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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~February~~August 2931, 2024

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

For the transition period from _________ to _________

Commission file number: 000-50612

UNIQUE LOGISTICS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Nevada		01-0721929
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
154-09 146th Ave, Jamaica, NY		11434
(Address of principal executive offices)		(Zip Code)

678-365-6004

154-09 146th Ave

Jamaica, NY

11434

(Address of principal executive offices)

(Zip Code)

(718) 978-2000

(Registrant’s telephone number, including area code)

Securities registered under Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of exchange on which registered
None		None		None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes ☒ No ☐~~

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant ishas asubmitted ~~large~~electronically ~~accelerated~~every ~~filer,~~Interactive anData ~~accelerated~~File ~~filer,~~required ato ~~non-accelerated~~be ~~filer,~~submitted apursuant ~~smaller~~to ~~reporting~~Rule ~~company,~~405 orof anRegulation ~~emerging~~S-T ~~growth company~~(§232.405 ~~See~~of ~~the~~this ~~definitions~~chapter) ofduring ~~“large~~the ~~accelerated~~preceding ~~filer,”~~12 ~~“accelerated~~months ~~filer,” “smaller~~(or ~~reporting~~for ~~company,”~~such ~~and~~shorter ~~“emerging~~period ~~growth~~that ~~company”~~the inregistrant was ~~Rule~~required ~~12b-2~~to ofsubmit ~~the~~such ~~Exchange Act~~files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a small reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ~~Yes ☐ No ☒~~

~~As of~~Yes ~~May~~☐ 2,No ~~2024, there were 799,141,770 shares of the registrant’s common stock outstanding.~~☒

As of December 16, 2024, there were 799,141,770 shares of the registrant’s common stock outstanding.

UNIQUE LOGISTICS INTERNATIONAL, INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~FEBRUARY~~AUGUST 2931, 2024

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION		F-1
ITEM 1.	Financial Statements	F-1
	Condensed Consolidated Balance Sheets as of February 29, 2024 (unaudited) and May 31, 2023	F-1
	Condensed Consolidated Balance Sheets	F-1
	Condensed Consolidated Statements of Operations for the Three and Nine Months ended February 29, 2024 and February 28, 2023 (unaudited)	F-2
	Condensed Consolidated Statements of Operations	F-2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months ended February 29, 2024 and February 28, 2023 (unaudited)	F-4
	Condensed Consolidated Statements of Comprehensive Income	F-3
	Condensed Consolidated Statements of Cash Flows for the Nine Months ended February 29, 2024 and February 28, 2023 (unaudited)	F-5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	F-4
	Notes to Condensed Consolidated Financial Statements (unaudited)	F-6
	Condensed Consolidated Statements of Cash Flows	F-5
	Notes to Condensed Consolidated Financial Statements	F-6
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
ITEM 3.	Quantitative and Qualitative Disclosures ~~about~~About Market Risk	138
ITEM 4.	Controls and Procedures	138
PART II. OTHER INFORMATION		149
ITEM 1.	Legal Proceedings	149
ITEM 1A.	Risk Factors	149
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	149
ITEM 3.	Defaults Upon Senior Securities	149
ITEM 4.	Mine Safety Disclosures	149
ITEM 5.	Other Information	149
ITEM 6.	Exhibits	1510
SIGNATURES		1611

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNIQUE LOGISTICS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	February 29, 2024			May 31, 2023
	August 31, 2024			May 31, 2024
	(Unaudited)			(Audited)
ASSETS
Current Assets:
Cash and cash equivalents	$	63,~~743~~520,~~144~~910		$	63,~~744~~799,~~238~~561
Accounts receivable, net		4261,~~059~~208,~~013~~381			4138,~~402~~601,~~435~~255
Contract assets		39,~~047~~440,~~570~~169			23,~~886~~961,~~779~~199
Other current assets and prepaids		5,~~374~~973,~~732~~307			95,~~293~~370,~~533~~376
Total current assets		5780,~~224~~142,~~459~~767			6051,~~326~~732,~~985~~391
Property and equipment, net		~~822~~697,~~230~~780			~~609~~659,~~785~~701
Other noncurrent assets:
Goodwill		2023,~~516~~768,~~018~~631			20,516,018
Intangible assets, net		1112,~~571~~547,~~589~~753			1211,~~865~~196,~~093~~171
Equity-method investments		3,~~449~~973,~~163~~365			3,~~381~~457,~~683~~449
Operating lease right-of-use assets, net		98,~~395~~296,~~501~~928			109,~~269~~019,~~516~~914
Deferred tax asset, net		1,~~978~~659,~~178~~830			-4,307,486
Deferred offering cost		-			2,419,976
Other noncurrent assets		2,423,373			2,426,314
Other noncurrent assets		670,707			1,133,674
Total other noncurrent assets		52,669,880			50,923,352
Total other noncurrent assets		47,581,156			50,585,960
Total assets	$	133,510,427		$	103,315,444
Total assets	$	105,627,845		$	111,522,730
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	2733,~~712~~750,~~571~~804		$	2519,~~132~~983,~~388~~859
Accrued expenses and current liabilities		68,~~372~~520,~~823~~080			86,~~594~~471,~~947~~835
Accrued freight		211,~~225~~337,~~313~~212			34,~~489~~054,~~957~~220
Revolving credit facility		1122,~~852~~788,~~663~~539			813,~~050~~125,~~227~~031
Current portion of notes payable		~~971~~1,~~081~~084,130			-1,272,165
Current portion of notes payable to related parties		150,655			4,801,310
Current portion of operating lease liability		2,318,315			2,588,817
Current portion of notes payable		150,655			4,801,310
Total current liabilities		79,799,080			47,495,927
Current portion of operating lease liability		2,676,904			2,379,774
Total current liabilities		51,962,010			52,448,603
Noncurrent liabilities
Notes payable		11,028,919			4,000,000
Notes payable, net of current portion		10,679,028			10,727,835
Notes payable to related parties, net of current portion		10,100,000			8,750,000
Notes payable to related parties		13,297,010			11,147,010
Notes payable		1013,~~100~~297,~~000~~010			811,~~750~~147,~~000~~010
Operating lease liability, net of current portion		76,~~194~~450,~~929~~163			86,~~212~~902,~~445~~171
Derivative liabilities		75,~~439~~572,~~695~~000			115,~~558~~669,~~261~~000
Deferred tax liability, net		-			4,405,442
Other noncurrent liabilities		9,349,755			10,961,931
Other noncurrent liabilities		11,558,135			4,552,346
Total noncurrent liabilities		45,347,956			45,407,947
Total noncurrent liabilities		47,321,678			41,478,494
Total liabilities		125,147,036			92,903,874
Total liabilities		99,283,688			93,927,097
Commitments and contingencies (Note 6)		-			-
Stockholders’ Equity:
Preferred Stock, $.001 par value: 5,000,000 shares authorized
Preferred Stock, $0.001 par value: 5,000,000 shares authorized, 941,240 issued and outstanding as of August 31, 2024 and May 31, 2024, respectively.		-			-
Series A Convertible Preferred stock, $0.001 par value; 120,065 issued and outstanding as of February 29, 2024 and May 31, 2023, respectively. Liquidation preference $120 on February 29, 2024		120			120
Series A Convertible Preferred stock, $0.001 par value; 120,065 issued and outstanding as of August 31, 2024 and May 31, 2024, respectively. Liquidation preference $120 at August 31, 2024		120			120
Series B Convertible Preferred stock, $0.001 par value; 820,800 issued and outstanding as of February 29, 2024 and May 31, 2023, respectively. Liquidation preference of $821 on February 29, 2024		821			821
Series B Convertible Preferred stock, $0.001 par value; 820,800 issued and outstanding as of August 31, 2024 and May 31, 2024, respectively. Liquidation preference of $821 at August 31, 2024		821			821
Series C Convertible Preferred stock, $0.001 par value; 195, issued and outstanding as of February 29, 2024 and May 31, 2023, respectively. Liquidation preference $7.6 million on February 29, 2024		-			-
Series C Convertible Preferred stock, $0.001 par value; 195, issued and outstanding as of August 31, 2024 and May 31, 2024, respectively. Liquidation preference $3.3 million at August 31, 2024		-			-
Series D Convertible Preferred stock, $0.001 par value; 180 issued and outstanding as of February 29, 2024 and May 31, 2023, respectively. Liquidation preference $7.1 million on February 29, 2024		-			-
Series D Convertible Preferred stock, $0.001 par value; 180 issued and outstanding as of August 31, 2024 and May 31, 2024, respectively. Liquidation preference $3.1 million at August 31, 2024		-			-
Preferred stock, value		-			-
Common stock, $0.001 par value; 800,000,000 shares authorized; 799,141,770 shares issued and outstanding as of February 29, 2024 and May 31, 2023, respectively.		799,142			799,142
Common stock, $0.001 par value; 800,000,000 shares authorized; 799,141,770 shares issued and outstanding as of August 31, 2024 and May 31, 2024, respectively.		799,142			799,142
Additional paid-in capital		180,220			180,220
Accumulated other comprehensive income		~~(218~~1,~~547~~206	)		3(161,~~258~~543	)
Retained earnings		13,~~976~~845,~~325~~292			135,~~066~~952,~~109~~906
Total Stockholders’ Equity attributable to common shareholder		24,~~738~~826,~~081~~801			146,~~049~~771,~~670~~666
Equity attributable to noncontrolling interests		3,~~606~~536,~~076~~590			3,~~545~~639,~~963~~904
Total Stockholders’ Equity		68,~~344~~363,~~157~~391			1710,~~595~~411,~~633~~570
Total Liabilities and Stockholders’ Equity	$	~~105~~133,~~627~~510,~~845~~427		$	~~111~~103,~~522~~315,~~730~~444

See notes accompanying condensed consolidated financial statements.

F-1

UNIQUE LOGISTICS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATION

(Unaudited)

	For the Three Months Ended February 29, 2024			For the Three Months Ended February 28, 2023			For the Nine Months Ended February 29, 2024			For the Nine Months Ended February 28, 2023
	For the Three Months Ended August 31, 2024			For the Three Months Ended August 31, 2023
Revenues:
Airfreight services	$	3147,~~672~~248,~~402~~102		$	1319,~~206~~147,~~112~~970		$	~~87,102,162~~		$	~~64,721,816~~
Ocean freight and ocean services		2757,~~543~~064,~~642~~403			2330,~~106~~728,~~949~~501			~~74,933,392~~			~~159,292,026~~
Contract logistics		~~579~~975,~~675~~579			~~755~~572,~~034~~712			~~1,892,954~~			~~2,499,459~~
Customs brokerage and other services		89,~~034~~910,~~666~~153			12,~~559~~419,~~407~~101			~~28,612,414~~			~~48,460,306~~
Total revenues		67115,~~830~~198,~~385~~237			4962,~~627~~868,~~502~~284			~~192,540,922~~			~~274,973,607~~
Equity method earnings		~~224~~465,~~854~~856			-175,696			~~675,606~~			-
Costs and operating expenses:
Airfreight services		2944,~~076~~845,~~358~~501			1117,~~964~~892,~~314~~433			~~81,374,442~~			~~59,465,104~~
Ocean freight and ocean services		2351,~~999~~117,~~410~~718			1925,~~722~~819,~~259~~755			~~62,964,504~~			~~142,806,034~~
Contract logistics		~~126~~255,~~523~~558			~~215~~168,~~245~~158			~~507,326~~			~~846,226~~
Customs brokerage and other services		68,~~346~~506,~~786~~125			1110,~~397~~748,~~398~~897			~~24,263,573~~			~~44,773,324~~
Salaries and related costs		5,~~529~~218,~~773~~613			36,~~076~~016,~~221~~892			~~17,293,553~~			~~10,036,200~~
Professional fees		~~666~~1,~~850~~055,949			39807,~~082~~893			~~2,299,312~~			~~1,213,807~~
Rent and occupancy		1,~~176~~362,~~612~~424			~~883~~1,~~681~~096,565			~~3,382,602~~			~~2,026,363~~
Selling and promotion		~~609~~576,~~751~~144			1714,~~471,236~~971			~~1,888,439~~			~~2,033,668~~
Depreciation and amortization		~~752~~467,~~750~~626			~~203~~699,~~390~~400			~~2,203,093~~			~~606,030~~
Foreign exchange transactions, net		26,858			-			(267,209	)		-
Foreign exchange (gains) and losses		(28,237	)		(194,186	)
Other		282,871			323,747			948,402			993,508
Other expense		639,722			666,165
Total costs and operating expenses		68114,~~594~~017,~~542~~143			4964,~~296~~436,~~573~~943			~~196,858,037~~			~~264,800,264~~
(Loss) income from operations		(539,303	)		330,929			(3,641,509	)		10,173,343
Income (loss) from operations		1,646,950			(1,392,963	)
Other (expenses) income
Other income (expenses)
Interest expense		(12,~~407~~018,~~449~~622	)		(~~546~~1,~~791~~390,208	)		~~(3,823,822~~	)		~~(2,876,776~~	)
Change in fair value of derivative liabilities		41,~~300~~613,~~429~~621			64(21,~~955~~788	)		~~4,118,566~~			~~809,611~~
SPAC merger termination cost		(10,415,816	)		-			(10,415,816	)		-
Total other income (expenses)		(405,001	)		(1,411,996	)
Uplist termination cost		(3,054,514	)		-			(3,054,514	)		-
Net income (loss) before income taxes		1,241,949			(2,804,959	)
Total other (expenses) income		(10,577,350	)		(481,836	)		(13,175,586	)		(2,067,165	)
Income tax expense (benefit)		3,349,563			(493,831	)
Net (loss) income before income taxes		(11,116,653	)		(150,907	)		(16,817,095	)		8,106,178
Net loss		(2,107,614	)		(2,311,128	)
Income tax (benefit) expense		(5,268,793	)		(814,080	)		(5,787,424	)		849,967
Noncontrolling interest		(103,314	)		80,477
Net (loss) income		(5,847,860	)		663,173			(11,029,671	)		7,256,211
Net loss attributable to for common shareholders	$	(2,210,928	)	$	(2,230,651	)
Noncontrolling interest		(114,538	)		-			(60,113	)		-
Net loss attributable to common shareholders per common share
Net (loss) income attributable to for common shareholders	$	(5,962,398	)	$	663,173		$	(11,089,784	)	$	7,256,211
– basic and dilited	$	(0.00	)	$	(0.00	)
Net (loss) income available for common shareholders per common share
Weighted average common shares outstanding
– basic	$	~~(0.01~~799,141,770	)	$	-799,141,770		$	~~(0.01~~	)	$	~~0.01~~
– diluted	$	~~(0.01~~799,141,770	)	$	-799,141,770		$	~~(0.01~~	)	$	-
Weighted average common shares outstanding
– basic		799,141,770			799,141,770			799,141,770			780,768,778
– diluted		799,141,770			9,677,967,424			799,141,770			9,659,594,432

See notes to accompanying condensed consolidated financial statements.

F-2

UNIQUE LOGISTICS INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(unaudited)

	For the Three			For the Three
	For the Three Months Ended August 31, 2024			For the Three Months Ended August 31, 2023
	Months Ended			Months Ended
Net Loss	$	(2,107,614	)	$	(2,311,128	)
	February 29, 2024			February 28, 2023
Other comprehensive income, net of tax:
Net (loss) income	$	(5,847,860	)	$	663,173
Foreign currency translation gain		162,749			3
Other comprehensive income (OCI), net of tax:
Other comprehensive loss		(1,944,865	)		(2,311,125	)
Foreign currency translation adjustments		21,432			-
Net loss (gain) attributable to noncontrolling interest		(103,314	)		80,477
OCI tax effect		-			-
Comprehensive loss attributable to common shareholder	$	(2,048,179	)	$	(2,230,648	)
Total comprehensive (loss) income		(5,826,428	)		663,173
Net loss attributable to noncontrolling interest		114,538			-
Comprehensive (loss) income attributable to common shareholder	$	(5,940,966	)	$	663,173

	For the Nine			For the Nine
	Months Ended			Months Ended
	February 28, 2023			February 28, 2023
Net (loss) income	$	(11,029,671	)	$	7,256,211
Other comprehensive income, net of tax:
Foreign currency translation adjustments		(236,674	)		-
OCI tax effect		14,869			-
Total comprehensive (loss) income		(11,251,476	)		7,256,211
Net loss attributable to noncontrolling interest		60,113			-
Comprehensive (loss) income attributable to common shareholder	$	(11,311,589	)	$	7,256,211

See notes to accompanying condensed consolidated financial statements.

F-3

UNIQUE LOGISTICS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

~~For the Three and Nine Months Ended February 29, 2024~~(unaudited)

	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Series D Preferred Stock				Common Stock				Additional Paid in		Accumulated Comprehensive			Retained			Total Stockholders’ equity attributable to common			Non- Controlling			Total Stockholders
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital		income			earning			stockholder			Interest			Equity
Balance, June 1, 2023		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	3,258		$	13,066,109		$	14,049,670		$	3,545,963		$	17,595,633
Other comprehensive income (loss), net of tax		-		-		-		-		-		-		-		-		-		-		-		(166,750	)		-			(166,750	)		-			(166,750	)
Net loss		-		-		-		-		-		-		-		-		-		-		-		-			(2,230,651	)		(2,230,651	)		(80,477	)		(2,311,128	)
Balance, August 31, 2023		120,065		120		820,800		821		195		-		180		-		799,141,770		799,142		180,220		(163,493	)		10,835,458			11,652,269			3,465,486			15,117,755
Other comprehensive income (loss), net of tax		-		-		-		-		-		-		-		-		-		-		-		(76,487	)		-			(76,487	)		-			(76,487	)
Net loss		-		-		-		-		-		-		-		-		-		-		-		-			(2,896,735	)		(2,896,735	)		26,052			(2,870,683	)
Balance, November 30, 2023		120,065		120		820,800		821		195		-		180		-		799,141,770	$	799,142		180,220		(239,979	)		7,938,723			8,679,047			3,491,538			12,170,585
Other comprehensive income (loss), net of tax		-		-		-		-		-		-		-		-		-		-		-		21,432			-			21,432			-			21,432
Net loss		-		-		-		-		-		-		-		-		-		-		-		-			(5,962,398	)		(5,962,398	)		114,538			(5,847,860	)
Balance, February 29, 2024		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	(218,547	)	$	1,976,325		$	2,738,081			3,606,076		$	6,344,157

For the Three Months Ended August 31, 2024

For the Three and Nine Months Ended February 28, 2023

	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital		income			earning			stockholder			Interest			Equity
	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Series D Preferred Stock				Common Stock				Additional Paid in		Accumulated Comprehensive			Retained			Total Stockholders’ equity attributable to common			Non- Controlling			Total Stockholders
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital		income			earning			stockholder			Interest			Equity
Balance, June 1, 2024		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	(161,543	)	$	5,952,906		$	6,771,666		$	3,639,904		$	10,411,570

Other comprehensive income (loss), net of tax		-		-		-		-		-		-		-		-		-		-		-		162,749			-			162,749			-			162,749

Net loss		-		-		-		-		-		-		-		-		-		-		-		-			(2,107,614	)		(2,107,614	)		(103,314	)		(2,210,928	)

Balance, August 31, 2024		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	1,206		$	3,845,292		$	4,826,801		$	3,536,590		$	8,363,391

	Series A Preferred Stock						Series B Preferred Stock				Series C Preferred Stock				Series D Preferred Stock					Common Stock				Additional Paid in			Retained		Total Stockholders’ equity attributable		Non- Controlling		Total Stockholders
	Shares			Amount			Shares		Amount		Shares		Amount		Shares			Amount		Shares		Amount		capital			earning		to registrant		Interest(1)		Equity
Balance, May 31 2022		130,000		$	130			820,800	$	821		195	$	-		187		$	-		687,196,478	$	687,197	$	292,155		$	4,851,541	$	5,831,844	$	-	$	5,831,844
Conversion of Preferred A to Common Stock		(9,935	)		(10	)		-		-		-		-		-			-		67,963,732		67,964		(67,954	)		-		-		-		-
Conversion of Preferred D to Common Stock		-			-			-		-		-		-		(7	)		-		43,981,560		43,981		(43,981	)		-		-		-		-
Net income		-			-			-		-		-		-		-			-		-		-		-			3,321,341		3,321,341		-		3,321,341
Balance, August 31, 2022		120,065			120			820,800		821		195		-		180			-		799,141,770		799,142		180,220			8,172,882		9,153,185		-		9,153,185
Net income		-			-			-		-		-		-		-			-		-		-		-			3,271,697		3,271,697		-		3,271,697
Balance, November 30, 2022		120,065			120			820,800		821		195		-		180			-		799,141,770		799,142		180,220			11,444,579		12,424,882		-		12,424,882
Balance		120,065			120			820,800		821		195		-		180			-		799,141,770		799,142		180,220			11,444,579		12,424,882		-		12,424,882
Recognition of non-controlling interest upon acquisition		-			-			-		-		-		-		-			-		-		-		-			-		-		3,558,757		3,558,757
Net income		-			-			-		-		-		-		-			-		-		-		-			663,173		663,173		-		663,173
Net income (loss)		-			-			-		-		-		-		-			-		-		-		-			663,173		663,173		-		663,173
Balance, February 28, 2023		120,065		$	120			820,800	$	821		195	$	-		180		$	-		799,141,770	$	799,142	$	180,220		$	12,107,752	$	13,088,055	$	3,558,757	$	16,646,812
Balance		120,065		$	120			820,800	$	821		195	$	-		180		$	-		799,141,770	$	799,142	$	180,220		$	12,107,752	$	13,088,055	$	3,558,757	$	16,646,812

For the Three Months Ended August 31, 2023

See notes accompanying condensed consolidated financial statements.

