Armlogi Holding (BTOC) risk factors, FY2026 10-K

Economic, Political, and Market Risks

1. 01We face competition in the market for warehousing and logistics activities, and we expect competition from existing competitors and other companies that may enter the market or introduce new solutions in the future, which may decrease our net revenue
2. 02Any adverse change in political relations between the U.S. and other countries or regions where our overseas customers are located (particularly the PRC), such as the ongoing U.S.-China trade conflicts, may negatively affect our business
3. 03U.S. government trade actions, including ongoing tariff escalations, trade negotiations with China, and new tariff measures targeting forced labor concerns, could have a material adverse effect on our business, financial position, and results of operationsNew
4. 04The ongoing conflict in the Middle East, including hostilities involving Israel, Hamas, Hezbollah, the Houthis, and Iran, as well as the broader risk of regional escalation, may adversely affect our business, financial condition, and results of operationsNew
5. 05China’s economic, political, and social conditions, as well as governmental policies, could affect the business environment and economic conditions in China, which may result in an adverse impact on the demand for our services, potentially harming our financial condition and operating results
6. 06Disruptions to the international supply chain systems could adversely impact our business, financial condition, and results of operations
7. 07Labor actions may disrupt the U.S. transportation network we rely on and thus may adversely impact our business, financial condition, and results of operations
8. 08Demand for our services may be adversely impacted by the changing consumer spending power and habits in the U.S
9. 09We may be adversely affected by the effects of inflation and a potential recession
10. 10If the PRC government imposes further restrictions and limitations on our PRC customers’ ability to transfer or distribute cash from the PRC to the U.S., our business, financial condition, and results of operations could be materially adversely affected

Operational Risks

1. 11Failure to renew our current leases or locate desirable alternatives for our facilities could materially and adversely affect our business
2. 12If our customers are able to reduce their logistics and supply chain costs or increase utilization of their internal solutions, our business and operating results may be materially and adversely affected
3. 13Customer demand is difficult to forecast accurately, and as a result we may be unable to make planning and spending decisions to match such demand
4. 14We may face risks related to natural disasters, health epidemics, and other outbreaks, which could significantly disrupt our operations57% rewritten
5. 15Our results of operations are subject to seasonal fluctuations
6. 16Our business and results of operations may be harmed by the misconduct of authorized employees that have access to important assets of our Company such as inventory, bank accounts, and confidential information
7. 17Our insurance does not fully cover all of our operational risks, and changes in the cost of insurance or the availability of insurance could materially increase our insurance costs or result in a decrease in our insurance coverage
8. 18Cybersecurity incidents could disrupt our business operations, result in the loss of critical and confidential information, adversely impact our reputation, and harm our business
9. 19Our business, financial condition, and reputation may be substantially harmed by security breaches, interruptions, delays, and failures in our systems and operations
10. 20Our business and financial condition may be substantially harmed by inventory losses caused by theft, vandalism, or accidents during transportation and/or warehousing22% rewritten
11. 21If we fail to manage our growth or execute our strategies and future plans effectively, we may not be able to take advantage of market opportunities or meet the demand of our customers
12. 22If we fail to attract, recruit, or retain our key personnel, including our executive officers, senior management, and key employees, our ongoing operations and growth could be affected
13. 23Future acquisitions may have an adverse effect on our ability to manage our business. Raising additional capital may cause dilution to our stockholders, including purchasers of our common stock in our initial public offering
14. 24Our previous growth rates and performance may not be sustainable or indicative of our future growth and financial outcomes, and there is no assurance that we will be able to achieve the same level of financial performance in the future28% rewritten

Legal, Regulatory, and Compliance Risks

1. 25We are subject to numerous laws and regulations applicable to the warehousing and logistics industry in the U.S., which, if we are found to have violated, may adversely affect our business and results of operations
2. 26Non-compliance with laws and regulations on the part of any third parties with which we conduct business could expose us to legal expenses, compensation to third parties, penalties, and disruptions of our business, which may adversely affect our results of operations and financial performance
3. 27Failure to protect intellectual property rights could adversely affect our business
4. 28Third parties may claim that we infringe their proprietary intellectual property rights, which could cause us to incur significant legal expenses and prevent us from promoting our services
5. 29We may from time to time be subject to claims, controversies, lawsuits, and legal proceedings, which could adversely affect our business, prospects, results of operations, and financial condition
6. 30We may be the subject of allegations, harassment, or other detrimental conduct by third parties, which could harm our reputation and cause us to lose market share and customers

Trading Risks

1. 31New Nasdaq minimum market value requirement may result in delisting of our common stockNew
2. 32The market price of our common stock may be volatile or may decline regardless of our operating performance, and we may be unable to maintain compliance with Nasdaq’s continued listing requirementsNew
3. 33The price of our common stock could be subject to rapid and substantial volatility
4. 34Our existing stockholders may experience future dilution as a result of future equity offerings or other equity issuances31% rewritten
5. 35As a public company, we incur substantially increased costs as compared to when we were a private company
6. 36We may not be able to maintain the listing of our common stock on Nasdaq86% rewritten
7. 37Substantial future sales of our common stock or the anticipation of future sales of our common stock in the public market could cause the price of our common stock to decline22% rewritten
8. 38If securities or industry analysts do not publish research or reports about our business, or if they publish a negative report regarding our common stock, the price of our common stock and trading volume could decline
9. 39We will be a “controlled company” within the meaning of the Nasdaq listing rules, and may follow certain exemptions from certain corporate governance requirements that could adversely affect our public stockholders
10. 40We are an “emerging growth company” and a “smaller reporting company” under the JOBS Act, and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors