Filing Compare · Lakeside Holding Ltd

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~December~~March 31, ~~2025~~ 2026

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

For the transition period from to .

Commission File No. 001-42140

Lakeside Holding Limited

(Exact name of registrant as specified in its charter)

Nevada		82-1978491
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1475 Thorndale Avenue, Suite A

Itasca, Illinois 60143

(Address of principal executive offices) (Zip Code)

(224) 446-9048

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value US$0.0001 per share		LSH		The Nasdaq Stock Market LLC

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 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 is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller 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 the date of this report, the Registrant had 34,427,559 shares of common stock outstanding.

Lakeside Holding Limited

FORM 10-Q

For the Quarterly Period Ended ~~December~~March 31, ~~2025~~ 2026

INDEX

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of December 31, 2025 (unaudited) and June 30, 2025	F-2
	Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and June 30, 2025	F-2
	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months and six months ended December 31, 2025 and 2024 (unaudited)	F-3
	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months and nine months ended March 31, 2026 and 2025 (unaudited)	F-3
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months and six months ended December 31, 2025 and 2024 (unaudited)	F-4
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months and nine months ended March 31, 2026 and 2025 (unaudited)	F-4
	Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2025 and 2024 (unaudited)	F-5
	Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2026 and 2025 (unaudited)	F-5
	Notes to Condensed Consolidated Financial Statements (unaudited)	F-6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	1814
Item 4.	Controls and Procedures	1814
	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	1915
Item 1A.	Risk Factors	1915
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1915
Item 3.	Defaults Upon Senior Securities	1915
Item 4.	Mine Safety Disclosures	1915
Item 5.	Other Information	1915
Item 6.	Exhibits	2016
	Signatures	2218

EXPLANATORY NOTE

As used in this Quarterly Report on Form 10-Q, unless otherwise indicated or the context otherwise requires, references to “Lakeside,” “the Company,” “we,” “us,” and “our” refer to Lakeside Holding Limited together with its consolidated subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains certain statements related to future results, or states our intentions, beliefs, and expectations or predictions for the future, all of which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent management’s expectations or forecasts of future events. Forward-looking statements are typically identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “project,” “intend,” “plan,” “probably,” “potential,” “looking forward,” “continue,” and other similar terms, and future or conditional tense verbs like “could,” “may,” “might,” “should,” “will,” and “would.” You can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results depending on a variety of factors. Forward-looking statements in this Form 10-Q may include, for example, statements concerning:

●

our future operating and financial performance, ability to generate positive cash flow and ability to achieve and sustain profitability;

●

our competitive position;

●

the sufficiency of our existing capital resources to fund our future operating expenses;

●

the timing of the introduction of new solutions and services;

●

the likelihood of success in and impact of litigation;

●

our protection or enforcement of our intellectual property rights;

●

our expectation with respect to securities, options and future markets and general economic conditions;

●

our ability to keep up with rapid technological change;

●

the impact of future legislation and regulatory changes on our business; and

●

our anticipated use of proceeds from our initial public offering.

Any or all of our forward-looking statements may turn out to be inaccurate, and there are no guarantees about our performance. The factors identified above are not exhaustive. We operate in a dynamic business environment in which new risks may emerge frequently. Accordingly, readers should not place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We are under no (and expressly disclaim any) obligation to update or alter any forward-looking statement that we may make from time to time, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

LAKESIDE HOLDING LIMITED

INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
Condensed Consolidated Balance Sheets as of December 31, 2025 (unaudited) and June 30, 2025	F-2
Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and June 30, 2025	F-2
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months and six months ended December 31, 2025 and 2024 (unaudited)	F-3
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months and nine months ended March 31, 2026 and 2025 (unaudited)	F-3
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months and six months ended December 31, 2025 and 2024 (unaudited)	F-4
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months and nine months ended March 31, 2026 and 2025 (unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2025 and 2024 (unaudited)	F-5
Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2026 and 2025 (unaudited)	F-5
Notes to Condensed Consolidated Financial Statements (unaudited)	F-6 – F-4846

F-1

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF ~~DECEMBER~~MARCH 31, ~~2025~~2026 (UNAUDITED) AND ~~JUNE~~ JUNE 30, 2025

	As of December 31, 2025 (unaudited)			As of June 30, 2025
	As of March 31, 2026 (unaudited)			As of June 30, 2025
ASSETS
CURRENT ASSETS
Cash	$	1,~~641~~300,~~438~~306		$	4,~~956~~814,~~060~~872
Accounts receivable – third parties, net of credit loss allowance of $171,609 and $87,728		3,744,551			2,895,580
Accounts receivable – third parties, net of credit loss allowance of $171,180 and $33,039		1,853,623			1,406,920
Accounts receivable – related party, net of credit loss allowance of $nil and $nil		443,941			396,331
Note receivable		-			65,152
Prepayment, deposit and other receivable – third parties		6,793,122			449,977
Prepayment, deposit and other receivable		5,414,243			221,993
Other receivable – related party		1,075,998			869,430
Inventories, net		22,024			96,534
Contract assets		68,912			119,054
Right of return asset		126,272			141,687
Inventories, net		124,336			96,534
Loan receivable from a third party, net of credit loss allowance of $350,000 and nil		8,329,194			11,380
Right of return asset		71,518			141,687
Current assets from discontinued operation		-			3,520,388
Loan receivable from related parties		386,541			277,741
Total current assets		17,045,662			10,278,926
Loan receivable from a third party, net of credit loss allowance of $288,000 and $nil		6,860,622			11,380
Total current assets		21,210,979			10,278,926
NON-CURRENT ASSETS
Long- term investment		15,741			15,741
Property and equipment at cost, net of accumulated depreciation		201,883			160,602
Property and equipment at cost, net of accumulated depreciation		362,802			389,421
Intangible assets, net		301,328			365,440
Intangible assets, net		322,698			365,440
Right of use operating lease assets, net		197,384			271,273
Right of use operating lease assets		2,212,464			3,158,202
Deposit		34,394			38,934
Right of use financing lease assets		76,597			93,797
Non-current assets from discontinued operation		-			3,290,286
Deposit and prepayment		98,927			103,934
Total non-current assets		734,989			4,126,535
Total non-current assets		3,089,229			4,126,535
TOTAL ASSETS	$	17,780,651		$	14,405,461
TOTAL ASSETS	$	24,300,208		$	14,405,461
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payables – third parties	$	2,899,042		$	2,494,217
Accounts payables	$	980,149		$	1,018,228
Accounts payables – related parties		200,434			65,237
Accrued liabilities and other payables		2,000,467			1,161,864
Accrued liabilities and other payables		2,509,295			2,119,994
Current portion of obligations under operating leases		78,945			108,817
Current portion of obligations under operating leases		1,314,019			2,323,290
Loans payable, current		184,609			262,870
Current portion of obligations under financing leases		42,273			47,035
Contract liabilities		3,847			15,355
Loans payable, current		2,325,149			1,300,112
Tax payable		418,328			233,078
Contract liabilities		50,783			15,355
Convertible debts - current		85,085			910,675
Tax payable		407,709			312,903
Refund liabilities		239,439			77,235
Amounts due to shareholders		174,626			-
Current liabilities from discontinued operation		-			5,877,931
Amounts due to a related party		260,144			-
Total current liabilities		3,990,869			9,666,053
Convertible debts - current		97,162			910,675
Refund liabilities		148,996			77,235
Total current liabilities		10,429,632			9,666,053
NON-CURRENT LIABILITIES
Loans payable, non-current		~~117~~49,~~064~~094			~~60,398~~-
Loan payable to a related party		124,176			124,176
Deferred tax liabilities		4,245			83,100
Deferred tax liabilities		59,606			83,100
Obligations under operating leases, non-current		124,480			150,823
Obligations under operating leases, non-current		1,336,300			1,559,782
Non-current liabilities from discontinued operation		-			1,659,800
Obligations under financing leases, non-current		54,739			66,267
Total non-current liabilities		177,819			1,893,723
Total non-current liabilities		1,691,885			1,893,723
TOTAL LIABILITIES		4,168,688			11,559,776
TOTAL LIABILITIES		12,121,517			11,559,776
Commitments and Contingencies
EQUITY
Common stocks, $0.0001 par value, 200,000,000 shares authorized, 34,427,559 and 10,500,000 issued and outstanding as of December 31, 2025 and June 30, 2025, respectively		3,443			1,050
Common stocks, $0.0001 par value, 200,000,000 shares authorized, 34,427,559 and 10,500,000 issued and outstanding as of March 31, 2026 and June 30, 2025, respectively		3,443			1,050
Subscription receivable		(21,~~530~~427,~~508~~769	)		-
Additional paid-in capital		22,681,315			8,084,275
Statutory reserve		8688,~~099~~662			63,416
Deficits		(8,~~278~~139,~~951~~106	)		(5,315,371	)
Accumulated other comprehensive income		~~217~~405,~~293~~418			12,315
Total equity		1213,~~178~~611,~~691~~963			2,845,685
TOTAL LIABILITIES AND EQUITY	$	2417,~~300~~780,~~208~~651		$	14,405,461

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

F-2

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS AND ~~SIX~~NINE MONTHS ENDED ~~DECEMBER~~MARCH 31, ~~2025~~2026 AND ~~2024~~2025(UNAUDITED)

(UNAUDITED)

	Nine Months Ended March 31,						Three Months Ended March 31,
	2026			2025			2026			2025
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	5,108,387		$	715,362		$	1,327,733		$	497,276
Cost of revenue		2,333,460			240,966			348,194			119,175
Gross profit		2,774,927			474,396			979,539			378,101

Operating expenses:
Selling expenses		1,804,797			158,117			711,553			103,629
General and administrative expenses		3,883,166			1,803,479			1,697,915			603,979
Provision of allowance for expected credit loss on accounts receivable		133,772			-			84,261			-
Provision of allowance for expected credit loss on loan receivable		350,000			-			62,000			-
Total operating expenses		6,171,735			1,961,596			2,555,729			707,608

Loss from operations		(3,396,808	)		(1,487,200	)		(1,576,190	)		(329,507	)

Other income (expense)
Other income, net		203,918			16,733			103,705			11,682
Interest expense		(149,355	)		(40,541	)		(26,733	)		(40,541	)
Total other income (expense)		54,563			(23,808	)		76,972			(28,859	)

Loss before income taxes		(3,342,245	)		(1,511,008	)		(1,499,218	)		(358,366	)
Income tax expense		110,632			18,594			29,593			18,594
Net loss from continuing operations		(3,452,877	)		(1,529,602	)		(1,528,811	)		(376,960	)

Income (loss) from discontinued operation, net of tax provision:
Loss from discontinued operation before the sale of ABL Chicago		(1,901,927	)		(2,823,421	)		(885,096	)		(693,836	)
Gain on sale of ABL Chicago		2,556,315			-			2,556,315			-
Net income (loss) from discontinued operation		654,388			(2,823,421	)		1,671,219			(693,836	)

NET (LOSS) INCOME		(2,798,489	)		(4,353,023	)		142,408			(1,070,796	)

Other comprehensive income (loss):
Foreign currency translation income (loss)		393,103			(8,603	)		188,125			3,583
Comprehensive income (loss) attributable to the Company	$	(2,405,386	)	$	(4,361,626	)	$	330,533		$	(1,067,213	)

Basic and Diluted Net Income (Loss) per Common Share
Continuing operations	$	(0.15	)	$	(0.20	)	$	(0.04	)	$	(0.05	)
Discontinued operations, net of tax	$	0.03		$	(0.38	)	$	0.05		$	(0.09	)

Weighted Average Shares Outstanding – basic and diluted		22,826,266			7,500,000			34,427,559			7,500,000

	Six Months Ended December 31,						Three Months Ended December 31,
	2025			2024			2025			2024
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue from cross-border freight solutions – third party	$	8,110,140		$	6,702,063		$	3,928,426		$	3,102,276
Revenue from cross-border freight solutions – related parties		1,221,728			756,994			641,568			275,227
Revenue from distribution of pharmaceutical products – third parties		3,780,654			218,086			2,442,639			218,086
Total revenue		13,112,522			7,677,143			7,012,633			3,595,589
Cost of revenue from cross-border freight solutions – third party		7,286,059			6,153,994			3,552,213			3,159,709
Cost of revenue from cross-border freight solutions – related party		822,137			921,050			355,631			356,320
Cost of revenue from pharmaceutical products – third parties		1,985,266			121,791			1,194,496			121,791
Total cost of revenue		10,093,462			7,196,835			5,102,340			3,637,820
Gross profit (loss)		3,019,060			480,308			1,910,293			(42,231	)
Operating expenses:
Selling expenses		1,093,244			54,488			903,833			54,488
General and administrative expenses		4,318,013			3,749,059			2,210,358			1,911,853
Provision (reversal) of allowance for expected credit loss for accounts receivable		82,151			1,956			(1,174	)		(10,881	)
Provision of allowance for credit loss on loan receivable from a third party		288,000			—			288,000			—
Total operating expenses		5,781,408			3,805,503			3,401,017			1,955,460
Loss from operations		(2,762,348	)		(3,325,195	)		(1,490,724	)		(1,997,691	)
Other income (expense)
Other income, net		282,380			201,541			135,541			91,753
Interest expense		(379,890	)		(68,992	)		(183,449	)		(40,882	)
Total other income (expense)		(97,510	)		132,549			(47,908	)		50,871
Loss before income taxes		(2,859,858	)		(3,192,646	)		(1,538,632	)		(1,946,820	)
Income tax expense		81,039			89,581			45,049			—
Net loss attributable to the Company		(2,940,897	)		(3,282,227	)		(1,583,681	)		(1,946,820	)
Other comprehensive loss:
Foreign currency translation income (loss)		204,978			(12,186	)		168,050			(25,179	)
Comprehensive loss attributable to the Company	$	(2,735,919	)	$	(3,294,413	)	$	(1,415,631	)	$	(1,971,999	)
Loss per share – basic and diluted	$	(0.17	)	$	(0.44	)	$	(0.08	)	$	(0.26	)
Weighted Average Shares Outstanding – basic and diluted		17,151,720			7,500,000			19,569,950			7,500,000

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

F-3

LAKESIDE HOLDING LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE THREE MONTHS AND ~~SIX~~NINE MONTHS ENDED ~~DECEMBER~~MARCH 31, ~~2025~~2026 AND ~~2024~~2025

(UNAUDITED)

	For The Three Months Ended December 31, 2024
	For The Three Months Ended March 31, 2025
	Common Shares		Amount		~~Subscription~~Additional ~~Receivable~~Paid in Capital		~~Additional~~Statutory ~~Paid in Capital~~Reserves		Deficits			Accumulated Other Comprehensive Income (Loss)			Total
Balance at September 30, 2024 (unaudited)		7,500,000	$	750	$	—	$	4,942,791	$	(1,341,226	)	$	15,965		$	3,618,280
Balance at December 31, 2024 (unaudited)		7,500,000	$	750	$	4,942,791	$	—	$	(3,288,046	)	$	(9,214	)	$	1,646,281
Net loss		—		—		—		—		(1,~~946~~070,~~820~~796	)		—			(1,~~946~~070,~~820~~796	)
Foreign currency translation adjustment		—		—		—		—		—			(25,179	)		(25,179	)
Statutory reserve		—		—		—		7,014		(7,014	)		—			—
Balance at December 31, 2024 (unaudited)		7,500,000	$	750	$	—	$	4,942,791	$	(3,288,046	)	$	(9,214	)	$	1,646,281
Foreign currency translation adjustment		—		—		—		—		—			3,583			3,583
Issuance of convertible note		—		—		170,720		—		—			—			170,720
Balance at March 31, 2025 (unaudited)		7,500,000	$	750	$	5,113,511	$	7,014	$	(4,365,856	)	$	(5,631	)	$	749,788

	For The Six Months Ended December 31, 2024
	For The Nine Months Ended March 31, 2025
	Common Shares		Amount		Subscription Receivable			Additional Paid in Capital		~~Deficits~~Statutory Reserves			~~Accumulated Other Comprehensive Income (Loss)~~Deficits			~~Total~~Accumulated Other Comprehensive Income (Loss)			Total
Balance at June 30, 2024		6,000,000	$	600	$	(600	)	$	642,639	$	~~(5,819~~—	)	$	2(5,~~972~~819	)	$	~~639~~2,~~792~~972		$	639,792
Paid in capital		—		—		600			—		—			—			~~600~~—			600
Net loss		—		—		—			—		~~(3,282,227~~—	)		—(4,353,023	)		~~(3,282,227~~—	)		(4,353,023	)
Initial public offering, net of share issuance costs		1,500,000		150		—			4,300,152		—			—			4,300,302
Statutory reserve		—		—		—			—		7,014			(7,014	)		—			—
Foreign currency translation adjustment		—		—		—			—		—			(12,186	)		(12,186	)
Initial public offering, net of share issuance costs		1,500,000		150		—			4,300,152		—			—			—			4,300,302
Balance at December 31, 2024 (unaudited)		7,500,000	$	750	$	—		$	4,942,791	$	(3,288,046	)	$	(9,214	)	$	1,646,281
Foreign currency translation adjustment		—		—		—			—		—			—			(8,603	)		(8,603	)
Issuance of convertible note		—		—		—			170,720		—			—			—			170,720
Balance at March 31, 2025 (unaudited)		7,500,000	$	750	$	—		$	5,113,511	$	7,014		$	(4,365,856	)	$	(5,631	)	$	749,788

	For The Three Months Ended December 31, 2025
	For The Three Months Ended March 31, 2026
	Common Shares		Amount		Subscription Receivable			Additional Paid in Capital		Statutory Reserves		Deficits			Accumulated Other Comprehensive Income (Loss)		Total
Balance at September 30, 2025 (unaudited)		17,427,559	$	1,743	$	—		$	13,512,515	$	74,608	$	(6,683,779	)	$	49,243	$	6,954,330
Net loss		—				—			—		—		(1,583,681	)		—		(1,583,681	)
Statutory reserve		—				—			—		11,491		(11,491	)		—		—
Foreign currency translation gain		—				—			—				—			168,050		168,050
Common stock issued for consulting services		3,000,000		300		—			2,506,200		—		—			—		2,506,500
Issuance of common shares - Private placement		14,000,000		1,400		(2,530,508	)		6,662,600		—		—			—		4,133,492
Balance at December 31, 2025 (unaudited)		34,427,559	$	3,443	$	(2,530,508	)	$	22,681,315	$	86,099	$	(8,278,951	)	$	217,293	$	12,178,691
Net income		—				—			—		—		142,408			—		142,408
Statutory reserve		—				—			—		2,563		(2,563	)		—		—
Foreign currency translation gain		—				—			—				—			188,125		188,125
Issuance of common shares - Private placement		—		—		1,102,739			—		—		—			—		1,102,739
Balance at March 31, 2026 (unaudited)		34,427,559	$	3,443	$	(1,427,769	)	$	22,681,315	$	88,662	$	(8,139,106	)	$	405,418	$	13,611,963

	For The Six Months Ended December 31, 2025
	For The Nine Months Ended March 31, 2026
	Common Shares		Amount		Subscription Receivable			Additional Paid in Capital		Statutory Reserves		Deficits			Accumulated Other Comprehensive Income (Loss)		Total
Balance at June 30, 2025		10,500,000	$	1,050	$	—		$	8,084,275	$	63,416	$	(5,315,371	)	$	12,315	$	2,845,685
Net loss		—		—		—			—		—		(2,~~940~~798,~~897~~489	)		—		(2,~~940~~798,~~897~~489	)
Statutory reserve		—		—		—			—		2225,~~683~~246		(2225,~~683~~246	)		—		—
Foreign currency translation gain		—		—		—			—				—			~~204~~393,~~978~~103		~~204~~393,~~978~~103
Common stock issued for consulting services		5,300,000		530		—			4,422,170		—		—			—		4,422,700
Issuance of common shares upon exercise of Convertible note		820,330		82		—			512,651		—		—			—		512,733
Issuance of common shares - Private placement		17,807,229		1,781		(21,~~530~~427,~~508~~769	)		9,662,219		—		—			—		78,~~133~~236,~~492~~231
Balance at December 31, 2025 (unaudited)		34,427,559	$	3,443	$	(2,530,508	)	$	22,681,315	$	86,099	$	(8,278,951	)	$	217,293	$	12,178,691
Balance at March 31, 2026 (unaudited)		34,427,559	$	3,443	$	(1,427,769	)	$	22,681,315	$	88,662	$	(8,139,106	)	$	405,418	$	13,611,963

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

F-4

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE ~~SIX~~NINE MONTHS ENDED ~~DECEMBER~~MARCH 31, ~~2025~~2026 AND ~~2024~~2025

(UNAUDITED)

	For the Six Months Ended December 31,
	For the Nine Months Ended March 31,
	2025			2024
	2026			2025
	(unaudited)			(unaudited)
Cash flows from operating activities:
Net loss	$	(2,~~940~~798,~~897~~489	)	$	(34,~~282~~353,~~227~~023	)
(Income) loss from discontinued operation, net of tax provision		(654,388	)		2,823,421
Net loss from continuing operations		(3,452,877	)		(1,529,602	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation – G&A		54,670			50,804
Depreciation		37,919			5,152
Depreciation – cost of revenue		48,305			36,328
Amortization of intangible asset		64,112			32,056
Amortization of intangible asset		42,742			—
Lease expense of operating lease assets		87,881			51,805
Amortization and interest expense of operating lease assets		1,054,794			989,003
Provision of allowance for expected credit loss on accounts receivable		133,772			-
Depreciation of right-of-use finance assets		17,200			15,480
Provision of allowance for expected credit loss on loan receivable		350,000			-
Provision of allowance for expected credit loss on accounts receivable		82,151			1,956
Amortization of discount and bond issuance cost		109,753			-
Provision of allowance for expected credit loss on loan receivable		288,000			—
Accrued interest expense of convertible debt		10,338			40,541
Amortization of discount and bond issuance cost		98,835			—
Deferred tax expense		(78,855	)		(8,014	)
Deferred tax expense		(23,494	)		89,581
Interest income		(177,765	)		(11,645	)
Interest income		(100,052	)		—
Stock-based compensation expense for consulting services		2,089,460			-
Stock-based compensation expense for consulting services		940,860			—
Changes in operating assets and liabilities:
Accounts receivable – third parties		(932,852	)		424,648
Accounts receivable		(517,421	)		(337,288	)
Accounts receivable – related parties		(47,610	)		565,766
Note receivables		65,152			-
Note receivables		65,152			—
Inventories		74,510			(216,538	)
Contract assets		50,142			98,118
Right of return asset		15,415			-
Inventories, net		(27,802	)		(10,328	)
Prepayment, deposit and other receivable		(2,926,217	)		(100,923	)
Right of return asset		70,169			—
Accounts payables		(38,079	)		299,114
Other receivable – related parties		(143,789	)		(241,702	)
Contract liabilities		(11,508	)		42,168
Prepayment, deposit and other receivable		(2,856,298	)		(112,620	)
Accrued expense and other payables		846,065			807,540
Accounts payables – third parties		404,825			28,285
Refund liabilities		162,204			-
Accounts payables – related parties		135,197			(156,165	)
Tax payable		185,250			26,608
Contract liabilities		35,428			—
Operating lease liabilities		(70,171	)		(80,709	)
Accrued expense and other payables		389,301			312,722
Net cash used in operating activities from continuing operations		(3,041,062	)		(979,735	)
Refund liabilities		71,761			—
Tax payable		94,806			—
Operating lease liabilities		(1,341,522	)		(742,649	)
Net cash used in operating activities		(4,469,978	)		(1,933,000	)
Cash flows from investing activities:
Purchase of furniture and equipment		—			(3610,~~072~~898	)
Payment for leasehold improvement		—			(7521,~~008~~902	)
Net cash payment for asset acquisition		—			(552,721	)
Loan to a third party		(78,~~037~~497,~~190~~511	)		(~~686~~561,~~697~~901	)
Loan to a related party		(108,800	)		—
Net cash used in investing activities from continuing operations		(8,497,511	)		(1,147,422	)
Net cash used in investing activities		(7,145,990	)		(1,350,498	)
Cash flows from financing activities:
Proceeds from loans		1,644,523			195,000
Repayment of loans		(25,411	)		-
Repayment of loans		(597,546	)		(339,914	)
Net proceeds from issuance of convertible notes		-			755,512
Repayment of principal of convertible debt		(~~399~~432,~~615~~948	)		—-
Repayment of equipment and vehicle loans		(407,~~666~~827	)		~~(55,877~~-	)
Principal payment of finance lease liabilities		(16,290	)		(14,964	)
Advances from Hupan Pharmaceutical prior to acquisition		-			276,365
Advances from Hupan Pharmaceutical prior to acquisition		—			276,365
Proceeds from initial public offering, net of share issuance costs		-			5,351,281
Proceeds from initial public offering, net of share issuance costs		—			5,351,281
Proceeds from a private placement		8,236,231			-
Proceeds from a private placement		7,133,492			—
Repayment to shareholders		-			(592,159	)
Advanced to related parties		(62,779	)		(311,185	)
Net cash provided by financing activities from continuing operations		7,770,045			5,790,999
Advance from a related party		260,144			—
CASH FLOWS FROM DISCONTINUED OPERATION
Proceeds from shareholders		174,626			—
Operating activities		(1,383,504	)		(1,191,569	)
Repayment to shareholders		—			(805,345	)
Investing activities		-			(79,728	)
Net cash provided by financing activities		8,095,889			4,295,361
Financing activities		1,337,183			(1,008,452	)
Effect of exchange rate changes on cash		205,457			(11,999	)
Cash sold in connection with sales of ABL Chicago		(167,536	)		-
Net (decrease) increase in cash		(3,314,622	)		999,864
Net cash used in discontinued operation		(213,857	)		(2,279,749	)
Effect of exchange rate changes on cash		326,631			(8,386	)
Net (decrease) increase in cash		(3,655,754	)		1,375,707
Cash, beginning of the period		4,956,060			123,550
Cash, end of the period	$	1,~~641~~300,~~438~~306		$	1,~~123~~499,~~414~~257
Less: cash and cash equivalents of discontinued operations		-			241,867
Cash, end of the period for continuing operations	$	1,300,306		$	1,257,390
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income tax	$	17,043		$	—
Cash paid for interest	$	~~354~~454,~~942~~850		$	4567,~~953~~704
NON-CASH ACTIVITIES
Right of use assets obtained in exchange for operating lease obligations	$	—		$	1,~~445~~447,~~498~~494
Right of use assets obtained in exchange for finance lease obligation	$	—		$	89,003
SUPPLEMENTAL SCHEDULE OF NON-CASH IN INVESTING AND FINANCING ACTIVITIES
Additions to property and equipment included in loan payable	$	69,544		$	102,235
Property additions included in loan payable	$	69,219		$	102,235
Additions to leasehold improvement and furniture and fixture through account payable	$	—		$	42,803
Additions to leasehold improvement through accounts payable and other payable	$	-		$	123,176
Settlement of due to shareholder and advance to related party	$	—		$	311,185
Due to shareholder offset against due from related parties	$	-		$	311,185
Convertible notes converted to common shares	$	512,733			—
Issuance of common shares in exchange for consulting service	$	4,422,700			—

The accompanying notes are an integral part of these condensed consolidated financial statements (unaudited).

F-5

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

Lakeside Holding Limited (the “Company”), is a holding company established on August 28, 2023 under the laws of the State of Nevada. The Company, acting through its subsidiary, is primarily engaged in ~~providing~~distribution ~~customized~~of ~~cross-border ocean~~pharmaceutical ~~freight solutions~~ and ~~airfreight~~medical ~~solutions~~products. On July 1, 2024, the Company closed its initial public offering (“IPO”) of 1,500,000 shares of its common stock at an IPO price of $4.50 per share for aggregate gross proceeds of approximately $6.75 million from the offering (Note 1716). In connection with the offering, the Company’s common shares began trading on the Nasdaq Capital Market under the trading symbol “LSH.”

As of ~~December~~March 31, ~~2025~~2026, the Company’s subsidiaries are as follows:

Name	Date of Incorporation/ Acquisition	Jurisdiction of Formation	Percentage of direct/indirect Economic Ownership	Principal Activities	~~Principal Activities~~
Parent Company
Lakeside Holding Limited	August 28, 2023	Nevada	Parent	Holding company	~~Holding company~~
Subsidiaries/companies with ownership
American Bear Logistics Corp. (“ABL Chicago”)	February 5, 2018	Illinois	100%		Logistics services
American Bear Logistics Corp. (“ABL Chicago”)*	February 5, 2018	Illinois	-	Logistics services
Sichuan Hupan Jincheng Enterprise Management Co., Ltd (“Sichuan Hupan”)	July 10, 2024	Sichuan, China	100%	Exploring business opportunities in China	~~Exploring business opportunities in China~~
Hupan Pharmaceutical (Hubei) Co., Ltd (“Hupan Pharmaceutical”)	November 21, 2024	Hubei, China	100%	Medical injection and pharmaceutical distributor	~~Medical injection and pharmaceutical distributor~~
Smart Reserve Holding LTD	September 16, 2025	Cayman Islands	100%	Expected to be involved in digital asset business	~~Expected to be involved in digital asset business~~
Smart Reserve Inc	September 25, 2025	Cayman Islands	100%	Expected to be involved in digital asset business	~~Expected to be involved in digital asset business~~

*	Effective on February 12, 2026, the Company completed the disposal of ABL Chicago (see Note 15).

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“~~U.S.~~ GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been ~~consistently~~condensed ~~applied~~or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. The accompanying unaudited condensed consolidated financial statements ~~include~~should be read in conjunction with the audited consolidated financial statements ofincluded ~~Lakeside~~in ~~Holding~~the ~~Limited~~Company’s ~~and~~annual ~~its~~report ~~subsidiaries.~~on ~~All~~Form ~~inter~~10-~~company~~K ~~balances~~for ~~and~~the ~~transactions have~~year ~~been~~ended ~~eliminated~~June ~~upon~~30, ~~consolidation~~2025.

In the opinion of the Company’s management, the unaudited interim condensed consolidated financial statements include all adjustments, which are only of a normal and recurring nature, necessary for a fair statement of the financial position of the Company as of March 31, 2026, and its results of operations and cash flows for the nine-month period then ended. Operating results for the three and nine months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ended June 30, 2026.

F-6

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Going concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the discharge of liabilities in the normal course of business for the foreseeable future.

As of ~~December~~March 31, ~~2025~~2026, the Company had an accumulated deficit of approximately $8.31 million. For the ~~six~~nine months ended ~~December~~ March 31, ~~2025~~2026, the Company incurred a net loss from continuing operations of approximately $23.9 5 million and the net cash used in operating activities from continuing operations was approximately $43.50 million. Losses have principally occurred as a result of the substantial resources required for general and administrative expenses associated with our operations. The continuation of the Company as a going concern is dependent upon the continued financial support from its external financing. The Company currently plans to fund its operations and support its ongoing acquisition projects mainly through cash flow from loans, issuance of notes and additional equity financing from outside investors, if necessary, to ensure sufficient working capital. However, there is no assurance that the Company will be successful in securing sufficient funds to sustain the operations.

These factors, among others, raise the substantial doubt regarding the Company’s ability to continue as a going concern. These condensed consolidated financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of these uncertainties. Management believes that the actions presently being taken to obtain additional funding and implement its strategic plan provide the opportunity for the Company to continue as a going concern.

~~F-6~~Discontinued Operations

On May 15, 2026, the Company entered into a Share Purchase Agreement with an unrelated third party for the disposition of ABL Chicago (the “Transaction”) and the transaction was legally finalized on May 16, 2026.

Effective February 12, 2026, the buyer assumed substantive decision-making authority and operational control over the transferred business and obtained the rights to substantially all economic benefits and obligations associated with the ownership of the business. In addition, the Company no longer retained substantive continuing involvement in the operations of ABL Chicago.

Accordingly, the Company accounted for the Transaction as a disposal/deconsolidation effective February 12, 2026 in accordance with ASC 810-10-40-4.

The Company recognized a gain (loss) on disposal of $2,556,315 during the period ended March 31, 2026. As of March 31, 2026, the assets and liabilities of the disposed business were no longer included in the unaudited condensed consolidated balance sheets and the results of operations of the disposed business were included through the effective disposal date only (see Note 15).

The assets and liabilities related to ABL Chicago were classified as discontinued operations and presented as “Assets of discontinued operations” and “Liabilities of discontinued operations,” respectively, in the accompanying condensed consolidated balance sheets prior to disposal. The results of operations of ABL Chicago are included in “Loss from discontinued operations, net of tax provision” in the accompanying condensed consolidated statements of operations and comprehensive income (loss). For comparative purposes, all prior periods presented have been reclassified to reflect the classifications on a consistent basis (see Note 15).

Reclassifications

Certain prior year balances have been reclassified in order to conform to current year presentation. These reclassifications have no effect on previously reported results of operations or loss per share.

F-7

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Use of estimates and assumptions

In preparing the unaudited condensed consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the unaudited condensed consolidated financial statements. Significant accounting estimates required to be made by management include allowance for credit losses on account receivable and loan receivable from a third party, return liabilities, percentage of performance obligation completed at the reporting period, the measurements of convertible debts with accompanying warrants. The Company evaluates its estimates and assumptions on an ongoing basis and its estimates on historical experience, current and expected future conditions and various other assumptions that management believes are reasonable under the circumstances based on the information available to management at the time these estimates and assumptions are made. Actual results and outcomes may differ significantly from these estimates and assumptions.