	Series A Preferred Stock				Series B Preferred Stock				Series C Preferred Stock				Series D Preferred Stock				Common Stock				Additional Paid in		Accumulated Comprehensive		Retained			Total Stockholders’ equity attributable to common			Non- Controlling			Total Stockholders
	Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		capital		income		earning			stockholder			Interest			Equity
Balance, June 1, 2023		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	3,258	$	13,066,109		$	14,049,670		$	3,545,963		$	17,595,633
Balance		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	3,258	$	13,066,109		$	14,049,670		$	3,545,963		$	17,595,633

Other comprehensive income (loss), net of tax		-		-		-		-		-		-		-		-		-		-		-		1		-			1			-			1

Net loss		-		-		-		-		-		-		-		-		-		-		-		-		(2,230,651	)		(2,230,651	)		(80,477	)		(2,311,128	)

Balance, August 31, 2023		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	3,259	$	10,835,458		$	11,819,020		$	3,465,486		$	15,284,506
Balance		120,065	$	120		820,800	$	821		195	$	-		180	$	-		799,141,770	$	799,142	$	180,220	$	3,259	$	10,835,458		$	11,819,020		$	3,465,486		$	15,284,506

See notes to accompanying condensed consolidated financial statements.

F-4

UNIQUE LOGISTICS INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	For the Nine Months Ended February 29, 2024			For the Nine Months Ended February 28, 2023
	For the Three Months Ended August 31, 2024			For the Three Months Ended August 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(11,029,671	)	$	7,256,211
Net loss	$	(2,107,614	)	$	(2,311,128	)
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		2467,~~203,093~~627			~~606~~497,~~030~~450
Bad debt recovery		(1,203,978	)		-
Amortization of the right of use assets		734,256			201,950
Amortization of right of use assets		2,144,717			1,269,299
Equity method investment income		(465,856	)		(175,696	)
Equity method earnings		(675,606	)		-
Change in net deferred tax provision		2,647,656			187,824
Change in net deferred tax provision		(6,838,466	)		(261,118	)
Change in fair value of derivative liabilities		(97,000	)		21,788
Change in fair value of derivative liabilities		(4,118,566	)		(809,611	)
Change in fair value of warrants		(1,516,621	)		-
Accretion of consulting agreement		-			(282,666	)
Uplist termination cost previously deferred		2,419,976			-
Changes in operating assets and liabilities:
Accounts receivable		~~547~~(19,~~400~~166,940	)		58(9,~~562~~382,~~998~~076	)
Contract assets		(~~160~~5,~~791~~177,435	)		27268,~~111,019~~668
Prepaid expenses and current assets		3(547,~~918,801~~013	)		(21,~~716~~975,~~596~~196	)
Other noncurrent assets		462,967			(1,533,533	)
Deposits and other noncurrent assets		2,941			(497,125	)
Accounts payable		37,~~035~~256,~~028~~651			~~(44~~1,~~314~~906,~~785~~315	)
Accrued expenses and other liabilities		4,783,665			(9,511,815	)
Accrued expenses and other current liabilities		1,678,088			(761,074	)
Accrued freight		(16,~~264~~782,~~644~~042	)		(1,~~183~~119,~~709~~311	)
Contract liabilities		-			(109,844	)
Operating lease liability		(733,780	)		(118,379	)
Operating lease liability		(1,991,088	)		(1,049,118	)
Net Cash Used in Operating Activities		(10,242,998	)		(9,305,598	)
Net Cash (Used in) Provided by Operating Activities		(7,767,163	)		33,032,762
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment		(1125,~~122,034~~365	)		(9487,~~900~~658	)
Dividends received from equity method investments		608,127			8,828,309
Cash acquired in connection with acquisition of business interest		500,297			-
Net Cash (Used in) Provided by Investing Activities		(513,907	)		8,733,409
Net Cash Provided by (Used in) Investing Activities		374,932			(87,658	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from notes payable		8,000,000			(303,833	)
Borrowing on notes payable		-			5,497,983
Repayments of debt due to related parties		(3,300,655	)		(223,143	)
Repayment of notes payable		(236,842	)		-
Borrowing (repayments) line of credit, net		3,802,436			(28,258,922	)
Repayment of debt due to related parties		-			(4,250,001	)
Net Cash Provided by (Used in) Financing Activities		8,501,781			(28,785,898	)
Deferred offering costs		-			(485,973	)
Difference on the effect of exchange rate on cash and equivalents		(221,805	)		-
Revolving credit facility, net		9,663,508			5,257,188
Net change in cash and cash equivalents		(1,094	)		12,980,273
Net Cash Provided by Financing Activities		9,426,666			6,019,197
Cash and cash equivalents - Beginning of period		6,744,238			1,422,393
Effect of exchange rate on cash and equivalents		162,749			3
Cash and cash equivalents - End of period	$	6,743,144		$	14,402,666
Net change in cash and cash equivalents		(278,651	)		(3,374,056	)
Cash and cash equivalents - Beginning of period		3,799,561			6,744,238
Cash and cash equivalents - End of period	$	$3,520,910		$	3,370,182
SUPPLEMENTARY CASH FLOW INFORMATION:
Cash Paid During the period for:
Income taxes	$	~~1,013,900~~-		$	1280,~~932,100~~321
Interest	$	31,~~088~~252,~~765~~614		$	21,~~571~~351,~~748~~972
SUPPLEMENTARY DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Operating lease asset and liability additions	$	111,270~~,702~~		$	~~8,897,639~~-
Non-cash consideration paid in business acquisition	$	-		$	25,250,000
Promissory notes issued in connection with acquisition of business interest (Note 2) at fair value	$	2,169,652		$	-

F-5

UNIQUE LOGISTICS INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~February~~August 2931, 2024

1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Unique Logistics International, Inc. and its subsidiaries (the “Company” or “Unique”) is a non-asset-based provider of global logistics and freight forwarding services operating through a worldwide network of offices and exclusive or non-exclusive agents. The Company’s customers include retailers and wholesalers, electronics, high technology, industrial and manufacturing companies around the world. The Company provides a range of international logistics services that enable its customers to outsource sections of their supply chain process. This range of services can be categorized as follows:

	●	Air Freight
	●	Ocean Freight
	●	Customs Brokerage and Compliance
	●	Warehousing and Distribution
	●	Order Management

Basis of Presentation

These condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all accounts of the Company and its majority owned subsidiaries stated in U.S. dollars, the Company’s functional currency. For subsidiaries operating outside the U.S., the financial information will be accounted for on a one-month lag. Substantially all unremitted earnings of international subsidiaries are free of legal and contractual restrictions. All intercompany transactions and balances have been eliminated in the condensed consolidated financial statements.

The unaudited interim financial information furnished herein reflects all adjustments, consisting solely of normal recurring items, which in the opinion of management are necessary to fairly state the financial position of the Company and the results of its operations for the periods presented. The results reported in these interim condensed consolidated financial statements should not be regarded as necessary indicative of results that may be expected for an entire fiscal year. This report should be read in conjunction with the Company’s consolidated financial statements and notes thereto included in the Company’s Form 10-K for the year ended May 31, ~~2023~~2024. The Company assumes that the users of the interim financial information herein have read or have access to the audited financial statements for the preceding fiscal year and that the adequacy of additional disclosure needed for a fair presentation may be determined in that context. The condensed consolidated balance sheet on May 31, ~~2023~~2024 was derived from audited financial statements but does not include all disclosures required by accounting principles generally accepted in the United States of America.

Liquidity and Going Concern

The ~~accompanying~~ ~~condensed~~Company’s ~~consolidated~~ financial statements ~~have~~are ~~been~~ prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business. ~~Substantial~~In ~~doubt~~accordance with ASU No. 2014-15, Disclosure of Uncertainties about an ~~entity~~Entity’s ~~ability~~ Ability to ~~continue~~Continue as a ~~going~~Going concern ~~exists~~(Subtopic ~~when~~205-40), the Company has evaluated whether there are conditions and events, considered in the aggregate, ~~indicate~~ that itraise issubstantial ~~probable~~doubt ~~that the~~about ~~entity~~its ~~will~~ability ~~be unable~~ to ~~meet~~continue ~~its obligations~~ as ~~they~~a ~~become~~going ~~due~~ concern within one year after the date that the condensed consolidated financial statements are issued.

The Company’s ~~working~~principal ~~capital~~sources ~~was~~of ~~$5.3~~cash ~~million~~are ~~and~~(i) ~~$7.9~~cash ~~million~~generated asfrom ofoperations, ~~February~~(ii) borrowings ~~29,~~available ~~2024~~under its revolving line of credit and ~~May~~(iii) proceeds from future debt or equity issuances. As of August 31, ~~2023~~2024, ~~respectively.~~the ~~The~~ Company ~~maintains~~had ~~its~~cash ~~operating~~on ~~line~~hand of ~~credit~~approximately ~~with~~$3.5 ~~TBK Bank~~million, ~~SSB~~working capital of $0.3 million, and on$2.2 ~~July~~million 20available to draw under its TBK Facility. On September 12, ~~2023~~2024, the Company entered into an agreement with TBK Bank ~~to renew~~ (the “TBK ~~line~~Facility”) ofto ~~credit~~temporarily increase ~~with~~the a credit limit ofunder upthe toTBK Facility from $25.0 million. ~~The~~to ~~Company~~$30.0 ~~has~~million ~~experienced~~for ~~negative operating~~a ~~cash~~period ~~flows~~of ~~during~~six ~~the nine~~ months. ~~ended~~The ~~February~~Company ~~29,~~has ~~2024~~incurred net ~~due~~losses toof ~~adverse market conditions~~$2.1 ~~The~~million ~~Company~~and ~~relied~~used ~~heavily~~cash onfor its ~~cash~~ ~~collections,~~operations ~~cash~~in ~~reserves,~~the ~~dividends~~amount ~~received~~of ~~from~~$10.2 million during the ~~ULHK~~quarter ~~Entities,~~ended ~~new~~August ~~loans~~31, ~~and~~2024 ~~the~~primarily due ~~use~~to ofthe ~~its~~ramp ~~operating~~up ~~line~~ of ~~credit.~~accounts ~~The funds~~receivable ~~available~~and ~~under~~accounts ~~the~~payable ~~current~~during ~~TBK~~the ~~line~~most ofrecent ~~credit~~quarter ~~are~~ended ~~sufficient~~due to ~~provide~~an ~~the~~increase ~~Company~~in ~~with~~sales. ~~the~~The net ~~cash~~losses ~~required~~and tocash ~~support~~used ~~its~~in ~~ongoing~~ operations ~~until~~are ~~market~~indicators ~~conditions~~of ~~improve~~substantial doubt.

~~While the~~The Company ~~continues~~is tocurrently ~~execute~~evaluating ~~its~~several ~~strategic~~different ~~plan~~strategies ~~and~~to ~~grow~~enhance its ~~customer~~liquidity position. ~~base,~~These ~~management~~strategies ismay ~~focused~~include, onbut ~~managing~~are ~~cash~~not ~~and~~limited ~~monitoring liquidity~~to, ~~position.~~pursuing ~~Many~~additional ofactions ~~the~~under ~~aspects~~its ofstrategic ~~the~~plan, ~~liquidity~~seeking ~~plan~~additional financing ~~involve~~from ~~management’s~~both ~~judgments~~the public and ~~estimates~~private ~~that~~markets ~~include~~through ~~factors that~~the ~~could~~issuance beof ~~beyond~~equity ~~our~~securities ~~control~~ and ~~actual~~seeking ~~results~~to ~~could~~extend ~~differ~~the ~~from~~term ~~our~~of ~~estimates~~outstanding debt. ~~These~~The ~~and~~outcome ~~other~~of ~~factors~~these ~~could~~matters ~~cause~~cannot ~~the~~be ~~strategic plan~~predicted towith beany ~~unsuccessful,~~certainty ~~which~~at ~~could~~this ~~have~~time. aThere ~~material~~can ~~adverse~~be ~~effect~~no onassurance ~~our~~that ~~operating~~the ~~results,~~Company ~~financial~~will be ~~condition,~~able ~~and~~to ~~liquidity.~~raise ~~Based on~~the ~~our~~capital ~~evaluation~~it ofneeds ~~the~~to ~~Company’s~~continue ~~projected~~its ~~cash~~operations ~~flows~~on ~~and~~satisfactory ~~business~~terms ~~performance~~or asat ofall. ~~and~~If ~~subsequent~~capital is not available to ~~February~~the Company 29when, ~~2024,~~and ~~management has~~in ~~concluded~~the ~~that~~amounts needed, the Company’s ~~current~~could ~~cash~~be ~~and~~required ~~cash~~to ~~availability~~liquidate ~~under~~its ~~the~~assets, ~~TBK~~cease ~~Facility~~or ~~would~~curtail beoperations, ~~sufficient~~which tocould materially ~~fund~~harm its ~~planned operations~~business, ~~for~~financial atcondition ~~least~~and ~~one~~results ~~year~~of ~~from~~operations, ~~the~~or ~~date~~seek ~~the~~protection ~~consolidated~~under ~~financial~~applicable ~~statements~~bankruptcy ~~were~~laws ~~issued~~or similar state proceedings.

The Company is continually evaluating its liquidity requirements in light of its operating needs, growth initiatives and capital resources. Based on its assessment of the Company’s projected cash flow and business performance as of and subsequent to August 31, 2024, management believes that the Company’s current cash and cash availability under the TBK facility would be sufficient to support its operations for at least the next 12 months from the issuance of this report. The Company's plan includes the items noted above as well as securing external financing which may include raising debt or equity capital. These plans are not entirely within the Company's control including its ability to raise sufficient capital on favorable terms, if at all, absent an infusion of sufficient capital there is substantial doubt about its ability to continue as a going concern for twelve months after the date the condensed consolidated financial statements for the quarter ended August 31, 2024 are issued.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from those estimates.

F-6

Significant estimates inherent in the preparation of the condensed consolidated financial statements include determinations of the useful lives and expected future cash flows of long-lived assets, including intangibles, valuation of assets and liabilities acquired in business combinations, and estimates and assumptions in valuation of debt and equity instruments, including derivative liabilities. In addition, the Company makes significant judgments to recognize revenue – see policy note “Revenue Recognition” below.

Revenue Recognition

The Company adopted ASC 606, Revenue from Contracts with Customers. Under ASC 606, revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to receive in exchange for services. The Company recognizes revenue upon meeting each performance obligation based on the allocated amount of the total consideration of the contract to each specific performance obligation.

To determine revenue recognition, the Company applies the following five steps:

	1.	Identify the contract(s) with a customer;

	2.	Identify the performance obligations in the contract;

	3.	Determine the transaction price;

	4.	Allocate the transaction price to the performance obligations in the contract; and

	5.	Recognize revenue as or when the performance obligation is satisfied.

Revenue is recognized as follows:

	i.	Freight income - export sales

		Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis through the sail or departure from origin port. The Company is the principal in these transactions and recognizes revenue on a gross basis.

	ii.	Freight income - import sales

		Freight income from the provision of air, ocean, and land freight forwarding services are recognized over time based on a relative transit time basis through the delivery to the customer’s designated location. The Company is the principal in these transactions and recognizes revenue on a gross basis.

	iii.	Customs brokerage and other service income

		Customs brokerage and other service income from the provision of other services are recognized at the point in time the performance obligation is met.

The Company’s business practices require, for accurate and meaningful disclosure, that it recognizes revenue over time. The “over time” policy is the period from point of origin to arrival of the shipment at the Port of entry (or in the case when the customer requires delivery to a designated point, the arrival at that delivery point). This overtime policy requires the Company to make significant judgements to recognize revenue over the estimated duration of time from port of origin to arrival at port of entry. The point in the process when the Company meets its obligation in the port of entry and the subsequent transfer of the goods to the customer is when the customer has the obligation to pay, has taken physical possession, has legal title, risk and awards (ownership) and has accepted the goods. The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its customers have an expected duration of one year or less.

F-7

The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection.

Revenue billed prior to realization is recorded as contract liabilities on the consolidated balance sheets and contract costs incurred prior to revenue recognition are recorded as contract assets on the consolidated balance sheets.

Contract Assets

Contract assets represent amounts for which the Company has the right to ~~consider~~consideration for the services provided while a shipment is still in-transit but for which it has not yet completed the performance obligation and has not yet invoiced the customer. Upon completion of the performance obligations, which can vary in duration based upon the method of transport and billing the customer, these amounts become classified within accounts receivable.

Contract Liabilities

Contract liabilities represent the amount of obligation to transfer goods or services to a customer for which consideration has been received.

Significant Changes in Contract Asset and Contract Liability Balances for the nine months ended February 29, 2024:

SCHEDULE OF CHANGES IN CONTRACT ASSET AND CONTRACT LIABILITY

	Contract Assets			Contract Liabilities
	Increase			(Increase)
	(Decrease)			Decrease
Reclassification of the beginning contract liabilities to revenue, as the result of performance obligation satisfied	$	-		$	-
Cash Received in advance and not recognized as revenue		-			-
Reclassification of the beginning contract assets to receivables, as the result of rights to consideration becoming unconditional		(4,307,081	)		-
Contract assets recognized		4,467,872			-
Net Change	$	160,791		$	-

Disaggregation of Revenue from Contracts with Customers

The following table disaggregates gross revenue from our clients by significant geographic area for the three ~~and nine~~ months ended ~~February~~August 2931, 2024, and ~~February 28,~~ 2023, based on origin of shipment (imports) or destination of shipment (exports):

SCHEDULE OF DISAGGREGATION OF REVENUE

	For the Three Months Ended February 29, 2024		For the Three Months Ended February 28, 2023
	For the Three		For the Three
China, Hong Kong & Taiwan	$	16,597,938	$	17,427,833
	Months Ended		Months Ended
Southeast Asia		12,329,911		9,335,793
	August 31, 2024		August 31, 2023
United States		17,455,213		8,022,489
China, Hong Kong & Taiwan	$	31,368,145	$	18,636,757
India Sub-continent		11,868,317		8,602,665
Southeast Asia		24,519,520		10,294,944
Other		9,529,007		6,238,722
United States		19,507,301		14,361,646
Total revenue	$	67,830,385	$	49,627,502
India Sub-continent		28,174,571		6,715,013
Other		11,628,700		12,859,925
Total revenue	$	115,198,237	$	62,868,284

	For the Nine Months Ended		For the Nine Months Ended
	February 29, 2024		February 28, 2023
China, Hong Kong & Taiwan	$	52,412,801	$	123,977,602
Southeast Asia		34,667,956		72,449,913
United States		46,648,201		29,699,664
India Sub-continent		32,490,278		37,919,338
Other		26,321,685		10,927,090
Total revenue	$	192,540,922	$	274,973,607

F-8

Foreign Currency Translation

For most of our international operations conducted by the subsidiaries operating outside the U.S, local currencies have been determined to be functional currencies. WeThe ~~translate~~Company translates functional currency assets and liabilities to their U.S. dollar equivalents at exchange rates in effect as of the balance sheet date and income and expense amounts at average exchange rates for the period. The U.S. dollar ~~affects~~effects that arise from changing translation rates are recorded in Other comprehensive income/(loss). Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. The Company aggregates all transaction gains and losses and classify the net amount in a single caption in the income statement in operating income as foreign exchange transactions, net.

Transaction gains or losses result from a change in exchange rates between the functional currency and the currency in which a foreign currency transaction is denominated. We aggregate all transaction gains and losses and classify the net amount in a single caption in the income statement in operating income as foreign exchange transactions, net.

Fair Value Measurement

The Company follows the authoritative guidance that establishes a formal framework for measuring fair values of assets and liabilities in the consolidated financial statements that are already required by generally accepted accounting principles to be measured at fair value. The guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability.

The Company utilizes market data or assumptions that market participants who are independent, knowledgeable, and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company is able to classify fair value balances based on the observability of those inputs. The guidance establishes a formal fair value hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to Level 1 measurements and the lowest priority to level 3 measurements, and accordingly, Level 1 measurement should be used whenever possible.

The hierarchy is broken down into three levels based on the reliability of inputs as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities or published net asset value for alternative investments with characteristics similar to a mutual fund.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Unobservable inputs for the asset or liability.

F-9

The methods used may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while management believes its valuation methods are appropriate, the fair value of certain financial instruments could result in a difference fair value measurement at the reporting date. There were no changes in the Company’s valuation methodologies from the prior year.

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable F- trade, contract assets, other prepaid expenses and current assets, accounts payable and other current liabilities, promissory notes, all approximate fair value due to their short-term nature as of February 29, 2024, and May 31, 2023. The carrying amount of the long-term debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. Lease liabilities approximate fair value based on the incremental borrowing rate used to discount future cash flows. The Company had Level 3 liabilities (See Derivative liabilities note) as of February 29, 2024, and May 31, 2023. There were no transfers between levels during the reporting period.9

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying amounts for financial assets and liabilities such as cash and cash equivalents, accounts receivable - trade, contract assets, factoring reserve, other prepaid expenses and current assets, accounts payable – trade and other current liabilities, including contract liabilities, convertible notes, promissory notes, all approximate fair value due to their short-term nature as of August 31, 2024, and May 31, 2024. The carrying amount of the long-term debt approximates fair value because the interest rates on these instruments approximate the interest rate on debt with similar terms available to the Company. Lease liabilities approximate fair value based on the incremental borrowing rate used to discount future cash flows. The Company had Level 3 liabilities (See Derivative liabilities note) as of August 31, 2024, and May 31, 2024. There were no transfers between levels during the reporting period.

