, in turn, result in an increase in the amount we pay for sourced products. Price increases may adversely impact our financial results. In addition, our staffing costs (including payroll and employee benefit expense) and administrative expenses also have a direct impact on our profitability. Our ability to drive the productivity of our staff and enhance our operating efficiency affects our profitability. To the extent that the costs we are required to pay to our suppliers and our staffs exceed our estimates, our profit may be impaired. If we fail to implement initiatives to control costs and improve our operating efficiency over time, our profitability will be negatively impacted.

Our Ability to Compete Successfully

The electronic component procurement market in China is intensely competitive. We face competition from large information based B2B e-commerce companies, offline distributors, vendors, and traders of electronic components, many of which possess significant brand recognition, sales volume and customer bases, and some of which currently sell, or in the future may sell, products or services through their online service platforms. Some of our current and potential competitors have significantly greater financial, technical or marketing resources than we do. In addition, some of our competitors or new entrants may be acquired by, receive investment from or enter into strategic relationships with, well-established and well-financed companies or investors which would help enhance their competitive positions. Our failure to properly respond to increased competition and the above challenges may reduce our operating margins, market share and brand recognition, or force us to incur losses, which will have a material adverse effect on our business, prospects, financial condition and results of operations.

A Severe or Prolonged Slowdown in The Global or Chinese Economy Could Materially and Adversely Affect Our Business and Our Financial Condition

The rapid growth of the Chinese economy has slowed down since 2012 and this slowdown may continue in the future. There is considerable uncertainty over trade conflicts between the United States and China, including the uncertainty regarding the proposed imposition of additional tariffs by the U.S., as well as the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world's leading economies, including the United States and China. The withdrawal of these expansionary monetary and fiscal policies could lead to a contraction. Further geopolitical risks persist, including concerns over unrest and terrorist threats in the Middle East, Europe, and Africa, which have resulted in volatility in oil and other markets. There are also concerns about the relationships between China and other Asian countries, which may result in or intensify potential conflicts in relation to territorial disputes. The eruption of armed conflict could adversely affect global or Chinese discretionary spending, either of which could have a material and adverse effect on our business, results of operation in financial condition. China's economic conditions remain sensitive to global economic conditions, as well as changes in domestic economic and political policies and the expected or perceived overall economic growth rate in China. Any severe or prolonged slowdown in the global or Chinese economy would likely materially and adversely affect our business, results of operations and financial condition. In addition, continued turbulence in the international markets may adversely affect our ability to access capital markets to meet liquidity needs.

Key Financial Performance Indicators

In assessing our financial performance, we consider a variety of financial performance measures, including growth in net revenue and gross profit, our ability to control costs and operating expenses to improve our operating efficiency and net income. Our review of these indicators facilitates timely evaluation of the performance of our business and effective communication of results and key decisions, allowing our business to respond promptly to competitive market conditions and different demands and preferences from our customers. The key measures that we use to evaluate the performance of our business are set forth below and are discussed in greater details under "Results of Operations".

Net Revenue

Our net revenue is driven by changes in the number of customers, sales volume, selling price, and mix of products sold.

		For the years ended June 30,
		2025				2024				2023
Sales of electronic components:
Sales of semiconductor products			91.6	%			69.8	%			88.4	%
Sales of equipment, tools and others			7.1	%			28.7	%			10.1	%
Total sales of electronic component products			98.7	%			98.5	%			98.5	%
Service commission fee			1.3	%			1.5	%			1.5	%
Total revenue			100.0	%			100.0	%			100.0	%
Number of customers for electronic component products			650				659				667
Number of customers for services			112				146				146
Total number of customers			762				805				813
Stock-keeping unit (SKU) available for sale- Semiconductor			13,499				9,290				19,485
Stock-keeping unit (SKU) available for sale- Equipment and tools			1,922				5,208				3,473
Total SKUs			15,421				14,498				22,958
Sales volume for semiconductor (Unit)			1,189,777,816				587,506,659				880,578,273
Sales volume for equipment, tools and others (Unit)			2,091,917				117,467,450				38,338,204
Total sales volume of electronic component products			1,191,869,733				704,974,109				918,916,477
Average selling price of semiconductor		$	0.14			$	0.21			$	0.22
Average selling price of equipment, tools and others		$	6.37			$	0.44			$	0.57

Revenues from sales of electronic component products accounted for 98.7%, 98.5% and 98.5% of our total revenues for the fiscal years ended June 30, 2025, 2024 and 2023. Electronic component products sold to customers by us fall into two categories: (i) semiconductor products and (ii) electronic equipment, tools and other products. Our semiconductor products primarily include various integrated circuit, power/circuit protection, discretes, passive components, optoelectronics/electromechanical and our equipment, tools and other electronic component products primarily include various MRO, and design tools.

Total SKUs sold to customers increased by 6.4% from 14,498 different products in fiscal year 2024 (including 9,290 different variety of semiconductor products and 5,208 different variety of equipment and tools products) to 15,421 different products in fiscal year 2025 (including 13,499 different variety of semiconductor products and 1,922 different variety of equipment and tools products). This expansion in product variety, driven by our response to evolving demand from our SME customers, enabled us to target more customers to meet their needs and increase our sales volume by 69.1% or 486.9 million units, from 705.0 million units of various electronic component products sold in the fiscal year 2024 to 1,191.9 million units of various electronic component products sold in the fiscal year 2025. The number of customers for our electronic component products decreased by 1.4% from 659 customers in the fiscal year 2024 to 650 customers in the fiscal year 2025. We also count the number of the repeat customers, measured by the number of the customers who made orders in the current period with transaction records with us in the last six fiscal years. The number of the repeat customers in fiscal year 2025 was 525, and the repeat customers accounted for 68.9% of the total customers, for the years ended June 30, 2025 while the repeat customers accounted for only 72.2% in fiscal year 2024. Our customers are mainly SMEs who rely on our e-commerce platform for one-stop procurement, as well as the add-on services to lower the total cost of procurement conducted by themselves. Even though the electronics industry is subject to short product life cycles, fast changing product trends, constantly evolving technologies and customers with frequent purchase needs, our relatively short inventory turnover period and the large number of the SKUs enable us to satisfy our customers' frequent, changing, and various demands and further to maintain a long-term business relationship with our customers. Our management references to the number of repeat customers to monitor our customers' satisfaction levels and takes it into consideration for the future development of the business. On the other hand, the average selling price of semiconductor products decreased by $0.07 per unit or 33.3%, and average selling price of equipment and tool products increased by $5.93 per unit or 1,347.7% per unit, when comparing fiscal year 2025 to fiscal year 2024. These combined factors led to a 5.3% increase in our total revenue from sales of electronic component products from fiscal year 2024 to fiscal year 2025.