Cash

Cash consists of unrestricted balances held with banks and deposits at banks or other financial institutions, which are available for withdrawal or use and have original maturities of three months or less. The Company maintains its bank accounts in the United States, which are insured by Federal Deposit Insurance Corporation (“FDIC”) at a limit of $250,000 per depositor, and in mainland China, which are insured by the People’s Bank of China Financial Stability Department (“FSD”) while there is a RMB 500,000 deposit insurance limit for a legal entity’s aggregated balance at each bank.

As of ~~December~~March 31, ~~2025~~2026 and ~~June~~ June 30, 2025, the Company had approximately $1.63 million and $54.08 million of cash in banks, most held in the banks located in the mainland of China and in the United States, respectively. Most of cash balance as of ~~December~~March 31, ~~2025~~2026 and June 30, 2025 were denominated in in RMB.

Accounts receivable, net

Accounts receivables are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company grant credit to customers, without collateral, under normal payment terms. The Company uses a loss rate method to estimate allowance for credit losses for accounts receivable from cross-border freights solutions and aging schedule to estimate the allowance for credit losses for accounts receivable from distribution of pharmaceutical products respectively. Loss-rate approach is based on the historical loss rates. The Company evaluates the expected credit loss of accounts receivable based on customer financial condition and historical collection information adjusted for current market economic conditions and forecasts of future economic performance when appropriate. For those past due balances over one year and other higher risk receivables identified by the Company are reviewed individually for collectability. The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, ~~the~~ the Company recorded the allowance of credit loss of $171,~~609~~180 and $8733,~~728~~039, respectively.

F-78

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Notes receivable, net

Notes receivable represents bank acceptance notes issued by financial institutions in the People’s Republic of China (“PRC”), typically received from customers as settlement for trade receivables. These notes are payable at a specified future date and are guaranteed by the issuing bank.

As of ~~December~~March 31, ~~2025~~2026 and ~~June~~ June 30, 2025, the Company held notes receivable totaling $nil and $65,152, all of which are expected to be collected within twelve months and are classified as current assets. The Company recognized $nil allowance for expected credit loss on bank notes receivable during the reporting periods, as all the acceptance notes were endorsed to suppliers for accounts payable payments.

Loan receivable from a third party and allowance for credit losses

Loans receivable from a third party are recorded at amortized cost, representing the principal amount and interest receivable outstanding net of any allowance for credit losses (see Note 5). The Company accounts for credit losses under ASC Topic 326, Financial Instruments—Credit Losses, which requires the immediate recognition of estimated credit losses expected to occur over the remaining life of the financial asset. The Company determines the allowance for credit losses by utilizing a Probability of Default (“PD”) and Loss Given Default (“LGD”) methodology. As As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, the Company recorded an allowance for expected credit losses of $~~288~~350,000 and $nil related to its loan receivable from a third party.

Inventories, net

Inventories are stated at the lower of cost or net realizable value, using the first-in, first out (FIFO) method. Costs include the cost of pharmaceutical products. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is estimated using selling price in the normal course of business less any costs to complete and sell products. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, the Company did not record any inventory provision.

Investment in other entity

The Company assesses its investment in ABL Wuhan and determines that no significant influence over investee existed, as defined in ASC 323-10-15-6, and therefore accounts for the investment used the measurement alternative under ASC 321-10-35-2. Under this approach, the investment is measured at cost, and adjusted for impairments, with changes recognized in net income. The investment in other entity that does not report net asset value is subject to qualitative assessment for indicators of impairments.

On August 4, 2023, ABL Wuhan ceased to be the Company’s subsidiary and became the Company’s long-term investment. As of December 31, 2025 and June 30, 2025, the Company’s investment in ABL Wuhan amounted to $15,741 and $15,741 respectively, and no impairment charges was recorded.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:

		Useful life
Furniture and fixtures		3 – 7 years
Machinery equipment		3 – 5 years
Vehicles		5 years
Software		3 years
Leasehold improvement		Lesser of the lease term or estimated useful lives of the assets

Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in other income or expenses in the unaudited condensed consolidated statements of income (loss) and other comprehensive income (loss).

F-89

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Intangible Assets, net

Intangible assets consist primarily of business license acquired from asset acquisition. It grants the Company the right of selling and distributing pharmaceutical products and solutions in mainland China.

Intangible assets are stated at cost less accumulated amortization. The license is amortized using the straight-line method over the estimated useful economic life of 5 years.

Accounts payable

The account payables are derived from logistics and forwarding service providers and from the pharmaceutical products supplier. Balances due to logistics service providers are typically settled within 7 to 30 days, while payables to pharmaceutical product suppliers are generally settled within 60 days.

Impairment of long-lived asset

Long-lived assets, including plant, property and equipment and intangible asset, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. The Company reviews the impairment of its right-of-use assets and intangible asset consistent with the approach applied for its other long-lived assets. No impairment charge was recognized for the three months and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

Asset acquisition

When an acquisition is related to a single asset or a group of similar assets, or does not meet the definition of a business combination, as the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, we account for the acquisition as an asset acquisition. In an asset acquisition, any direct acquisition-related transaction costs are capitalized as part of the purchase consideration. Deferred taxes are recorded on temporary book/tax differences in an asset acquisition using the simultaneous equations method and adjusted the assigned value of the non-monetary assets acquired to include the deferred tax liability (see Note 2120).

~~F-9~~Leases

The Company evaluates the contracts it entered into to determine whether such contracts contain leases at inception. A contract contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. At commencement, contracts containing a lease are further evaluated for classification as an operating or finance lease where the Company is a lessee.

F-10

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Leases (cont.)

Operating Leases

A lease for which substantially all the benefits and risks incidental to ownership remain with the lessor is classified by the lease as an operation lease. Operating leases are included in the line items right-of-use (ROU) asset, lease liabilities, current, and lease liabilities, non-current in the unaudited condensed consolidated balance sheet. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. For operating leases, the Company measures its lease liabilities based on the present value of the total lease payments not yet paid discounted based on the more readily determinable of the rate implicit in the lease or its incremental borrowing rate, which is the estimated rate the Company would be required to pay for a collateralized borrowing equal to the total lease payments over the term of the lease. The Company uses its incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The Company measures ROU assets based on the corresponding lease liability adjusted for payments made to the lessor at or before the commencement date, and initial direct costs it incurs under the lease. The Company begins recognizing lease expense when the lessor makes the underlying asset available to the Company. Lease expenses for lease payments are recognized on a straight-line basis over the lease term.

For leases with lease term less than one year (short-term leases), the Company has elected not to recognize a lease liability or ROU asset on its unaudited condensed consolidated balance sheet. Instead, it recognizes the lease payments as expenses on a straight-line basis over the lease term. Short-term lease costs are immaterial to its unaudited condensed consolidated statements of operations and cash flows.

Finance leases

Leases that transfer substantially all of the benefits and risks incidental to the ownership of assets are accounted for as finance leases as if there was an acquisition of an asset and incurrence of an obligation at the inception of the lease. Lease cost for finance leases where the Company is the lessee includes the amortization of the ROU asset, which is amortized on a straight-line basis and recorded to “Depreciation of right-of-use finance asset” and interest expense on the finance lease liability, which is calculated using the interest method and recorded to “Interest expense”. Finance lease ROU assets are amortized over the shorter of their estimated useful lives or the terms of the respective leases. If the Company is reasonably certain to exercise the option to purchase the underlying asset at the end of lease term, the finance lease ROU assets are amortized to the end of useful life of the assets on a straight-line basis.

Related parties

The Company adopted ASC 850, Related Party Disclosures, for the identification of related parties and disclosure of related party transactions.

F-1011

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Fair value of financial instruments

ASC 820, “Fair Value Measurements” (ASC 820) and ASC 825, “Financial Instruments” (ASC 825), requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. It establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. It prioritizes the inputs into three levels that may be used to measure fair value:

	Level 1 —	Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities

	Level 2 —	Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

	Level 3 —	Level 3 applies to assets or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities.

The carrying value of cash, accounts receivable ~~from third parties and related parties~~, ~~due to shareholders,~~ other receivables, ~~other receivable from related parties,~~ ~~contract assets,~~ loan receivable balance from a third party, ~~loan receivable from related parties,~~ accounts payable, convertible debts - current, ~~loan payable to a related party,~~ other payables and accrued expenses and other current liabilities approximate fair value due to their short-term nature. For lease liabilities, ~~loan payable to a related party~~ and loans payable, their carrying value approximate the fair value at the year-end, as the interest rates used to discount the host contracts approximate market rates. The Company noted no transfers between levels during any of the periods presented. The Company did not have any instruments that were measured at fair value on a recurring nor non-recurring basis as of ~~December~~March 31, ~~2025~~2026 and June 30, 2025.

Convertible debts

In accordance with ASC 470, Debt (“ASC 470”) the Company records its 7% original issue discount secured convertible promissory notes (“Notes”) at the aggregate principal amount, less discount. The Company evaluated the loan portion of the Notes with the conversion feature and the detachable warrant under the guidance of ASC 470-20, “Debt with Conversion and Other Options, as amended by ASU 2020-06” and ASC 815, “Derivatives and Hedging.” The Company determined that the warrant met the criteria for equity classification under ASC 815-40. Accordingly, the fair value of the warrant was recorded as a component of additional paid-in capital. Following the adoption of ASU 2020-06, the Notes are recorded as a single unit within liabilities in the unaudited condensed consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium. The Convertible debt is subsequently accounted for at amortized cost in accordance with the interest method described in ASC 835-30 (see Note 1312).

F-1112

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Convertible debts (cont.)

Debt issuance costs

Direct and incremental costs and original issue discounts and premiums incurred in connection with the issuance of long-term debt are deferred and amortized to interest expense using the effective interest method or, if the amounts approximate the effective interest method, on a straight-line basis. All debt issuance costs are presented as a direct reduction of debt on the unaudited condensed consolidated balance sheets. Approximately $2910,~~233~~918 and $98109,~~835~~753 were amortized to interest expense during the three and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026.

Common stock warrants

The Company evaluates common stock warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company assesses whether common stock warrants are freestanding financial instruments and whether they meet the criteria to be classified in stockholders’ equity, or classified as a liability. Where common stock warrants do not meet the conditions to be classified in equity, the Company assesses whether they meet the definition of a liability under ASC 815.

Revenue recognition

The Company adopted ASC Topic 606 “Revenue from Contracts with Customers” and all subsequent ASUs that modified ASC 606. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, the Company applies the following steps:

Step 1: Identify the contract (s) with a customer

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

F-1213

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Revenue recognition (cont.)

The Company generates revenue from providing cross-border ocean and airfreight solutions and distribution of pharmaceutical products. No practical expedients were used when adoption ASC606. Revenue recognition policies are as follows:

Revenue recognized from ~~cross-border freights solutions~~ continuing operations during the three and nine months ended March 31, 2026 and 2025 was from the following sources:

The Company provides comprehensive services in the United States for customers to transport goods from overseas to the United States and from the United States to overseas. Operating under service contracts, for goods entering the United States, after the goods arrive at a U.S. seaports or airports, the Company offers customs clearance, container unloading, storage, unpacking, packing, and transportation services to the locations specified by the customers. For customers shipping goods overseas, the Company provides cargo space arrangements, storage, packing, export customs clearance, and arranges transportation to seaports or airports for loading.

The transaction price is determined based on the range of services provided and the volume of goods. The Company considers these comprehensive services as one performance obligation since these promises are not distinct within the context of the contract, and the bundle of integrated services represents a combined output. This performance obligation is satisfied over time as customers receive the benefits of these services during the process of transporting goods from one location to another.

For goods entering the United States, the Company determines that the performance period for revenue recognition is between the pickup date and the date of completing delivery. For customers shipping goods overseas with cargo space booking service, the Company determines that the performance period for revenue recognition is between the container or cargo space confirmed date and the date of arrival at destination. For customers shipping goods overseas without cargo space booking service, the Company determines that the performance period for revenue recognition is between pickup date and the date when the goods depart from airport or port. The performance period may be estimated if the date of completing delivery or the departure date or arrival date has not occurred by the reporting date. The Company has determined that revenue recognition over the time in transit provides a reasonable estimate of the transfer of services to its customers as it depicts the pattern of the Company’s performance under the contracts with its customers. Determining the performance period and the progress of the transportation as of the reporting date requires management’s estimation and judgement, which may impact the timing of revenue recognition.

Revenue from distribution of pharmaceutical products

For customers with goods entering the United States, we offer customs clearance, container unloading, storage, unpacking, packing, and transportation services to customer-specified locations after the goods arrive at a U.S. seaport or airport. For customers shipping goods overseas, we provide cargo space arrangement, storage, packing, export customs clearance, and transportation to the seaport or airport for loading. The performance obligation is satisfied over time as customers receive the benefits of these services during the process of transporting goods from one location to another. As a result, we recognize revenue over time. We believe that the methodology employed is comparable to that of other global logistics companies and offers faithful depiction of the services rendered to customers.

The Company generates revenue from the distribution of pharmaceutical and medical products. The Company orders products from the manufacturer, receives and carries the product at a designated warehouse, and delivers the product directly to its customers’ warehouses or designated locations. Revenue is recognized at a point in time when control of goods is transferred to the customers upon goods delivered to the customers and accepted by the customers.

F-13

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Revenue recognition (cont.)

Principal and agent considerations

In the Company’s transportation business, the Company utilizes independent contractors and third-party carriers and related party carriers in the performances of some transportation services as and when needed. U.S. GAAP requires us to evaluate, using a control model, whether the Company itself promises to provide services to the customers (as a principal) or to arrange for services to be provided by another party (as an agent). Based on the Company’s evaluation using a control model, the Company determined that in all of its major business activities, it serves as a principal rather than an agent within their revenue arrangements. Revenue and the associated purchased transportation costs are both reported on a gross basis within the unaudited condensed consolidated statements of income (loss) and comprehensive income (loss).

In the Company’s distribution of pharmaceutical products business, the Company determined that in all of its major business activities, it serves as a principal rather than an agent within their revenue arrangements under the fact that the Company controls the goods before they are transferred to customers, bears inventory risk, and has discretion in establishing pricing. As a principal, the Company recognizes revenue on a gross basis within the unaudited condensed consolidated statements of income (loss) and comprehensive income (loss).

~~Disaggregation~~Contract ~~of revenues~~liabilities

Contract liabilities represent estimated advances received from customers. The contract liabilities are reported in a net position on a customer-by-customer basis at the end of each reporting period. Contract liabilities are recognized when the Company ~~disaggregates~~receives prepayment from customers resulting from purchase order. Contract liabilities will ~~its~~be recognized as revenue ~~from~~when ~~types~~the products are delivered. As of ~~services~~March ~~providing~~31, 2026 and June 30, 2025, the ~~customer~~Company ~~geographic~~recorded contract liabilities of ~~its~~$3,847 ~~customers~~and $15,355, which will be recognized as revenue upon delivery of the ~~Company~~products ~~believes~~and itthe ~~best~~acceptance ~~depicts~~by ~~how~~ the ~~nature,~~customers. ~~amount~~For the nine months ended March 31, ~~timing~~2026 and ~~uncertainty~~2025, of the amounts transferred from contract liabilities to revenue ~~and~~at ~~cash~~the ~~flows~~beginning ~~are~~of ~~affected~~the byfiscal period ~~economic~~were ~~factors~~$15,355 and $nil, respectively.

The Company’s disaggregation of revenues for three months ended December 31, 2025 and 2024 are disclosed as below:

By service/product type

	For the Three Months Ended December 31,
	2025		2024
Cross-border ocean freights solutions	$	945,533	$	1,374,805
Cross-border airfreights solutions		3,624,461		2,002,698
Distribution of pharmaceutical products		2,442,639		218,086
Total revenue	$	7,012,633	$	3,595,589

F-14

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Revenue recognition (cont.)

By service/product type (cont.)

	For the Three Months Ended December 31,
	2025		2024
Timing of revenue recognition:
Service transferred over time	$	4,569,994	$	3,377,503
Product sales at a point in time		2,442,639		218,086
Total revenue	$	7,012,633	$	3,595,589

By customer geographic location

	For the Three Months Ended December 31,
	2025		2024
Asia-based customers	$	6,534,316	$	2,968,288
U.S.-based customers		478,317		627,301
Total revenue	$	7,012,633	$	3,595,589

The Company’s disaggregation of revenues for six months ended December 31, 2025 and 2024 are disclosed as below:

By service/product type

	For the Six Months Ended December 31,
	2025		2024
Cross-border ocean freights solutions	$	2,380,397	$	3,211,396
Cross-border airfreights solutions		6,951,471		4,247,661
Distribution of pharmaceutical products		3,780,654		218,086
Total revenue	$	13,112,522	$	7,677,143

	For the Six Months Ended December 31,
	2025		2024
Timing of revenue recognition:
Service transferred over time	$	9,331,868	$	7,459,057
Product sales at a point in time		3,780,654		218,086
Total revenue	$	13,112,522	$	7,677,143

By customer geographic location

	For the Six Months Ended December 31,
	2025		2024
Asia-based customers	$	11,889,190	$	5,777,923
U.S.-based customers		1,223,332		1,899,220
Total revenue	$	13,112,522	$	7,677,143

F-15

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Contract assets

Contract assets represent estimated amounts for which the Company has the right to consideration for the services provided while a delivery is still in-transit and has not yet invoiced the customer. The estimated contract asset is based on the estimated completion percentage of the performance obligation. We believe that customers simultaneously benefit from the comprehensive services we provided. 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. As of December 31, 2025 and June 30, 2025, the Company recorded contract assets of $68,912 and $119,054 respectively.