Accounts Receivable

Accounts receivable from revenue transactions are based on invoiced prices which the Company expects to collect. In the normal course of business, the Company extends credit to customers that satisfy pre-defined credit criteria. The Company generally does not require collateral to support customer receivables. Accounts receivable, as shown on the consolidated balance sheets, is net of allowances when applicable. AnManagement estimates that allowance for ~~doubtful~~credit ~~accounts~~losses is ~~determined~~based ~~through~~on ~~analysis~~ongoing ofreview ~~the aging~~ of ~~accounts~~existing ~~receivable~~economic ~~at the date~~conditions, of the ~~consolidated~~ financial ~~statements,~~conditions ~~assessments~~ of ~~collectability~~the ~~based~~customers, onhistorical antrends ~~evaluation~~in ofcredit ~~historic~~losses, and ~~anticipated trends,~~ the ~~financial~~amount ~~condition~~and age of ~~the~~past due accounts. The Company’s ~~customers,~~trade ~~and~~accounts anreceivable ~~evaluation~~present ofsimilar credit risk characteristics and the ~~impact~~allowance offor ~~economic~~credit ~~conditions.~~loss ~~The~~is ~~maximum~~estimated ~~accounting~~on ~~loss~~a ~~from~~collective ~~the~~basis, ~~credit~~using ~~risk~~a ~~associated~~credit ~~with~~loss-rate ~~accounts~~method ~~receivable~~that isuses ~~the~~historical ~~amount~~credit ~~receivable~~loss ~~recorded,~~information ~~net~~and ofconsiders ~~allowance~~the ~~for~~current ~~doubtful~~economic ~~accounts~~environment. As of ~~February~~each 29August 31, 2024, and May 31, ~~2023~~2024 the ~~Company recorded an~~ allowance for ~~doubtful~~credit ~~accounts of~~losses was approximately $~~0.5 million and $~~1.7 0 million, ~~respectively~~ and the bad debt expense was immaterial for each of the ~~three~~quarters ~~and nine months~~ ended ~~February~~August 2931, 2024 and ~~February~~ ~~28,~~ 2023. ~~The reason for the reduction in an allowance for doubtful accounts from the prior period is a successful settlement and subsequent collection of $1.2 million on a specific customer reserved account.~~

Concentrations

~~As of~~Revenue ~~February~~from ~~29,~~one ~~2024, three~~ major ~~customers~~customer ~~represented~~was ~~approximately~~ 13% of ~~all~~the ~~accounts~~Company’s ~~receivable~~total ~~and~~revenue nofor ~~single~~the ~~customer~~three ~~represented more~~months ~~than~~ending ~~10.0%~~August ~~of total accounts receivable. As of May~~ 31, 2024. ~~2023,~~There ~~three~~were ~~major~~no customers ~~represented~~with ~~approximately~~revenue ~~21.0%~~greater ofthan ~~all~~10% ~~accounts receivable~~for ~~and~~the nothree ~~single~~months ~~customer~~ended ~~represented~~August ~~more~~31, ~~than 10~~2023.~~0% of total accounts receivable.~~

Revenue from three customers in the aggregate as a percentage of the Company’s total revenue was approximately 35.0% and 25.0%, respectively, for the three months and nine months ended February 29, 2024, and no single customer represented more than 10.0% of total revenue except for customer A who represented approximately 16.0% and 12.0% respectively. Revenue from these customers in the aggregate as a percentage of the Company’s total revenue was 18.0% and 20.0% for the three and nine months ended February 28, 2023, respectively, and no single customer represented more than 10.0% of total revenue.

Goodwill and Other Intangibles

The Company accounts for business acquisitions in accordance with GAAP. Goodwill in such acquisitions is determined as the excess of fair value over amounts attributable to specific tangible and intangible assets. GAAP specifies criteria to be used in determining whether intangible assets acquired in a business combination must be recognized and reported separately from goodwill. Amounts assigned to goodwill and other identifiable intangible assets are based on independent appraisals or internal estimates.

F-10

In accordance with GAAP, the Company does not amortize goodwill or indefinite-lived intangible assets. Management evaluates the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life. If an intangible asset that is not being amortized is subsequently determined to have a finite useful life, it is amortized prospectively over its estimated remaining useful life. Amortizable intangible assets, including tradenames and non-compete agreements, are amortized on a straight-line basis over 3 to 10 years. Customer relationships are amortized on a straight-line basis over 12 to 15 years.

The Company tests goodwill for impairment annually as of May 31 or if an event occurs or circumstances change that indicate that the fair value of the entity, or the reporting unit, may be below its carrying amount ~~(a “triggering event”)~~. Whenever events or circumstances change, entities have the option to first make a qualitative evaluation about the likelihood of goodwill impairment. If impairment is deemed more likely than not, management would perform the two-step goodwill impairment test. Otherwise, the two-step impairment test is not required. In assessing the qualitative factors, the Company assessed relevant events and circumstances that may impact the fair value and the carrying amount of the reporting unit. The identification of the relevant events and circumstances and how these may impact a reporting unit’s fair value or carrying amount involve significant judgements and assumptions. The judgement and assumptions include the identification of macroeconomic conditions, industry and market considerations, overall financial performance, Company specific events and share price trends, an assessment of whether each relevant factor will impact the impairment test positively or negatively, and the magnitude of such impact.

If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved and multiples of current and future earnings. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.F-10

Equity-method investments

Equity methods investments were acquired from Unique Logistics Holdings Limited, a Hong Kong corporation on February 21, 2023. These are less than 50% owned operating entities. Under the equity method, we record our share of the investee’s income and expenses in income from operation and any share of the earnings and loss would be recorded against investment reduced by cash dividends received. The following activity took place for the nine months ended February 29, 2024.

SCHEDULE OF EQUITY METHOD INVESTMENTS

Equity method investment as of June 1, 2023	$	3,381,683
Net income		675,606
Dividends paid		(608,126	)
Equity method investment as of February 29, 2024	$	3,449,163

Derivative Liability

~~SCHEDULE~~Convertible OFPreferred ~~DERIVATIVE~~Stock ~~LIABILITIES~~ Series A, C and D feature anti-dilution provision that expires on a specified date. Management has determined the anti-dilution provision embedded in preferred stock Series A, C and D is required to be accounted for separately from the preferred stock as a derivative liability and recorded at fair value. Separation of the anti-dilution option as a derivative liability is required because its economic characteristics are considered more akin to an equity instrument and therefore the anti-dilution option is not considered to be clearly and closely related to the economic characteristics of the preferred stock.

	Level 1		Level 2		Level 3
Derivative liability as of June 1, 2023	$	-	$	-	$	11,558,261
Additions		-		-		-
Change in fair value		-		-		(4,118,566	)
Derivative liability as of February 29, 2024	$	-	$	-	$	7,439,695

Convertible Preferred Stock

Convertible Preferred Stock Series A, C and D feature anti-dilution provision that expires on a specified date. Management has determined the anti-dilution provision embedded in preferred stock Series A, C and D is required to be accounted for separately from the preferred stock as a derivative liability and recorded at fair value. Separation of the anti-dilution option as a derivative liability is required because its economic characteristics are considered more akin to a debt instrument and therefore the anti-dilution option is not considered to be clearly and closely related to the economic characteristics of the preferred stock.

The Company has identified and recorded derivative instruments arising from an anti-dilution provision. An embedded derivative liability is representing the rights of holders of Convertible Preferred Stock Series A, C and D to receive additional common stock of the Company upon issuance of any additional common stock by the Company prior to qualified financing event as defined in the agreement. Each reporting period, the embedded derivative liability, if material, would be adjusted to reflect fair value at each period end with changes in fair value recorded in the “Change in fair value of embedded derivative liability” financial statement line item of the company’s statements of operations.

~~F-11~~ SCHEDULE OF FAIR VALUE OF DERIVATIVE LIABILITIES

The underlying value of the anti-dilution provision is calculated from estimating the probability and value of the provision assuming a near term financing event. For the period ended February 29, 2024, based on the assumption of how antidilutive shares of Convertible Preferred Series A, C and D would be exchanged in the near future for common stock, and the fact that the antidilution provision of these shares is effective through December 31, 2024, the assumptions include probability of the financing event, estimated value of common stock at the exchange point and estimated time to financing event.

	Level 1		Level 2		Level 3
Derivative liabilities as of June 1, 2023	$	-	$	-	$	11,558,261
Addition		-		-		-
Change in fair value		-		-		21,788
Derivative liabilities as of August 31, 2023	$	-	$	-	$	11,580,049

Derivative liabilities as of June 1, 2024	$	-	$	-	$	5,669,000
Derivative liabilities, beginning balance	$	-	$	-	$	5,669,000
Addition		-		-		-
Change in fair value		-		-		(97,000)
Derivative liabilities as of August 31, 2024	$	-	$	-	$	5,572,000
Derivative liabilities, ending balance	$	-	$	-	$	5,572,000

The underlying value of the anti-dilution provision is calculated from estimating the probability and value of the provision assuming a near term financing event. For the period ended August 31, 2024, based on the assumption of how antidilutive shares of Convertible Preferred Series A, C and D would be exchanged in the near future for common stock, and the fact that the antidilution provision of these shares is effective through December 31, 2024, the assumptions include probability of the financing event, estimated value of common stock at the exchange point and estimated time to financing event.

The key inputs into the model were as follows:

SCHEDULE OF FAIR VALUE ASSUMPTION

	February 29, 2024			May 31, 2023
	August 31, 2024			May 31, 2024
Risk-free interest rate		43.591	%		54.596	%
Probability of financing event or capital raise		63.8	%		90	%
Probability of capital raise (financing event)		30	%		30	%
Estimated value of common stock	$	60,971,000		$	10.00 per share
Probability of sale (financing event)		50	%		50	%
Estimated time to financing event		2.00 years			0.42 years
Derivative liabilities measurement input		50	%		50	%
Estimated value of common stock capital raise per share	$	0.0059		$	0.0067
Estimated value of common stock upon sale per share	$	0.0070		$	0.0079
Estimated time to financing event		1.5 years			1.75 years

F-11

Income Taxes

~~Our~~Income ~~tax~~taxes ~~provision~~are accounted for ~~interim~~under ~~periods~~the isasset ~~determined~~and ~~using~~liability anmethod ~~estimated~~of ~~annual~~accounting. ~~effective~~Under ~~tax~~this ~~rate~~method, ~~adjusted~~deferred ~~for~~tax ~~discrete~~assets ~~items~~and ~~arising~~liabilities inare recognized for the ~~applicable~~future ~~quarter.~~tax Inconsequences ~~each~~attributed ~~quarter~~to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, the ~~estimated~~tax ~~annual~~effect ~~effective~~of loss carry forwards and tax ~~rate~~credit iscarry ~~updated~~forwards. Deferred tax assets and aliabilities ~~year-~~are measured using enacted tax rates expected to~~-date~~ ~~adjustment~~apply to taxable income in the ~~provision~~years in which those temporary differences isare ~~made~~expected to be recovered or settled. The ~~estimated~~effect ~~annual~~on ~~effective~~deferred tax ~~rate~~assets isand ~~subject~~liabilities toof ~~significant~~a ~~volatility~~change ~~due~~in totax ~~several~~rates ~~factors,~~is ~~including~~recognized in income in the ~~mix~~period ofthat ~~pretax income~~includes orthe ~~loss~~enactment ~~across~~date. ~~multiple~~A ~~jurisdictions~~valuation ~~and~~allowance ~~certain~~is ~~book-~~established when necessary to reduce deferred tax ~~differences~~assets to amounts expected to be realized.

Income taxes are accounted for under the asset and liability method of accounting. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, the tax effect of loss carryforwards and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the 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 that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to amounts expected to be realized.

F-12

The Company uses a two-step approach to recognizing and measuring uncertain income tax positions (tax contingencies). The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not the position will be sustained on audit, including resolution of related appeals or litigation processes. The second step is to measure the tax benefit as the largest amount which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating its tax positions and estimating our tax benefits, which may require periodic adjustments, and which may not match the ultimate future outcome.

Segment Reporting

Based on the guidance provided by the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 280, Segment Reporting, management has determined that the Company currently operates in one primary geographical segment, the USUnited States of America, where most of ~~the~~its customers are located, and consists of a single reporting unit given the similarities in economic characteristics between its operations and the common nature of its products, services, and customers.

Comprehensive Income

Comprehensive income consists of net earnings and other gains and losses affecting equity that, under GAAP, are excluded from net earnings. For the Company, these consist of foreign currency translation gains and losses, net of related income tax effects and comprehensive income or loss attributable to the noncontrolling interests. Accumulated other comprehensive income or loss consisted entirely of foreign currency translation adjustments, net of related income tax effects for the periods ended August 31, 2024 and 2023.

F-12

Earnings per Share

~~Basic~~The ~~Earnings~~computations ~~Per Share (“EPS”) is computed by dividing income available to common stockholders (the numerator) by the weighted-average number~~ of ~~common~~basic shares outstanding, including warrants exercisable for less than a penny, (the denominator) during the period. Income available to common stockholders shall be computed by deducting both the dividends declared in the period on preferred stock (whether or not paid) and ~~the~~diluted ~~dividends~~earnings ~~accumulated~~per ~~for~~share ~~the~~were ~~period~~as ~~on cumulative preferred stock (whether or not earned) from net income.~~follows:

~~The~~ SCHEDULE ~~computation~~OF ofCOMPUTATIONS ~~diluted~~OF ~~EPS~~BASIC isAND ~~similar~~DILUTED toEARNING ~~the~~PER computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued during the period to reflect the potential dilution that could occur from common shares issuable through contingent shares issuance arrangement, preferred stock, stock options or warrants.SHARE

F-13

		August 31, 2024			August 31, 2023
		For the Three Months Ended
		August 31, 2024			August 31, 2023
Numerator:
Net loss		$	(2,107,614	)		(2,311,128	)
Effect of dilutive securities:			-			-
Diluted net loss		$	(2,107,614	)		(2,311,128	)

Denominator:
Weighted average common shares outstanding – basic			799,141,770			799,141,770

Dilutive securities:*
Series A Preferred	*		-			-
Series B Preferred	*		-			-
Series C Preferred	*		-			-
Series D Preferred	*		-			-
Dilutive securities	*		-			-
						-
Weighted average common shares outstanding and assumed conversion – diluted			799,141,770			799,141,770

Basic and Diluted net loss per common share		$	(0.00	)	$	(0.00	)

~~The following~~* ~~table~~Due ~~provides~~to a ~~reconciliation~~net ofloss for the ~~numerator~~three months ended August 31, 2024 and ~~denominator~~2023, only weighted average common shares are used in ~~computing~~calculations. ~~basic~~As August 31, 2024 and ~~diluted~~2023, ~~net~~the ~~income~~Company’s ~~(loss)~~dilution ~~attributable to~~of ~~common~~all ~~stockholders~~outstanding ~~per~~securities ~~common~~would ~~share.~~be as follows:

SCHEDULE OF ~~EARNING~~DILUTION ~~PER~~OF ~~SHARE~~ ALL OUTSTANDING SECURITIES

		February 29, 2024			February 28, 2023
		August 31, 2024 and 2023
		For the Three Months Ended
Weighted average common shares outstanding – basic			799,141,770
		February 29, 2024			February 28, 2023
Series A Preferred			1,168,177,320
Numerator:
Series B Preferred			5,373,342,576
Net (loss) income		$	(5,847,860	)		663,173
Series C Preferred			1,206,351,359
Effect of dilutive securities:						-
Series D Preferred			1,130,954,399
Diluted net income (loss)		$	(5,847,860	)		663,173
Weighted average common shares outstanding and assumed conversion			1,130,954,399
Denominator:
Weighted average common shares outstanding and assumed conversion – diluted			9,677,967,425
Weighted average common shares outstanding – basic			799,141,770			799,141,770
Dilutive securities*:			-
Series A Preferred	*		-			1,168,177,320
Series B Preferred	*		-			5,373,342,576
Series C Preferred	*		-			1,206,351,359
Series D Preferred	*		-			1,130,954,399
Weighted average common shares outstanding and assumed conversion – diluted			799,141,770			9,677,967,424
Basic net income (loss) per common share		$	(0.01	)	$	0.00
Diluted net income (loss) per common share		$	(0.01	)	$	0.00

		February 29, 2024			February 28, 2023
		For the Nine Months Ended
		February 29, 2024			February 28, 2023
Numerator:
Net (loss) income		$	(11,029,671	)	$	7,256,211
Effect of dilutive securities:
Diluted net income		$	(11,029,671	)	$	7,256,211
Denominator:
Weighted average common shares outstanding – basic			799,141,770			780,768,778
Dilutive securities*:
Series A Preferred	*		-			1,168,177,320
Series B Preferred	*		-			5,373,342,576
Series C Preferred	*		-			1,206,351,359
Series D Preferred	*		-			1,130,954,399
			799,141,770
Weighted average common shares outstanding and assumed conversion – diluted			799,141,770			9,659,594,432
Basic net income per common share		$	(0.01	)	$	0.01
Diluted net income per common share		$	(0.01	)	$	0.00

2. ACQUISITIONS

*On ~~Due~~August to1, a2024, ~~net~~the ~~loss~~Company ~~for~~closed the ~~three~~acquisition ~~and~~of ~~nine~~all ~~months~~of ~~ended~~the ~~February~~share ~~29,~~capital ~~2024,~~owned ~~only~~by ~~weighted~~Unique ~~average~~Logistics ~~common~~Holdings Limited, ~~shares~~a ~~are~~Hong ~~used~~Kong corporation (“ULHK”), in ~~calculations.~~Unique InLogistics ~~case~~International of(Sin) ~~net~~Pte ~~income~~Ltd. ~~for~~(“Unique ~~these~~Singapore”) pursuant ~~periods,~~to ~~the~~a ~~Company’s~~Share ~~dilution~~Sale ofand ~~all~~Purchase ~~outstanding~~Agreement, ~~securities~~as ~~would~~amended, bebetween asthe ~~follows:~~Company and ULHK.

~~SCHEDULE~~The total OFconsideration ~~ANTI~~for the purchased shares was calculated at an estimated fair value of $2,169,652. The Company issued two promissory notes to ULHK, one on August 1, 2024, in the principal amount of $1,800,000 and one executed on October 21, 2024, in the amount of $350,000 in lieu of cash payment of $350,000 as per the original agreement. The principal amount under these notes is due in full on August 1, 2026, with interest accruing at an annual rate of 15%, payable semi-~~DILUTIVE~~annually. ~~SHARES~~Both notes were recorded as notes payable at face value of $2,150,000, as agreed with the Seller upon this acquisition, which approximated fair value as of August 1, 2024.

	February 29, 2024
Weighted average common shares outstanding – basic		799,141,770
Series A Preferred		1,168,177,320
Series B Preferred		5,373,342,576
Series C Preferred		1,206,351,359
Series D Preferred		1,130,954,399
Weighted average common shares outstanding and assumed conversion – diluted		9,677,967,424

Purchase Price Allocation

~~F-14~~The Company obtained full control of Unique Singapore and consolidated this entity as of the acquisition date. GAAP requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquired entity at the acquisition date, measured at their fair values as of that date. The acquisition method of accounting requires extensive use of estimates and judgments to allocate the considerations transferred to the identifiable tangible and intangible assets acquired and liabilities assumed.

~~Business~~The ~~Combination~~following -summarizes ~~Pro~~preliminary ~~Forma~~estimates ~~Information~~of ~~(Unaudited)~~fair values of the assets acquired and liabilities assumed at the acquisition:

~~The results of operations of eight entities which the Company acquired~~ SCHEDULE onOF ~~February~~FAIR ~~21,~~VALUES ~~2023,~~OF ~~have~~ASSETS ~~not~~ACQUIRED ~~been~~AND ~~included~~LIABILITIES in the Company’s results for the three months ended February 28, 2023 because for the period from February 21, 2023 through February 28, 2023, such amount was not deemed material. The following unaudited pro forma financial information represents a summary of the consolidated results of operations for the nine and three months ended February 28, 2023 assuming the acquisitions had been completed as of June 1, 2022, first day of the period presented. The proforma adjustments include the elimination of intercompany revenue and expense transactions. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had been effective as of these dates, or of future results.ASSUMED

	At Fair Value
Assets Acquired:
Current assets	$	4,288,925
Identifiable intangible assets		1,727,000
Fixed Assets and other non-current assets		4,911
Goodwill		3,252,614

Liabilities Assumed:
Current liabilities		(7,103,798	)
Purchase Price	$	2,169,652

The goodwill acquired is primarily attributable to the workforce retained of the acquired business and synergies expected to arise after the Company’s acquisition of the above operating subsidiary. It is also anticipated that the goodwill will be deductible for tax purposes.

The Company paid approximately $0.3 million of closing costs for legal, accounting, and other professional fees that were expensed during the three-month period ended August 31, 2024.

Identifiable intangible assets and their amortization periods are estimated as follows:

		Cost Basis				Useful Life
Customer relationships		$	1,727,000				8 years

Amortization of identifiable intangible assets was immaterial for the period from the acquisition date to the end of the reporting period August 31, 2024. The future amortization schedule is as follows:

For the Twelve Months Ending August 31
2025	$	179,896
2026		215,875
2027		215,875
2028		215,875
2029		215,875
Thereafter		683,604
Total	$	1,727,000

Pro Forma Information (Unaudited)

The results of operations of Unique Singapore which the Company acquired on August 1, 2024, have not been included in our August 31, 2024, condensed consolidated financial statements because of the company’s decision to include earnings from consolidated subsidiaries on a one-month lag basis.

The following unaudited pro forma financial information represents a summary of the consolidated results of operations of the Company for the three months ended August 31, 2024 and 2023, assuming the acquisitions had been completed as of June 1, 2023, first day of the period presented. The proforma adjustments include the elimination of intercompany revenue and expense transactions. The pro forma financial information is not necessarily indicative of the results of operations that would have been achieved if the acquisitions had been effective as of these dates, or of future results.