Service commission fee revenue from providing customs clearance, temporary warehousing, and logistic and shipping services to customers accounted for 1.3% and 1.5% of our total revenues for the fiscal years both ended June 30, 2025 and 2024, respectively. We earn a commission fee ranging from 0.15% to 2% based on the value of the merchandise that customers purchase from suppliers and such commission fee is not refundable. The number of customers for our services was 112 and 146 for the fiscal year ended June 30, 2025 and 2024, respectively.

For a detailed description of the comparison of our revenues from sales of electronic component products and from service commission fee for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Gross Profit

Gross profit is equal to revenue minus cost of goods sold. Cost of goods sold primarily includes inventory costs (third-party products purchase price, tariffs, inbound freight costs, warehouse lease and overhead costs and business taxes) and sales taxes. Cost of goods sold generally changes as affected by factors including the availability of the third-party products in the market, the purchase price of third-party products, sales volume and product mix changes. Our cost of revenues accounted for 96.7%, 97.2% and 97.5% of our total revenue for the fiscal years 2025, 2024 and 2023, respectively.

Our gross margin was 3.3% for fiscal year 2025, an increase by 0.5% from gross margin of 2.8% in fiscal year 2024. Our gross profit and gross margin are affected by sales of different product mix during each reporting period. Our gross margin increases when more revenue comes from products with lower costs and higher margin, while our gross margin decreases when more revenue comes from products with higher costs and lower margin. In fiscal year 2025, we earned more revenue from products with lower costs and higher margin. These factors led to the increase in our gross profit and in gross margin. See detailed discussion under "Results of Operation".

Operating Expenses

Our operating expenses consist of selling expenses, and general and administrative expenses.

Our selling expenses primarily include salary and welfare benefit expenses paid to our sales personnel, warehouse rental expense, shipping and delivery expenses, tariff expenses, expenses incurred for our business travel, meals and other sales promotion and marketing activities related expenses.

Our selling expenses accounted for 1.2%, 1.3% and 1.0% of our total revenue for the years ended June 30, 2025, 2024 and 2023, respectively. Our selling expenses in terms of our total revenue decreased from 1.3% in fiscal year 2024 to 1.2% in fiscal year 2025, although due to increased total revenue, in terms of dollar amount, our total selling expenses decreased by $180,514 or 7.7% in the fiscal year 2025 compared to the fiscal year 2024, and the decrease was largely due to the decrease of stock-based compensation expense. Nevertheless, if we continue to expand our business and promote our products to customers located at extended geographic areas, we still expect our overall selling expenses, including but not limited to, brand promotion expenses and salaries, to increase in the foreseeable future and facilitate the growth of our business.

Our general and administrative expenses primarily consist of employee salaries, welfare and insurance expenses, bad debt reserve expenses, office supply and utility expenses, business travel and meals expenses, and professional service expenses. General and administrative expenses were 1.6% and 2.2% of our revenue for the years ended June 30, 2025 and 2024, respectively. Our general and administrative expenses in terms of our total revenue decreased from 2.2% in fiscal year 2024 to 1.6% in fiscal year 2025, however, as the total revenue increased by 5.1%, our total general and administrative expenses decreased by $987,620 or 25.0% in terms of dollar amount, in the fiscal year 2025 compared to the fiscal year 2024, and the decrease was largely due to the decrease in salaries and stock-based compensation expenses for management and the decrease in professional fees as a result of legal services and services related to the maintenance of investor relations. However, we expect our general and administrative expenses, including, but not limited to, salaries and business consulting expenses, to increase relatively in the foreseeable future, as we plan to hire additional personnel and incur additional expenses in connection with the expansion of our business operations.

For a detailed description of the comparison of our operating expenses for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Results of Operations for the Fiscal Years Ended June 30, 2025, 2024 and 2023

The following table summarizes our operating results as reflected in our statements of income during the fiscal years ended June 30, 2025,2024 and 2023, respectively, and provides information regarding the dollar and percentage increase or decrease during such periods.

		For the years ended June 30,
		2025								2024								2023
		Amount				% of total revenue				Amount				% of total revenue				Amount				% of total revenue
Revenues
Sales of electronic components		$	184,529,681				98.7	%		$	175,320,895				98.5	%		$	211,123,155				98.5	%
Service commission fee			2,519,010				1.3	%			2,612,995				1.5	%			3,282,071				1.5	%
Total revenue			187,048,691				100.0	%			177,933,890				100.0	%			214,405,226				100.0	%
Cost of revenues			180,938,212				96.7	%			172,983,529				97.2	%			209,112,615				97.5	%
Gross profit			6,110,479				3.3	%			4,950,361				2.8	%			5,292,611				2.5	%
Operating expenses
Selling expenses			2,163,327				1.2	%			2,343,841				1.3	%			1,991,992				1.0	%
General and administrative expenses			2,962,731				1.6	%			3,950,351				2.2	%			2,425,587				1.1	%
Total operating expenses			5,126,058				2.7	%			6,294,192				3.5	%			4,417,579				2.1	%
income/(Loss) from operations			984,421				0.5	%			(1,343,831	)			(0.8	)%			875,032				0.4	%
Other income/(expenses)
Interest expenses, net			(397,072	)			(0.2	)%			(696,908	)			(0.4	)%			(567,915	)			(0.3	)%
Income from short-term investment			135,947				0.1	%			67,293				0.0	%			14,748				0.0	%
Foreign exchange gain/(loss)			814,093				0.4	%			(258,649	)			(0.1	)%			1,788,870				0.8	%
Subsidy income			37,139				0.0	%			54,104				0.0	%			125,125				0.1	%
Other expenses, net			(81,623	)			0.0	%			(160,022	)			(0.1	)%			(219,020	)			(0.1	)%
Total other income/(expenses)			508,484				0.3	%			(994,182	)			(0.6	)%			1,141,808				0.5	%
Income/(Loss) before income tax provisions			1,492,905				0.8	%			(2,338,013	)			(1.3	)%			2,016,840				0.9	%
Income tax (expenses)/benefit			(298,408	)			(0.2	)%			65,716				0.0	%			(265,670	)			(0.1	)%
Net income/(loss)		$	1,194,497				0.6	%		$	(2,272,297	)			(1.3	)%		$	1,751,170				0.8	%

Revenue.

The total revenue increased by $9,114,801, or 5.1%, to $187,048,691 for the fiscal year 2025 from $177,933,890 for the fiscal year 2024. The increase was mainly due to the increase in demand from repeat customers as a result of the increase in SKUs and the increase in the number of new customers.