Contract liabilities

Contract liabilities represent estimated advances received from customers. The contract liabilities are reported in a net position on a customer-by-customer basis at the end of each reporting period. Contract liabilities are recognized when the Company receives prepayment from customers resulting from purchase order. Contract liabilities will be recognized as revenue when the products are delivered. As of December 31, 2025 and June 30, 2025, the Company recorded contract liabilities of $50,783 and $15,355, which will be recognized as revenue upon delivery of the products and the acceptance by the customers. For the six months ended December 31, 2025, the amounts transferred from contract liabilities to revenue at the beginning of the fiscal period were $15,355.

Refund liabilities and right of returned assets

Refund liabilities represent the estimated amount of consideration expected to be refunded to customers and are recorded at the time revenue is recognized. Refund allowances are recorded as a reduction in sales with corresponding refund liabilities, and the estimated cost of refunded inventory is recorded as a reduction to cost of sales and an increase of right of return assets. The estimate is based on historical refund patterns, current trends, and contractual terms. If actual results differ from the estimates, the Company revises its estimated refund liabilities accordingly. Each period end, the Company reviews and reassesses the adequacy of its recorded refund liabilities and adjusts the amount as necessary. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, the Company recorded refund liabilities of $~~148~~239,~~996~~439 and $77,235, respectively on the unaudited condensed consolidated balance sheet. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, the Company recorded right of return asset of $71126,~~518~~272 and $141,687, respectively on the unaudited condensed consolidated balance sheet.

Cost of revenues

In the Company’s transportation business, cost of revenue primarily consists of the transportation and delivery costs, warehouse service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation, which includes operating and financing lease-related costs, the depreciation expenses of property and equipment, and others miscellaneous items.

In the Company’s distribution of pharmaceutical products business, cost of revenues primarily consists of cost of products, less discount and rebate.

Selling expenses

Selling expenses primarily include salaries expense, advertising expense, marketing expense of a system, entertainment expense and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.

F-16

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

General and administrative expenses

General and administrative expenses primarily include salaries and staff benefits, repair and maintenance expense, depreciation on property and equipment, lease expenses of warehouses used for administrative purpose and office premises, travelling and entertainment, bank charges, legal and professional fees, insurance expenses and other office expenses.

401(k) benefit plan

401(k) benefit plan covers substantially all employees and allows voluntary employee contributions up to the annually adjusted Inland Revenue Service (“IRS”) dollar limit. These voluntary contributions are matched equal to 100% of the first 3% of the employee’s compensation contributed and 50% of contributions exceeding 3% of eligible compensation, not to exceed 5% of the total eligible compensation. The employees’ voluntary contributions and the Company’s matching contributions are 100% vested immediately. The Company adopted the 401(k) benefit plan from April 2022. The expense related to matching employees’ contributions was $8,397 and $6,896 for the three months ended December 31, 2025 and 2024, respectively. The expense related to matching employees’ contributions was $15,892 and $15,878 for the six months ended December 31, 2025 and 2024, respectively.

F-15

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Employee defined contribution plan

Full-time employees of the Company in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which certain pension benefits, medical care, unemployment insurance, employee housing fund and other welfare benefits are provided to them. Chinese labor regulations require that the Company make contributions to the government for these benefits based on government prescribed percentage of the employee’s salaries. The Company has no legal obligation for the benefits beyond the contributions. The total amount was expensed as incurred. For the three months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, employee welfare contribution expenses amounted to approximately $915,~~535~~841 and $11,~~225~~456, respectively. For the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, employee welfare contribution expenses amounted to approximately $2339,~~858~~699 and $1122,~~225~~681, respectively.

Value added tax (“VAT”)

Revenue represents the invoiced value of goods and service, net of VAT. The VAT is based on gross sales price and VAT rates range up to 13%, depending on the type of products sold or services provided. Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. Net VAT balance between input VAT and output VAT is recorded in taxes payable. All of the VAT returns filed by the Company’s subsidiaries in PRC remain subject to examination by the tax authorities for five years from the date of filing.

Rental income

The Company subleased portion of its offices area, warehouse and parking lots to third parties and related parties. The Company recognizes rental income over the sublease period. For the three months ended December 31, 2025 and 2024, the Company recognized rental income amounted to $82,122 and $87,227, respectively, For the six months ended December 31, 2025 and 2024, the Company recognized rental income amounted to $168,244 and $188,294, respectively, included in other income, net on the unaudited condensed consolidated statements of income (loss) and comprehensive income (loss).

F-17

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Income taxes

The Company’s U.S. subsidiaries are subjected to U.S. federal income tax at 21% and the 7.0% state tax and the 2.5% replacement tax in the state of Illinois.

The Company’s PRC subsidiaries are governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to 25% enterprise income tax rate.

Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

The Company accounts for uncertain tax positions in accordance with FASB ASC Topic No. 740, Accounting for Uncertainty in Income Taxes. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. As of ~~December~~ March 31, 2026 ~~2025~~ and June 30, 2025, the Company did not have a liability for unrecognized tax benefits. It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company’s historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.

~~Statutory reserves~~F-16

The Company’s PRC subsidiaries are required to allocate at least 10% of their after-tax profit to the general reserve in accordance with the PRC accounting standards and regulations. The allocation to the general reserve will cease if such reserve has reached to 50% of the registered capital of respective company. These reserves can only be used for specific purposes and are not transferable to the Company in form of loans, advances, or cash dividends. There is no such regulation of providing statutory reserve in United States. The statutory reserve as determined pursuant to PRC statutory laws totaled approximately $86,099 and $63,416 as of December 31, 2025 and June 30, 2025, respectively.

Comprehensive income (loss)

Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.

F-18

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Statutory reserves

The Company’s PRC subsidiaries are required to allocate at least 10% of their after-tax profit to the general reserve in accordance with the PRC accounting standards and regulations. The allocation to the general reserve will cease if such reserve has reached to 50% of the registered capital of respective company. These reserves can only be used for specific purposes and are not transferable to the Company in form of loans, advances, or cash dividends. There is no such regulation of providing statutory reserve in United States. The statutory reserve as determined pursuant to PRC statutory laws totaled approximately $88,662 and $63,416 as of March 31, 2026 and June 30, 2025, respectively.

Comprehensive income (loss)

Basic and diluted earnings (loss) per share

The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the three months and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, the Company reported a net loss. As a result, all potentially dilutive securities, including the convertible debenture, were excluded from the calculation of diluted loss per share because their inclusion would have been antidilutive.

Foreign currency transactions

Our reporting currency is the U.S. dollar. The functional currency of our operations, except for Sichuan Hupan and Hupan Pharmaceutical, is the U.S. dollar. The functional currency of Sichuan Hupan and Hupan Pharmaceutical is the RMB. The assets, liabilities, revenues, and expenses of Sichuan Hupan and Hupan Pharmaceutical are remeasured in accordance with ASC 830. For the three and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, assets and liabilities of Sichuan Hupan and Hupan Pharmaceutical are translated into U.S. dollars based upon exchange rates prevailing at the end of the year. Revenues and expenses of Sichuan Hupan and Hupan Pharmaceutical are translated at average exchange rates during the reporting period. The resulting translation adjustment is included in accumulated other comprehensive loss.

The following table outlines the currency exchange rates that were used in creating the unaudited condensed consolidated financial statements in this report:

	December 31, 2025
	March 31, 2026	March 31, 2025
Balance sheet items, except for equity accounts	US$1=RMB 6.~~9931~~8980	US$1=RMB 7.2567
Items in the statements of income and cash flows	US$1=RMB 7.~~1235~~0577	US$1=RMB 7.2080

		December 31, 2024
Balance sheet items, except for equity accounts		US$1=RMB 7.2993
Items in the statements of income and cash flows		US$1=RMB 7.1767

F-17

F-19

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Commitments and contingencies

In the normal course of business, the Company is subject to contingencies, such as legal proceedings and claims arising out of its business, which cover a wide range of matters. Liabilities for contingencies are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

If the assessment of a contingency indicates that it is probable that a material loss is incurred and the amount of the liability can be estimated, then the estimated liability is accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingency liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

Concentrations and risks

a. Concentration of credit risk

The Company estimates credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash, accounts receivable, ~~contract~~note ~~assets, other~~ receivable, other receivable ~~from~~and ~~related parties,~~ loan receivable balance from a third party ~~and loans receivable from related parties~~. The Company has designed their credit policies with an objective to minimize their exposure to credit risk.

The maximum exposure of such assets to credit risk is their carrying amounts at the balance sheet dates. The Company maintains majority of bank accounts in mainland China, where there is a RMB 500,000 deposit insurance limit for a legal entity’s aggregated balance at each bank. As of ~~December~~ March 31, 2026 ~~2025~~ and June 30, 2025, ~~three~~Two and four banks account exceeded the insured limit in mainland China, respectively. To limit the exposure to to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the mainland China.

The Company also has the bank accounts at financial institutions in the United States, where there is $250,000 standard deposit insurance coverage limit per depositor, per FDIC-insured bank and per ownership category. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, no bank balance exceeded the insured limit. To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the United States.

The Company has adopted a credit policy of dealing with creditworthy counterparties to mitigate the credit risk from defaults. The management team conducts credit evaluations of its customers, and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for allowance for credit loss based on the individual customer’s financial condition, credit history, and the future economic conditions. Except loan receivable from a third party, ~~other receivable~~ and ~~loan~~other receivable ~~from related parties~~ are monitored on an ongoing basis with the result that the Company’s exposure to impairment is not significant. As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, the Company recognized an allowance for credit loss of $~~288~~350,000 and nil on a loan receivable from a third party. No ~~impairment~~ provision was recorded on the Company’s other receivables ~~or loans receivable from related parties~~ as of those dates.

F-2018

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Concentrations and risks (cont.)

b. Foreign exchange risk

Our subsidiaries in PRC have functional currency in RMB. PRC subsidiaries’ expense transactions are denominated in RMB and their assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. The value of the Chinese Yuan against the U.S. dollar is affected by the changes in China and United States economic conditions. We do not believe that we currently have any significant direct foreign exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. Also, considering the volume of its business, the impact of foreign exchange risk is limited.

c. Interest rate risk

The interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Our exposure to interest rate risk primarily relates to the interest rates from our lessors, convertible debenture and our private lenders. The shareholder loans bear no interest. We have not been exposed to material risks due to the fact that our leasing obligations’ interest rate and the private loan’s interest are fixed at commence date of the leases and loans and we have not used any derivative financial instruments to manage our interest risk exposure. However, we cannot provide assurance that we will not be exposed to material risks due to changes in market interest rate in the future.

d. Liquidity risk

Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. Our objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet our liquidity requirements at any point in time. The Company monitors and analyzes its cash flow position, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. The Company typically funds the working capital needed primarily from operations, loans, shareholder advances to the Company, as well as the external financing activities.

e. Significant customers and suppliers

For the ~~six~~nine months ended ~~December~~ March 31, ~~2025~~2026, ~~two~~four third-party customers individually accounted for 17%, 14%, 14% and 1513%, respectively, of the Company’s total revenue. For the ~~six~~nine months ended ~~December~~ March 31, ~~2024~~2025, ~~two~~three third-party customers ~~represented~~individually 24accounted for 35%, 32% and 1322%, respectively, of the Company’s total revenue.

As of ~~December~~March 31, ~~2025~~2026, ~~two~~ three third-party customers ~~accounted~~individually accounted for 1223%, 21% and 1714% of the Company’s total accounts receivable, respectively. As of June 30, 2025, three third-party customers individually accounted for 2150%, 1419% and 11% of the Company’s total accounts receivable, respectively.

For the ~~six~~nine months ended ~~December~~ March 31, ~~2025~~2026, two third-party vendors accounted for 1487% and 1912%, respectively, of the Company’s total ~~cost of revenue~~purchase. For the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025, noone vendor individually accounted for ~~over~~more than 10%, of the Company’s ~~cost of~~ total ~~revenue~~purchase.

As of ~~December~~March 31, ~~2025~~2026, ~~two~~ three third-party vendors ~~accounted~~individually accounted for 1557%, 22% and 1714% of the Company’s total accounts payable, respectively. As of June 30, 2025, one third-party vendor accounted for 3895% of the Company’s total accounts payable.

F-2119

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Recent accounting pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Derivatives and Hedging (Topic 815), or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. The guidance also requires the if-converted method to be applied for all convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. Adoption of the standard requires using either a retrospective or a retrospective approach. The Company has adopted ASU 2020-06 using the retrospective approach ~~during~~in ~~the~~fiscal ~~three months ended December 31,~~2025.

In April 2024, the Company adopted ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,” which improves reportable segment disclosure requirements. The amendments require the disclosure of (1) significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss; (2) an amount for other segment items by reportable segment and a description of its composition; and (3) the title and position of the CODM and an explanation of how the CODM uses the reported measure(s). The amendments also provide disclosure requirements for interim periods and entities that have a single reportable segment. Details of segment reporting are set out in Note ~~2 and Note 19~~18.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which improves income tax disclosures. The amendments require the disclosure of specific categories in rate reconciliation and additional information for reconciling items that meet a quantitative threshold. The amendments also require disaggregated information about the amount of income taxes paid (net of refunds received), Income (or loss) from continuing operations before income tax expense (or benefit) and Income tax expense (or benefit) from continuing operations. The new guidance is required to be applied either prospectively or retrospectively. This guidance is effective for the Company for the year ending June 30, 2026. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance.

In November 2024, the FASB issued ASU 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” and issued subsequent amendment within ASU 2025-01. The amendments require disaggregation disclosure for certain expense captions presented on the face of income statement, as well as additional disclosure about selling expenses. This guidance is effective for the Company for the year ending June 30, 2028 and interim reporting periods during the year ending December 31, 2029. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance on its disclosures.

F-2220

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Recent accounting pronouncements (cont.)

In November 2024, the FASB issued ASU 2024-04, “Debt - Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments,” which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments also clarify some specific applications of induced conversion guidance and that the guidance applies to a convertible debt instrument that is not currently convertible as long as it had a substantive conversion feature as of both its issuance date and the date the inducement offer is accepted. The new guidance is required to be applied either prospectively or retrospectively. This guidance is effective for the Company for the year ending June 30, 2027. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance.

In May 2025, the FASB issued ASU 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity,” which requires an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider specific factors to determine the accounting acquirer and removes the requirement that the primary beneficiary always is the acquirer for certain transactions. Under the amendments, acquisition transactions in which the legal acquiree is a VIE will, in more instances, result in the same accounting outcomes as economically similar transactions in which the legal acquiree is a voting interest entity. The amendments do not change the accounting for a transaction determined to be a reverse acquisition or a transaction in which the legal acquirer is not a business and is determined to be the accounting acquiree. The new guidance is required to be applied prospectively to any acquisition transaction that occurs after the initial application date. This guidance is effective for the Company for the year ending June 30, 2028. Early adoption is permitted. The Company is evaluating the impact of the adoption of this guidance.

In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Scope Refinements. This update clarifies the application of derivative accounting to certain contracts and refines the guidance for share-based noncash consideration received from customers. Specifically, ASU 2025-07 introduces a scope exception for contracts that are not exchange-traded and whose underlying is tied to operations or activities specific to one party. It also clarifies that share-based noncash consideration from a customer should initially be accounted for under Topic 606 until the right to receive or retain such consideration becomes unconditional, at which point financial instruments guidance may apply. The amendments are effective for the Company for the year ending June 30, 2028, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of ASU 2025-07 on its unaudited condensed consolidated financial statements and related disclosures.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of income (loss) and comprehensive income (loss) and statements of cash flows.