SCHEDULE OF PRO FORMA INFORMATION

	Three Months Ended February 28, 2023			Nine Months Ended February 28, 2023
	Three Months Ended August 31, 2024			Three Months Ended August 31, 2023
Revenue, net	$	77115,~~956~~936,~~880~~396		$	~~397~~62,~~275~~998,~~349~~717
Net income attributable to registrant		2,177,952			14,671,414
Net loss attributable to registrant		(4,345,888	)		(3,140,570	)
Weighted average shares of common stock outstanding, basic (as previously reported)		799,141,770			780,768,778
Weighted average shares of common stock outstanding, basic and diluted		799,141,770			799,141,770
Weighted average shares of common stock outstanding, diluted (as previously reported)		-			-
Net loss per share, basic and diluted	$	(0.01	)		(0.00	)
Net (loss) income per share, basic	$	0.00		$	0.02
Net (loss) income per share, diluted	$	0,00		$	0.00

2. SPAC MERGER TERMINATION

Merger Termination

As previously disclosed, on December 18, 2022, the Company entered into an Agreement and Plan of Merger by and among Edify Acquisition Corp., a Delaware corporation, Edify Merger Sub, Inc., a Nevada corporation (“Merger Sub”), and the Company, as amended and supplemented (the “Merger Agreement”). On March 1, 2024, the Company, Buyer and Merger Sub entered into a mutual termination agreement, pursuant to which they mutually agreed to terminate the Merger Agreement effective as of such date (Subsequent Event Note 9).

As a result of terminating the merger, besides the merger termination costs of approximately $10.4 million, the Company recognized an impairment charge for the previously deferred uplist costs in the amount of $3.1 million as reflected on the statement of operations for the period ended February 29, 2024, of which approximately $2.4 million was deferred as of December 31, 2023.

Amendment to the financing agreement and a waiver

As previously disclosed, on March 10, 2023, the Company entered into a financing agreement (the “Agreement”) as borrower with certain of its subsidiaries party thereto as guarantors (collectively, the “Borrowers”), the lenders party thereto (collectively, the “Lenders”), CB Agent Services LLC, as origination agent, and Alter Domus (US) LLC, as collateral agent and administrative agent (together with CB Agents, the “Agents”)(collectively, the “Parties”), for an initial senior secured term loan in a principal amount of $4,210,526 and a delayed draft term loan in an aggregate principal amount of up to $14,789,474.

Effective March 1, 2024, the Parties entered into a waiver and amendment no. 2 to financing agreement (the “Second Waiver”), (Subsequent Event Note 9) whereby the Agents and the Lenders agreed to waive (i) (a) that certain event of default that has occurred or may occur, due to the borrower’s’ noncompliance with Section 7.03(a) of the Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (the “FCCR Event of Default”), (b) that certain Event of Default that has occurred or may occur, due to the Loan Parties’ noncompliance with Section 7.03(b) of the Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (the “Liquidity Event of Default”) and (c) that certain Event of Default that has occurred or may occur, due to the Loan Parties’ noncompliance with Section 7.03(c) of the Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024” and, together with the FCCR Event of Default and the Liquidity Event of Default, the “Specified Events of Default”). Each of the Specified Events of Default constitute an Event of Default under Section 9.01(c) of the Agreement; and (ii) interest at the post-default rate with respect to the Specified Events of Default from the date such event occurred through the Second Waiver effective date.

In addition, pursuant to the Second Waiver, the borrowers agreed to (i) pay the administrative agent a non-refundable Waiver Fee in an aggregate amount equal to $3,000,000, which was deemed fully earned on the effective date; and (ii) issue the origination agent or its designee warrants, in form and substance satisfactory to the origination agent, entitling the holder thereof to purchase a number of shares of the Company’s common stock equal to the greater of (a) seven percent (7%) of enterprise value as calculated in a manner to be mutually agreed and acceptable to the origination agent and the Company on a fully diluted basis and (b) $7,000,000, on terms, conditions and in a form reasonably acceptable to origination agent, and having an exercise price of $0.01 per share.

The anti-dilution provisions applicable to the warrants shall at no time be less favorable to the holder thereof than those accorded by the parent to any other person on or after the effective date. The warrants shall be exercisable for a period of 7.5 years. This contract did not meet qualification requirements to be classified as equity because there is no explicit limit on the number of shares to be delivered in a share settlement. Accordingly, the warrants were classified as a liability as the issuer is obligated to settle the warrant by issuing a variable number of shares and the monetary value of the obligation based on a predetermined fixed amount, variation in something other than the issuers stock price, in this case the amount is the enterprise value of the Company at the time of the future financing event. As the warrants were not issued on the balance sheet date, these expected warrants were recorded as other long-term liability at initially estimated fair market value of $7,415,816.

F-15

For the period ended February 29, 2024, both amounts related to the nonrefundable waiver fee and the warrant, or $3.0 million and $7.4 million, respectively, were expensed as SPAC merger termination cost on the condensed consolidated statements of operations, since the terms of the agreements were agreed to as of February 28, 2024 and the documents were executed on March 1, 2024.

Due to the unique nature of these warrants, which the Company anticipates will have an effective date of March 1, 2024, a Monte Carlo simulation was necessary in order to properly perform the valuation. Monte Carlo simulation analysis is mathematically similar to that used in a Black-Scholes option pricing model. However, in a Monte Carlo simulation, a computer is used to generate random price movements, which are constrained by the expected volatility of the underlying security. Where each step in a binomial model contains two possible outcomes, each step in a Monte Carlo simulation contains an unlimited number of potential outcomes. For the fair value of the warrants to be issued, a simulation using a risk neutral drift factor, the risk-free rate, was used.

The key inputs into the model were as follows:

SCHEDULE OF FAIR VALUE ASSUMPTION

	February 29, 2024
Risk-free interest rate		4.3	%
Probability of financing event next 2 years		85.0	%
Probability of financing event years 2 through 7.5		90.0	%
Probability of financing event		90.0	%
Volatility:		100.0	%

3. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following on ~~February~~August 2931, 2024, and May 31, ~~2023~~2024:

	February 29, 2024		May 31, 2023
	August 31, 2024		May 31, 2024
Accrued salaries and related expenses	$	720,132	$	1,938,111
Accrued professional fees	$	3,375,281	$	2,744,066
Accrued sales and marketing expense		306,980		768,713
Accrued salaries and related expenses		1,353,877		1,620,083
Accrued professional fees		2,878,114		2,574,542
Accrued interest		1,493,203		800,850
Accrued income tax		-		1,531,789
Accrued refunds		336,378		529,757
Accrued Interest		739,951		-
Accrued sales and marketing expense		582,161		187,915
Other accrued expenses and current liabilities		1,727,646		1,781,812
Accrued income tax		427,848		106,213
Accrued expenses and other current liabilities	$	6,372,823	$	8,594,947
Accrued overdraft liabilities		42,910		21,725
Other accrued expenses and current liabilities		908,422		461,226
Accrued expenses and other current liabilities	$	8,520,080	$	6,471,835

F-13

4. FINANCING ARRANGEMENTS

Financing arrangements on the consolidated balance sheets consists of:

SCHEDULE OF FINANCING ARRANGEMENT

	February 29, 2024			May 31, 2023
	August 31, 2024			May 31, 2024
Revolving Credit Facility	$	1122,~~852~~788,~~663~~539		$	813,~~050~~125,~~227~~031
Term loans		12,000,000			4,000,000
Term Debt		11,763,158			12,000,000
Notes payable, gross		2334,~~852~~551,~~663~~697			1225,~~050~~125,~~227~~031
Less: Current portion		~~(12~~23,~~823~~872,~~744~~669	)		(814,~~050~~397,~~227~~196	)
Long term, notes payable	$	11,028,919		$	4,000,000
Notes payable, net of current portion	$	10,679,028		$	10,727,835

Revolving Credit Facility

The ~~Company’s~~TBK ~~Revolving~~Facility ~~Purchase,~~provides ~~Loan~~for ~~and~~the ~~Security~~Company ~~Agreement~~to ~~with~~have ~~TBK~~access ~~Bank,~~to ~~SSB,~~the alesser ~~Texas~~of ~~State~~(i) ~~Savings Bank matured on May 31, 2023~~$25.0 ~~The~~million ~~parties~~and ~~agreed~~(ii) ~~to extend~~ the ~~maturity~~Formula ~~date~~Amount ~~and~~(as ondefined ~~July~~in ~~20, 2023,~~ the ~~Company and TBK Bank entered into a new~~ loan and security agreement ~~(the~~ ~~“New~~with ~~TBK~~respect ~~Agreement,”~~thereto) ~~amending and restating in their entirety, the terms, conditions, agreements, covenants, obligations, representations, and warranties of the existing TBK Agreement~~. The ~~terms of the new agreement are substantially the same as the original agreement. The New~~ TBK Agreement ~~provides~~is for aan ~~facility~~initial ~~under~~term ~~which~~of ~~TBK~~24 months ~~Bank~~and ~~will,~~may ~~from~~be ~~time~~extended toor ~~time~~renewed, ~~make~~unless ~~advances~~terminated ~~under~~in ~~the~~accordance ~~Revolving Credit~~with ~~Facility~~its toterms, ~~the~~and ~~Company~~is incurrently ~~such~~scheduled ~~amounts~~to asmature ~~the~~on ~~Company~~June 1, ~~may request~~2025, ~~but~~and ~~not~~an tointerest ~~exceed~~rate ~~$25,000,000.~~based ~~This~~on ~~loan~~Wall isStreet ~~scheduled~~Journal toPrime ~~mature on~~Rate ~~June~~plus ~~1, 2025~~2.75%.

~~Term~~On December 11, 2024, ~~Loans~~the Company entered into a waiver to the TBK Agreement with TBK Bank, SSB whereby TBK Bank agreed to waive a specified event of default for the quarter ended August 31, 2024. Also, on September 4, 2024, the Company entered into an amendment to the security and loan agreement for a temporary increase in the available credit limit from $25.0 million to $30.0 million through March 4, 2025. All other terms of the TBK Agreement remain the same.

OnTerm March 10, 2023, the Company entered into a financing agreement and related fee letter as a borrower with certain of its subsidiaries party thereto as guarantors, the lenders party thereto, CB Agent Services LLC, as origination agent, and Alter Domus (US) LLC, as collateral agent, and administrative agent (“the Lenders”). The Financing Agreement provides for an initial senior secured term loan in a principal amount of $4,210,526 which was received on March 13, 2023 and a delayed draft term loan in an aggregate principal amount of up to $14,789,474. On June 30, 2023, the Company borrowed on the delayed draft term loan amount of $5,263,158. Each term loan under the financing agreement shall be, at the option of the Company, either a base rate loan or a SOFR Loan. Interest on each term loan shall be payable monthly in arrears, on the first business day of each month. The outstanding principal amounts for all loans are subject to mandatory quarterly amortization at various rates, payable quarterly, throughout the life of the loan. These loans mature on March 10, 2026. Debt

~~As discussed~~On ~~in more details in Subsequent Events Note 8, effective~~ March 110, ~~2024~~2023, the Company ~~and the Lenders~~ entered into a ~~waiver~~ ~~and amendment no. 2 to~~ financing agreement (the “~~Second~~Financing ~~Waiver~~Agreement”), ~~whereby~~and ~~the~~related fee ~~Lenders~~letter ~~agreed~~as toa ~~waive~~borrower awith certain ~~event~~ of ~~default~~its ~~that~~subsidiaries ~~has~~party ~~occurred~~thereto oras ~~may~~guarantors ~~occur,~~(collectively ~~due to noncompliance~~ with ~~Section~~the ~~7.03(a)~~Company, ofthe “Borrowers”), the ~~agreement~~lenders ~~for~~party ~~each~~thereto(collectively, of the ~~fiscal quarters~~“Lenders”), inCB ~~the~~Agent ~~fiscal~~Services ~~year~~LLC, ~~ending~~as ~~May~~origination 31agent, ~~2024~~ and ~~for~~Alter ~~the~~Domus ~~fiscal~~(US) LLC, ~~quarter~~as ~~ending~~collateral ~~August~~agent ~~31,~~and ~~2024.~~administrative Inagent ~~addition,~~(together ~~pursuant~~with toCB ~~the Second Waiver~~Agents, the ~~Borrowers~~“Agents”) ~~agreed~~(collectively, ~~to pay~~ the ~~administrative~~“Parties”). The ~~agent~~Financing asAgreement ~~part~~provides offor ~~the~~an ~~SPAC~~initial ~~termination~~senior ~~costs~~secured aterm ~~non-refundable~~loan ~~waiver fee~~ in ana ~~aggregate~~principal amount ~~equal~~of to $34,~~000~~210,~~000,~~526 ~~which~~and ~~was~~a ~~deemed~~delayed ~~fully~~draft ~~earned~~term ~~on the effective date with interest on this portion of the~~ loan ~~accrued~~in ~~through~~an ~~maturity~~aggregate ~~with no interest or~~ principal ~~payments~~amount ~~until~~of ~~maturity~~up ~~March~~to 10$14, ~~2026~~789,474. On ~~This~~June ~~instrument~~30, ~~was~~2023, ~~classified~~the asCompany aborrowed ~~liability that existed~~ on the ~~balance~~ ~~sheet~~delayed ~~date~~draft ~~and recognized at fair value and reported as an additional~~ term loan. ~~(See~~amount ~~Note~~of 2)$5,263,158.

AsThe Company is subject to certain financial covenants as part of the Financing Agreement. During several periods since entering into the Financing Agreement, the Company was in violation of the EBITDA leverage ratio financial covenant set forth in Section 7.03(c) thereof. The Company entered into a waiver agreement with the Agents dated as of February 295, 2024, whereby the ~~outstanding~~Agents ~~principal~~waived ~~amount~~the requirements of, among other requirements, Section 7.03(c) of the Financing Agreement for each of the ~~above~~fiscal ~~loans~~quarters ~~combined~~in ~~was~~the ~~$12~~fiscal year ending May 31,~~000~~ 2024 and for the quarter ended August 31,~~000~~ 2024. The Company is also non-compliant with the EBITDA leverage ratio financial covenant for the second quarter ended November 30, 2024 and is currently working with the lender on a new waiver agreement.

~~Debt Covenant~~F-14

The Company is subject to certain financial covenants. As of February 29, 2024, the Company was in compliance with the financial covenants except for the following:

An event of default has occurred with the loan and security agreement with TBK Bank as a result of the Company failing to maintain, as of the last day of the fiscal quarter ended February 29, 2024, a fixed charge coverage ratio at a specified rate. On April 30, 2024, the Company entered into a waiver and amendment to the loan and security agreement with TBK Bank where the bank agreed to waive this default and to make certain modifications to the loan agreement.

F-16

5. RELATED PARTY TRANSACTIONS

The Company has the following debt due to related parties:

SCHEDULE OF RELATED PARTY ~~TRANSACTIONS~~ TRANSACTION

	February 29, 2024			May 31, 2023
	August 31, 2024			May 31, 2024
Due to FTS (1)	$	~~650~~500,~~655~~000		$	~~801~~500,~~310~~000
Due to ULHK(2)		912,~~600~~797,~~000~~010			1210,~~750~~647,~~000~~010
Total due to related party transaction		10,250,655			13,551,310
Due to related parties		13,297,010			11,147,010
Less: current portion		~~(150,655~~-	)		~~(4,801,310~~-	)
Non current portion	$	10,100,000		$	8,750,000
Due to related parties, net of current portion	$	13,297,010		$	11,147,010

(1)	~~Two~~Promissory ~~Notes~~note ~~due~~dated toFebruary 21, 2023, in connection with the acquisitions completed in the principal amount of $500,000 for the remaining 35% share capital of Unique Logistics International (India) Private Ltd. acquired by the Company from Frangipani Trade Services (“FTS”) maturing December 31, an2025, ~~entity~~and bearing no interest. FTS is owned by the Company’s CEO:.
	The Promissory Note dated March 30, 2021 in the principal amount $903,927 bears no interest provided that any amount due under this Note which is not paid when due shall bear interest at an interest rate equal to six percent (6%) per annum. The principal amount is due and payable in six payments of $150,655. The first payment was due on November 30, 2021, with each succeeding payment to be made six months after the preceding payment. The balance of this Promissory Note due within the next 12 months is $150,655 as of February 29, 2024.
(2)	This debt relates to the February 21, 2023 acquisition by the Company of the share capital owned by ULHK, an entity with over 10% investment in the Company in eight ULHK subsidiaries for a combination of cash and promissory notes issued to ULHK. In addition, on August 1, 2024, the Company completed the acquisition of all of the share capital owned by ULHK in Unique Singapore pursuant to a share sale and purchase agreement, as amended, between the Company and ULHK. Patrick Lee, a director of the Company, is also a director of ULHK and is the Group Chief Operating Officer of ULHK. Richard Lee, an owner of ULHK, is also an affiliate of the Company through his interests in Great Eagle Freight Limited, a related party. As consideration for the purchased shares, including the Company’s assumption of $1,800,000 of indebtedness owed to ULHK by Unique Singapore, the Company issued two promissory notes in the aggregate principal amount of $2,150,000 to ULHK. The Company issued to ULHK a promissory note in the principal amount of $1,800,000 upon closing of the acquisition on August 1, 2024, and a second promissory note in the amount of $350,000 to cover the additional portion of the purchase price on October 21, 2024. The principal amount under both promissory notes is due in full on August 1, 2026, with interest accruing at an annual rate of 15%, payable semi-annually. The total consideration for the purchased shares in the amount of $2,150,000 was calculated at an estimated fair value ,of $2,169,652.
	Promissory Note dated February 21, 2023, in connection with the acquisitions completed in the principal amount of $500,000 for the remaining 35% share capital of Unique Logistics International (India) Private Ltd. acquired by the Company from FTS maturing February 21, 2025, and bearing no interest.
(2)	Due to ULHK, the entity with over 10% investment in the Company.
	On February 21, 2023, the Company completed the acquisition of eight ULHK operating subsidiaries, in a combination of cash and promissory notes issued to the Seller. As of February 29, 2024, some of these notes were paid off or had been refinanced.

Transactions listed below are between the Company and ULHK and its operating subsidiaries. These are considered related party transactions due to ULHK being an entity with ~~over~~a more than 10% investment in the Company.

Accounts Receivable and Payable

Transactions with related parties account for $0.2.5 million and $35.16 million, respectively, of accounts receivable and accounts payable as of ~~February~~August 2931, 2024, compared to $31.52 million and $25.92 million, respectively, of accounts receivable and accounts payable as of May 31, ~~2023~~2024.

Revenue and Expenses

Revenue from related party transactions is for export services from related parties or for delivery at place imports nominated by such related parties. For the three months ended ~~February~~August 2931, 2024, and ~~February 28,~~ 2023, these transactions represented approximately $0.23 million ~~and~~ ~~$6.4 million, respectively. For the nine months ended February 29, 2024,~~ and ~~February 2, 2023, these transactions represented~~ $01.8 ~~million~~ ~~and $5.5~~ million, respectively.

Direct costs are services billed to the Company by related parties for shipping activities. For the three months ended ~~February~~August 2931, 2024, and ~~February~~ ~~28,~~ 2023 these transactions represented approximately $26.41 million and $41.56 million, respectively. ~~For the nine months ended February 29, 2024, and February 28, 2023, these transactions represented $4.9 million and $32.5 million, respectively.~~

~~6. STOCKHOLDERS’ EQUITY~~F-15

6. OTHER LONG-TERM LIABILITIES

Merger Termination

On December 18, 2022, the Company entered into an Agreement and Plan of Merger by and among Edify Acquisition Corp., a Delaware corporation (“Buyer”), Edify Merger Sub, Inc., a Nevada corporation (“Merger Sub”), and the Company, as amended and supplemented (the “Merger Agreement”). On March 1, 2024, the Company, Buyer and Merger Sub entered into a mutual termination agreement, pursuant to which they mutually agreed to terminate the Merger Agreement effective as of such date.

As a result of terminating the Merger Agreement, besides the merger termination costs of approximately $10.4 million initially and adjusted to $9.9 million for the year ended May 31, 2024, the Company also recognized an impairment charge for the previously deferred uplist costs in the amount of $3.1 million as reflected on the statement of operations for the year ended May 31, 2024.

Amendment to the financing agreement and a waiver

As previously disclosed, on March 10, 2023, the Company entered into the Financing Agreement as borrower with certain of its subsidiaries party thereto as guarantors, the Lenders, and the Agents, for an initial senior secured term loan in a principal amount of $4,210,526 and a delayed draft term loan in an aggregate principal amount of up to $14,789,474.

Effective March 1, 2024, the Parties entered into a waiver and amendment no. 2 to the Financing Agreement (the “Second Waiver”), whereby the Agents and the Lenders agreed to waive: (i) (a) that certain Event of Default (as defined in Section 9.01 of the Financing Agreement) that has occurred or may occur due to the Borrowers’ noncompliance with Section 7.03(a) of the Financing Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (the “FCCR Event of Default”), (b) that certain Event of Default that has occurred or may occur due to the Borrowers’ noncompliance with Section 7.03(b) of the Financing Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (the “Liquidity Event of Default”) and (c) that certain Event of Default that has occurred or may occur due to the Borrowers’ noncompliance with Section 7.03(c) of the Financing Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (together with the FCCR Event of Default and the Liquidity Event of Default, the “Specified Events of Default”); and (ii) interest at the post-default rate with respect to the Specified Events of Default from the date such event occurred through the Second Waiver effective date. As noted above, the Company is still non-compliant with Section 7.03(c) of the Financing Agreement in the second quarter ended November 30, 2024 and is currently working with the lender on a new waiver agreement.