		For the years ended June 30,
		2025								2024								2023
		Amount				% of total revenue				Amount				% of total revenue				Amount				% of total revenue
Revenues
Sales of electronic components
Revenue from sales of semiconductor		$	171,210,024				91.6	%		$	124,138,137				69.8	%		$	189,388,293				88.4	%
Revenue from sales of equipment, tools and others			13,319,657				7.1	%			51,182,758				28.7	%			21,734,862				10.1	%
Subtotal of sales of electronic component products			184,529,681				98.7	%			175,320,895				98.5	%			211,123,155				98.5	%
Service commission fee			2,519,010				1.3	%			2,612,995				1.5	%			3,282,071				1.5	%
Total revenue		$	187,048,691				100.0	%		$	177,933,890				100.0	%		$	214,405,226				100.0	%

(1) Revenue from sales of electronic component products

The revenue from sales of electronic components increased by $9,208,786 or 5.3%, from $175,320,895 for the fiscal year 2024 to $184,529,681 for the fiscal year 2025.

Our electronic component products sold to customers fall into two categories: semiconductor products and electronic equipment, tools and other products.

		For the years ended June 30,
		2025				2024				2023
Sales of electronic components products:
Semiconductor:
Integrated Circuits		$	103,996,133			$	93,611,171			$	36,208,767
Power/Circuit Protection			14,705,571				2,135,446				13,902,350
Discrete			9,976,721				997,097				16,047,821
Passive Components			9,233,555				5,706,403				99,326,417
Optoelectronics/Electromechanical			11,750,060				17,733,992				8,535,997
Other semiconductor products			21,547,984				3,954,028				15,366,941
Equipment, tools and others:
Equipment			3,620				29,665,978				10,102,545
Tools and others			13,316,037				21,516,780				11,632,317
Total sales of electronic components products			184,529,681				175,320,895				211,123,155
Service commission fees			2,519,010				2,612,995				3,282,071
Total revenue		$	187,048,691			$	177,933,890			$	214,405,226

Our semiconductor products primarily include various integrated circuit, power/circuit protection, discretes, passive components, optoelectronics/electromechanical, etc. Total SKUs of semiconductor products available to be sold to customers increased by 4,209 SKUs, or 45.3% from 9,290 different SKUs in fiscal year 2024 to 13,499 SKUs in fiscal year 2025. The increase in product offerings reflected the increased demands of the customers and increased our sales volume of semiconductor products by 102.5% or 602.3 million units, from 587.5 million units of various semiconductor products sold in fiscal year 2024 to 1,189.8 million units of various semiconductor products sold in fiscal year 2025. Number of customers decreased by 1.4% from 659 (including 448 repeat customers and 211 new customers) in fiscal year 2024 to 650 (including 422 repeat customers and 228 new customers) in fiscal year 2025. Sales to repeat customers accounted for approximately 90% and 88% of the total revenue, while sales to new customers accounted for approximately 10% and 12% of the total revenue for the years ended June 30, 2025 and 2024, respectively. On the other hand, in terms of average selling price, due to changes in product mix sold, average selling price of semiconductor products decreased by $0.07 per unit or 33.3%, from $0.21 per unit in fiscal year 2024 to $0.14 per unit in fiscal year 2025, which offset the decrease of the sales of semiconductor products. These combined factors led to an increase in sales of semiconductor products by $47,071,887 or 37.9%, from $124,138,137 in fiscal year 2024 to $171,210,024 in fiscal year 2025.

Our equipment, tools and other electronic component products primarily include various MROs, and design tools, etc. Total SKUs of equipment and tools available to be sold to customers decreased by 3,286 SKUs, or 63.1% from 5,208 different SKUs in fiscal year 2024 to 1,922 SKUs in fiscal year 2025. The decrease in variety of our equipment, tools and other electronic component products sold reflected the decreased demand from the customers on the equipment, tools and other electronic component products. As a result, our sales volume of equipment and tools product decreased by 98.2% or 115.4 million units, from 117.5 million units of various equipment and tools products sold in fiscal year 2024 to 2.1 million units of various equipment and tools products sold in fiscal year 2025. On the other hand, in terms of average selling price, due to changes in product mix sold and the decrease of the volume sold, average selling price of equipment and tools products increased by $5.93 per unit or 1,347.7%, from $0.44 per unit in fiscal year 2024 to $6.37 per unit in fiscal year 2025, which offset the decrease of the sales of equipment, tools and other electronic component products. These combined factors led to decrease in sales of equipment and tools products by $37,863,101 or 74%, from $51,182,758 in fiscal year 2024 to $13,319,657 in fiscal year 2025.

For our sales of electronic component products, for the fiscal years ended June 30, 2025 and 2024, the number of our repeat customers were 422 and 448, respectively. Sales to repeat customers accounted for approximately 90% and 88% of the total revenue, while sales to new customers accounted for approximately 10% and 12% of the total revenue for the years ended June 30, 2025 and 2024, respectively. The average purchase amount per customer for our electronic component products was $283,892 per customer in fiscal year 2025, increased by approximately 6.7% from $266,041 per customer in fiscal year 2024. By providing one stop solutions to our customers, we enhance our client loyalty. The repeat customers accounted for 64.9% and 68.0% of the total customers for the years ended June 30, 2025 and 2024, respectively.

The product mix change is driven by the market conditions. As we adjust our product mix from time to time based on market demands which had driven the decrease in average selling price during fiscal years ended June 30, 2025, we are unable to predict with reasonable certainty whether such price decrease will continue to be a trend or whether such price will increase. If it is, in either case, we do not believe it is likely to have a material impact on future operating results or financial condition because the variety of the SKUs we provide can minimize the impact of the price increase or decrease and product costs and other factors that contribute to our future operating results will may offset such an increase or decrease in response to the market conditions.

(2) Service commission fees

Service commission fees decreased by $93,985 or 3.6%, to $2,519,010 for the fiscal year 2025 from $2,612,995 for the fiscal year 2024.

We provide customs clearance when customers purchase electronic component products directly from overseas suppliers, as well as temporary warehousing, and logistic and shipping services after the customs clearance. We earn a commission fee ranging from 0.15% to 1.5% based on the value of the merchandise that customers purchase from suppliers, and such commission fee is not refundable. The number of customers for our services in fiscal year 2025 was 112, consisting of 103 repeat customers and 9 new customers. The decrease of revenue from service commission fees was primarily due to the negative impact of the depressed market. As a result, our service commission fee earned decreased by 3.6% from fiscal year 2024 to fiscal year 2025.

For a detailed description of the comparison of revenue, including both revenue from sales of electronic component products and service commission fees for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Cost of Revenues.

Our cost of revenues primarily consists of third-party products purchase price, tariffs associated with import products from overseas suppliers, inbound freight costs, warehousing and overhead costs and business taxes. Cost of revenue generally changes as affected by factors including the availability of the third-party products in the market, the purchase price of third-party products, sales volume and product mix changes.