F-2321

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 — ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following:

	December 31, 2025			June 30, 2025
	March 31, 2026			June 30, 2025
Accounts receivable – third-party customers	$	3,916,160		$	2,983,308
Accounts receivable	$	2,024,803		$	1,439,959
Less: allowance for credit loss – third-party customers		(171,609	)		(87,728	)
Less: allowance for credit loss		(171,180	)		(33,039	)
Accounts receivable from third-party customers, net	$	3,744,551		$	2,895,580
Accounts receivable, net	$	1,853,623		$	1,406,920
Accounts receivable – related party customers	$	443,941		$	396,331
Less: allowance for credit loss – related party customers		-			-
Total accounts receivable, net	$	443,941		$	396,331

Approximately $20.17 million or 5436.72% of the accounts receivable ~~from third party customers~~ have been collected as of ~~February~~May 911, 2026.

~~Approximately~~The ~~$240,000~~movement orof allowance ~~54.9%~~for ofcredit ~~the~~loss ~~accounts~~for ~~receivable~~the ~~from~~nine ~~related~~months ~~party~~ended ~~customers~~March ~~have~~31, ~~been~~2026 ~~collected~~and asthe ofyear ~~February~~ended 9June 30, ~~2026.~~2025 is as follows:

The movement of allowance for credit loss for the six months ended December 31, 2025 and the year ended June 30, 2025 is as follows:

	March 31, 2026		June 30, 2025
Beginning balance	$	33,039	$	-
Provision of expected credit loss allowance		133,772		32,836
Effect of foreign exchange translation		4,369		203
Ending balance	$	171,180	$	33,039

	December 31, 2025		June 30, 2025
Beginning balance	$	87,728	$	54,066
Provision of expected credit loss allowance		82,151		33,432
Effect of foreign exchange translation		1,730		230
Ending balance	$	171,609	$	87,728

The Company recorded addition of allowance for credit loss of $84,261 and $nil for the three months ended March 31, 2026 and 2025, respectively. The Company recorded addition of allowance for credit loss of $133,772 and $nil for the nine months ended March 31, 2026 and 2025, respectively.

The Company recorded reversal of allowance for credit loss of $1,174 and $10,881 for the three months ended December 31, 2025 and 2024, respectively. The Company recorded addition of allowance for credit loss of $82,151 and $1,956 for the six months ended December 31, 2025 and 2024, respectively.

NOTE 4 — INVENTORIES, NET

Inventories, net consists of the following:

	December 31, 2025		June 30, 2025
	March 31, 2026		June 30, 2025
Finished goods	$	~~124~~22,~~336~~024	$	96,534
Less: inventory allowance		—		—
Inventories, net	$	~~124~~22,~~336~~024	$	96,534

F-24

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 5 — LOAN RECEIVABLE FROM A THIRD PARTY, NET

On October 8, 2024, the ~~Company~~ Company entered into a loan agreement with a third party providing for a principal amount of up to $2 million at a fixed interest rate of 4.35% per annum. This agreement was subsequently amended on July 3, 2025, to increase the available principal to $6 million, carrying a twelve-month maturity and the same fixed interest rate. On December 25, 2025, the facility was further expanded to a maximum principal amount of $10 million. As of ~~December~~March 31, ~~2025~~2026, all other terms and conditions of the original agreement remain unchanged, with the facility continuing to bear interest at a fixed rate of 4.35% per annum. The loan is unsecured and without a pledge or guarantee from the third party. As of ~~December~~March 31, ~~2025~~2026, and June 30, 2025, the gross loan balance was $78,~~148~~679,~~622~~194 and $11,380, respectively.

For the three and six months ended December 31, 2025, the Company recognized an expected credit loss allowance of $288,000 against the loan balance. The net carrying value of the loan as of December 31, 2025 was $6,860,622 and the Company expected to collect this amount in twelve months.F-22

	December 31, 2025			June 30, 2025
Loan balance	$	7,148,622		$	11,380
Less: expected credit loss allowance		(288,000	)		—
Loan balance, net	$	6,860,622		$	11,380

The Company recognized interest income of $39,491 and $100,052 in connection with this loan receivable from a third party for the three and six months ended December 31, 2025.

NOTE 6 — PREPAYMENT, DEPOSIT AND OTHER RECEIVABLE – THIRD PARTY

	December 31, 2025			June 30, 2025
Prepayment and other deposits (a)	$	3,747,303		$	282,704
Rent deposits		271,486			271,207
Advance to suppliers (b)		2,873,260			—
Ending balance		6,892,049			553,911
Less: non-current portion		(98,927	)		(103,934	)
Current portion	$	6,793,122		$	449,977

(a) The Company entered several consulting agreements with third parties and issued shares for the services to be provided from July 2025 to December 2026. As of December 31, 2025, balance mainly represented the prepaid consulting services of $3.5 million.

(b) The Company entered a purchase agreement with a third party to purchase $2.9 million steel bar on September 15, 2025. As of December 31, 2025, $2.9 million has been paid to the supplier and the delivery is expected to be completed within 180 days after the prepayment.

F-25

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 5 — LOAN RECEIVABLE FROM A THIRD PARTY, NET (cont.)

For the nine months ended March 31, 2026, the Company recognized an expected credit loss allowance of $350,000 against the loan balance. The net carrying value of the loan as of March 31, 2026 was $8,329,194 and the Company expected to collect this amount in twelve months.

	March 31, 2026			June 30, 2025
Loan balance	$	8,679,194		$	11,380
Less: expected credit loss allowance		(350,000	)		—
Loan balance, net	$	8,329,194		$	11,380

The Company recognized interest income of $77,713 and $177,765 in connection with this loan receivable from a third party for the three and nine months ended March 31, 2026.

NOTE 6 — PREPAYMENT, DEPOSIT AND OTHER RECEIVABLE

	March 31, 2026			June 30, 2025
Prepayment and other deposits (a)	$	2,518,533		$	246,700
Rent deposits		14,774			14,227
Advance to suppliers (b)		2,915,330			-
Ending balance		5,448,637			260,927
Less: non-current portion		(34,394	)		(38,934	)
Current portion	$	5,414,243		$	221,993

(a)

The Company entered several consulting agreements with third parties and issued shares for the services to be provided from July 2025 to December 2026. As of March 31, 2026, balance mainly represented the prepaid consulting services of $2.3 million.

(b)

The Company entered a purchase agreement with a third party to purchase $2.9 million steel bar on September 15, 2025. As of March 31, 2026, $2.9 million has been paid to the supplier and the delivery is expected to be completed within 360 days after the prepayment.

NOTE 7 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

	December 31, 2025			June 30, 2025
	March 31, 2026			June 30, 2025
Furniture and Fixtures	$	7728,~~956~~456		$	7526,~~901~~014
Machinery equipment		~~291~~10,~~679~~593			~~290~~9,~~818~~588
Vehicles		~~395~~71,~~108~~818			~~324,267~~-
Software		5,~~517~~594			5,386
Leasehold improvement		~~271~~140,~~238~~753			~~267~~135,~~933~~535
Subtotal		1257,~~041,498~~214			~~964~~176,~~305~~523
Less: accumulated depreciation		(~~678~~55,~~696~~331	)		(~~574~~15,~~884~~921	)
Property and equipment, net	$	~~362~~201,~~802~~883		$	~~389~~160,~~421~~602

Depreciation expense recorded in general and administrative expense was $28,772 and $32,809 for the three months ended December 31, 2025 and 2024, respectively. Depreciation expense recorded in cost of revenue was $F-23~~,638 and $18,164 for the three months ended December 31, 2025 and 2024, respectively.~~

Depreciation expense recorded in general and administrative expense was $54,670 and $50,804 for the six months ended December 31, 2025 and 2024, respectively. Depreciation expense recorded in cost of revenue was $48,305 and $36,328 for the six months ended December 31, 2025 and 2024, respectively.

NOTE 8 — INTANGIBLE ASSETS, NET

Net intangible assets consist of the following:

	December 31, 2025			June 30, 2025
License	$	418,867		$	418,867
Less: accumulated amortization		(96,169	)		(53,427	)
Intangible asset, net	$	322,698		$	365,440

On November 5, 2024, the Company purchased a license of pharmaceutical distribution in Mainland China through its acquisition of 100% equity interest in Hupan Pharmaceutical. The Company recognized the distribution license as an intangible asset of $418,867 based on the assessment of fair value at the purchase date, adjusted by deferred taxes impact on temporary tax differences in an asset acquisition using the simultaneous equations method. The transaction was closed on November 21, 2024. No impairment expense was recognized for the six months ended December 31, 2025.

Amortization expense of $21,371 was recognized for the three months ended December 31, 2025. Amortization expense of $42,742 was recognized for the six months ended December 31, 2025.

F-26

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 — PROPERTY AND EQUIPMENT, NET (cont.)

Depreciation expense recorded in general and administrative expense was $13,847 and $4,705 for the three months ended March 31, 2026 and 2025, respectively.

Depreciation expense recorded in general and administrative expense was $37,919 and $5,152 for the nine months ended March 31, 2026 and 2025, respectively.

NOTE 8 — INTANGIBLE ASSETS, NET

Net intangible assets consist of the following:

	March 31, 2026			June 30, 2025
License	$	418,867		$	418,867
Less: accumulated amortization		(117,539	)		(53,427	)
Intangible asset, net	$	301,328		$	365,440

Amortization expense of $21,370 was recognized for the three months ended March 31, 2026. Amortization expense of $64,112 was recognized for the nine months ended March 31, 2026.

NOTE 9 — LEASES

The Company has ~~multiple~~two lease agreements for ~~warehouses, warehouse machinery and equipment and~~ offices. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Total operating lease expenses on offices, ~~warehouses, and warehouse equipment~~ for the three months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 were $~~527~~29,~~533~~835 and $~~522~~28,~~281~~582, respectively.

Total operating lease expenses on offices, ~~warehouses, and warehouse equipment~~ for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025 were $187,~~054,794~~881 and $~~989~~51,~~003~~805, respectively.

~~Depreciation of finance lease right~~F-~~of-use assets were $8,600 and $7,886 for the three months ended December 31, 2025 and 2024, respectively.~~24

Depreciation of finance lease right-of-use assets were $17,200 and $15,480 for the six months ended December 31, 2025 and 2024, respectively.

The following table includes supplemental cash flow and non-cash information related to leases:

	For the Six Months Ended December 31,
	2025		2024
Cash paid of amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,341,522	$	742,649
Operating cash flows from finance leases	$	3,432	$	1,951
Financing cash flows from finance leases	$	16,290	$	14,964
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities	$	-	$	1,445,498
Finance lease liabilities		-	$	89,003

The weighted average remaining lease terms and discount rates for all of operating lease and finance leases is as follows:

	December 31, 2025			June 30, 2025
Weighted-average remaining lease term (years):
Operating lease		2.45 years			2.44 years
Finance lease		2.87 years			3.19 years
Weighted average discount rate:
Operating lease		7.16	%		7.00	%
Finance lease		9.60	%		9.32	%

F-27

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 9 — LEASES (cont.)

The following istable ~~a schedule~~includes ofsupplemental ~~maturities~~cash offlow ~~operating~~ and ~~finance~~non-cash information ~~lease~~related ~~liabilities~~to ~~as of December 31, 2025~~leases:

	For the Nine Months Ended March 31,
	2026		2025
Cash paid of amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	70,171	$	80,709
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities	$	-	$	341,961

The weighted average remaining lease terms and discount rates for all of operating lease is as follows:

The following is a schedule of maturities of operating lease liabilities as of March 31, 2026:

Operating leases

Twelve months ending December 31,	Repayment
Twelve months ending March 31,	Repayment
2026	$	1,446,467
2027	$	83,646
2027		585,122
2028		47,403
2028		606,252
2029		47,403
2029		285,910
2030		35,552
2030		—
Total future minimum lease payments		214,004
Total future minimum lease payments		2,923,751
Less: imputed interest		(10,579	)
Less: imputed interest		(273,432	)
Total operating lease liabilities	$	203,425
Total operating lease liabilities	$	2,650,319

Financing leases

Twelve months ending December 31,	Repayment
2026	$	47,667
2027		21,656
2028		21,656
2029		18,047
2030		—
Total future minimum lease payments		109,026
Less: imputed interest		(12,014	)
Total finance lease liabilities	$	97,012

NOTE 10 — ACCRUED LIABILITIES AND OTHER PAYABLES

Accrued liabilities and other payables comprise the following amounts relating to the operation of the Company

	December 31, 2025		June 30, 2025
	March 31, 2026		June 30, 2025
Credit card payables	$	~~300~~39,~~280~~399	$	~~370~~47,~~766~~384
Payroll liabilities		~~723~~641,~~645~~176		~~378~~266,~~358~~282
Accrued expense		~~777~~964,~~359~~334		~~806~~585,~~324~~501
Other payables		~~708~~355,~~011~~558		~~564~~262,~~546~~697
Total	$	2,~~509~~000,~~295~~467	$	21,~~119~~161,~~994~~864

F-2825

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 — LOANS PAYABLE

The Company obtained multiple loans to finance the purchase of vehicles and warehouse machinery and obtained other loans to support its working capital needs.

The loan balance consists of the following:

	December 31, 2025			June 30, 2025
	March 31, 2026			June 30, 2025
Equipment loans (a)	$	16,080		$	34,645
Loan A	$	24,246		$	23,347
Vehicle loans (b)		138,079			88,762
Loan B		144,970			139,595
Other loans		2,288,054			1,237,103
Loan C		-			99,928
Total		2,442,213			1,360,510
Loan D		64,487			-
Less: loan payable, current		(2,325,149	)		(1,300,112	)
Total		233,703			262,870
Loan payable, non-current	$	117,064		$	60,398
Less: loan payable, current		(184,609	)		(262,870	)
Loan payable, non-current	$	49,094		$	-

(A) The Company entered a loan of RMB167,250 with a third party on August 9, 2024. The loan is unsecured, with no interest bearing and repayable on demand. (B) ~~Equipment~~The ~~loans~~Company entered a loan of RMB1,000,000 with a third party on June 6, 2025. The loan is unsecured, with no interest bearing for 12 months period and matured on May 31, 2026. (C) The Company entered a loan of $99,928 with a third party on June 27, 2025. The loan is at a fixed interest of 8.99% per annum and payable on monthly basis, for 11 months period and matured on May 27, 2026. The monthly payment is $9,498 blending of interest and principal. During the nine months ended March 31, 2026, the Company cancelled an insurance policy associated with a loan arrangement and, as a result, was legally released from its obligation to repay the related loan. The Company determined that the liability had been extinguished as it was no longer the primary obligor. Accordingly, the Company derecognized the outstanding loan balance and recognized a gain on extinguishment of debt of $25,832, which is included in income from continuing operations. (D) The Company entered a loan of RMB500,000 with a third party on August 8, 2025. The loan is at a fixed interest of 1.92% per annum and payable on monthly basis, for 60 months period and matured on May 4, 2030. The monthly payment is RMB8,746 blending of interest and principal.

The Company made the total principal repayments of $9,096 and $11,768 in connection with the equipment loans during the three months ended December 31, 2025 and 2024, respectively. Interest expenses for the aboveF-mentioned equipment loans amounted to $560 and $1,416 during the three months ended December 31, 2025 and 2024, respectively. The Company did not have any new equipment loan during the three months ended December 31, 2025.26

The Company made the total principal repayments of $18,565 and $25,523 in connection with the equipment loans during the six months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned equipment loans amounted to $1,321 and $3,056 during the six months ended December 31, 2025 and 2024, respectively. The Company did not have any new equipment loan during the six months ended December 31, 2025.

(b) Vehicle loans

During the six months ended December 31, 2025, the Company entered into a new vehicle loan with Webank for a principal amount of $69,862 at a fixed interest rate of 1.92% per annum and matures in July, 2030. The loan is secured by the related vehicle, which has been pledged as collateral.

The Company made the total principal repayments of $10,151 and $16,119 in connection with the above vehicle loans during the three months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned above vehicle loans amounted to $1,155 and $ 3,136 during the three months ended December 31, 2025 and 2024, respectively.

The Company made the total principal repayments of $22,101 and $30,354 in connection with the above vehicle loans during the six months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned above vehicle loans amounted to $2,301 and $ 4,444 during the six months ended December 31, 2025 and 2024, respectively.

F-29

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1112 — ~~LOANS~~CONVERTIBLE ~~PAYABLE (cont.)~~DEBTS

Other loans

	December 31, 2025		June 30, 2025
Loan A	$	120,000	$	120,000
Loan B		50,000		50,000
Loan C		50,000		50,000
Loan D		90,000		95,000
Loan E		-		12,009
Loan F		-		50,000
Loan G		-		19,995
Loan H		99,975		99,975
Loan I		668,046		317,252
Loan J		10,000		10,000
Loan K		100,000		100,000
Loan L		100,000		50,003
Loan M		23,916		23,347
Loan N		142,998		139,595
Loan O		140,771		99,927
Loan P		89,438		-
Loan Q		120,000		-
Loan R		196,179		-
Loan S		286,731		-
Total	$	2,288,054	$	1,237,103

(a) The Company entered a loan of $300,000 with a third party on March 1, 2022. The loan is unsecured, with a fixed interest of 15% per annum and payable on monthly basis, for 6 months period and matured on September 1, 2022. On September 1, 2022, both parties agreed to extend the loan’s principal payment term to on demand. The Company did not make repayment during the three and six months ended December 31, 2025.