In addition, pursuant to the Second Waiver, the borrowers agreed to (i) pay the administrative agent a non-refundable Waiver Fee in an aggregate amount of $3,000,000, which was deemed fully earned on the effective date of the Second Waiver, and (ii) issue the origination agent or its designee warrants, in form and substance satisfactory to the origination agent, entitling the holder thereof to purchase a number of shares of the Company’s common stock equal to the greater of (a) 7% of enterprise value as calculated in a manner to be mutually agreed and acceptable to the origination agent and the Company on a fully diluted basis and (b) $7,000,000, on terms, conditions and in a form reasonably acceptable to origination agent, and having an exercise price of $0.01 per share.

The anti-dilution provisions applicable to the warrants shall at no time be less favorable to the holder thereof than those accorded by the parent to any other person on or after the effective date. The warrants shall be exercisable for a period of 7.5 years unless otherwise agreed within the warrant agreement, which is currently being drafted. This contract did not meet qualification requirements to be classified as equity because there is no explicit limit on the number of shares to be delivered in a share settlement. Accordingly, the warrants were classified as a liability as the issuer is obligated to settle the warrant by issuing a variable number of shares and the monetary value of the obligation based on a predetermined fixed amount, variation in something other than the issuers stock price, in this case the amount is the enterprise value of the Company at the time of the future financing event. As the warrants were not yet issued on the balance sheet date, these expected warrants were recorded as other long-term liability with an estimated fair market value of $6,879,823 as of May 31, 2024 and $5,363,202 as of August 31, 2024.

Due to the unique nature of these warrants, which the Company anticipates will have an effective date of August 31, 2024, a Monte Carlo simulation was necessary in order to properly perform the valuation. Monte Carlo simulation analysis is mathematically similar to that used in a Black-Scholes option pricing model. However, in a Monte Carlo simulation, a computer is used to generate random price movements, which are constrained by the expected volatility of the underlying security. Where each step in a binomial model contains two possible outcomes, each step in a Monte Carlo simulation contains an unlimited number of potential outcomes. For the fair value of the warrants to be issued, a simulation using a risk neutral drift factor, the risk-free rate, was used.

F-16

The key inputs into the model were as follows:

SCHEDULE OF FAIR VALUE ASSUMPTION

	August 31, 2024			May 31, 2024
Risk-free interest rate		3.91	%		4.5	%
Discount rate		13.3	%		6.0	%
Probability of financing event next 2 years		85	%		85.0	%
Probability of financing event years 2 through 7.5		90	%		90.0	%
Term		7.0 years			7.3 years

The Company has identified and recorded these expected warrants (prior to issuance) due to the contractual nature of this liability as a long-term liability. Once issued, these warrants will be reclassified into derivative liability as representing the rights of holders of these warrants to receive certain shares of common stock upon qualified financing event. Accordingly, the Company is treating this long-term liability as derivative liability and adjusting it to reflect fair value at each period end with changes in fair value recorded in the “Change in fair value of derivative liabilities” financial statement line item of the Company’s statements of operations.

	Level 1		Level 2		Level 3
Other long-term liabilities as June 1, 2024	$	-	$	-	$	6,879,823
Addition		-		-
Change in fair value of derivative liabilities		-		-		(1,516,621	)
Other long-term liabilities as August 31, 2024	$	-	$	-	$	5,363,202

7. STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized to issue 800,000,000 shares of common stock, a par value of $0.001 per share.

F-17

During the nine months ended February 29, 2024, there were no common stock issuances and no conversions of Preferred Shares.

Preferred Shares

The Company is authorized to issue 5,000,000 shares of preferred stock, $0.001, par value per share.

Preferred Shares

Series A Convertible Preferred

The ~~holders~~ ~~of Series A Preferred stock. subject to the rights of holders of~~ shares of the Company’s Series BA Preferred ~~stock~~Stock ~~which shares~~contain ~~will~~an beanti-dilution ~~pari~~provision ~~passu~~that ~~with~~provides ~~Series~~for Ban adjustment ~~Preferred~~necessary into ~~terms~~maintain ofthe ~~liquidation~~stockholders’ ~~preference~~fully ~~and~~diluted ~~dividend~~ownership ~~rights~~percentage ~~and~~as ~~are~~of ~~subject~~the todate anof ~~anti-dilution provision,~~issuance ~~making~~of the ~~holders~~shares ~~subject~~of Series toA anPreferred ~~adjustment necessary to maintain their agreed upon fully diluted ownership percentage~~Stock.

~~Each holder~~Subject to the rights of ~~shares~~holders of ~~Series~~shares Aof ~~Preferred~~the ~~stock~~Company’s ~~has~~Series ~~the~~B ~~right~~Preferred toStock, ~~convert~~which ~~all~~shares orrank ~~any~~pari passu ~~portion~~with shares of ~~such~~the ~~holder~~Company’s Series A Preferred ~~stock into~~Stock ~~fully~~in ~~paid~~terms ~~and~~of ~~non-assessable~~liquidation ~~shares~~preference, ofin ~~common~~the ~~stock~~event atof any ~~time~~liquidation, dissolution or ~~from~~winding ~~time~~up toof ~~time~~the atCompany, ~~such~~either ~~holder’s~~voluntary ~~sole~~or ~~discretion.~~involuntary, ~~Each share~~the stockholders of record of shares of the Company’s Series A Preferred Stock asshall be entitled to ~~which~~receive, ~~the~~at ~~conversion~~their ~~right~~option, isimmediately ~~exercised~~prior ~~may~~and bein ~~converted~~preference ~~into~~to ~~6,546.47~~any ~~shares~~distribution to the holders of the Company’s ~~authorized~~ ~~but~~common ~~unissued~~stock ~~shares~~and ofother ~~common~~junior ~~stock~~securities, a liquidation preference equal to their stated value per share.

If the common stock issuable upon conversion of Series A Preferred may be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise, then, in any such event, in lieu of the number of shares of common stock which the holders would otherwise have been entitled to receive, each holder of Series A Preferred Stock may have the right thereafter to convert such shares of Series A Preferred stock into a number of shares of such other class or classes of stock which a holder of the number of shares of common stock deliverable upon conversion of the Series A Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.

If and whenever on or after the date on which the holder received shares of Series A Preferred stock (the “Issuance Date”) and through December 31, 2024, the anti-dilution termination date, the Company issues or sells, or in accordance with the terms herein is deemed to have issued or sold, any shares of common stock or equivalents, the number of conversion shares issuable upon conversion will be adjusted to entitle the holder to acquire such number of shares of common stock necessary to maintain the holders fully-diluted ownership percentage at the time of the Issuance Date.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the stockholders of record of shares of Series A Preferred shall be entitled to receive, at their option, immediately prior and in preference to any distribution to the holders of the Company’s common stock, $0.001 par value per share and other junior securities, a liquidation preference equal to the Stated Value per share.

During the nine months ended February 29, 2024, there were no conversions of Series A Preferred stock.

Series B Convertible Preferred

~~The holders~~Subject ~~of Series B Preferred stock, subject~~ to the rights of holders of shares of the Company’s Series A Preferred ~~stock~~Stock, which shares ~~will~~rank be pari passu with shares of the Company’s Series B Preferred Stock in terms of liquidation preference, ~~and~~in ~~dividend~~the ~~rights~~event of any liquidation, dissolution ~~may~~or winding up of the Company, either voluntary or involuntary, the stockholders of record of shares of Series B Preferred Stock shall be entitled to receive, at their option, immediately prior anand in preference to any distribution to the holders of the Company’s common stock and other junior securities, a liquidation preference equal to their stated value per share.

F-18

Each holder of shares of Series B Preferred stock has the right to convert all or any portion of such holder’s Series A Preferred Stock into fully paid and non-assessable shares of common stock at any time or from time to time at such holder’s sole discretion. Each share of Series B Preferred stock as to which the conversion right is exercised may be converted into 6,546.47 shares of the Company’s authorized but unissued shares of common stock.

If the common stock issuable upon conversion of Series B Preferred may be changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise, then, in any such event, in lieu of the number of shares of common stock which the holders would otherwise have been entitled to receive, each holder of Series B Preferred stock may have the right thereafter to convert such shares of Series B Preferred stock into a number of shares of such other class or classes of stock which a holder of the number of shares of common stock deliverable upon conversion of the Series B Preferred Stock immediately before that change would have been entitled to receive in such reorganization or reclassification, all subject to further adjustment as provided herein with respect to such other shares.

In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, the stockholders of record of shares of Series B Preferred shall be entitled to receive, at their option, immediately prior and in preference to any distribution to the holders of the Company’s common stock, $0.001 par value per share and other junior securities, a liquidation preference equal to the stated value per share.

Series C & D Convertible Preferred

The ~~number~~ holders of ~~shares~~the ~~designated~~Company’s as Series C and Series D Preferred ~~stock~~Stock shall ~~may~~ be ~~200~~entitled ~~each.~~to ~~Such~~receive, ~~number~~upon ~~may~~liquidation, ~~not~~dissolution beor ~~subject~~winding toup ~~increase~~of ~~without~~the Company, the ~~written~~ ~~consent~~amount of ~~the~~cash, ~~Series~~securities, Cor ~~and~~other Dproperty to ~~holders~~which ofsuch aholder ~~majority~~would ofbe ~~the~~entitled ~~then-issued~~to ~~and~~receive ~~outstanding~~with ~~Series~~respect Cto orsuch Dshares of Preferred ~~stock.~~Stock ~~The~~if ~~Series~~such shares had been converted to Cshares ~~and~~of Dcommon ~~Preferred~~stock ~~Stock~~immediately ~~have~~prior noto ~~voting~~such ~~rights~~liquidation, dissolution or winding up.

Each share of Series C Preferred Stock may be convertible, at any time and from time to time from and after the date of issuance, at the option of the Series C holder thereof, into a number of shares of common stock determined in accordance with the conversion ratio calculated on the conversion date where each share of Series C Preferred stock may be a number of shares of common stock equal to 08.~~064113% (or~~ upCOMMITMENTS toAND ~~12.48% in the aggregate) of the Corporation’s common stock on a fully diluted basis, subject to anti-dilution adjustment.~~CONTINGENCIES

Each share of Series D Preferred stock may be convertible, at any time and from time to time from and after the date of issuance, at the option of the Series D holder thereof, into a number of shares of common stock determined in accordance with the conversion ratio calculated on the conversion date where each share of Series D Preferred stock may be a number of shares of common stock equal to 0.0651869% (or up to 12.48% in the aggregate) of the Corporation’s common stock on a fully diluted basis, subject to anti-dilution adjustment.

In order to maintain the conversion ratio, the fully diluted basis may be calculated as of the conversion date and after an anti-dilution termination event the conversion ratio will be set to the fully diluted basis as of the moment after the anti-dilution termination event without any further adjustments for any subsequent issuance of common stock or equivalents, by the Corporation after the anti-dilution termination event. An anti-dilution termination event is the earlier of (i) December 31, 2024, or (ii) the closing of the qualified financing or SPAC merger.

The holders of the Series C and D Preferred stock may be entitled to receive, upon liquidation, dissolution or winding up of the Company, the amount of cash, securities, or other property to which such holder would be entitled to receive with respect to such shares of Series C and D Preferred stock if such shares had been converted to common stock immediately prior to such liquidation.

During the nine months ended February 29, 2024, there were no conversions of Series D Preferred stock.

F-19

7. COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, the Company may become involved in litigation relating to claims arising in the ordinary course of the business. There are no claims or actions pending or threatened against the Company that, if adversely determined, would in the Company’s management’s judgment have a material adverse effect on the Company.

Leases

The Company leases office space, warehouse facilities and equipment under non-cancellable lease agreements expiring on various dates through October 2028. Office leases contain provisions for future rent increases. The Company adopted ASC 842 from inception, requiring the Company to recognize an asset and liability on the consolidated balance sheets for lease arrangements with terms longer than 12 months. The Company has elected the practical expedient to not apply the recognition requirement to leases with a term of less than one year (short term leases). The Company uses its incremental borrowing rate to discount lease payments to present value. The incremental borrowing rate is based on the estimated interest rate the Company could obtain for borrowing over a similar term of the lease at commencement date. Rental escalations, renewal options and termination options, when applicable, have been factored into the Company’s determination of lease payments when appropriate. The Company does not separate lease and non-lease components of contracts. Variable payments related to pass-through costs for maintenance, taxes and insurance or adjustments based on an index such as Consumer Price Index are not included in the measurement of the lease liability or asset and are expensed as incurred.

F-17

The components of lease expense were as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

	For the Three Months Ended		For the Three Months Ended
	February 29, 2024		February 28, 2023
	August 31, 2024		August 31, 2023
Operating lease cost – Right of Use Asset Amortization	$	734,957		531,728
Operating lease (right of use (“ROU”) amortization)	$	734,256		587,418
Interest on lease liabilities		~~209~~190,~~561~~890		~~202~~211,~~885~~151
Total net lease cost	$	~~944~~925,~~518~~146		~~734~~798,~~613~~569

	For the Nine Months Ended		For the Nine Months Ended
	February 29, 2024		February 28, 2023
Operating lease cost – Right of Use Asset Amortization	$	2,144,717		1,269,299
Interest on lease liabilities		650,419		363,398
Total net lease cost	$	2,795,136		1,632,697

Supplemental balance sheet information related to leases was as follows:

	February 29, 2024		May 31, 2023
	August 31, 2024		May 31, 2024
Operating leases:
Operating lease ROU assets – net	$	9,395,501	$	10,269,516
Operating lease ROU assets, net	$	8,296,928	$	9,019,914
Current operating lease liabilities, included in current liabilities		2,676,904		2,379,774
Current operating lease liabilities		2,318,315		2,588,817
Noncurrent operating lease liabilities, included in long-term liabilities		7,194,929		8,212,445
Noncurrent operating lease liabilities		6,450,163		6,902,171
Total operating lease liabilities	$	98,~~871~~768,~~833~~478	$	109,~~592~~490,~~219~~988

F-20

Supplemental cash flow and other information related to leases was as follows:

	For the Three Months Ended			For the Three Months Ended
	February 29, 2024			February 28, 2023
	August 31, 2024			August 31, 2023
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	2111,~~371~~270		$	-
Weighted average remaining lease term (in years):
Operating leases		3.6818			4.6014
Weighted average discount rate:
Operating leases		98.0122	%		89.5709	%

	For			For
	Nine Months Ended			Nine Months Ended
	February 29, 2024			February 28, 2023
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	1,270,702		$	8,897,639
Weighted average remaining lease term (in years):
Operating leases		3.68			4.60
Weighted average discount rate:
Operating leases		8.96	%		8.57	%

Future Minimum Payments for the Twelve Months Ending August 31,

Future minimum lease payments under noncancelable operating leases are as follows:

SCHEDULE OF MINIMUM LEASE PAYMENTS

	February 29, 2024
	August 31, 2024
2024 (remaining)	$	3,397,531
2025	$	3,157,532
2025		2,875,024
2026		2,847,715
2026		2,753,892
2027		2,877,307
2027		2,194,694
2028		1,090,344
2028		238,279
2029		83,735
Total lease payments		11,459,420
Thereafter		-
Less: imputed interest		(1,587,587	)
Total lease payments		10,056,633
Total lease obligations	$	9,871,833
Less: imputed interest		1,288,155
Total lease obligations	$	8,768,478

F-2118

89. INCOME TAX PROVISION

The ~~expense~~breakout ~~(benefit)~~of ~~for~~foreign and domestic pretax income ~~taxes~~(loss) ~~consists~~is ofas follows:

SCHEDULE OF ~~INCOME~~PRETAX ~~TAX EXPENSE~~ INCOME

	For the Three Months Ended February 29, 2024			For the Three Months Ended February 28, 2023
	For the Three Months Ended August 31, 2024			For the Three Months Ended August 31, 2023
Current:
Domestic	$	977,766		$	(4,170,245	)
Federal	$	(676,503	)	$	(134,755	)
Foreign		264,183			1,365,286
State		(286,900	)		(542,436	)
Pretax income	$	1,241,949		$	(2,804,959	)
Foreign		897,801			10,299
Total		(65,602	)		(666,892	)
Deferred:
Federal		(4,525,137	)		(135,654	)
State		(156,917	)		(11,534	)
Foreign		(521,138	)
Total		(5,203,191	)		(147,188	)
Total tax expense (benefit)	$	(5,268,793	)	$	(814,080	)

	For the Nine Months Ended February 29, 2024			For the Nine Months Ended February 28, 2023
Current:
Federal	$	(784,480	)	$	1,194,842
State		107,978			(138,956	)
Foreign		1,727,544			10,299
Total		1,051,042			1,066,185
Deferred:
Federal		(5,675,695	)		(188,613	)
State		(413,042	)		(27,605	)
Foreign		(749,730	)		-
Total		(6,838,466	)		(216,218	)
Total tax expense (benefit)	$	(5,787,424	)	$	849,967

The quarterly tax provision is determined using an estimated annual effective tax rate, adjusted for discrete items arising in the applicable quarter. The Company recorded a provision for income tax expense of $3.3 million, reflecting an effective tax rate of 269.7%, and $0.5 million of income tax benefit, reflecting an effective tax rate of 17.6%, for the three months ended August 31, 2024, and August 31, 2023, respectively. For the three-months ended August 31, 2024, our effective tax rate differed from the U.S. federal statutory rate primarily due to the recognition of a valuation allowance during the period. The Company has determined that it is not more likely than not to recognize a portion of its federal, foreign and state deferred tax assets. For the three-months ended August 31, 2023, our effective tax rate differed from the U.S. federal statutory rate primarily as a result of the foreign derived intangible income deduction.

The Company ~~recorded~~evaluated athe ~~provision~~provisions of ASC 740 related to the accounting for uncertainty in income ~~tax benefit~~taxes ofrecognized $5in an enterprise’s financial statements.3 ~~million~~ASC 740 prescribes a comprehensive model for how a company should recognize, ~~reflecting~~present, anand ~~effective~~disclose ~~tax~~uncertain ~~rate~~positions that ofthe 48Company has taken or expects to take in its tax return.3% For those benefits to be recognized, ~~and~~a $0tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.8 ~~million~~Differences ofbetween ~~income~~tax positions taken or expected to be taken in a tax return and the net benefit, ~~reflecting~~recognized anand ~~effective~~measured ~~tax~~pursuant to the interpretation are referred to as “unrecognized benefits.” A ~~rate~~liability is recognized (or amount of ~~539.82%,~~net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the ~~three~~taxing ~~months~~authority ~~ended~~for ~~February~~a ~~29,~~tax ~~2024,~~position ~~and~~that ~~February~~was ~~28,~~not ~~2023,~~recognized as ~~respectively~~a result of applying the provisions of ASC 740. ~~For~~Interest and penalties related to the ~~three-months~~unrecognized ~~ended~~tax ~~February~~positions are required to be ~~29,~~calculated ~~2024,~~and ~~our~~would ~~effective~~be ~~tax~~classified ~~rate~~as ~~differed~~“tax ~~from~~expense” in the Ustatement of operations.S. ~~federal~~Interest ~~statutory~~expense ~~rate~~in ~~primarily~~the ~~due~~amount of $0.1 million has been recorded related to the ~~section~~unrecognized ~~245A~~tax ~~Deduction~~positions onfor ~~distributions from~~the ~~foreign~~period ~~subsidiaries~~ended ~~and~~August ~~equity~~31, ~~investments.~~2024 ~~For~~and none for the ~~three-months~~period ended August ~~February 28~~31, 2023,. ~~our~~These ~~effective~~reserves would impact income tax ~~rate~~expense ~~differed~~if ~~from~~released ~~the U~~into income.S. ~~federal~~The ~~statutory~~Company ~~rate~~does ~~primarily~~not asexpect a ~~result~~change ofto ~~the~~its unrealized ~~foreign~~tax ~~derived~~position ~~intangible~~in ~~income~~the ~~deduction~~next twelve months.

The Company ~~recorded~~has afiled ~~provision~~its ~~for~~ income ~~taxes~~tax ~~benefit~~returns ofin $5the U.8S. ~~million~~federal jurisdiction, ~~reflecting~~various anstate ~~effective tax rate of 35.3%~~jurisdictions, and ~~$0.8~~various ~~million~~international ofjurisdictions. ~~income~~Tax years ~~tax~~2020 ~~expense,~~and ~~reflecting~~forward angenerally ~~effective~~remain ~~tax~~open ~~rate~~for ofexamination ~~10.49%,~~ for ~~the~~federal ~~nine months ended February 29, 2024,~~ and ~~February~~state ~~28,~~tax ~~2023, respectively~~purposes. ~~For~~Tax ~~the~~years ~~nine-months~~2017 ~~ended~~and ~~February~~forward generally ~~29,~~remain ~~2024,~~open ~~our~~for ~~effective~~examination ~~tax~~for ~~rate~~foreign ~~differed~~tax ~~from the U~~purposes.S. ~~federal statutory~~To ~~rate primarily due to~~ the ~~section~~extent ~~245A~~utilized ~~Deduction~~in onfuture ~~distributions~~years’ ~~from~~tax ~~foreign~~returns, ~~subsidiaries~~net operating ~~and~~losses ~~equity~~as ~~investments.~~of ~~For~~May ~~the nine-months~~31, ~~ended~~2024 ~~February~~and ~~28,~~ 2023, ~~our~~will ~~effective~~remain ~~tax~~subject ~~rate~~to ~~differed~~examination ~~from~~until the ~~U.S.~~respective ~~federal~~tax ~~statutory~~year ~~rate primarily as a result of the~~is ~~foreign derived intangible income deduction~~closed.