The following table sets forth the breakdown of our cost of revenues for the fiscal years ended June 30, 2025, 2024 and 2023:

		For the years ended June 30,
		2025								2024								2023
		Amount				% of total cost				Amount				% of total cost				Amount				% of total cost
Third-party products purchase costs		$	179,083,640				99.0	%		$	170,739,550				98.7	%		$	206,892,634				98.9	%
Tariffs			1,044,907				0.6	%			1,258,006				0.7	%			1,220,804				0.7	%
Inbound shipping and delivery costs			352,221				0.2	%			452,885				0.3	%			474,543				0.2	%
Warehouse lease and overhead costs			372,478				0.2	%			449,473				0.3	%			446,621				0.2	%
Business taxes			84,966				0.0	%			83,615				0.0	%			78,013				0.0	%
Total cost of revenues		$	180,938,212				100.0	%		$	172,983,529				100.0	%		$	209,112,615				100.0	%

Total cost of revenue increased by $7,954,683 or 4.6%, from $172,983,529 in fiscal year 2024 to $180,938,212 in fiscal year 2025. The increase in our cost of revenue was largely attributable to increased third-party product purchase costs by $8,344,090 or 4.9%, which were due to the increase in volume and were in line with the increase of the revenue.

The cost of revenue related to tariffs associated with our purchase of products from overseas suppliers decreased by $213,099 or 16.9%, from $1,258,006 in fiscal year 2024 to $1,044,907 in fiscal year 2025, due to increased purchases of low-tariff electronic components from the overseas suppliers as the product mix changed.

For a detailed description of the comparison of cost of revenue for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Gross profit

Our gross profit increased by $1,160,118 or 23.4%, from $4,950,361 in fiscal year 2024 to $6,110,479 in fiscal year 2025. Our gross margin increased by 0.5%, from 2.8% in fiscal year 2024 to 3.3% in fiscal year 2025. Our gross profit and gross margin were affected by changes in selling price and third-party product purchase costs, changes in sales volume and the sales of different product mix during each reporting period. Our gross margin increased in the period is primarily attributable to the decrease in the average third party product purchase cost per unit. In addition, our gross profit and gross margin is also affected by sales of different product mix during each reporting period. In fiscal year 2025, we earned more revenue from products with lower costs and higher margin. Our average third party purchased cost per unit decreased by 37.4% from $0.24 per unit for the electronic components for the fiscal year 2024 to $0.15 per unit for fiscal year 2025. These factors led to the decrease in our costs of revenue and increase in our gross profit.

For a detailed description of the comparison of gross profit for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Operating expenses

The following table sets forth the breakdown of our operating expenses for the fiscal years ended June 30, 2025, 2024 and 2023:

		For the years ended June 30,
		2025								2024								2023
		Amount				% of total revenue				Amount				% of total revenue				Amount				% of total revenue
Total revenues:		$	187,048,691				100.0	%		$	177,933,890				100.0	%		$	214,405,226				100.0	%
Operating expenses:
Selling expenses			2,163,327				1.2	%			2,343,841				1.3	%			1,991,992				1.0	%
General and administrative expenses			2,962,731				1.6	%			3,950,351				2.2	%			2,425,587				1.1	%
Total operating expenses		$	5,126,058				2.7	%		$	6,294,192				3.5	%		$	4,417,579				2.1	%

Selling expenses

Our selling expenses primarily include salary and welfare benefit expenses paid to our sales personnel, office rental expense, shipping and delivery expenses, customs clearance, expenses incurred for our business travel, meals and other sales promotion and marketing activities related expenses.

		For the years ended June 30,
		2025								2024								2023
		Amount				%				Amount				%				Amount				%
Salary and employee benefit expenses		$	919,039				42.5	%		$	797,493				34.0	%		$	1,015,872				51.0	%
Stock-based compensation expenses			442,165				20.4	%			740,784				31.6	%			67,180				3.4	%
Lease expense			140,041				6.5	%			146,987				6.3	%			200,139				10.0	%
Shipping and delivery expenses			391,395				18.1	%			408,440				17.4	%			423,606				21.3	%
Sales promotion			91,291				4.2	%			86,879				3.7	%			132,743				6.7	%
Business travel and meals expenses			35,664				1.6	%			37,778				1.6	%			41,009				2.1	%
Tariffs			20,957				1.0	%			20,522				0.9	%			26,256				1.3	%
Utility and office expenses			119,265				5.5	%			104,731				4.5	%			83,891				4.2	%
Other sales promotion related expenses			3,510				0.2	%			227				0	%			1,296				0.0	%
Total selling expenses		$	2,163,327				100.0	%		$	2,343,841				100.0	%		$	1,991,992				100.0	%

Our selling expenses decreased by $180,514 or 7.7%, from $2,343,841 for fiscal year 2024 to $2,163,327 for fiscal year 2025, primarily attributable to that (i) stock-based compensation expenses decreased by $298,619 or 40.3% from $740,784 or 31.61% in fiscal year 2024 to $442,165 or 20.44% in fiscal year 2025; that (ii) shipping and delivery expenses decreased by $17,045 or 4.2% from $408,440 or 17.4% in fiscal year 2024 to $391,395 or 18.1% in fiscal year 2025, primarily due to the decrease in personnel in the logistics department. The decrease was offset by that (i) salary and employee benefit expenses increased by $121,546 or 15.2%; and (ii) utility and office expenses increased by $14,534 or 13.9%, mainly due to restoration costs for the handover of warehouse. These above-mentioned factors combined led to the decrease in our selling expenses in fiscal year 2025 as compared to fiscal year 2024. As a percentage of revenues, our selling expenses accounted for 1.2% and 1.3% of our total revenue for the years ended June 30, 2025 and 2024, respectively.

For a detailed description of the comparison of selling expenses for the year ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

General and Administrative Expenses

Our general and administrative expenses primarily consist of employee salaries, welfare and insurance expenses, bad debt reserve expenses, office supply and utility expenses, business travel and meals expenses, and professional service expenses.