(b) On June 27, 2025, the Company entered a loan of $50,000 with a third party. The loan is unsecured, with no interest bearing for a 6-month period and matured on December 27, 2025. The Company did not made repayment during the three and six months ended December 31, 2025. On December 27,2025, both parties agreed to extend the loan’s principal payment term to on demand.

(c) The Company entered a loan agreement of $50,000 with an employee on October 27, 2021. The loan is non-interest bearing, for a 12-month period, and matured on October 26, 2022. On October 26, 2022, both parties agreed to extend the loan term to on demand.

F-30

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 — LOANS PAYABLE (cont.)

Other loans (cont.)

(d) The Company entered a loan agreement of $100,000 with a third party on July 3, 2023. The loan is non-interest bearing, for a 6-month period. On April 10, 2024, the Company entered another loan agreement of $75,000 with same party. The loan is non-interest bearing, for a 6-month period, and matured on September 9, 2024. The Company made repayment of $5,000 during the six months ended December 31, 2025. Both parties agreed to extend the remaining principal balance of $90,000 payment term to on demand.

(e) The Company entered a loan of $125,000 with a third party on August 17, 2023. The loan is personally guaranteed by Henry Liu, the CEO, with a fixed interest of 16.00% per annum for 24 months period and matured on August 16, 2025. The monthly payment is $6,120 blending of interest and principal. (f) On October 16, 2024, the Company entered a loan of $150,000 with a third party. The loan is personally guaranteed by Henry Liu, the CEO, with a fixed interest of 33.37% per annum and payable on monthly basis, for 12 months period and matured on October 16, 2025. The monthly payment is $16,250 for the first six months and $13,250 for the remaining six months blending of interest and principal. (g) The Company entered a loan of $45,000 with a third party on November 5, 2024. The loan is personally guaranteed by Henry Liu, the CEO, with a fixed interest of 24.16% per annum and payable on monthly basis, for 12 months period and matured on November 5, 2025. The monthly payment is $4,259 blending of interest and principal. (h) The Company entered a loan of $99,975 with a third party on January 21, 2025. The loan is unsecured, with no interest bearing for 6 months period and matured on July 21, 2025. On July 21, 2025, both parties agreed to extend the remaining principal balance payment term to on demand. (i) The Company entered a loan of $350,000 with a third party on May 17, 2025. The loan is personally guaranteed by Henry Liu, the CEO, and Shuai Li, the Shareholder, with a fixed interest of 45.7% per annum and payable on weekly basis, for 52 weeks and matured on May 16, 2026. The weekly payment is $8,413 blending of interest and principal. On August 11, 2025, the Company refinanced its existing loan, increasing the principal amount to $1,000,000 under a new loan agreement. The loan bears a fixed interest rate of 45.7% per annum, is payable in weekly installments over 52 weeks, and matures on August 13, 2026. The loan is personally guaranteed by Henry Liu, the Company’s Chief Executive Officer, and Shuai Li, a shareholder. Under the loan agreement, the Company granted the lender a security interest in substantially all of the Company’s assets, whether now owned or hereafter acquired, including cash, accounts receivable, inventory, equipment, general intangibles, and proceeds thereof. The security interest secures all obligations under the loan agreement and is perfected through the filing of financing statements. The Company is required to make weekly blended payments of principal and interest of approximately $24,038.

(j) The Company entered a loan of $10,000 with a third party on April 18, 2025. The loan is unsecured, with a fixed interest of 6% per annum for 6 months period and matured on October 18, 2025. On October 18, 2025, both parties agreed to extend the loan’s principal payment term to on demand.

F-31

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 — LOANS PAYABLE (cont.)

Other loans (cont.)

(k)

The Company entered a loan of $100,000 with an unrelated party on June 30, 2025. The loan is unsecured, with no interest bearing for 6 months period and matured on December 30, 2025. On December 30, 2025, both parties agreed to extend the loan’s principal payment term to on demand.

(l)

The Company entered a loan of $67,003 with a third party on April 10, 2025. The loan is unsecured, with no interest bearing for 6 months period and matured on October 10, 2025. The Company entered a new loan of $86,911 with same party on August 6, 2025. The loan is unsecured, with no interest bearing for 6 months period and matured on February 6, 2026. The Company made repayment of $36,914 during the six months ended December 31, 2025. Both parties agreed to extend the remaining principal payment term to on demand.

(m) The Company entered a loan of $23,347 (RMB167,250) with a third party on August 9, 2024. The loan is unsecured, with no interest bearing and repayable on demand. (n) The Company entered a loan of $139,595 (RMB1,000,000) with a third party on June 6, 2025. The loan is unsecured, with no interest bearing for 12 months period and matured on May 31, 2026. (o) The Company entered a loan of $99,928 with a third party on June 27, 2025. The loan is at a fixed interest of 8.99% per annum and payable on monthly basis, for 11 months period and matured on May 27, 2026. The monthly payment is $9,498 blending of interest and principal. During the six months ended December 31, 2025, the Company entered a loan of $106,757 with a third party on July 27, 2025. The loan is at a fixed interest of 16.9% per annum and payable on monthly basis, for 10 months period and matured on June 27, 2026. The monthly payment is $11,520 blending of interest and principal (p) The Company entered a loan of $105,263 with a third party on July 1, 2025. The loan is at a fixed interest of 34.0% per annum and payable on biweekly basis, for 24 months period and matured on July 1, 2027. The repayment is $3,037 blending of interest and principal. Under the loan agreement, the Company granted the lender a security interest in substantially all of the Company’s present and future assets, including accounts, inventory, equipment, general intangibles, and proceeds thereof, to secure all obligations under the agreement. (q) The Company entered a loan of $120,000 with a third party on July 24, 2025, with a fixed interest of 10.0% per annum for 10 months period. (r) The Company entered a loan of $208,332 (RMB1,500,000) with a third party on July 12, 2025, with a fixed interest of 10.0% per annum for 10 months period. The loan was pledged by two residential properties owned by Henry Liu, the Company’s Chief Executive Officer, and Shuai Li, a shareholder (s) The Company entered a loan of $300,000 with a third party on December 9, 2025. The loan is at a fixed interest of 12.5% per annum and payable on weekly basis, for 12 months period and matured on December 9, 2026. The weekly payment is $7,500 blending of interest and principal. The loan is secured by a security interest in ABL Chicago’s all current and future accounts, including deposit accounts, accounts receivable, and all related proceeds.

F-32

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 — LOANS PAYABLE (cont.)

Other loans (cont.)

The Company made the total principal repayments of $368,549 and $74,458 in connection with the above other loans during the three months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned other loans amounted to $135,659 and $ 21,550 during the three months ended December 31, 2025 and 2024, respectively.

The Company made the total principal repayments of $597,546 and $339,914 in connection with the above other loans during the six months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned other loans amounted to $235,249 and $38,064 during the six months ended December 31, 2025 and 2024, respectively.

The repayment schedule for the Company’s loans is as follows:

Twelve months ending December 31,	Vehicle loans			Equipment loans			Others			Total
2026	$	51,613		$	15,434		$	2,469,951		$	2,536,998
2027		39,388			1,448			27,336			68,172
2028		28,414			-			-			28,414
2029		17,243			-			-			17,243
2030		8,755			-			-			8,755
Total undiscounted borrowings		145,413			16,882			2,497,287			2,659,582
Less: imputed interest		(7,334	)		(802	)		(209,233	)		(217,369	)
Total	$	138,079		$	16,080		$	2,288,054		$	2,442,213

NOTE 12 — LOAN PAYABLE TO A RELATED PARTY

On March 1, 2025, the Company entered into a loan agreement with a related party – ABL Shenzhen (see Note 15) for a principal amount up to $124,176, bearing interest at a fixed interest rate of 7.79% per annum, with a maturity date of March 1, 2028. The loan balance was $ 124,176 and $ 124,176 as of December 31, 2025 and June 30, 2025, respectively, and interest expense in connection with the loan for the three and six months ended December 31, 2025 were $2,418 and $4,836.

F-33

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 13 — CONVERTIBLE DEBTS

On March 5, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with an institutional investor (the “Investor”).

Under the Securities Purchase Agreement, the Company agreed to issue 7% original issue discount secured convertible promissory notes (“Notes”) in the aggregate principal amount of up to $4.5 million and accompanying Warrants (as defined below), in up to three separate tranches that are each subject to certain closing conditions (the “Financing”). On March 5, 2025, the initial closing of the first tranche (the “First Closing of First Tranche”) occurred, pursuant to which the Company issued to the Investor a Note in a principal amount of $1,000,000 (the “First Tranche”). For the subsequent closing of the first tranche, the Investor agreed to purchase an additional Note in the principal amount of $500,000, subject to the satisfaction of certain closing conditions including the Equity Conditions (as defined in the Securities Purchase Agreement), after a resale Registration Statement on Form S-3 or S-1 (the “Resale Registration Statement”) has been declared effective by the Securities and Exchange Commission (the “Commission”) for the registration of common stock of the Company (the “Common Stock”) issuable upon conversion of the Notes and the Warrants (as defined below). The Company and the Investor may also, pursuant to the Securities Purchase Agreement, choose to consummate a second tranche and a third tranche of financing, subject to certain closing conditions.

Pursuant to the Securities Purchase Agreement, the Company agreed to issue, upon the consummation of the closing of each tranche, common stock purchase warrants (“Warrants”) to the Investor, in each case to purchase a number of shares of common stock determined by dividing 40% of the applicable principal amount of the corresponding Note by the VWAP (as defined in the Securities Purchase Agreement) immediately prior to the applicable closing date. In the First Closing of the First Tranche, the Company issued Investor Warrants to purchase 318,827 shares of common stock at an initial exercise price of $1.9098 per share, subject to certain adjustments set forth therein.

The Note does not bear any interest absent an Event of Default (as defined in the Note) and matures on June 5, 2026. Commencing on the earlier of (i) the 60-day anniversary after the date hereof and (ii) the date on which the first Resale Registration Statement shall have been declared effective by the Commission, the Company is required to pay to the Investor the outstanding principal balance under the Note in monthly installments, on such date and each one (1) month anniversary thereof, in an amount equal to 105% of the total principal amount multiplied by the quotient determined by dividing one by the number of months remaining until the maturity date of the Note, until the outstanding principal amount has been paid in full or, if earlier, upon acceleration, conversion or redemption of the Note in accordance with its terms. All monthly payments are payable by the Company, in cash, provided that under certain circumstances, as provided in the Note, the Company may elect to pay in common stock. The number of common shares to be converted shall be calculated by the monthly payment divided by the Conversion Price. The Conversion Price is the lesser of (i) the initial fixed conversion price of $1.9098 and (ii) 95% of the average of the four lowest daily VWAPs during the 20 trading day period immediately preceding the applicable payment date, provided that such price shall not be less than the Floor Price of $0.234. At any time after the original issuance date, the Note shall be convertible (in whole or in part) at the option of the Investor into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing (x) that portion of the outstanding Principal and any accrued and unpaid interest thereon that Invest elects to convert by (y) the Applicable Conversion Price then in effect on the date.

On April 22, 2025, the Second Closing of the First Tranche was consummated. The Company issued Investor Warrants to purchase 202,082 shares of common stock at an initial exercise price of $1.929 per share, subject to certain adjustments set forth therein.

F-3427

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1312 — CONVERTIBLE DEBTS (cont.)

The Company evaluated the Note with conversion features and the detachable warrant under the guidance of ASC 470-20, “Debt with Conversion and Other Options, as amended by ASU 2020-06” and ASC 815, “Derivatives and Hedging.” The Company determined that the warrant met the criteria for equity classification under ASC 815-40. Accordingly, the relative fair value of the warrant was recorded as a component of additional paid-in capital on the issuance date.

The Company determined that embedded derivative meets the definition of derivative instruments under ASC 815, Derivatives and Hedging. Following the adoption of ASU 2020-06, the Notes are recorded as a single unit within liabilities in the unaudited condensed consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium.

The Company accounted for the host debt as a liability recorded at amortized cost under ASC 470-10, net of issuance costs and any discount that allocated to debt component.

The debt discount and issuance cost will be amortized to interest expense over the term of the Note using the effective interest method.

The Company recorded $667,068, net of the discount and debt issuance cost of $215,867, as the balance of the debt component and $88,444, net of the discount and debt issuance cost of $28,621, as the equity for the warrants at the inception point of the first Closing date by assessing the fair value of each component.

The Company recorded $361,661, net of the discount and debt issuance cost of $74,075, as the balance of the debt component and $53,340, net of the discount and debt issuance cost of $10,924, as the equity for the warrants at the inception point of the second Closing date by assessing the fair value of each component.

The relative fair value of warrants of first closing of the first tranche was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $1.21, risk free rate of 4.08%, expected term of 5 years; exercise price of the warrants of $1.9098, volatility of 46.09%; and expected future dividends of nil.

The relative fair value of warrants of second closing of the first tranche was estimated using the Black-Scholes pricing model with the following weighted-average assumptions: market value of underlying share of $0.93, risk free rate of 3.98%, expected term of 5 years; exercise price of the warrants of $1.929, volatility of 46.37%; and expected future dividends of nil.

The Company applied the relative fair value method to allocate the proceeds from the issuance of convertible debt. The Note’s original issue discount and incurred total issuance costs were allocated to the note payable and warrants on the relative fair value basis in accordance with ASC 835-30 and ASC 470-20. The debt discount and issuance cost allocated to the loan component will be amortized to interest expense over the term of the Convertible Debts using the effective interest method.

F-3528

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1312 — CONVERTIBLE DEBTS (cont.)

The initial purchaser’s discount and debt issuance costs primarily consisted of underwriting fees, lawyers fee, investor legal fee, auditor fee and SEC registration fee. These costs were allocated to the debt and equity component based on the allocation of the proceeds as follows:

	Amount		Equity Component		Debt Component
Initial purchaser’s debt discount	$	105,000	$	12,693	$	92,307
Debt issuance cost		224,488		26,852		197,636
Total	$	329,488	$	39,545	$	289,943

The portion allocated to debt component is amortized to interest expense using the effective interest method over the effected life of the Notes, or approximately 13 and 15 months term. The effective interest rate on the liability component of the Notes for the period from date of issuance is 86.52% and 60.80% for the first closing and second closing, which remains unchanged from the date of issuance.

During the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, the holder of the Company’s convertible notes converted portions of the outstanding principal balance into shares of the Company’s common stock pursuant to the original terms of the respective note agreements.

The conversions occurred on multiple dates throughout the period and resulted in the issuance of an aggregate of 820,330 shares of common stock in exchange for the conversion of $661,536 of outstanding principal.

The conversions were accounted for in accordance with ASC 470-20, Debt with Conversion and Other Options, as conversions under the original terms of the agreements. Accordingly, the carrying amount of the debt, including any unamortized discount, was reclassified to equity upon conversion, and no gain or loss was recognized.

As of ~~December~~March 31, ~~2025~~2026, the Company had $9785,~~162~~085 in convertible notes outstanding, which remain convertible under the original terms.

	December 31, 2025			June 30, 2025
	March 31, 2026			June 30, 2025
Long term debt
Outstanding principal	$	~~108~~74,~~080~~747		$	1,021,819
Unamortized Initial Purchaser’s debt discount and debt issuance cost		~~(10,918~~-	)		(150,948	)
Accrued interest		-10,338			39,804
Net carrying amount	$	9785,~~162~~085		$	910,675
Convertible debts, current	$	9785,~~162~~085		$	910,675

The Company recognized interest expense of $3422,~~233~~923 and $~~116~~139,~~528~~451 for the three and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, respectively, which includes $2910,~~233~~918 and $98109,~~835~~753 related to the amortization of the debt discount and issuance costs.

F-29

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 13 — GENERAL AND ADMINISTRATIVE EXPENSES

	For the Three Months Ended March 31,
	2026		2025
Payroll and staff benefit expense	$	134,723	$	179,732
Professional expense		1,433,951		205,282
Travelling and entertainment		13,431		20,206
Office expense		15,774		7,512
Lease expense		18,252		26,335
Insurance		-		25,700
Other expense		30,575		23,819
Depreciation on plant property and equipment		13,847		4,705
Advertising		-		70,968
Rent expense of short-term lease		13,036		4,151
Amortization on intangible assets		21,370		32,056
Bank charge		155		88
Motor expense		690		1,226
Management fee		1,253		1,982
Repair & maintenance		858		217
Total	$	1,697,915	$	603,979

	For the Nine Months Ended March 31,
	2026		2025
Payroll and staff benefit expense	$	594,759	$	400,436
Professional expense		2,719,572		751,999
Travelling and entertainment		67,691		323,605
Office expense		46,354		10,383
Lease expense		76,299		49,558
Insurance		54,314		79,098
Other expense		186,609		46,492
Depreciation on plant property and equipment		37,919		5,152
Advertising		-		80,238
Rent expense of short-term lease		23,919		9,368
Amortization on intangible assets		64,112		32,056
Bank charge		1,437		506
Motor expense		3,957		3,235
Management fee		3,263		3,110
Repair & maintenance		2,961		8,243
Total	$	3,883,166	$	1,803,479

F-30

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 14 — TAXES

Corporate Income Taxes

Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%.