~~Other~~10. ~~noncurrent~~SUBSEQUENT ~~liabilities include liabilities for uncertain tax provision (UTP) as follows:~~EVENTS

~~SCHEDULE~~Line OFof ~~UNCERTAIN~~credit ~~TAX PROVISION~~ increase

	For the Nine Months Ended February 29, 2024		For the Nine Months Ended February 28, 2023
Total UTP balance on June 1	$	2,582,341	$	-
Additions based on tax provisions related to the current year		-		-
Additions for tax positions of prior years		-		-
Reductions for tax positions of prior years		-		-
Settlements		-		-
Reductions due to lapse of applicable statute of limitations		-		-
Total UTP balance on February 29, 2024	$	2,582,341	$	-

As previously reported, on July 20, 2023, the Company and its operating subsidiaries (collectively, “Borrower”) entered into a loan and security agreement with TBK Bank, SSB, a Texas State Savings Bank (the “Agreement”), for a facility under which TBK Bank will advance funds secured on eligible trade receivables of the Company. The Agreement was further amended by amendments No. 1 and 2 thereto, dated as of February 5, 2024 and August 7, 2024, respectively.

~~The~~On ~~Company~~September evaluated the provisions of ASC 740 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740 prescribes a comprehensive model for how a company should recognize12, ~~present~~2024, Borrower and ~~disclose~~TBK ~~uncertain~~Bank ~~positions that~~entered ~~the~~into ~~Company~~Amendment ~~has taken or expects to take in its tax return~~No. ~~For~~3 ~~those benefits~~ to bethe ~~recognized~~Agreement, awhereby ~~tax position must be more-likely-than-not~~the toparties beagreed ~~sustained upon examination by taxing authorities. Differences between tax positions taken or expected~~ to betemporarily ~~taken~~increase ~~in a tax return and~~ the ~~net~~maximum ~~benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits.” A liability is recognized (or~~ amount of net operating loss carry forward or amount of tax refundable is reduced) for unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that ~~was~~Borrower ~~not~~may ~~recognized as~~borrow aunder ~~result of applying~~ the ~~provisions~~Agreement offrom ~~ASC~~$25,000,000 ~~740. Interest and penalties related~~ to ~~the unrecognized tax positions are required to be~~$30,000,000 ~~calculated~~through ~~and~~March ~~would~~12, be2025, ~~classified~~after aswhich ~~“tax expense” in~~ the ~~statement~~maximum ~~of operations. Interest expense in the~~ amount ofthat ~~$0.3 million~~Borrower ~~has~~may ~~been~~borrow ~~recorded~~under ~~related to~~ the ~~unrecognized~~Agreement ~~tax~~will ~~positions~~revert ~~for~~back ~~the~~to ~~period ended February 29~~$25, ~~2024 and none for the period ended February 28~~000, ~~2023~~000. ~~These reserves would impact income tax expense if released into income. The Company does not expect a change to its unrealized tax positions in the next twelve months.~~

~~F-22~~Amendment of the related party debt

~~The~~As ~~Taxing~~previously ~~jurisdiction~~reported, ~~that~~on isFebruary ~~significant~~21, to2023, the Company isissued ~~the~~to ~~U.S.~~ULHK, ~~open~~promissory ~~tax~~notes, ~~years~~as ~~related~~amended, towith ~~this~~the ~~taxing~~following ~~jurisdiction~~original ~~remains~~principal ~~subject~~amounts: to$2,000,000 (the “Second ~~examination~~Net ~~and~~Assets ~~could~~Note”), ~~result~~$1,000,000 in(the ~~additional~~“Original ~~tax~~Seller ~~liabilities~~Note”), and $1,000,000 (the “ULHK Note”), respectively. Further, ~~The~~on March 5, 2024, the Company isissued noULHK ~~longer~~a ~~subject~~promissory tonote ~~income~~in ~~tax~~the ~~examinations~~aggregate ~~for~~principal ~~years~~amount ~~before~~of $2,500,000 (“Note 11”) ~~fiscal~~and ~~year~~a ~~2019~~promissory note in the aggregate principal amount of $3,400,000 (“Note 12”).

9On October 7, 2024, the Company and ULHK amended the ULHK Note to extend the maturity date thereof from June 30, 2025 to December 31, 2025. Further, on October 7, 2024, the Company and ULHK amended ~~SUBSEQUENT~~the ~~EVENTS~~Second Net Assets Note the Original Seller Note, Note 11 and Note 12 to extend the maturity dates on each of these promissory notes from June 30, 2025 to December 31, 2025.

~~Merger~~Acquisition ~~Termination~~of Unique Singapore

~~As previously~~On ~~disclosed,~~August ~~on December 18~~1, ~~2022~~2024, ~~The~~the Company ~~entered~~closed ~~into~~the anacquisition ~~Agreement~~of ~~and~~all ~~Plan~~ of ~~Merger~~the byshare ~~and~~capital ~~among~~owned ~~Edify~~ULHK ~~Acquisition~~in ~~Corp~~Unique Singapore. The total consideration for the purchased shares in the amount of $2,150,000 was calculated at an estimated afair ~~Delaware~~value ~~corporation~~of $2,169,652. ~~Edify~~As ~~Merger~~part ~~Sub~~of the consideration for the purchased shares, ~~Inc.~~the Company, aby ~~Nevada~~mutual ~~corporation~~agreement ~~(“Merger~~with ~~Sub”)~~ULHK, ~~and~~issued to ULHK a promissory note in the ~~Company~~principal amount of $350,000 in aslieu ~~amended~~of ~~and~~the ~~supplemented (~~cash payment originally contemplated under the ~~“Merger~~purchase ~~Agreement”)~~agreement. OnThe ~~March~~principal 1amount under this note is due in full on October 21, ~~2024~~2026, ~~the~~with ~~Company~~interest accruing at an annual rate of 15%, ~~Buyer~~payable ~~and~~semi-annually. ~~Merger~~This ~~Sub~~note ~~finalized~~has abeen ~~mutual~~already ~~termination~~accrued ~~agreement,~~as ~~pursuant to~~part ~~which~~of ~~they~~the ~~mutually~~acquisition ~~agreed~~accounting toand ~~terminate~~included in the related ~~Merger~~party ~~Agreement~~debt ~~effective~~line asitem of ~~such~~the ~~date.~~condensed ~~(See~~consolidated ~~Note~~financial 2:statements ~~SPAC~~of ~~Merger~~the ~~Termination)~~Company as of August 31, 2024.

Amendment to the financing agreement and a waiver

As previously disclosed, on March 10, 2023, the Company entered into a financing agreement (the “Agreement”) as borrower with certain of its subsidiaries party thereto as guarantors (collectively, the “Borrowers”), the lenders party thereto (collectively, the “Lenders”), CB Agent Services LLC, as origination agent, and Alter Domus (US) LLC, as collateral agent and administrative agent (together with CB Agents, the “Agents”)(collectively, the “Parties”), for an initial senior secured term loan in a principal amount of $4.2 million and a delayed draft term loan available in an aggregate principal amount of up to $14.8 million (See Note 4: Financing Arrangements)

Effective March 1, 2024, the Parties entered into a waiver and amendment no. 2 to financing agreement (the “Second Waiver”), whereby the Agents and the Lenders agreed to waive (i) (a) that certain event of default that has occurred or may occur, due to the borrower’s’ noncompliance with Section 7.03(a) of the Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (the “FCCR Event of Default”), (b) that certain Event of Default that has occurred or may occur, due to the Loan Parties’ noncompliance with Section 7.03(b) of the Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024 (the “Liquidity Event of Default”) and (c) that certain Event of Default that has occurred or may occur, due to the Loan Parties’ noncompliance with Section 7.03(c) of the Agreement for each of the fiscal quarters in the fiscal year ending May 31, 2024 and for the fiscal quarter ending August 31, 2024” and, together with the FCCR Event of Default and the Liquidity Event of Default, the “Specified Events of Default”). Each of the Specified Events of Default constitute an Event of Default under Section 9.01(c) of the Agreement; and (ii) interest at the post-default rate with respect to the Specified Events of Default from the date such event occurred through the Second Waiver effective date (See Note 2: SPAC Merger Termination)

F-23

Line of credit waiver of financial covenant

On ~~April~~ 30December 11, 2024, the Company entered into an amendment and waiver to the loan and security agreement, ~~dated~~with asrespect ofto the TBK Facility, dated July 20, 2023, with TBK Bank, SSB whereby ~~where~~ the bank agreed to waive a specified event of default ~~and~~as toof ~~make~~August ~~certain~~31, ~~modifications to the loan agreement~~2024. All other terms and conditions of the original and amended loan and security agreement with respect to the TBK Facility remain the same. This loan is scheduled to mature on June 1, 2025.

~~Amendment to Promissory Notes~~F-19

As previously reported, on February 21, 2023, the Company issued to Unique Logistics Holdings Limited, a Hong Kong corporation (“ULHK”), three promissory notes related to the acquisitions of certain ULHK entities by the Company, as amended, with the following original principal amounts: (i) $2,500,000 (the “Net Assets Note”), (ii) $2,000,000 (the “Second Net Assets Note”), (iii) $2,000,000 (the “Taiwan Note”), and (iv) $1,000,000 (the “Original Seller Note”), respectively.

On October 3, 2023, the Company and ULHK agreed to cancel, replace and supersede the Net Assets Note and the Taiwan Note, each in their entirety, in favor of a newly issued promissory note as of the same date (“Note 9”). Note 9 includes the remaining balances of the Net Assets Note and the Taiwan Note, along with an additional loan in the principal amount of $1,100,000 for an aggregate principal amount of $4,500,000. Note 9 matures on March 31, 2025, and has an interest rate of fifteen percent (15%) per annum.

On October 9, 2023, the Company amended the Second Net Assets Note (the “Amended Second Net Assets Note”), which extended the maturity date thereof from February 21, 2024, to March 31, 2025. The Amended Second Net Assets Note includes simple interest accruing at a rate of fifteen percent (15%) per annum starting February 21, 2024, until such time as the principal amount is paid in full.

On March 5, 2024, the Company and ULHK agreed to cancel, replace and supersede Note 9, in its entirety, in favor of (i) a promissory note in the aggregate principal amount of $2,500,000 (“Note 11”) and (ii) a promissory note in the aggregate principal amount of $3,400,000 (“Note 12”).

Note 11 matures on June 30, 2025, with an interest rate of 15% per annum, payable to ULHK in quarterly installments.

Note 12 matures on June 30, 2025, with an interest rate of 15% per annum.

On March 5, 2024, the Company and ULHK further amended the Amended Second Net Assets Note”), which extended the maturity date thereof from March 31, 2025 to June 30, 2025.

Additionally, on March 6, 2024, the Company and ULHK amended the Original Seller Note which extended the maturity date thereof from the second anniversary of the date of the Note to June 30, 2025 and increased the principal amount of the Note to $1,053,000.

Acquisitions

On April 29, 2024, the Company entered into a share sale and purchase agreement between the Company and Unique Logistics Holdings Limited, a Hong Kong corporation (the “ULHK”), to acquire 100% ULHK’s share capital in Unique Logistics International (Sin) Pte Ltd., with a purchase price of $2.2 million, to be settled in cash in the amount of $0.4 million and the assumption by the Company of $1.8 million existing indebtedness to ULHK.

F-24

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) that reflect management’s current views with respect to future events and financial performance. These statements are based upon beliefs of, and information currently available to, the Company’s management as well as estimates and assumptions made by the Company’s management. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. When used herein, the words “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “future,” “intend,” “plan,” “predict,” “project,” “target,” “potential,” “will,” “would,” “could,” “should,” “continue” or the negative of these terms and similar expressions as they relate to the Company or the Company’s management identify forward-looking ~~statements.~~ ~~Such~~ statements reflect the current view of the Company with respect to future events and are subject to risks, uncertainties, assumptions, and other factors, including the risks relating to the Company’s business, industry, and the Company’s operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned.

~~Although~~Our financial statements are prepared in accordance with accounting principles generally accepted in the ~~Company~~United ~~believes~~States (“GAAP”). These accounting principles require us to make certain estimates, judgements and assumptions. We believe that the ~~expectations~~estimates, ~~reflected~~judgements and inassumptions ~~the~~upon ~~forward-looking~~which ~~statements~~we rely are reasonable, ~~the~~based ~~Company~~upon ~~cannot~~information ~~guarantee~~available ~~future results,~~to ~~levels~~us ofat ~~activity,~~the ~~performance~~time that these estimates, orjudgements and ~~achievements~~assumptions are made. ~~Except~~These asestimates, ~~required~~judgements byand ~~applicable~~assumptions ~~law,~~can ~~including~~affect the ~~securities~~reported ~~laws~~amounts of ~~the~~assets and liabilities as of ~~United~~the ~~States,~~date of the ~~Company~~condensed ~~does~~consolidated ~~not~~financial ~~intend~~statements toas ~~update~~well ~~any~~as the reported amounts of revenues and expenses during the ~~forward-looking~~periods presented. ~~statements~~Our tocondensed ~~conform~~consolidated ~~these~~financial statements would be affected to the extent there are material differences between these estimates and actual results. The following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report.

~~Our financial~~The forward-looking statements ~~are~~made ~~prepared~~ in ~~accordance~~this ~~with~~report ~~accounting~~are ~~principles~~based ~~generally~~only ~~accepted~~on inevents ~~the~~or information ~~United~~as ~~States~~of ~~(“GAAP”). These~~the ~~accounting~~date ~~principles~~on ~~require~~which usthe tostatements ~~make~~are ~~certain~~made ~~estimates,~~in ~~judgements~~this ~~and assumptions~~report. WeSuch ~~believe~~statements ~~that~~reflect the ~~estimates,~~current ~~judgements and~~view ~~assumptions~~of ~~upon~~the ~~which~~Company wewith ~~rely~~respect ~~are reasonable based upon information available~~ to future usevents ~~at the time that these estimates, judgements~~ and ~~assumptions~~ are ~~made.~~subject ~~These~~to ~~estimates~~risks, ~~judgements~~uncertainties, ~~and~~ assumptions, ~~can affect the reported amounts of assets~~ and ~~liabilities~~other asfactors, ~~of the~~including ~~date of~~ the ~~condensed~~risks ~~consolidated~~relating ~~financial~~to ~~statements as well as~~ the ~~reported~~Company’s business, ~~amounts~~industry, ~~of revenues~~ and ~~expenses during~~ the ~~periods presented.~~Company’s ~~Our~~operations ~~condensed consolidated financial statements would be affected to the extent there are material differences between these estimates~~ and ~~actual~~ results. ~~The~~of ~~following discussion should be read in conjunction with our condensed consolidated financial statements and notes thereto appearing elsewhere in this report~~operations. ~~The~~Should ~~forward-looking~~one ~~statements made in this report are based only on events~~ or ~~information~~ asmore of ~~the~~these ~~date~~risks onor ~~which~~uncertainties ~~the statements are made in this report. Except as required by law~~materialize, ~~we undertake no obligation to~~ ~~update~~ or ~~revise~~should ~~publicly~~the ~~any~~underlying ~~forward-looking~~assumptions ~~statements~~prove incorrect, ~~whether~~actual asresults amay ~~result~~differ ofsignificantly ~~new~~from ~~information~~those anticipated, ~~future events or otherwise~~believed, ~~after the~~estimated, ~~date~~expected, onintended, ~~which the statements are made~~ or toplanned ~~reflect the occurrence of unanticipated events.~~ You should read this report and the documents we refer to in this report and have filed as exhibits to this report completely and with the understanding that our actual future results may be materially different from what we expect. These risks include, by way of example and without limitation:

● The Company provides services to customers engaged in international commerce. Everything that affects international trade has the potential to expand or contract our primary market and adversely impact our operating results ● We depend on operators of aircrafts, ships, trucks, ports and airports ● We derive a significant portion of our total revenues and net revenues from our largest customers ● Due to our dependence on a limited number of customers, we are subject to a concentration of credit risk ● Our earnings may be affected by seasonal changes in the transportation industry ● Our business is affected by ever increasing regulations from a number of sources in the United States and in foreign locations in which we operate

● We depend on operators of aircrafts, ships, trucks, ports and airports

● We derive a significant portion of our total revenues and net revenues from our largest customers

● Due to our dependence on a limited number of customers, we are subject to a concentration of credit risk

● Our earnings may be affected by seasonal changes in the transportation industry

● Our ~~As a corporation transacting~~ business inis ~~multiple~~affected ~~countries,~~by weever ~~are~~increasing ~~subject~~regulations tofrom ~~formal~~a ornumber ~~informal~~of ~~investigations~~sources ~~from~~in ~~governmental~~the ~~authorities~~United orStates ~~others~~and in ~~the~~foreign ~~countries~~locations in which we do business ● The global economy and capital and credit markets continue to experience uncertainty and volatility ● Our business is subject to significant seasonal fluctuations driven by market demands and each quarter is affected by seasonal trends. ● Our revenue and direct costs are subject to significant fluctuations depending on supply and demand for freight capacity.operate

● As a corporation transacting business in multiple countries, we are subject to formal or informal investigations from governmental authorities or others in the countries in which we do business

● The global economy and capital and credit markets continue to experience uncertainty and volatility

● Our business is subject to significant seasonal fluctuations driven by market demands and each quarter is affected by seasonal trends

● Our revenue and direct costs are subject to significant fluctuations depending on supply and demand for freight capacity

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, or performance. Readers are urged to carefully review and consider the various disclosures made by us in this report and in our other reports filed with the Securities and Exchange Commission (“SEC”). We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes in the future operating results over time except as required by law. We believe that our assumptions are based upon reasonable data derived from and known about our business and operations. No assurances are made that actual results of operations or the results of our future activities will not differ materially from our assumptions.

Business Overview and Recent Developments

The Company is a global logistics and freight forwarding company.

Unique Logistics provides a range of international logistics services that enable its customers to outsource to the Company sections of their supply chain process. Our global network of trained employees and integrated information systems seamlessly manage the services that we provide. We enable our customers to share data regarding their international vendors and purchase orders with us, execute the flow of goods and information under their operating instructions, provide visibility to the flow of goods from factory to distribution center or store and, when required, update their inventory records.

Our range of services can be categorized as follows:

	●	Air freight services
	●	Ocean freight services
	●	Customs brokerage and compliance services
	●	Warehousing and distribution services
	●	Order management

On ~~February~~ 21August 1, ~~2023~~2024, the Company acquired ~~completed the acquisition~~ of all of the share capital owned by Unique Logistics Holdings Limited, a Hong Kong ~~company~~corporation (“ULHK”), in ~~eight~~Unique ~~subsidiaries~~Logistics ~~(the~~International ~~“ULHK Entities”~~(Sin) ~~for~~Pte ~~$26~~Ltd.5 ~~million~~ (~~the~~ “~~ULHK~~Unique ~~Entities Acquisition~~Singapore”). Inpursuant ~~addition~~ to ~~the~~a ~~acquisition~~Share ofSale ~~the~~and ~~shares~~Purchase ~~in the ULHK Entities~~Agreement, ~~Unique Logistics acquired two companies that~~as ~~are~~amended, ~~owned~~between ~~by two of~~ the ~~ULHK Entities. We expect that the acquisition of these entities will have a material favorable impact on the~~ Company’s ~~revenues~~ and ~~consolidated income going forward~~ULHK.

On December 18, 2022, the Company entered into an Agreement and Plan of Merger by and among Edify Acquisition Corp., a Delaware corporation, Edify Merger Sub, Inc., a Nevada corporation, and the Company, as amended and supplemented (the “Merger Agreement”). On March 1, 2024, the parties entered into a mutual termination agreement, pursuant to which they mutually agreed to terminate the Merger Agreement effective as of such date.

Market and Business Trends - Overview of Impact on Results of Operations

The logistics industry experienced a global slowdown in 2023 compared with calendar year 2022. Typically, the flow of imported goods to the United States starts to pick up for the “back to school” and “holiday sales” seasons during the June to November period, with a particular increase in air shipping to meet store deadlines towards the later part of this peak period. In 2023, however, overall volumes remained depressed even during the traditional peak period, possibly due to excess inventory overhang and conservative ordering by retailers. The trend started to reverse itself, somewhat, in the later part of the traditional June to November peak with conversions of shipping mode, to air freight from sea freight, and the Company benefited through increased air freight revenue but at low margins.

By December 2023, attacks on ships in the Red Sea, which required re-routing of vessels traveling from Asia to Europe and the East Coast of the United States, created shipping bottlenecks and increased freight rates. Air freight volumes were already on an elevated trend driven by Chinese e-commerce shipments and the Red Sea situation added to this volume as shippers converted ocean shipments to air. Thus, air freight rates have been driven up and they remain at elevated levels as Chinese e-commerce shipping continues to grow and the Red Sea situation has become worse.

~~Results of~~Industry ~~Operations for the Three Months ended February 29~~Trends, ~~2024~~Trade Conditions and ~~February 28, 2023~~Competition

We specialize in shipping by air and sea from Asia to the United States. Our business is thus intricately linked to the economic, political and other market factors that impact trade and shipping in this sector. Geopolitical factors have resulted in United States’ importers moving production from China to other countries in the region. This trend poses challenges to ensure that we meet the changing logistics requirements of our customers and secure the capacity necessary by air or sea to successfully ship products for our customers from other parts of Asia.

Shipping from Asia to the United States continues to be influenced by the conflicts in the Middle East. United States’ importers have also been wary of the potential impact of East Coast dockworkers’ industrial action, first anticipated in October 2024 and now deferred to, possibly, January 2025. In anticipation of such disruptions and the longer transit times on some shipping routes due to the Middle East conflicts, customers have accelerated their shipping to protect inventory levels. This has caused congestion and poses challenges for us to manage shipping capacity.

Air shipping volumes have increased as a result of accelerated shipping and another more recent trend: the increasing amount of air freight volumes utilized by Chinese E-Commerce shipping companies. Increasing air shipping volumes and reduced air freight capacity for commercial imports has increased air freight costs.

United States’ importers remain wary of the potential impact of further tariffs on imports from China and are starting to plan further relocation of production in the longer term and even more accelerated shipping in the shorter term. We will likely begin to see the impact of anticipated tariffs in our financial results for the last quarter of our fiscal year ending May 31, 2025.