		For the years ended June 30,
		2025								2024								2023
		Amount				%				Amount				%				Amount				%
Salary and employee benefit expenses		$	1,266,700				42.8	%		$	1,445,909				36.6	%		$	1,142,759				47.1	%
Stock-based compensation expenses			166,408				5.6	%			420,625				10.7	%			94,202				3.9	%
Rent expense			92,448				3.1	%			95,768				2.4	%			104,760				4.3	%
Bad debt reserve expenses			374				0.0	%			-				0.0	%			(93,231	)			(3.8	)%
Transportation, travel and meals expenses			221,589				7.5	%			263,803				6.7	%			119,876				4.9	%
Office supply and utility expenses			244,688				8.3	%			273,612				6.9	%			268,303				11.1	%
Professional service fee			843,259				28.5	%			1,333,125				33.8	%			594,880				24.5	%
Bank charges			101,847				3.4	%			112,573				2.8	%			101,090				4.2	%
Insurance			25,418				0.8	%			4,936				0.1	%			92,948				3.8	%
Total general and administrative expenses		$	2,962,731				100.0	%		$	3,950,351				100.0	%		$	2,425,587				100.0	%

Our general and administrative expenses decreased by $987,620 or 25.0% from $3,950,351 in fiscal year 2024 to $2,962,731 in fiscal year 2025, primarily attributable to that (i) salary and employee benefit expenses decreased by $179,209 or 12.4% from $1,445,909 or 36.6% in fiscal year 2024 to $1,266,700 or 42.8% in fiscal year 2025 due to the decreased salaries to the senior management; that (ii) stock-based compensation expenses decreased by $254,217 or 60.4% from $420,625 or 10.7% in fiscal year 2024 to $166,408 or 5.6% in fiscal year 2025; that (iii) transportation, travel and meals expense decreased by $42,214 or 16.0% from $263,803 or 6.7% from fiscal year 2024 to $221,589 or 7.5% in fiscal year 2025, mainly due to a decrease in hospitality expenses for management; that (iv) office supply and utility expenses decreased by $28,924 or 10.6% from $273,612 or 6.9% from fiscal year 2024 to $244,688 or 8.3% in fiscal year 2025, mainly due to the decreased in fixed assets depreciation; that (v) professional service fee decreased by $489,866 or 36.7% from $1,333,125 or 33.8% from fiscal year 2024 to $843,259 or 28.5% in fiscal year 2025, primarily due to less cost incurred as compared to such incurred related to the proposed public offering in the fiscal year 2024, including legal fees, consulting advisory fees, financial advisor consulting fees, investor relations services. The overall decrease in our general and administrative expenses in fiscal year 2025 as compared to fiscal year 2024 reflected the above-mentioned factors combined. As a percentage of revenues, general and administrative expenses were 1.6% and 2.2% of our revenue for the years ended June 30, 2025 and 2024, respectively.

For a detailed description of the comparison of general and administrative expenses ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Other income (expenses)

Other income (expenses) primarily included interest income, interest expenses, foreign exchange gain or loss, government subsidiary income, gain or loss from disposal of fixed assets, other non-operating income or expenses.

		For the years ended June 30,
		2025				2024				2023
		Amount				Amount				Amount
Interest expense		$	(397,072	)		$	(696,908	)		$	(567,915	)
Interest from short-term investment			135,947				67,293				14,748
Foreign transaction gain/(loss)			814,093				(258,649	)			1,788,870
Government subsidy			37,139				54,104				125,125
Other expense			(81,623	)			(160,022	)			(219,020	)
Total Other income (expense), net		$	508,484			$	(994,182	)		$	1,141,808

Total other income increased by $1,502,666 from net other loss of $994,182 in fiscal year 2024 to net other income of $508,484 in fiscal year 2025. The increase was attributable to the following factors:

(i)

Foreign exchange gain increased by $1,072,742 or 414.7%, from foreign exchange loss of $258,649 in fiscal year 2024 to foreign exchange income of $814,093 in fiscal year 2025, due to more exchange gain derived from the favorable USD and other currency exchange rates against RMB on our foreign currency denominated account receivables.

(ii)

Interest expenses on our short-term bank loans, notes payable decreased by $299,836 from $696,908 in fiscal year 2024 to $397,072 in fiscal year 2025, due to the decreased interest rates for debts and borrowing in various currencies, including USD, RMB, etc.

(iii)

Government subsidies mainly include local governments encouraging import and export business activities and supporting foreign trade support for e-commerce businesses such as ours. Total government subsidies amounted to $37,139 and $54,104 for the years ended June 30, 2025 and 2024, respectively. The decrease of $16,965 or 31.4% was mainly due to a decrease in government subsidies provided to support our loan interest expense.

The decrease of total other expense was offset by the following factors:

(i)

Interest income from short-term investment increased by $68,654 from $67,293 in fiscal year 2024 to $135,947 in fiscal year 2025. Our investment income was generated from our short-term investment to purchase interest-bearing wealth management financial products from the PRC and HK banks to earn interest income and cash deposit as collateral. The increase in our investment income was largely due to the overall higher interest of cash deposit as collateral during the fiscal year 2025 as compared to the fiscal year 2024.

(ii)

Other expense primarily included the amortized deferred financing expense for the loan in the banks. The other expense decreased mainly due to less deferred financing expense was amortized in fiscal year 2025 as compared to fiscal year 2024.

For a detailed description of the comparison of other income (expenses) ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Other income (expenses)" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Income tax expenses

Our income taxes expenses was $298,408 in fiscal year ended June 30, 2025, an increase by $364,124 or 554.1% from income tax benefit $65,716 in fiscal year ended June 30, 2024 due to our increased taxable income of our major operating entities Hjet Supply Chain.

For a detailed description of the comparison of income tax (benefit)/expenses ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Net Income/(Loss)

As a result of the foregoing, we reported a net income of $1,194,497 for the fiscal year ended June 30, 2025, representing a $3,466,794 increase from the net loss of $2,272,297 for the fiscal year ended June 30, 2024.

For a detailed description of the comparison of net income ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

B. Liquidity and capital resources

Under the PRC laws, an offshore company may choose to transfer funds to its PRC subsidiaries via an increase in the registered capital of the onshore company or a shareholder loan to the onshore company. We transfer offshore cash to our direct onshore PRC subsidiary, ICZOOM WFOE, via increasing the registered capital of ICZOOM WFOE. According to the relevant PRC regulations on foreign-invested enterprises, capital contributions from a foreign shareholder to our PRC subsidiary is subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System and registration with a local bank authorized by the State Administration of Foreign Exchange, as well as registration with the local branch of the State Administration for Market Regulation, or the SAMR, by such PRC subsidiary.

Our offshore company principally relies on dividends distributions from our PRC subsidiaries. Current PRC regulations permit our PRC subsidiaries to pay dividends to shareholders only out of their accumulated profits, if any, as determined in accordance with the PRC accounting standards and regulations. Additionally, our PRC subsidiaries may not pay dividends unless they set aside at least 10% of their respective accumulated profits after tax each year, if any, to fund certain statutory reserve funds, until such time as the accumulative amount of such fund reaches 50% of the company's registered capital. Upon contribution to the statutory reserves using its after-tax profits, each of such PRC subsidiaries may also make further contribution to the discretionary reserve funds using its after-tax profits in accordance with a resolution of the shareholders meeting. These reserves are not distributable as cash dividends.

The restricted net assets were the total book value of the share capital, additional paid-in capital and statutory reserve which were not allowed to transfer to the shareholders in the forms of dividends.