As of March 31, 2026 and June 30, 2025, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the period ended March 31, 2026 and 2025, no amounts were incurred for income tax uncertainties or interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examination by its major taxing authorities for all periods.

The provision for income tax for the three months ended March 31, 2026 and 2025 consists of the following:

	For the Three Months Ended March 31,
	2026			2025
Current income tax expense	$	84,954			26,608
Deferred income tax credit		(55,361	)		(8,014	)
Total income tax expense	$	29,593			18,594

The following table reconciles the statutory tax rate to the Company’s effective tax the three months ended March 31, 2026 and 2025:

	For the Three Months Ended March 31,
	2026			2025
Loss before tax	$	(1,499,218	)	$	(358,366	)
Statutory state tax rate		21	%		21	%
Income tax credit at the federal statutory rate		(314,835	)		(75,257	)
Change in valuation allowance		324,578			70,779
Tax effect on other tax jurisdiction		(1,038	)		1,919
Non-deductible expense		20,888			21,153
Total income tax expense	$	29,593		$	18,594

The provision for income tax for the nine months ended March 31, 2026 and 2025 consists of the following:

	For the Nine Months Ended March 31,
	2026			2025
Current income tax expense	$	189,487			26,608
Deferred income tax credit		(78,855	)		(8,014	)
Total income tax expense	$	110,632			18,594

F-31

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 14 — TAXES (cont.)

Corporate Income Taxes (cont.)

The following table reconciles the statutory tax rate to the Company’s effective tax the nine months ended March 31, 2026 and 2025:

	For the Nine Months Ended March 31
	2026			2025
Loss before tax	$	(3,342,245	)	$	(1,511,008	)
Statutory state tax rate		21	%		21	%
Income tax credit at the federal statutory rate		(701,871	)		(317,312	)
Change in valuation allowance		772,953			329,955
Tax effect on other tax jurisdiction		342			(15,202	)
Non-deductible expense		39,208			21,153
Total income tax expense	$	110,632		$	18,594

The Company’s deferred tax assets and liabilities consist of the following:

	March 31 2026			June 30, 2025
Deferred tax assets:
Allowance for credit loss	$	42,795		$	8,260
Allowance for credit loss - loan receivable		73,500			-
Refundable liability net of right of return asset		28,292			-
Non-capital loss carried forward		1,234,620			535,167
Valuation allowance		(1,308,120	)		(535,167	)
Total deferred tax assets	$	71,087		$	8,260
Deferred tax liabilities:
Intangible asset – license		(75,332	)		(91,360	)
Total deferred tax liabilities		(75,332	)		(91,360	)
Deferred tax liabilities, net	$	(4,245	)	$	(83,100	)

As of March 31, 2026 and June 30, 2025, the accumulated tax losses of subsidiaries incorporated in the U.S. of approximately $4.9 million and approximately $1.8 million, are allowed to be carried forward to offset against future taxable profits. The carry forward of non-capital losses in the U.S. generally has no time limit, but the loss could be only offset up to 80% of taxable income in a given year. The carry forward of net operating loss generated by the subsidiaries incorporated in the PRC, subject to the agreement of the PRC tax authorities, of approximately $1.0 million and $0.6 million as of March 31, 2026 and June 30, 2025 can be carried forward for 5 years.

F-32

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 —DISCONTINUED OPERATIONS AND SALES OF ABL CHICAGO

During the third quarter of 2026, the Company entered into the Share Purchase Agreement (“SPA”) to sell the equity interests of its subsidiaries that own and operate its ABL business (the “Sale Transaction”), subject to shareholder and regulatory approvals, for a total base purchase price of $1. The ABL Chicago business has been recast as discontinued operations, and the assets and liabilities of ABL Chicago are classified as assets and liabilities of discontinued operations. See Note 1 – Business Organization and Nature of Operations.

On February 12, 2026, the sale of 100% of the issued and outstanding shares of ABL Chicago was duly approved and adopted. Accordingly, the Company consummated the sale of the ABL Chicago business.

As of June 30, 2025, the major of assets and liabilities from discontinued operation included the following:

	As of June 30, 2025
ASSETS:
Current Assets:
Cash	$	141,188
Accounts receivable – third parties, net		1,488,660
Accounts receivable – related party, net		396,331
Prepaid expenses and other assets– third parties		227,984
Other receivable – related parties		869,430
Contract assets		119,054
Loan receivable – Related parties		277,741
Current assets from discontinued operation	$	3,520,388

Non-current Assets:
Long-term investment	$	15,741
Property and equipment, net		228,819
Right of use operating lease assets, net		2,886,929
Right of use financing lease assets, net		93,797
Prepaid expenses and other assets		65,000
Non-current assets from discontinued operation	$	3,290,286

LIABILITIES
Current liabilities
Accounts payable– third parties	$	1,475,989
Accounts payable– related party		65,237
Accrued expenses and other liabilities		958,130
Obligations under operating leases		2,214,473
Obligations under financing leases		47,035
Other loan payable		1,037,242
Tax payable		79,825
Current liabilities from discontinued operation	$	5,877,931

Non-current liabilities
Other loan payable	$	60,398
Loan payable to related party		124,176
Obligations under operating leases		1,408,959
Obligations under financing leases		66,267
Non-current liabilities from discontinued operation	$	1,659,800

F-33

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 —DISCONTINUED OPERATIONS AND SALES OF ABL CHICAGO (cont.)

Results of Discontinued Operations

Net income (loss) from discontinued operations details is as follows:

	Nine Months Ended March 31,						Three Months Ended March 31,
	2026			2025			2026			2025
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	10,678,106		$	10,764,921		$	1,346,238		$	3,305,864
Cost of revenue		9,768,331			10,043,158			1,660,135			2,968,114
Operating expenses		2,661,614			3,633,941			496,212			1,082,426
Loss from operation		(1,751,839	)		(2,912,178	)		(810,109	)		(744,676	)
Gain on sale of ABL Chicago		2,556,315			-			2,556,315			-
Other (expense) income, net		(150,088	)		178,338			(74,987	)		50,840
Net income (loss) from discontinued operations, before tax		654,388			(2,733,840	)		1,671,219			(693,836	)
Income tax		-			89,581			-			-
Income (loss) from discontinued operations, net of tax provision	$	654,388		$	(2,823,421	)	$	1,671,219		$	(693,836	)

Revenue from discontinued operation

ABL Chicago generates revenue from providing cross-border ocean and airfreight solutions. No practical expedients were used when adoption ASC606. Revenue recognition policies are as follows:

Revenue from cross-border freights solutions

Principal and agent considerations

F-34

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 —DISCONTINUED OPERATIONS AND SALES OF ABL CHICAGO (cont.)

Accounts receivable, net

Accounts receivables are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company grant credit to customers, without collateral, under normal payment terms. The Company uses a loss rate method to estimate allowance for credit losses for accounts receivable from cross-border freights solutions and aging schedule to estimate the allowance for credit losses for accounts receivable from distribution of pharmaceutical products respectively. Loss-rate approach is based on the historical loss rates. The Company evaluates the expected credit loss of accounts receivable based on customer financial condition and historical collection information adjusted for current market economic conditions and forecasts of future economic performance when appropriate. For those past due balances over one year and other higher risk receivables identified by the Company are reviewed individually for collectability. The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected. As of June 30, 2025, the Company recorded the allowance of credit loss of $54,689.

Accounts receivable, net consists of the following:

	June 30, 2025
Accounts receivable – third-party customers	$	1,543,349
Less: allowance for credit loss – third-party customers		(54,689	)
Accounts receivable from third-party customers, net	$	1,488,660

Accounts receivable – related party customers	$	396,331
Less: allowance for credit loss – related party customers		-
Total accounts receivable– related party customers, net	$	396,331

Prepayment, deposit and other receivable – third party

	June 30, 2025
Prepayment and other deposits	$	33,212
Rent deposits		259,772
Total		292,984
Less: non-current portion		(65,000	)
Current portion	$	227,984

Contract assets

Contract assets represent estimated amounts for which the Company has the right to consideration for the services provided while a delivery is still in-transit and has not yet invoiced the customer. The estimated contract asset is based on the estimated completion percentage of the performance obligation. We believe that customers simultaneously benefit from the comprehensive services we provided. 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. As of June 30, 2025, the Company recorded contract assets $119,054.

F-35

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 —DISCONTINUED OPERATIONS AND SALES OF ABL CHICAGO (cont.)

Investment in other entity

On August 4, 2023, ABL Wuhan ceased to be the ABL Chicago’s subsidiary and became the ABL Chicago’s long-term investment. As of June 30, 2025, the Company’s investment in ABL Wuhan amounted to $15,741, and no impairment charges was recorded.

Property and equipment, net

Property and equipment are stated at cost less accumulated depreciation. The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets.

Lease

ABL Chicago has multiple lease agreements for warehouses, warehouse machinery and equipment and offices.

The following table includes supplemental cash flow and non-cash information related to leases:

	For the Nine Months Ended March 31,
	2026		2025
Cash paid of amounts included in the measurement of lease liabilities:
Operating cash flows from discontinued operation - operating leases	$	1,599,276	$	1,071,222
Operating cash flows from discontinued operation - finance leases	$	4,466	$	3,963
Financing cash flows discontinued operation - from finance leases	$	20,980	$	22,814
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities	$	-	$	1,105,533
Finance lease liabilities		-	$	89,003

F-36

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 14 15 — ~~GENERAL~~DISCONTINUED OPERATIONS AND SALES ~~ADMINISTRATIVE~~OF ~~EXPENSES~~ABL CHICAGO (cont.)

	For the Three Months Ended December 31,
	2025		2024
Payroll expense	$	862,512	$	952,968
Staff benefit expense		80,003		113,588
Professional expense		765,060		216,012
Travelling and entertainment		41,260		285,541
Office expense		82,046		33,475
Lease expense		99,430		88,513
Insurance		64,859		87,681
Other expense		130,564		62,532
Repair and maintenance		25,047		33,535
Depreciation on plant property and equipment		28,772		32,809
Motor expense		265		3,934
Bank charges		1,609		1,265
Rent expense of short-term lease		5,549		-
Management fee		2,011		-
Amortization on intangible assets		21,371		-
Total	$	2,210,358	$	1,911,853

Accrued liabilities and other payables

	For the Six Months Ended December 31,
	2025		2024
Payroll expense	$	1,691,303	$	1,712,110
Staff benefit expense		196,421		278,004
Professional expense		1,335,798		556,126
Travelling and entertainment		88,064		411,649
Office expense		234,032		255,022
Lease expense		198,591		151,806
Insurance		149,302		125,131
Other expense		243,655		122,182
Repair and maintenance		63,120		73,492
Depreciation on plant property and equipment		54,670		50,804
Motor expense		9,806		9,725
Bank charges		2,949		1,880
Rent expense of short-term lease		5,549		-
Management fee		2,011		1,128
Amortization on intangible assets		42,742		-
Total	$	4,318,013	$	3,749,059

Accrued liabilities and other payables comprise the following amounts relating to the discontinued operation:

NOTE 15 — RELATED PARTY TRANSACTIONS

	June 30, 2025
Credit card payables	$	323,382
Payroll liabilities		112,076
Accrued expense		220,823
Other payables		301,849
Total	$	958,130

~~The~~Loan ~~relationship~~payable ofto a related ~~parties is summarized as follows:~~party

Name of Related Party		Relationship with the Company
Mr. Henry Liu		CEO, and an ultimate shareholder of the Company
Mr. Shuai Li		President, and an ultimate shareholder of the Company
Weship Transport Inc. (“Weship”)		Controlled by Mr. Henry Liu
American Bear Logistics (Wuhan) Co., Ltd. (“ABL Wuhan”)		The Company owns 5% of equity interest
American Bear Logistics (Shenzhen) Co., Ltd. (“ABL Shenzhen”)		100% owned subsidiary of ABL Wuhan
LLL Intermodal Inc. (“Intermodal”)		Controlled by Mr. Henry Liu
ABL LAX LLC. (“ABL LAX”)		Controlled by Mr. Henry Liu and Mr. Shuai Li
ABWL Group		Controlled by Mr. Henry Liu and Mr. Shuai Li

On March 1, 2025, the Company entered into a loan agreement with a related party – ABL Shenzhen for a principal amount up to $124,176, bearing interest at a fixed interest rate of 7.79% per annum, with a maturity date of March 1, 2028. The loan balance was $124,176 as of June 30, 2025, and interest expense in connection with the loan for the nine months ended March 31, 2025 was nil.

Loan payable

The Company obtained multiple loans to finance the purchase of vehicles and warehouse machinery and obtained other loans to support its working capital needs.

The loan balance consists of the following:

	June 30, 2025
Equipment loans (a)	$	34,645
Vehicle loans (b)		88,762
Other loans (c)		974,233
Total		1,097,640
Less: loan payable, current		(1,037,242	)
Loan payable, non-current	$	60,398

(a) Equipment loans

The Company made the total principal repayments of $37,507 in connection with the above vehicle loans during the nine months ended March 31, 2025. Interest expenses for the above-mentioned above vehicle loans amounted to $4,256 during the nine months ended March 31, 2025.

(b) Vehicle loans

The Company made the total principal repayments of $48,085 in connection with the equipment loans during the nine months ended March 31, 2025. Interest expenses for the above-mentioned equipment loans amounted to $7,827 during the nine months ended March 31, 2025.

F-37

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 — ~~RELATED~~DISCONTINUED ~~PARTY~~OPERATIONS ~~TRANSACTIONS~~AND SALES OF ABL CHICAGO (cont.)

Loan payable (cont.)

(c) Other loans

The Company made the total principal repayments of $420,765 in connection with the above other loans during the nine months ended March 31, 2025. Interest expenses for the above-mentioned other loans amounted to $63,872 during the nine months ended March 31, 2025.

Related party transactions

a) Other receivable from related parties

Other receivable from related parties consists of balances with the parties listed below, arising from interest receivable, storage income, rental income, contractor salaries charged by related parties, other expenses paid on their behalf:

	December 31, 2025			June 30, 2025
	June 30, 2025
Other receivable from Weship	$	~~947~~753,~~914~~116			~~753,116~~
Other receivable from Intermodal		~~115~~99,~~950~~635			~~99,635~~
Other receivable from ABL LAX		1318,~~746~~291			~~18,291~~
Other payable to ABL Shenzhen		(1,612	)		~~(1,612~~	)
Total	$	1869,~~075,998~~430			~~869,430~~

b) Summary of balances payable to related parties

	December 31, 2025		June 30, 2025
	June 30, 2025
Account payable to Weship	$	~~127~~35,~~984~~003		~~35,003~~
Account payable to ABL Wuhan		539,~~945~~012		~~9,012~~
Account payable to Intermodal		1821,~~505~~222		~~21,222~~
Total	$	~~200~~65,~~434~~237		~~65,237~~

c) Summary of balances receivable from related parties

	December 31, 2025		June 30, 2025
	June 30, 2025
Accounts receivable from Weship	$	208,~~617~~853		~~8,853~~
Accounts receivable from ABL Shenzhen		~~101~~129,~~298~~588		~~129,588~~
Accounts receivable from ABL LAX		320		—
Accounts receivable from ABL Wuhan		257,890
Accounts receivable from ABL Wuhan		321,706		257,890
Total	$	396,331
Total	$	443,941		396,331

Approximately $240,000 or 54.9% of the accounts receivable from related party customers have been collected as of February 9, 2026.

d) Loan receivable from related parties

	December 31, 2025		June 30, 2025
Loan receivable from Weship	$	148,000		148,000
Loan receivable from ABL LAX		238,541		129,741
Total	$	386,541		277,741

The Company entered into a loan agreement with related parties to support working capital needs. The loan bears interest at an annual rate of 8.99%, with the outstanding principal not exceeding $1.0 million. The loan matures within twelve months from the date of execution. During the six months ended December 31, 2025, the Company advanced a loan of $108,800 to ABL LAX. As of December 31, 2025, the total loan receivable from related parties was $0.4 million.

F-38

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 — ~~RELATED~~DISCONTINUED ~~PARTY~~OPERATIONS ~~TRANSACTIONS~~ AND SALES OF ABL CHICAGO (cont.)

e)Related ~~Amounts~~party ~~due~~transactions ~~to a related party~~(cont.)