Results of Operations for the Three Months Ended August 31, 2024 and August 31, 2023

Revenue

For the three months ended ~~February~~August 2931, 2024 and ~~February 28,~~ 2023, Unique Logistics’ revenue by product line was as follows:

For the Three Months ended February 29, 2024

For the Three Months ended February 28, 2023

$ change

% change

For the Three Months Ended August 31, 2024

For the Three Months Ended August 31, 2023

$ change

% change

Airfreight services

3147,~~672~~248,~~402~~102

1319,~~206~~147,~~112~~970

1828,~~466~~100,~~290~~132

~~139~~146.8

Ocean freight and ocean services

2757,~~543~~064,~~642~~403

2330,~~106~~728,~~949~~501

426,~~436~~335,~~693~~902

1985.27

Contract logistics

~~579~~975,~~675~~579

~~755~~572,~~034~~712

~~(175~~402,~~359~~867

)

~~(23~~70.23

Customs brokerage and other services

89,~~034~~910,~~666~~153

12,~~559~~419,~~407~~101

(42,~~524~~508,~~741~~948

)

(3620.02

Total revenues

67115,~~830~~198,~~385~~237

4962,~~627~~868,~~502~~284

1852,~~202~~329,~~883~~953

3683.02

~~For~~ The increase in total revenues for the three months ended ~~February~~August 2931, 2024, ~~and~~compared ~~February~~to 28the three months ended August 31, 2023, ~~the~~is ~~Company’s~~primarily ~~revenue~~due byto ~~product~~increases ~~line,~~in ~~excluding~~airfreight ~~the~~services ~~operations~~revenue ofand ~~the~~ocean ~~ULHK~~freight ~~Entities~~and ~~acquired~~ocean onservices ~~February 21~~revenue, ~~2023,~~offset ~~were~~by asa ~~follows:~~decrease in revenue from customs brokerage and other services.

	For the Three Months ended February 29, 2024		For the Three Months ended February 28, 2023		$ change			% change
Airfreight services	$	23,150,157	$	13,206,112	$	9,944,045			75.3	%
Ocean freight and ocean services		19,331,728		23,106,949		(3,775,221	)		(16.3	)%
Contract logistics		579,675		755,034		(175,359	)		(23.2	)%
Customs brokerage and other services		7,363,918		12,559,407		(5,195,489	)		(41.4	)%
Total revenues	$	50,425,478	$	49,627,502	$	797,976			1.6	%

The increase in air freight revenue was due to an approximately 68.7% increase in pricing (that is, the rates that we charge customers), which was responsible for 68.5% of the total increase in airfreight services revenue, and an approximately 46.3% increase in volume during the three months ended August 31, 2024 compared to the comparable period of 2023. The increases in both pricing and volume were due to significant increases in demand for air freight services due to geopolitical issues discussed above and the rerouting of vessels traveling from Asia to Europe and the East Coast of the United States during the quarter ended August 31, 2024 compared to the quarter ended August 31, 2023.

The ~~36.0%~~ increase in ~~total~~ocean ~~revenues~~freight ~~for~~revenue ~~the~~was ~~three~~due ~~months~~to ~~ended~~a ~~February~~price ~~29,~~increase ~~2024,~~of approximately 117.6% for such services compared to the three-month ~~months~~period ended ~~February~~August 2831, 2023, isas ~~primarily~~shipping demand ~~due~~picked toup, ~~increases~~which resulted in ~~airfreight revenue and, to~~ a ~~lesser~~117.1% ~~extent,~~increase in ocean freight ~~and~~revenue ~~ocean~~period-over ~~services revenue~~period, offset by a 17.1% decrease in such revenue resulting from ~~customs~~a ~~brokerage~~14.7% ~~and~~decrease ~~other~~in volume due to a shift by major customers to airfreight services, quarter over quarter.

The ~~139.8%~~decrease ~~increase~~ in ~~airfreight~~ revenue ~~was primarily~~from ~~due~~custom tobrokerage and ~~the~~other ~~acquisition~~services ofduring the ~~ULHK~~three ~~Entities~~months ~~and~~ended ~~the~~August ~~market~~31, ~~trends~~2024 ~~discussed~~compared ~~above.~~to Athe ~~209.8%~~quarter ~~increase~~ended inAugust ~~volume~~31, ~~resulted in a 149.3% increase in air freight revenue~~2023, ~~offset~~was by a ~~49.3% reduction in such revenue as a~~ result of customers apaying ~~22.3%~~their ~~decrease~~own induties ~~air~~at ~~freight pricing compared to~~ the ~~same~~Company’s ~~period last year~~encouragement.

Excluding airfreight revenues of $8.5 million (net of intercompany eliminations) attributable to the operations of the ULHK Entities, air freight revenue increased by 75.3% over the same period last year. A 97.1% increase in volume resulted in a 129.0% increase in air freight revenue, offset by a 29.0% reduction in such revenue as a result of an 11.1% decrease in pricing, quarter over quarter.

The 19.2% increase in ocean freight and ocean services revenue was due to the acquisition of the ULHK Entities in February 2023, offset by a decrease in ocean freight and ocean services revenue from our legacy operations. The overall increase in ocean freight and ocean services revenues was the result of an 81.8% increase in volume, which resulted in a 426.1% increase in such revenue, offset by a 326.1% decrease in such revenue resulting from a 34.4% reduction in pricing, quarter over quarter.

Excluding ocean revenues of $8.2 million (net of intercompany eliminations) attributable to the acquisition of the ULHK Entities, ocean freight and ocean services revenue decreased by 16.3% over the same period last year. Such decrease is the result of a 22.5% decrease in pricing for such services, which resulted in a 148.8% decrease in revenues, offset by an increase of 48.8% in such revenue resulting from an 8.0% increase in volume, quarter over quarter.

The decline in revenue from customs brokerage and other services during the three months ended February 29, 2024 as compared with the same period of 2023 was a direct result of our asking customers to pay their own duties.

While not a material contributor to the decrease in revenues generally, contract logistics revenue declined by 23.2% during the three months ended February 29, 2024 compared with the same period of 2023, both with and without the inclusion of the operations of the ULHK Entities, because of the overall decrease in demand for ocean freight and services, meaning less cargo was being handled in the Company’s warehouses.

Costs and Operating Expenses

For the three months ended ~~February~~August 2931, 2024 and ~~February 28~~August 31, 2023, Unique Logistics’ costs and operating expenses were as follows:

	For the Three Months ended February 29, 2024			For the Three Months ended February 28, 2023			$ change			% change
	For the Three Months ended August 31, 2024			For the Three Months ended August 31, 2023			$ change			% change
Costs and operating expenses:
Cost of sales
Airfreight services	$	2944,~~076~~845,~~358~~501		$	1117,~~964~~892,~~314~~433		$	1726,~~112~~953,~~044~~068			~~143~~150.06	%
Ocean freight and ocean services		2351,~~999~~117,~~410~~718			1925,~~722~~819,~~259~~755			425,~~277~~297,~~151~~963			2198.70	%
Contract logistics		~~126~~255,~~523~~558			~~215~~168,~~245~~158			~~(88~~87,~~722~~400	)		~~(41~~52.20	)%
Customs brokerage and other services		68,~~346~~506,~~786~~125			1110,~~397~~748,~~398~~897			(52,~~050~~242,~~612~~772	)		(4420.39	)%
Salaries and related costs		5,~~529~~218,~~773~~613			36,~~076~~016,~~221~~892			2(798,~~453,552~~279	)		79(13.83	)%
Professional fees		~~666~~1,~~850~~055,949			39807,~~082~~893			~~627~~248,~~768~~056			~~1606~~30.37	%
Rent and occupancy		1,~~176~~362,~~612~~424			~~883~~1,~~681~~096,565			~~292~~265,~~931~~859			3324.12	%
Selling and promotion		~~609~~576,~~751~~144			1714,~~471,236~~971			(~~861~~138,~~485~~827	)		(5819.64	)%
Depreciation and amortization		~~752~~467,~~750~~626			~~203~~699,~~390~~400			~~549~~(231,~~360~~774	)		~~270~~(33.1	)%
Foreign exchange transactions, net		26,858			-			26,858			100	%
Foreign exchange (gains) and losses		(28,237	)		(194,186	)		165,949			(85.5	)%
Other expense		~~282~~639,~~871~~722			~~323~~666,~~747~~165			(4026,~~876~~443	)		(124.60	)%
Total costs and operating expenses	$	68,594,542		$	49,296,573			19,297,969			39.1	%
Total operating expenses	$	114,017,143		$	64,436,943			49,580,200			76.9	%

~~For~~The ~~the~~76.9% ~~three~~increase ~~months~~in ~~ended~~operating ~~February~~expenses ~~29,~~was ~~2024~~primarily ~~and~~due ~~February~~to ~~28,~~a ~~2023,~~97.1% increase in the ~~Company’s~~cost ~~costs~~of ~~and~~sales, offset by an aggregate decrease in other operating expenses. The increase in the cost of sales in each of airfreight services, ocean freight and ocean ~~excluding~~services, and contract logistics was primarily attributable to the ~~operations~~increased ofrevenues during the ~~ULHK~~three ~~Entities~~months ended August 31, ~~were~~2024 compared to the same period of 2023, as ~~follows:~~discussed above under Revenue.

	For the Three Months ended February 29, 2024		For the Three Months ended February 28, 2023		$ change			% change
Costs and operating expenses:
Airfreight services	$	21,877,801	$	11,964,314	$	9,913,487			82.9	%
Ocean freight and ocean services		17,206,923		19,722,259		(2,515,336	)		(12.8	)%
Contract logistics		145,747		215,245		(69,498	)		(32.3	)%
Customs brokerage and other services		5,743,583		11,397,398		(5,653,815	)		(49.6	)%
Salaries and related costs		3,334,963		3,076,221		258,742			(8.4	)%
Professional fees		627,225		39,082		588,143			1,504.9	%
Rent and occupancy		846,327		883,681		(37,354	)		(4.2	)%
Selling and promotion		527,871		1,471,236		(943,365	)		(64.1	)%
Depreciation and amortization		464,708		203,390		261,318			128.5	%
Other expense		456,037		323,747		132,290			40.9	%
Total costs and operating expenses	$	51,231,185	$	49,296,573		1,934,612			3.9	%

The $16.3 million or 37.5% increase in cost of sales correlates with the 36.0% increase in product revenue for the period, specifically in airfreight and ocean freight and ocean services revenue.

In addition, other operating and administrative expenses increased by $3.0 million during the three months ended February 29, 2024, compared to the same period of 2023, primarily due to a $2.5 million increase in salaries and related costs, $2.2 million of which is attributable to the employees of our new subsidiaries acquired in the ULHK Entities Acquisition; the balance of this increase resulted primarily from increases in professional fees, rent and occupancy, and amortization of newly acquired intangible assets, offset by a decrease in selling and promotional expenses. The Company doesn’t expect significant increases in salaries and benefits going forward and is considering actions it can implement to curtail these costs in future periods. Professional fees increased during the three months ended February 29, 2024 compared to the same period of 2023 primarily due to additional legal fees incurred in connection with the now-abandoned merger transaction pursuant to the Merger Agreement. Approximately half of the 33.1% increase in rent and occupancy expenses was due to an increase in the rental rates of our warehouse facility in Los Angeles and the other half to leases of the newly acquired ULHK Entities. The Company doesn’t expect significant increases in rent and occupancy expenses going forward. The 270.1% increase in depreciation and amortization was the result of recognition of approximately $6.5 million of identifiable intangible assets such as customer relations and non-compete agreements as part of the ULHK Entities Acquisition. These intangible assets are now being amortized over the useful life of the assets contributing to approximately half of the increase, with the other half being contributed by depreciation expense recorded by the ULHK Entities. Finally, selling and promotion expenses decreased by 58.6% quarter-over-quarter due to lower sales commissions as a result of revisions of commission-based sales targets.

Excluding costs (net of intercompany eliminations) attributable to the operations of the ULHK Entities, costs of sales increased by $1.6 million or 3.8% during the quarter ended February 29, 2024, compared to the same period of 2023, which is consistent with the $0.8 million or 1.6% increase in product revenue for the same period.

Other operating and administrative expenses, excluding the operations of the ULHK Entities, increased by $0.3 million, primarily as a result of increases in professional fees, salaries and related costs, and depreciation and amortization, offset by a decrease in selling and promotion expenses. Professional fees increased by $0.6 million primarily due to additional legal fees incurred in connection with the now-abandoned merger, as discussed above. The 128.5% increase in depreciation and amortization was the result of our recognition of approximately $6.5 million of identifiable intangible assets such as customer relations and non-compete agreements as part of the ULHK Entities Acquisition. Selling and promotion expenses decreased by $0.9 million or 64.1% period-over-period due to lower sales commissions as a result of revisions of commission-based sales targets.

Gross Margins

~~Gross~~Although revenue and direct costs both increased during the three months ended August 31, 2024 compared to the three months ended August 31, 2023, the gross margin as a percentage of revenue decreased from 1213.81% ~~for~~during ~~three~~the ~~months ended February 28,~~ 2023, period to 109.01%, orduring tothe 2024 10period.8% ~~excluding~~This decrease was primarily the ~~operations~~ result of ~~the~~an ~~ULHK~~increase ~~Entities,~~in airfreight revenue that historically produces lower margins than ocean freight revenue due to higher utilization during the ~~three~~2024 ~~months~~period ~~ended~~of ~~February~~spot ~~29,~~market ~~2024.~~contracts as aopposed ~~result~~to ofocean ~~market~~freight ~~pricing~~minimum ~~fluctuations~~quantity commitments that generally provide more favorable freight rates than the spot market. Gross margin is an important measurement of a the logistics company’s efficiency and profitability. The Company is focused on this and other measures when making strategic decisions and investments.

Other Income (Expenses)

During the quarter ended ~~February~~August 2931, 2024, total other expenses were approximately $100.64 million and consisted primarily of $12.40 million of interest ~~paid~~expense onoffset ~~our~~by ~~operating~~change ~~line~~in fair value of ~~credit~~derivative ~~with~~liabilities ~~TBK~~resulting ~~Bank,~~in ~~SSB,~~gain ~~term~~of ~~debt~~$1.6 ~~and~~million. ~~related~~During the ~~party~~quarter ~~debt~~ended August 31, a2023, ~~net~~total ~~gain~~other inexpenses ~~derivative liabilities~~consisted of $41.34 million, of interest expense and a $100.42 million decrease in the fair value of derivative liabilities. The increase in interest expense ~~related~~quarter over quarter was due to higher debt balances during the quarter ~~termination~~ended August 31, 2024, as borrowings under our line of ~~the~~credit ~~Merger~~with ~~Agreement~~TBK inBank increased due to higher sales and payments made to the ~~form~~shipping lines. Also, interest expense increased due to our restructuring of anpromissory ~~additional~~notes ~~loan~~due to ULHK in 2024 that resulted in ~~and~~our ~~issuance~~issuing ofnew anotes ~~warrant~~that ~~and~~accrue aninterest ~~uplist~~to ~~termination~~replace ~~cost~~interest free notes. Changes in the fair value of ~~previously~~derivative ~~deferred~~liabilities ~~offering~~are ~~costs~~due to a reduction in the ~~amount~~enterprise value of ~~$3.1~~the ~~million~~Company that is a primary driver for the mark to market valuation adjustment.

~~During~~Income ~~the~~Tax ~~quarter~~Expense ~~ended February 28, 2023, total other expenses of $0.5 million consisted primarily of interest expense of $0.5 million.~~(Benefit)

~~Results~~Due to cumulative taxable losses as of ~~Operations~~August ~~for~~31, 2024, the ~~Nine~~Company ~~Months~~established ~~Ended~~a deferred ~~February~~tax ~~29,~~asset ~~2024~~valuation ~~and~~allowance ~~February~~in 28the amount of $3.4 million which resulted in tax expense of $3.3 million as part of its annual tax provision compared with income tax benefit of $0.5 million recorded during the three months ended August 31, 2023, based on net loss before income taxes for that quarter. This deferred tax asset valuation allowance is reversable in future periods when there will be sufficient cumulative taxable income.

~~Revenue~~6

For the nine months ended February 29, 2024 and February 28, 2023, Unique Logistics’ revenue by product line was as follows:

	For the Nine Months ended February 29, 2024		For the Nine Months ended February 28, 2023		$ change			% change
Airfreight services	$	87,102,162	$	64,721,816	$	22,380,346			35.6	%
Ocean freight and ocean services		74,933,392		159,292,026		(84,358,634	)		(53.0	)%
Contract logistics		1,892,954		2,499,459		(606,505	)		(24.3	)%
Customs brokerage and other services		28,612,414		48,460,306		(19,847,892	)		(41.0	)%
Total revenues	$	192,540,922	$	274,973,607		(82,432,685	)		(30.0	)%

For the nine months ended February 29, 2024 and February 28, 2023, the Company’s revenue by product line, excluding the operations of the ULHK Entities acquired on February 21, 2023, were as follows:

	For the Nine Months ended February 29, 2024		For the Nine Months ended February 29, 2023		$ change			% change
Airfreight services	$	61,548,566	$	64,721,816	$	(3,173,250	)		(4.9.	)%
Ocean freight and ocean services		57,451,916		159,292,026		(101,840,110	)		(63.9	)%
Contract logistics		1,892,954		2,499,459		(606,505	)		(24.3	)%
Customs brokerage and other services		23,373,286		48,460,306		(25,087,020	)		(51.8	)%
Total revenues	$	144,266,722	$	274,973,607		(130,706,885	)		(47.5	)%

The 30.0% decrease in total revenues for the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023, is almost entirely due to decreases in ocean freight and ocean services revenue and, to a lesser extent, in customs brokerage revenue, offset by an increase in air freight revenue.

The 53.0% decrease in ocean freight and ocean services revenue was attributable to a reduction in pricing period over period, offset by a slight increase in volume. A20.3% increase in volume, primarily as a result of the acquisition of the ULHK Entities, resulted in a 38.4% increase in ocean freight and ocean services revenue, offset by a 138.4% decrease in such revenue resulting from a 60.9% reduction in pricing based on market conditions, period over period.

Excluding revenues of $17.5 million (net of intercompany eliminations) attributable to the operations of the ULHK Entities, ocean freight and ocean services revenue decreased 63.9% during the nine months ended February 29, 2024, compared to the nine months ended February 28, 2023, which decrease is attributable to reductions in both pricing and volume period over period. A 22.4% decrease in volume accounted for 35.1% of the decrease while a 53.5% decrease in pricing accounted for the remaining 64.9% of the decrease in ocean freight and ocean services revenue, period over period.

The 41.0% decline in revenue from customs brokerage and other services during the nine months ended February 29, 2024, as compared to the same period of 2023 was a direct result of our asking customers to pay their own duties as duty is a pure cash outlay.

The 35.6% increase in airfreight revenue during the nine months ended February 29, 2024, as compared to the same period of 2023, was due to the acquisition of the ULHK Entities and the market trends discussed above. A 114.7% increase in volume resulted in a 331.8% increase in air freight revenue, offset by a 231.8% decrease in such revenue resulting from a 37.3% reduction in pricing due to market conditions, period over period.

Excluding revenues of $25.6 million (net of intercompany eliminations) attributable to the operations of the ULHK Entities, airfreight revenue decreased 4.9%, mostly due to a decrease in market prices, period over period. While volume increased 25.5%, resulting in a 519.2% increase in air freight revenue, this increase was offset by a 619.2% decrease in such revenue resulting from a 24.2% reduction in pricing period over period.

While not a material contributor to the decrease in revenues generally, contract logistics revenue declined by 24.3%, both with and without the inclusion of the operations of the ULHK Entities, during the nine months ended February 29, 2024 compared with the same period of 2023 mostly due a lower warehousing activity off peak season.

Costs and Operating Expenses

For the nine months ended February 29, 2024 and February 28, 2023, Unique Logistics’ costs and operating expenses were as follows:

	For the Nine Months ended February 29, 2024			For the Nine Months ended February 28, 2023		$ change			% change
Costs and operating expenses:
Airfreight services	$	81,374,442		$	59,465,104	$	21,909,338			36.8	%
Ocean freight and ocean services		62,964,504			142,806,034		(79,841,530	)		(55.9	)%
Contract logistics		507,326			846,226		(338,900	)		(40.0	)%
Customs brokerage and other services		24,263,573			44,773,324		(20,509,751	)		(45.8	)%
Salaries and related costs		17,293,553			10,036,200		7,257,353			72.3	%
Professional fees		2,299,312			1,213,807		1,085,505			89.4	%
Rent and occupancy		3,382,602			2,026,363		1,356,239			66.9	%
Selling and promotion		1,888,439			2,033,668		(145,229	)		(7.1	)%
Depreciation and amortization		2,203,093			606,030		1,597,063			263.5	%
Foreign exchange transactions, net		(267,209	)		-		(267,209	)			%
Other expense		948,402			993,508		(45,106	)		(4.5	)%
Total costs and operating expenses	$	196,858,037		$	264,800,264		(67,942,227	)		(25.7	)%

For the nine months ended February 29, 2024 and February 28, 2023, Unique Logistics’ costs and operating expenses, excluding the operations of the ULHK Entities, were as follows:

	For the Nine Months ended February 29, 2024		For the Nine Months ended February 28, 2023		$ change			% change
Costs and operating expenses:
Airfreight services	$	59,064,241	$	59,465,104	$	(400,863	)		(0.7	)%
Ocean freight and ocean services		50,176,428		142,806,034		(92,629,606	)		(64.9	)%
Contract logistics		507,326		846,226		(338,900	)		(40.0	)%
Customs brokerage and other services		20,338,896		44,773,324		(24,434,428	)		(54.6	)%
Salaries and related costs		10,733,395		10,036,200		697,195			6.9	%
Professional fees		2,150,093		1,213,807		936,286			77.1	%
Rent and occupancy		2,516,493		2,026,363		490,130			24.2	%
Selling and promotion		1,651,463		2,033,668		(382,205	)		(18.8	)%
Depreciation and amortization		1,394,290		606,030		788,260			130.1	%
Other expense		1,046,785		993,508		(53,277	)		5.4	%
Total costs and operating expenses	$	149,579,410	$	264,800,264		(115,220,854	)		(43.5	)%

the $78.8 million or 31.8% reduction in cost of sales correlates with the 30.0% decrease in product revenue for the period, as discussed above.