Please see the following table of the breakdown of cash and restricted cash and short-term investment in different jurisdictions:

		As of June 30,
		2025				2024				2023
Cash and Restricted cash
Cayman Islands		$	31,948			$	11,252			$	40,957
Hong Kong			6,995,978				1,155,026				659,145
PRC			1,351,566				4,318,682				5,713,265
Total		$	8,379,492			$	5,484,960			$	6,413,367
Short-term Investments
Cayman Islands		$	-			$	-			$	-
Hong Kong			-				-				-
PRC			-				-				-
Total		$	-			$	-			$	-

Cash Flows for the Year Ended June 30, 2025 Compared to the Year Ended June 30, 2024

As of June 30, 2025, we had $8,379,492 in cash and restricted cash on hand as compared to $5,484,960 as of June 30, 2024.

We also had $27,218,260 in accounts receivable. Our accounts receivable primarily include balance due from customers for our electronic component products sold and delivered to customers. As of the date of this Annual Report, 100.0% or $28.3 million of our net accounts receivable balance as of June 30, 2024 has been subsequently collected. As of June 30, 2025, one customer accounted for more than 10% of the total accounts receivable balance. We periodically review our accounts receivable and allowance level in order to ensure that our methodology used to determine allowances is reasonable and to accrue additional allowances if necessary. As of June 30, 2025 and 2024, the expected credit loss are both nil. The allowance is determined based on individual customer financial health analysis, historical collection trend and management's best estimate of specific losses on individual exposures. As of September 30, 2025, approximately 99.3% or $1.7 million of the June 30, 2025 advances to suppliers' balance has been realized, and approximately $24.8 million or 91.0% of the June 30, 2025 outstanding accounts receivable has been collected.

The following table summarizes our accounts receivable ("AR") and subsequent collection by aging bucket of the June 30, 2025 as of September 30, 2025:

		Balance as of June 30, 2025				Subsequent collection				% of collection
AR aged less than 6 months		$	27,218,260				24,770,166				91.0	%
Accounts Receivable		$	27,218,260				24,770,166				91.0	%

The following table summarizes our AR and subsequent collection by aging bucket as of June 30, 2024:

		Balance as of June 30, 2024				Subsequent collection				% of collection
AR aged less than 6 months		$	28,297,491			$	28,297,491				100.0	%
Accounts Receivable		$	28,297,491			$	28,297,491				100.0	%

As of June 30, 2025, our inventory balance amounted to $1,326,007, primarily consisting of electronic component products we purchased from third-party suppliers, which we believe can be sold quickly based on the analysis of the current trends in demand for our products. We also had advances to suppliers of $1,756,138, representing our prepayment to various suppliers to lock the purchase of electronic component products at favorable prices. Approximately 99.3% or $1.7 million of the June 30, 2025 balance of advances to suppliers has been realized as of September 30, 2025.

As of June 30, 2025, we had outstanding accounts payable ("AP") of $4,278,634, representing balance due to suppliers for purchase of electronic components products. We normally have 30 days to 90 days payment terms with our suppliers for credit purchases. As of September 30, 2025, we have settled approximately $4.0 million or 92.5% of the June 30, 2025 outstanding accounts payable.

The following table summarizes the Company's outstanding AP as of June 30, 2025 and subsequent settlement by aging bucket as of September 30, 2025:

		Balance as of June 30, 2025				Subsequent settlement				% of Collection
Accounts payable aged less than 6 months		$	4,278,634				3,956,497				92.5	%
Total accounts payable		$	4,278,634				3,956,497				92.5	%

The following table summarizes the Company's outstanding AP as of June 30, 2024 and subsequent settlement by aging bucket:

		Balance as of June 30, 2024				Subsequent settlement				% of Collection
Accounts payable aged less than 6 months		$	5,263,945				5,263,945				100.0	%
Total accounts payable		$	5,263,945				5,263,945				100.0	%

As of June 30, 2025, we had contract liabilities of $2,218,095, which represents payments of products we had received in advance prior to delivery of the products to customers and fully satisfying our performance obligation. Such amount is expected to be fully recognized as revenue in the fiscal year 2026.

As of June 30, 2025, we had outstanding bank loans of approximately $9.9 million borrowed from banks in the PRC. We expect that we will be able to renew all of our existing bank loans upon their maturity based on past experience and our good credit history. In addition to the current borrowings, subsequently, we borrowed additional $1.0 million loans from various PRC banks and repaid approximately $4.1 million loans upon loan maturity up to the date of the Company's consolidated financial statements were released.

As of June 30, 2025, our working capital amounted to $14,834,774. We intend to finance our future working capital requirements from cash generated from operating activities, bank borrowings and financial support from related parties. However, we may seek additional financings, to the extent required, and there can be no assurances that such financing will be available on favorable terms or at all.

Based on the current operating plan, the management believe that the above-mentioned measures collectively will provide sufficient liquidity for us to meet our future liquidity and capital requirement for at least 12 months from the date of this filing.

The following table sets forth summary of our cash flows for the periods indicated:

		For the years ended June 30,
		2025				2024				2023
Net cash provided by (used in) operating activities		$	2,746,352			$	2,082,250			$	(3,751,832	)
Net cash used in investing activities			(79,741	)			(155,448	)			(144,227	)
Net cash provided by (used in) financing activities			2,913,017				(2,246,032	)			8,749,216
Effect of exchange rate fluctuation on cash and restricted cash			(2,685,096	)			(609,177	)			(1,391,813	)
Net increase (decrease) in cash and restricted cash			2,894,532				(928,407	)			3,461,344
Cash and restricted cash at beginning of year			5,484,960				6,413,367				2,952,023
Cash and restricted cash at end of year		$	8,379,492			$	5,484,960				6,413,367

Cash Flows for the Year Ended June 30, 2024 Compared to the Year Ended June 30, 2023

For a detailed description of the comparison of cash flows ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Operating Activities

Net cash provided by operating activities was $2,746,352 for the fiscal year ended June 30, 2025, which primarily consisted of the following:

●

Net income of $1,194,497 for the fiscal year 2025.

●

A decrease in accounts receivable of $1,207,384. The decrease was due to timely payment from the customers for the June 30, 2025 account receivables payments. All of AR balance as of June 30, 2024 has been collected and approximately 91.0% of accounts receivable balance as of June 30, 2025 has been collected as of September 30, 2025. The collected accounts receivable is available cash, which can be used as working capital for our business operation if necessary.

Built upon our proprietary industry knowledge and coupled with our SaaS suite, we are committed to working with our clients to understand their needs and challenges and offering suitable products and services to help them meet their respective needs. Our mission is to transform the traditional electronic component distribution business by offering SME customers integrated solutions and help them introduce innovative products, reduce their time to market, and enhance their overall competitiveness.