The overall decrease in cost and operating expenses for the period of $67.9 million or 25.7% was due to the decrease in cost of sales offset by increases in other operating and administrative expenses, which in total increased by $10.8 million during the nine months ended February 29, 2024, compared to the same period of 2023, primarily due to a $7.3 million increase in salaries and related costs, $6.6 million of which is attributable to the employees of our new subsidiaries acquired in the ULHK Entities Acquisition; the balance of this increase resulted primarily from increases in professional fees, rent and occupancy costs and amortization of newly acquired intangible assets. Professional fees increased during the nine months ended February 29, 2024, compared to the same period of 2023, primarily due to additional legal fees incurred in connection with the now-abandoned merger transaction pursuant to the Merger Agreement. Approximately half of the 66.9% increase in rent and occupancy expenses was due to an increase in the rental rates of our warehouse facility in Los Angeles and the other half related to leases of the newly acquired ULHK Entities. The 263.5% increase in depreciation and amortization was the result of recognition of approximately $6.5 million of identifiable intangible assets such as customer relations and non-compete agreements as part of the ULHK Entities Acquisition. These intangible assets are now being amortized over the useful life of the assets contributing to approximately half of the increase, with the other half being contributed by depreciation expense recorded by the ULHK Entities.

Excluding the cost of sales of the acquired ULHK Entities of $39.9 million, cost of sales decreased by $117.1 million period over period or 43.5%, which is consistent with the 47.5% decrease in product revenue for the period.

The overall decrease in total cost and operating expenses for the period, excluding the operations of the ULHK Entities, of $115.2 million or 43.5% was due to the cost of sales decrease offset by a $2.5 million increase in other operating and administrative expenses during the nine months ended February 29, 2024, compared to the same period of 2023, as a result of increases in salaries and related costs, professional fees, rent and occupancy expenses and amortization of newly acquired intangible assets, offset by a decrease in selling and promotion expenses. Professional fees increased during the three months ended February 29, 2024, compared to the same period of 2023, primarily due to additional legal fees incurred in connection with the no-abandoned merger transaction pursuant to the Merger Agreement. Most of the $0.5 million increase in rent and occupancy expenses was due to an increase in the rental rates of our warehouse facility in Los Angeles. The 130.1% increase in depreciation and amortization was the result of recognition of approximately $6.5 million of identifiable intangible assets such as customer relations and non-compete agreements as part of the ULHK Entities Acquisition. Selling and promotion expenses decreased by 58.6% period-over-period due to lower sales commission as a result of revision of commission-based sales targets.

Gross Margin

The gross margin as a percentage of revenue increased from 9.9% for the nine months ended February 28, 2023 to 11.4% for the nine months ended February 29, 2024, excluding the operations of the ULHK Entities, gross margins was at 9.8% for the nine months ended February 28, 2023 and February 29, 2024.

Other Income (Expenses)

For the nine months ended February 29, 2024, other expenses were $13.2 million and consisted of interest expense of $3.8 million on our operating line of credit with TBK Bank, SSB, term loan interest and interest on related party debts, a net gain in derivative liabilities of $4.1 million, a $10.4 million expense related to the termination of the Merger Agreement in the form of an additional loan and an issued warrant and an uplist termination cost of previously deferred offering costs in the amount of $3.1 million.

For the nine months ended February 28, 2023, other expenses were $2.1 million and consisted of interest expense of $2.9 million offset by a $0.8 million increase in the fair value of derivative liabilities.

Liquidity and Capital Resources

The Company’s principal ~~accompanying~~sources ~~condensed~~of ~~consolidated~~cash ~~financial~~are ~~statements~~(i) ~~have~~cash ~~been~~generated ~~prepared~~from operations, (ii) borrowings available under its revolving line of credit and (iii) proceeds from future debt or equity issuances. As of August 31, 2024, the Company had cash on ahand ~~going~~of ~~concern~~approximately ~~basis~~$3.5 ~~Substantial~~million, ~~doubt~~working ~~about~~capital of $0.3 million, and $2.2 million available to draw under its TBK Facility. On September 12, 2024, the Company entered into an ~~entity’s~~agreement ~~ability~~with TBK Bank (the “TBK Facility”) to ~~continue~~temporarily asincrease the credit limit under the TBK Facility from $25.0 million to $30.0 million for a ~~going~~period ~~concern~~of ~~exists~~six ~~when~~months. ~~conditions~~The Company has incurred net losses of $2.1 million and ~~events,~~used ~~considered~~cash for its operations in the ~~aggregate~~amount of $10.2 million during the quarter ended August 31, ~~indicate~~2024 ~~that~~primarily itdue isto ~~probable~~the ~~that~~ramp up of accounts receivable and accounts payable during the ~~entity~~most ~~will~~recent bequarter ~~unable~~ended due to ~~meet~~an increase in sales. The net losses and cash used in operations are indicators of substantial doubt about its ~~obligations~~ability to continue as ~~they~~a ~~become~~going ~~due~~concern within one year after the date that the condensed consolidated financial statements are issued.

The Company is currently evaluating ~~following~~several ~~table~~different ~~summarizes~~strategies ~~the~~to ~~Company’s~~enhance ~~total~~its ~~current~~liquidity ~~assets~~position. These strategies may include, ~~liabilities~~but are not limited to, pursuing additional actions under its strategic plan, seeking additional financing from both the public and ~~working~~private markets through the issuance of equity securities and seeking to extend the term of outstanding debt. The outcome of these matters cannot be predicted with any certainty at this time. There can be no assurance that the Company will be able to raise the capital it needs to continue its operations on satisfactory terms or at all. If capital is not available to the ~~dates~~Company ~~indicated:~~when, and in the amounts needed, the Company could be required to liquidate its assets, cease or curtail operations, which could materially harm its business, financial condition and results of operations, or seek protection under applicable bankruptcy laws or similar state proceedings.

	February 29, 2024		May 31, 2023		Change			% change
Current Assets	$	57,224,459	$	60,326,985	$	(3,102,526	)		(5.1	)%
Current Liabilities		51,962,012		52,448,603		(486,591	)		0.9	%
Working Capital	$	5,262,447	$	7,878,382	$	(2,615,935	)		(33.2	)%

The Company’s working capital was $5.3 million and $7.9 million as of February 29, 2024 and May 31, 2023, respectively. The Company maintains its operating line of credit with TBK Bank, SSB, and on July 20, 2023 the Company entered into an agreement with TBK Bank to renew the TBK line of credit with a credit limit of up to $25.0 million. The Company has experienced negative operating cash flows during the nine months ended February 29, 2024 due to adverse market conditions. The Company relied heavily on its cash collections, cash reserves, dividends received from the ULHK Entities, new loans, and the use of its operating line of credit. The funds available under the current TBK line of credit are sufficient to provide the Company with the cash required to support its ongoing operations until market conditions improve.

While the Company continues to execute its strategic plan and grow its customer base, management is focused on managing cash and monitoring liquidity position. Many of the aspects of the liquidity plan involve management’s judgments and estimates that include factors that could be beyond our control and actual results could differ from our estimates. These and other factors could cause the strategic plan to be unsuccessful, which could have a material adverse effect on our operating results, financial condition, and liquidity. Based on our evaluation of the Company’s projected cash flows and business performance as of and subsequent to February 29, 2024, management has concluded that the Company’s current cash and cash availability under the TBK Facility would be sufficient to fund its planned operations for at least one year from the date the consolidated financial statements were issued.

Cash generated and used by the Company during the nine months ended February 29, 2024 and for the nine months ended February 28, 2024 was as follows:

	For the Nine Months ended February 29, 2024			For the Nine Months ended February 28, 2023			Change
Net cash (used in) provided by operating activities	$	(7,767,163	)	$	33,032,762		$	(40,799,925	)
Net cash used in investing activities		(513,907	)		8,733,409			(9,247,316	)
Net cash provided (used in) by financing activities		8,501,781			(28,785,898	)		37,287,679
Effect of exchange rate changes on cash		(221,805	)		-			(221,805	)
Net (decrease) in cash and cash equivalent	$	(1,094	)	$	12,980,273		$	(12,981,367	)

Operating activities used cash of $7.8 million during the nine months ended February 29, 2024 compared to net cash provided by operations of $33.0 million for the nine months ended February 28, 2023. The primary reason for the cash used during the nine months ended February 29, 2024 was our $11.0 million net loss adjusted for non-cash items. The primary reason for cash provided for the nine months ended February 28, 2023, was collections on accounts receivables offset by a reduction in accounts payable and accrued freight.

Investing activities used cash of $0.5 million to purchase equipment during the nine months ended February 29, 2024 compared to net cash generated of $8.7 million during the nine months ended February 28, 2023, mostly due to February 21, 2023 acquisitions of operating subsidiaries from ULHK with approximately $13.3 million of cash on hand at the time of the acquisition.

Financing activities provided cash of $8.5 million during the nine months ended February 29, 2024, primarily as a result of borrowing on the TBK line of credit and net borrowing on the term debt to partially repay seller notes assumed during the acquisition of the ULHK Entities on February 21, 2023. Cash used by financing activities during the nine months ended February 28, 2023was primarily repayment of the TBK line of credit.

Critical Accounting Estimates

~~Accounting~~We ~~policies,~~consider ~~methods~~an ~~and~~accounting ~~estimates~~estimate ~~are~~to anbe ~~integral~~critical ~~part~~if: of(1) the ~~condensed~~accounting ~~consolidated~~estimate ~~financial~~requires ~~statements~~us ~~prepared~~to bymake ~~management~~assumptions ~~and~~about ~~are based~~matters ~~upon~~that ~~management’s current judgments. These judgments are normally based on knowledge and experience regarding past and current~~were ~~events~~highly ~~and~~uncertain ~~assumptions~~at ~~about~~the ~~future~~time ~~events.~~the ~~Certain~~ accounting ~~policies,~~estimate ~~methods~~was made, and ~~estimates~~(2) ~~are~~changes ~~particularly~~in ~~sensitive because of their significance to~~ the ~~financial~~estimate ~~statements and because of the possibility~~ that ~~future~~are ~~events~~reasonably ~~affecting~~likely ~~them~~to ~~may~~occur ~~differ~~ from ~~management’s~~ ~~current~~period ~~judgments.~~to ~~While~~period, ~~there~~or ~~are~~use ~~a number~~ of ~~accounting~~different ~~policies, methods and~~ estimates that ~~affect~~we ~~our~~reasonably ~~condensed~~could ~~consolidated~~have ~~financial statements,~~used ~~the~~in ~~areas that are particularly significant include revenue recognition;~~ the ~~fair~~current ~~value~~period, ofwould ~~acquired~~have ~~assets~~a ~~and~~material ~~liabilities;~~impact ~~fair~~on ~~value~~our offinancial ~~contingent~~condition ~~consideration;~~or ~~the~~results ~~assessment~~ of ~~the recoverability of long-lived assets, goodwill and intangible assets; and leases~~operations.

WeManagement ~~perform~~has andiscussed ~~impairment~~the ~~test~~development ofand ~~goodwill~~selection ~~for~~of ~~each~~these ~~year~~critical ~~unless~~accounting ~~events~~estimates orwith ~~circumstances~~our ~~indicate~~board ~~impairment~~of ~~may~~directors. ~~have~~In ~~occurred~~addition, ~~before~~there ~~that~~are ~~time.~~other Weitems ~~assess~~within ~~qualitative~~our ~~factors~~financial tostatements ~~determine whether it is more-likely-than-not~~ that ~~the~~require ~~fair~~estimation ~~value~~but ofare ~~the~~not ~~reporting~~deemed ~~unit~~critical isas ~~less than~~defined ~~the carrying amount~~above. ~~After~~Changes ~~assessing~~in ~~qualitative factors, if further testing is necessary, we would determine the fair value of~~estimates ~~each~~used ~~reporting~~in ~~unit~~these and ~~compare~~other ~~the~~items ~~fair~~could ~~value~~have toa ~~the~~material ~~reporting~~impact ~~unit’s~~on ~~carrying~~our ~~amount~~financial statements.

Intangible assets consist of customer relationships, trade names and trademarks and non-compete agreements arising from our acquisitions. Customer relationships are amortized on a straight-line basis over 12 to 15 years. Tradenames, trademarks and non-compete agreements, are amortized on a straight-line basis over 3 to 10 years.

We review long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, we estimate fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell.

The Company has identified derivative instruments arising from an antidilution provision in the Company’s preferred stock. Each reporting period, the embedded derivative liability is adjusted to reflect fair value at each period end with changes in fair value recorded in the “change in fair value of embedded derivative liability” financial statement line item of the Company’s condensed consolidated statements of operations.

Our significant accounting policies are summarized in Note 1 of our condensed consolidated financial statements.

Adjusted EBITDA

We define adjusted EBITDA toas be earnings before interest, taxes, depreciation and amortization, transaction gains and losses, other income, merger and acquisition costs, impairment charges and certain other non-recurring items.

Adjusted EBITDA is not a measurement of financial performance under GAAP and may not be comparable to other similarly titled measures of other companies. We present adjusted EBITDA because we believe that adjusted EBITDA is a useful supplement to net income as an indicator of operating performance ~~and represents income that is within management’s control~~. We use adjusted EBITDA as a financial metric to measure the financial performance of the business because management believes that it provides additional information with respect to the performance of our fundamental business activities. For this reason, we believe that adjusted EBITDA will also be useful to others, including our stockholders, as a valuable financial metric.

Adjusted EBITDA should not be considered as an alternative to net income, as an indicator of performance or as an alternative to cash flows from operating activities as an indicator of cash flows, in each case as determined in accordance with GAAP, or as a measure of liquidity. In addition, adjusted EBITDA does not take into account changes in certain assets and liabilities as well as interest and income taxes that can affect cash flows. We do not intend the presentation of this non-GAAP financial measure to be considered in isolation or as a substitute for results prepared in accordance with GAAP. This non-GAAP financial measure should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP.

~~Following is the reconciliation of our consolidated net income to adjusted EBITDA for the three and nine months ended February 29, 2024 and February 28, 2023:~~7

	For the Three Months Ended February 29, 2024			For the Three Months Ended February 28, 2023
Net (loss) income	$	(5,847,860	)	$	663,173
Add Back:
Income tax expense (benefit)		(5,268,793	)		(814,080	)
Depreciation and amortization		752,750			203,390
Foreign exchange transactions, net		26,858			-
Change in fair value of derivative liability		(4,300,429	)		546,791
Uplist termination cost		3,054,514			-
SPAC Merger termination cost		10,415,816			-
Interest expense		1,407,449			(64,955	)
Adjusted EBITDA	$	240,305		$	534,319

Following is the reconciliation of our consolidated net income to adjusted EBITDA for the three months ended August 31, 2024 and 2023:

	For the Nine Months Ended February 29, 2024			For the Nine Months Ended February 28, 2023
	For the three months Ended August 31, 2024			For the three months ended August 31, 2023
Net (loss) income	$	(11,029,671	)	$	7,256,211
Net loss	$	(2,107,614	)	$	(2,311,128	)
Add Back:
Add back:
Income tax expense (benefit)		(53,~~787~~349,~~424~~563	)		~~849~~(493,~~967~~831	)
Depreciation and amortization		2467,~~203,093~~626			~~606~~497,~~030~~450
Foreign exchange transactions, net		(267,209	)		-
(Gain)/loss on foreign exchange		(28,237	)		(194,186	)
Change in fair value of derivative liability		(4,118,566	)		(809,611	)
Change in fair value of derivative liabilities		(1,613,621	)		21,788
Uplist termination cost		3,054,514			-
Interest expense		2,018,622			1,390,208
SPAC Merger termination cost		10,415,816			-
Adjusted EBITDA	$	2,086,339		$	(1,089,699	)
Interest expense		3,823,822			2,876,776
Adjusted EBITDA	$	(1,705,625	)	$	10,779,373

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we are not required to provide the information required by this item.

ITEM 4. CONTROLS AND PROCEDURES

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our principal executive officer to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, the Company recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable assurance of achieving the desired control objectives, and we necessarily are required to apply our judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures.

As of ~~February~~August 2931, 2024, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures. Our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our Chief Executive Officer and Chief Financial Officer have concluded, based upon the evaluation described above, that as of ~~February~~August 2931, 2024, our disclosure controls and procedures were not effective and require remediation in order to be effective at the reasonable assurance level.

In addition, our auditors identified material weaknesses in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the audit of the fiscal year ended May 31, ~~2023~~2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified relate to the fact that we did not design and maintain an effective control environment commensurate with our financial reporting requirements, including (a) lack of a sufficient number of trained professionals with an appropriate level of accounting knowledge, training and experience and (b) we have not completed a full risk assessment of our internal control over financial reporting at the activity level, including process documentation and testing. In the course of preparing the financial statements for the year ended May 31, ~~2023~~2024, we identified separate material weaknesses in internal control over financial reporting, which relates to the ineffective design and implementation of information technology general controls (“ITGC”) combined with the lack of properly designed management review controls to compensate for these deficiencies. The Company’s ITGC deficiencies included improperly designed controls pertaining to user access rights and segregation of duties over systems that are critical to the Company’s system of financial reporting. Management’s general assessment of the above processes in light of the ~~company~~Company’s size, maturity and complexity, as to the design and effectiveness of the internal control over financial reporting, is that the key controls and procedures in each of these processes provide reasonable assurance regarding reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

138

Changes in Internal Control over Financial Reporting

~~During~~There ~~the~~have ~~quarter~~not ~~ended~~been ~~February~~any ~~29,~~changes ~~2024, the Company actively addressed and commenced to remediate a number of previously identified material weaknesses~~ in ~~its~~our internal control over financial reporting ~~that~~during ~~has~~the ~~materially~~quarter ~~affected,~~ended orAugust ~~is reasonably likely to materially affect~~31, ~~its~~ ~~internal~~2024 ~~control~~that over financial reporting. We improved our accounting processes and documentation, introduced new accounting policies and procedures, and provided training to our accounting personnel. The Company has not completed a full risk assessment of its internal control over financial reporting at the activity level, including process documentation and testing and because we have ~~not completed~~materially ~~a full risk assessment of the internal control over financial reporting at the activity level~~affected, ~~including~~or ~~extensive process documentation and testing, we~~ are ~~not~~reasonably ~~able~~likely to ~~conclude~~materially ~~that~~affect, our internal control over financial reporting ~~is operating effectively and efficiently at this time~~. ~~The Company’s principal executive officer, principal financial officer, and board of directors are fully committed to achieving full compliance by August 31, 2024.~~

PART II –- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is not involved in any disputes and does not have any litigation matters pending that it believes could have a material adverse effect on its financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company’s executive officers or any of its subsidiaries, threatened against or affecting the Company, its common stock, any of its subsidiaries or of the Company’s or the Company’s subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

From time to time, however, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of our business. Litigation is subject to inherent uncertainties, and an adverse result in any such matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS

Our business, financial condition, results of operations, and cash flows may be impacted by a number of factors, many of which are beyond our control, including those set forth in our most recent Annual Report on Form 10-K and in our other filings with the SEC, the occurrence of any one of which could have a material adverse effect on our actual results. There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K and our other filings with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER REPURCHAES OF EQUITY SECURITIES.

There were no unregistered sales of the Company’s equity securities during the quarter ended ~~February~~August 2931, 2024.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

149

ITEM 6. EXHIBITS

Exhibit		Incorporated by Reference		Filed or Furnished
		Incorporated by
Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
		Reference		Filed or Furnished
3.1	Certificate of Amendment of Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock of Unique Logistics International, Inc., filed with the Nevada Secretary of State on January 17, 2024	8-K	3.1	1/19/2024
Exhibit Number	Exhibit Description	Form	Exhibit	Filing Date	Herewith
3.2	Certificate of Amendment of Certificate of Designations, Preferences and Rights of Series C Convertible Preferred Stock of Unique Logistics International, Inc., filed with the Nevada Secretary of State on January 17, 2024	8-K	3.2	1/19/2024
10.1	Promissory Note in the principal amount of $1,800,000, dated August 1, 2024, in favor of Unique Logistics Holdings Limited.	8-K	10.1	8/7/2024
3.3	Certificate of Amendment of Certificate of Designations, Preferences and Rights of Series D Convertible Preferred Stock of Unique Logistics International, Inc., filed with the Nevada Secretary of State on January 16, 2024	8-K	3.3	1/19/2024
31.1	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.				X
31.2	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.				X
32.1	Section 1350 Certification of Chief Executive Officer.				X
32.2	Section 1350 Certification of Chief Financial Officer.				X
101.INS	Inline XBRL Instance Document				X
101.SCH	Inline XBRL Taxonomy Extension Schema Document				X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				X
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)				X

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

UNIQUE LOGISTICS INTERNATIONAL, INC.
By:	/s/ Sunandan Ray
	Sunandan Ray
	Chief Executive Officer (Principal Executive Officer)
	May 2, 2024
	December 16, 2024
By:	/s/ Eli Kay
	Eli Kay
	Chief Financial Officer (Principal Financial Officer)
	May 2, 2024
	December 16, 2024

1611

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