●

A decrease in accounts payable of $986,372. We decreased the purchase of electronic component products from various suppliers with payment terms ranging from one to three months. We make payment to suppliers based on payment terms and upon receiving the invoices from suppliers. 92.5% of accounts payable balances as of June 30, 2025 has been fully settled of September 30, 2025.

●

A decrease in contract liabilities of $808,666. Our customers are typically required to make certain prepayment to us before we purchase products from suppliers. We record such prepayment as deferred revenue because our performance obligation associated with delivery of products to customers had not been satisfied as of the balance sheet date.

●

A decrease in advances to suppliers of $2,266,224 due to the less purchase required prepayment to the suppliers in fiscal year 2025.

●

An increase in taxes payable of $267,625 due to increased value added taxes payables.

For a detailed description of the comparison of operating activities ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Investing Activities

Net cash used in investing activities amounted to $79,741 for the fiscal year ended June 30, 2025, primarily consisting of purchase of property and equipment of $32,478, purchase of intangible assets of $47,263, and an increase in short-term investment $4,051,068 to purchase interest-bearing wealth management financial products from PRC banks to earn interest income, offset by a collection of $4,051,068 short-term investments proceeds upon maturity.

For a detailed description of the comparison of operating activities ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Financing Activities

The net cash used in financing activities amounted to $2,913,017 for the year ended June 30, 2025, primarily consisting of proceeds from short-term bank loans of $168,375,378, proceeds from borrowings from related parties as working capital of $3,416,744, proceeds from notes payable of $4,334,761, and proceeds from the sale of common stock $111,882, offset by a repayment of short-term bank loans of $168,102,629, repayment of related parties borrowings of $3,684,978, and repayment of notes payable of $1,538,141.

For a detailed description of the comparison of financial activities ended Jun 30, 2024 to the year ended June 30, 2023, see "Item 5. Operating and Financial Review and Prospects-Our Organization-Results of Operations for the Fiscal Years Ended June 30, 2024, 2023 and 2022" of our Annual Report on Form 20-F filed with the Securities and Exchange Commission October 25, 2024.

Commitments and contingencies

From time to time, we are a party to various legal actions arising in the ordinary course of business. We accrue costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. For the years ended June 30, 2025, 2024 and 2023, we did not have any material legal claims or litigation that, individually or in aggregate, could have a material adverse impact on our consolidated financial position, results of operations and cash flows.

As of June 30, 2025, we had the following contractual obligations:

		Total				Less than 1 year				1 - 2 years				More than 2 years
Contractual obligations
Repayment of short-term bank loans(1)		$	9,893,448			$	9,893,448			$	-			$	-
Operating lease commitment(2)			199,119				81,608				66,250				51,261
Total		$	10,092,567			$	9,975,056			$	66,250			$	51,261

(1)

As of June 30, 2025, we borrowed total of $9,893,448 short-term loans from PRC banks as working capital (including $3.1 million short-term loans from Shanghai Pudong Development Bank, $1.0 million short-term loans from Agricultural Bank of China, $4.4 million short-term loans from HSBC Bank (China) Company Limited and $1.4 million short-term loans from Huaxia bank) with maturity date ranging from November 22, 2024 to February 27, 2026, with effective interest rate ranging from 2.9% to 3.6% per annum. Most of these short-term loans have been repaid upon maturity (see Note 11).

(2)	The Company's PRC subsidiaries entered into operating lease agreements with landlords to lease warehouse and office space. For the years ended June 30, 2025 and 2024, total operating lease commitment amounted to $199,119 and $52,012, respectively (see Note 18).

Subsequent after June 30, 2025, we have borrowed additional $1.0 million short-term loans from various PRC banks in total, which we believe sufficient for our current operation in the next 12 months.

As of June 30, 2025, future minimum lease payments under non-cancelable operating lease agreement are as follows:

Twelve Months ended June 30,		Lease expense
2026			439,046
2027			254,930
2028			152,234
Total future minimum lease payments		$	846,210
Less: Imputed interest			(18,948	)
Total		$	827,262

The future minimum lease payment consists of lease future payment from lease agreements with terms that are shorter than twelve months which was not included in lease liability in balance sheet and lease liability from lease agreements with terms that are greater than twelve months which are classified as lease liability (see Note 10).

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements as of June 30, 2025, 2024 and 2023.

Inflation

Inflation does not materially affect our business or the results of our operations.

Seasonality

Seasonality does not materially affect our business or the results of our operations.

Holding Company Structure

We are a holding company with no material operations of our own and do not generate any revenue. We currently conduct substantially all of our operations through our wholly-owned subsidiaries in Hong Kong and China. We are permitted under PRC laws and regulations to provide funding to PRC subsidiaries only through loans or capital contributions, and only if we satisfy the applicable government registration and approval requirements.

If we determine to pay dividends on any of our Class A Ordinary Shares in the future, as a holding company, unless we receive proceeds from future offerings, we will be dependent on receipt of funds from our Hong Kong subsidiaries, including Components Zone HK, which will be dependent on receipt of dividends from ICZOOM WFOE, which will be dependent on dividends from the Hjet Shuntong, which will be dependent on receipt of dividends from Hjet Supply Chain, which will be dependent on receipt of payments from ICZOOM Shenzhen and Hjet Logistics in accordance with the laws and regulations of the PRC and Hong Kong.

ICZOOM WFOE's ability to distribute dividends is based upon its distributable earnings. Current PRC regulations permit ICZOOM WFOE to pay dividends to Components Zone HK only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. In addition, each of ICZOOM WFOE and other subsidiaries in China is required to set aside at least 10% of its after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital. Upon contribution to the statutory reserves using its after-tax profits, each of such entity in China may also make further contribution to the discretionary reserve funds using its after-tax profits in accordance with a resolution of the shareholders meeting. Although the statutory reserves can be used, among other ways, to increase the registered capital and eliminate future losses in excess of retained earnings of the respective companies, the reserve funds are not distributable as cash dividends except in the event of liquidation.

As of the date of this Annual Report, PRC subsidiaries have not paid any dividends to the offshore companies.

C. Research and development, Patents and License, etc.

Research and development expenses primarily consist of salaries, welfare and insurance expenses paid to our employees involved in the research and development activities, materials and supplies used in the research and development activities, depreciation, and other miscellaneous expenses.

Our research and development expenses were $463,173, $481,548 and $437,261 for the fiscal years ended June 30, 2025, 2024 and 2023, respectively.

As we continue to develop and implement our e-commerce platform and software in order to optimize our inventory management and provide more friendly services to satisfy customer demand, we expect our research and development expenses to continue to increase in the foreseeable future.

D. Trend information

Other than as disclosed elsewhere in this Form 20-F, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our net revenues, income from operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

E. Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenue and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenue and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the valuation of accounts receivable, useful lives of property and equipment, the realization of deferred tax assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, and revenue recognition. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this Annual Report reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. Further, we elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that we (1) are no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Risks and uncertainties

The main operations of the Company are located in the PRC. Accordingly, the Company's business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the economy in the PRC. The Company's results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, such experience may not be indicative of future results.

The Company's business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company's operations.

The Company's business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company's operations.

The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:

Uses of estimates

In preparing the consolidated financial statements in conformity U.S. GAAP, the management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the valuation of accounts receivable and advance to suppliers, inventory valuations, useful lives of property and equipment and intangible assets, the recoverability of long-lived assets, realization of deferred tax assets, and provision necessary for contingent liabilities. Actual results could differ from those estimates.

Accounts receivable

Accounts receivables are presented net of allowance for credit losses. The Company reduces accounts receivable by recording an allowance for doubtful accounts to account for the estimated impact of collection issues resulting from a client's inability or unwillingness to pay valid obligations to the Company. The Company determines the adequacy of allowance for doubtful accounts based on individual account analysis, historical collection trend, and best estimate of specific losses on individual exposures. The Company establishes a provision for doubtful receivable when there is objective evidence that the Company may not be able to collect amounts due. Actual amounts received may differ from management's estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after the management has determined that the likelihood of collection is not probable. As of June 30, 2025, 2024 and 2023, there was no expected credit loss.

Inventories

Inventories are comprised of purchased electronic components products to be sold to customers. Inventories are stated at the lower of cost or net realizable value, determined using primarily an average weighted cost method. The Company reviews its inventories periodically to determine if any reserves are necessary for potential shrinkage and obsolete or unusable inventory. The inventory allowance as of June 30, 2025, 2024 and 2023 was $374, nil and $1,851, respectively.

Advances to suppliers

Advance to suppliers consists of balances paid to suppliers for purchase of electronic components that have not been provided or received. Advance to suppliers is short-term in nature and are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for uncollectible balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. As of June 30, 2025, 2024 and 2023, there was no allowance recorded as the Company considers all of the advances to be fully realizable.

Revenue recognition

ASC 606 establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. This new guidance provides a five-step analysis in determining when and how revenue is recognized. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the new guidance requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

We currently generate our revenue from the following main sources:

Revenue from sales of electronic components to customers

We operate two B2B online platforms www.iczoom.com and www.iczoomex.com with same functions and services, where our customers can register as members first, and then use the platform to search for or post the quotes for electronic component products (such as microcircuit and microchip, etc.). Once we receive purchase orders from customers, we purchase desired products from suppliers, take control of purchased products in our warehouses, and then organize the shipping and delivery of products to customers. New customers are typically required to make certain prepayment to us before we purchase products from suppliers.

The Company accounts for revenue from sales of electronic components on a gross basis as the Company is responsible for fulfilling the promise to provide the desired electronic component products to customers, and is subject to inventory risk before the product ownership and risk are transferred and has the discretion in establishing prices. All of the Company's contracts are fixed price contracts and have one single performance obligation as the promise is to transfer the individual goods to customers, and there is no separately identifiable other promises in the contracts. The Company's revenue from sales of electronic components is recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company determines that control has transferred, and revenue is recognized, upon the customer's receipt and formal acceptance of the goods, as evidenced by a proof of delivery. This policy is applied in accordance with ASC 606, and the Company's contracts typically stipulate that acceptance occurs at delivery. Advance payment from customers is recorded as contract liabilities first and then recognized as revenue when products are delivered to the customers and the Company's performance obligations are satisfied. The Company does not routinely allow customers to return products and historically return allowance was immaterial. There is no separate rebate, discount, or volume incentive involved. Revenue is reported net of all value added taxes ("VAT").

Commission fee revenue

Our commission fee revenues primarily consist of (1) fees charged to customers for assisting them for customs clearance when they directly purchase electronic component products from overseas suppliers; (2) fees charged to customers for providing temporary warehousing and organizing the product shipping and delivery to customer designated destinations after customs clearance. There is no separately identifiable other promises in the contracts.

The Company merely acts as an agent in this type of transaction and earns a commission fee ranging from 0.15% to 2% based on the value of the merchandise that customers purchase from suppliers and such commission fee is not refundable. The Company does not have control of the goods in this type of transaction, has no discretion in establishing prices and does not have the ability to direct the use of the goods to obtain substantially all the benefits. Revenue is recognized only at the point when the Company's customs clearance, warehousing, logistic and delivery services are completed and evidenced by the customer's signed proof of delivery, which constitutes the customer acknowledge of receipt and service completion. Revenues are recorded net of sales taxes and value added taxes.

Contract Assets and Liabilities

We did not have contract assets as of June 30, 2025, 2024 and 2023.

Contract liabilities are recognized for contracts where payment has been received in advance of delivery. Our contract liabilities, which are reflected in our consolidated balance sheets as deferred revenue of $2,218,095, $3,037,609 and $1,671,353 as of June 30, 2025, 2024 and 2023, respectively. Costs of fulfilling customers' purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling expense when incurred.

Disaggregation of revenue

Revenue disaggregated by product and service types was as follows for the fiscal years ended June 30, 2025, 2024 and 2023:

		For the years ended June 30,
		2025				2024				2023
Sales of electronic components products:
Semiconductor:
Integrated Circuits		$	103,996,133			$	93,611,171			$	36,208,767
Power/Circuit Protection			14,705,571				2,135,446				13,902,350
Discretes			9,976,721				997,097				16,047,821
Passive Components			9,233,555				5,706,403				99,326,417
Optoelectronics/Electromechanical			11,750,060				17,733,992				8,535,997
Other semiconductor products			21,547,984				3,954,028				15,366,941
Equipment, tools and others:
Equipment			3,620				29,665,978				10,102,545
Tools and others			13,316,037				21,516,780				11,632,317
Total sales of electronic components products			184,529,681				175,320,895				211,123,155
Service commission fees			2,519,010				2,612,995				3,282,071
Total revenue		$	187,048,691			$	177,933,890			$	214,405,226

Income Tax

We account for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates applicable to taxable income in the fiscal years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

An uncertain tax position is recognized only if it is "more likely than not" that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. No significant penalties or interest relating to income taxes have been incurred during the years ended June 30, 2025, 2024 and 2023. We do not believe that there was any uncertain tax provision as of June 30, 2025, 2024 and 2023. Our subsidiaries in Hong Kong are subject to the profit taxes in Hong Kong. Our subsidiaries in China are subject to the income tax laws of the PRC. Through its Hong Kong subsidiaries and parent company, for the fiscal year ended June 30, 2025, the Company's net income was $410,999; for the fiscal years 2024 and 2023, the Company generated net loss of $1,964,641 and net income of $554,846 respectively. As of June 30, 2025, all of the tax returns of our subsidiaries remain available for statutory examination by Hong Kong and PRC tax authorities.