~~Amounts~~d) ~~due~~Loan toreceivable afrom related ~~party consists of balances with the~~ parties ~~listed below, arising from other expenses paid on behalf of ABL Chicago:~~

	December 31, 2025		June 30, 2025
	June 30, 2025
Amounts due to ABL Wuhan	$	260,144		-
Loan receivable from Weship	$	148,000
Loan receivable from ABL LAX		129,741
Total	$	277,741

f)The ~~Summary~~Company ofentered into a loan agreement with related parties’ ~~transactions~~to support working capital needs. The loan bears interest at an annual rate of 8.99%, with the outstanding principal not exceeding $1.0 million. The loan matures within twelve months from the date of execution. In November 2025, the loan to ABL LAX was mutually extended and become repayable on demand.

	For the Three Months Ended December 31,
	2025		2024
Revenue from Weship (a)	$	11,764	$	330
Revenue from ABL Wuhan (a)	$	417,380	$	22,379
Revenue from ABL Shenzhen (a)	$	212,424	$	252,518
Rental income from Weship (c)	$	76,182	$	81,542
Cost of revenue charged by Weship (b)	$	127,003	$	169,098
Cost of revenue charged by Intermodal (e)	$	205,630	$	168,544
Cost of revenue charged by ABL Wuhan (f)	$	22,998	$	18,678
Interest expense charge by ABL Shenzhen (see Note 12)	$	2,418	$	—

e) Summary of related parties’ transactions

	For the Six Months Ended December 31,
	Nine Months Ended March 31,				Three Months Ended March 31,
	2025		2024
	2026		2025		2026		2025
Revenue from Weship (a)	$	1115,~~764~~435	$	15,~~762~~341	$	3,671	$	3,579
Revenue from ABL Wuhan (a)	$	~~742~~831,~~992~~021	$	~~447~~692,~~206~~212	$	88,030	$	245,006
Revenue from ABL Shenzhen (a)	$	~~464~~530,~~387~~888	$	~~308~~507,~~026~~801	$	66,501	$	199,775
Revenue from ABL LAX (a)	$	2,585	$	—-	$	-	$	-
Rental income from Weship (c)	$	~~152~~155,~~364~~344	$	~~178~~255,~~854~~483	$	2,979	$	76,629
Rental income from Intermodal (d)	$	48,~~099~~199	$	—11,963	$	4,099	$	11,963
Cost of revenue charged by Weship (b)	$	~~377~~402,~~319~~846	$	~~515~~661,~~113~~763	$	25,526	$	146,650
Cost of revenue charged by Intermodal (e)	$	~~359~~386,~~966~~468	$	~~341~~494,~~009~~333	$	26,502	$	153,324
Cost of revenue charged by ABL Wuhan (f)	$	8496,~~852~~310	$	64127,~~928~~548	$	11,459	$	62,620
Interest expense charge by ABL Shenzhen (see Note 12)	$	4,836	$	—
Cost of revenue charged by ABL LAX (f)	$	-	$	2,736		-	$	2,736
Interest expenses charged by ABL Shenzhen	$	6,448	$	-		1,612	$	-

During the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, the Company had the following transactions with its related parties — Weship, ABL Wuhan, ABL Shenzhen, ABL LAX and Intermodal

(a)

The Company provides logistic forwarding services to Weship, ABL Wuhan and ABL Shenzhen and charges Weship, ABL Wuhan and ABL Shenzhen at its regular market rate for the services provided.

(b)

Weship is one of the Company’s vendors for truck delivery service.

(c) The Company subleased portion of its warehouse space to Weship for rental income. The Company subleased its warehouse in Chicago to Weship in July 2023 and again for the period from January 2024 to ~~December~~February ~~2025~~12, 2026. The Company also subleased another warehouse with monthly rent of $6,500 from August 01, 2023 to October 31, 2024.

	(d)	The Company subleased portion of its warehouse space to Intermodal for ~~six~~nine months ended ~~December~~February 3112, ~~2025~~2026.
	(e)	Intermodal is one of the Company’s vendors, providing truck delivery service and provides ~~labour~~labor forces.

(f)

ABL Wuhan provides labor force and certain cross-border freight consolidation and forwarding services and is one of our cross-border freight consolidation and forwarding service providers.

F-39

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 — ~~RELATED~~DISCONTINUED ~~PARTY~~OPERATIONS ~~TRANSACTIONS~~ AND SALES OF ABL CHICAGO (cont.)

g)Related ~~Due~~party totransactions ~~shareholders~~(cont.)

	December 31, 2025		June 30, 2025
Due to shareholders, beginning	$	—	$	—
Addition		174,626		—
Due to shareholders, end	$	174,626	$	—

f) Salaries and employee benefits paid to major shareholders

The balance with the shareholders is unsecured, interest free, and due on demand. The Company had balance of due to shareholder Henry Liu of $87,313 and nil and Shuai Li of $87,313 and nil as of December 31, 2025 and June 30, 2025, respectively.

	Nine Months Ended March 31,				Three Months Ended March 31,
	2026		2025		2026		2025
Mr. Henry Liu	$	46,238	$	53,492	$	4,007	$	19,707
Mr. Shuai Li		52,828		61,299	$	4,434		22,584
Total	$	99,066	$	114,791	$	8,441	$	42,291

~~h) Salaries and employee benefits paid to major shareholders~~Transaction

	For the Three Months Ended December 31,
	2025		2024
Mr. Henry Liu	$	19,708		11,262
Mr. Shuai Li		22,584		12,905
Total	$	42,292		24,167

On February 12, 2026, the sale of 100% of the issued and outstanding shares of ABL Chicago was duly approved and adopted by the Company’s shareholders. Accordingly, the Company consummated the transfer of the ABL Chicago business. Immediately prior to the Transaction, the Company forgave $3,402,808 of amounts due from ABL Chicago. The Company recorded a gain on the sale of the ABL Chicago business in the amount of $2,556,315 as follows:

	For the Six Months Ended December 31,
Cash consideration for sale of ABL Chicago	$	1
	2025		2024
Less: book value of assets sold:
Mr. Henry Liu	$	42,231		33,785
Cash		167,536
Mr. Shuai Li		48,394		38,715
Accounts receivable – third parties, net		1,078,847
Total	$	90,625		72,500
Accounts receivable – related party, net		358,246
Prepaid expenses and other as sets		337,616
Other receivable – related parties		1,141,959
Loan receivable – related parties		386,541
Contract assets		43,365
Investment in other entity		15,741
Property and equipment, net		132,366
Right of use operating lease assets, net		1,697,873
Right of use financing lease assets, net		71,692
Net book value of assets sold		5,431,782
Add: Liabilities assumed by buyer
Accounts payable– third parties		1,907,730
Accounts payable– related party		153,353
Accrued expenses and other liabilities		794,091
Obligations under operating leases		2,150,449
Obligations under financing leases		92,323
Tax payable		79,825
Other loan payable		2,243,159
Amounts duo related party		260,144
Amounts due to shareholder		182,846
Amounts due to ultimate holding company		3,402,808
Loan payable to related party		124,176
Total liabilities assumed		11,390,904
Less: Amounts due from ABL Chicago		3,402,808
Gain on Sale of ABL Chicago	$	2,556,315

~~NOTE~~Management 16has ~~— TAXES~~determined that there are no current federal or state income taxes payable in connection with the sale of ABL Chicago, after considering the Company’s tax basis in the stock of ABL Chicago as well as the Company’s projected tax losses. Further, if needed, the Company has net operating loss carryforwards that are available to offset any tax liability.

Corporate Income Taxes

Before the Reorganization, the Company was elected to be taxed as an “S Corporation” under the provisions of the Internal Revenue Code and comparable state income tax law. As an S Corporation, the Company is not subject to Federal income tax and Illinois State tax. Taxable income “pass through” to the personal tax returns of the owners. However, Illinois allows subchapter S corporations to elect to pay the Pass-through Entity (“PTE”) tax at entity level for tax years ending on or after December 31, 2021 and beginning prior to January 1, 2026. The PTE tax rate is equal to 4.95% of the taxpayer’s net income for the taxable year. The S corporation making the election is liable for paying the PTE tax, and the shareholders will receive credit for the amount of PTE tax credit paid but shall be liable to pay any remaining tax based on their share of the pass-through entity’s income and credits. Illinois also taxes 1.5% replacement tax on S corporation’s net taxable income.

The Company terminated its status as a Subchapter S Corporation as of September 23, 2023, in connection with its Reorganization. As a C Corporation, the Company combined statutory income tax rate is 28% in each period, representing a U.S. federal income tax rate of 21.0% and 7% state income tax for Illinois. Also, as a C Corporation, the Company is subjected to Illinois State replacement tax at rate of 2.5% and no PTE tax is applicable.

Under the PRC Enterprise Income Tax Law (the “EIT Law”), the standard enterprise income tax rate for domestic enterprises and foreign invested enterprises is 25%.

F-40

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 16 — ~~TAXES~~STOCKHOLDERS’ ~~(cont.)~~EQUITY

~~Corporate~~About ~~Income~~ABL ~~Taxes (cont.)~~Chicago

AsABL ofChicago ~~December~~is ~~31,~~a ~~2025 and~~U.S.-based ~~June~~integrated ~~30,~~cross-border ~~2025,~~supply ~~the~~chain ~~Company~~solution ~~did~~provider ~~not~~with ~~have~~a anstrategic ~~accrued~~focus ~~liability~~on ~~for~~the ~~uncertain~~Asian ~~tax~~market ~~positions~~including ~~and~~China. ~~does~~We ~~not~~primarily ~~anticipate~~provide customized ~~recognition~~cross-border ofocean ~~any~~freight ~~significant liabilities~~solutions ~~for~~and ~~uncertain~~airfreight ~~tax~~solutions ~~positions~~in ~~during~~ the ~~next 12 months~~U.S. ~~For~~that ~~the~~specifically ~~period~~cater ~~ended~~to ~~December~~our ~~31,~~customers’ ~~2025~~ requirements and ~~2024,~~needs noin ~~amounts~~transporting ~~were incurred~~goods ~~for~~into ~~income~~the ~~tax uncertainties or interest and penalties~~U.S. ~~The~~We ~~Company~~offer isa ~~currently~~wide ~~not~~variety ~~aware~~ of ~~any~~integrated ~~issues~~services under ~~review~~our ~~that~~cross-border ~~could~~ocean freight solutions ~~result~~and incross-border ~~significant~~airfreight ~~payments~~solutions, ~~accruals,~~including or(i) ~~material~~cross-border ~~deviation~~freight ~~from~~consolidation ~~its~~and ~~position.~~forwarding ~~The~~services, ~~Company’s~~(ii) ~~tax years~~customs ~~since its formation~~clearance ~~remain~~services, ~~subject~~(iii) towarehousing ~~possible~~and ~~income~~distribution ~~tax~~services ~~examination~~and by(iv) ~~its~~U.S. ~~major~~domestic ~~taxing~~ground ~~authorities~~transportation ~~for all periods~~services.

The provision for income tax for the three months ended December 31, 2025 and 2024 consists of the following:

	For the Three Months Ended December 31,
	2025			2024
Current income tax expense	$	46,554			—
Deferred income tax credit		(1,505	)		—
Total income tax expense	$	45,049			—

The following table reconciles the statutory tax rate to the Company’s effective tax the three months ended December 31, 2025 and 2024:

	For the Three Months Ended December 31,
	2025			2024
Loss before tax	$	(1,538,632	)	$	(1,946,820	)
Statutory state tax rate		21	%		21	%
Income tax credit at the federal statutory rate		(323,113	)		(408,832	)
Illinois state tax/PET tax credit		(109,295	)		(120,596	)
Illinois replacement tax credit		(39,034	)		(43,070	)
Change in valuation allowance		504,611			585,198
Foreign tax rate differential		477			(12,700	)
Non-deductible expense		11,403			—
Total income tax expense	$	45,049		$	—

The provision for income tax for the six months ended December 31, 2025 and 2024 consists of the following:

	For the Six Months Ended December 31,
	2025			2024
Current income tax expense	$	104,533			—
Deferred income tax (credit) expense		(23,494	)		89,581
Total income tax expense	$	81,039			89,581

The following table reconciles the statutory tax rate to the Company’s effective tax the six months ended December 31, 2025 and 2024:

	For the Six Months Ended December 31,
	2025			2024
Loss before tax	$	(2,859,858	)	$	(3,192,646	)
Statutory state tax rate		21	%		21	%
Income tax credit at the federal statutory rate		(600,570	)		(670,456	)
Illinois state tax/PET tax credit		(203,361	)		(200,066	)
Illinois replacement tax credit		(72,629	)		(71,452	)
Change in valuation allowance		937,898			1,048,676
Tax effect on other tax jurisdiction		1,380			(17,121	)
Non-deductible expense		18,321			—
Total income tax expense	$	81,039		$	89,581

F-41

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 16 — TAXES (cont.)

Corporate Income Taxes (cont.)

The Company’s deferred tax assets and liabilities consist of the following:

	December 31, 2025			June 30, 2025
Deferred tax assets:
Allowance for credit loss	$	47,705		$	24,940
Allowance for credit loss - loan receivable		87,840			-
Lease liability – operating		744,087			1,105,147
Lease liability – financing		29,589			34,557
Non-capital loss carried forward		2,496,368			1,569,089
Valuation allowance		(2,754,251	)		(1,816,352	)
Total deferred tax assets	$	651,338		$	917,381
Deferred tax liabilities:
Right of use assets – operating	$	(606,907	)	$	(880,513	)
Right of use assets – financing		(23,362	)		(28,608	)
Intangible asset – license		(80,675	)		(91,360	)
Total deferred tax liabilities		(710,944	)		(1,000,481	)
Deferred tax liabilities, net	$	(59,606	)	$	(83,100	)

As of December 31, 2025 and June 30, 2025, the accumulated tax losses of subsidiaries incorporated in the U.S. of approximately $7.5 million and $4.7 million, are allowed to be carried forward to offset against future taxable profits. The carry forward of non-capital losses in the U.S. generally has no time limit, but the loss could be only offset up to 80% of taxable income in a given year. The carry forward of net operating loss generated by the subsidiaries incorporated in the PRC, subject to the agreement of the PRC tax authorities, of approximately $0.8 million and $0.6 million as of December 31, 2025 and June 30, 2025 can be carried forward for 5 years.

NOTE 17 — STOCKHOLDERS’ EQUITY

Common Stocks

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

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

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

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

F-42

LAKESIDE HOLDING LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 17 — STOCKHOLDERS’ EQUITY (cont.)

Common Stocks (cont.)

Private offering

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

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

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

On December 15, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 8,400,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.70 per share, resulting in total gross proceeds of approximately $5,880,000. Upon closing of the private offering, the Company issued 8,400,000 common shares. As of ~~December~~March 31, ~~2025~~2026, a total of $21,~~530~~427,~~508~~769 of the gross proceeds related to these shares had not yet been received by the Company. Therefore, the Company recorded as an increase to common stock of $840, additional paid-in capital of $5,879,160 and subscription receivable of $21,~~530~~427,~~508~~769 on the unaudited condensed consolidated balance sheet in connection with this private offering.

On December 29, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 5,600,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.14 per share, resulting in total gross proceeds of approximately $784,000. Upon closing of the private offering, the Company issued 5,600,000 common shares and recorded as an increase to common stock of $560 and additional paidF-~~in capital of $783,440 on the unaudited condensed consolidated balance sheet.~~41

Convertible debts conversion

During the six months ended December 31, 2025, holders of the Company’s convertible notes elected to convert an aggregate principal amount of $661,536 into 820,330 shares of the Company’s common stock pursuant to the original terms of the note agreements. The conversions resulted in a reduction of the carrying amount of convertible debt by $512,733, which was reclassified to stockholders’ equity. Accordingly, the Company recorded an increase to common stock of $82 (reflecting the par value of shares issued) and an increase to additional paid-in capital of $512,651.

F-43

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1716 — STOCKHOLDERS’ EQUITY (cont.)

Common Stocks (cont.)

Private offering (cont.)

On December 29, 2025, the Company entered into Securities Purchase Agreements with certain investors for the issuance and sale of an aggregate of 5,600,000 shares of its common stock, par value $0.0001 per share (the “Shares”), through a private offering. The Shares were sold at a purchase price of $0.14 per share, resulting in total gross proceeds of approximately $784,000. Upon closing of the private offering, the Company issued 5,600,000 common shares and recorded as an increase to common stock of $560 and additional paid-in capital of $783,440 on the unaudited condensed consolidated balance sheet.

Convertible debts conversion

During the nine months ended March 31, 2026, holders of the Company’s convertible notes elected to convert an aggregate principal amount of $661,536 into 820,330 shares of the Company’s common stock pursuant to the original terms of the note agreements. The conversions resulted in a reduction of the carrying amount of convertible debt by $512,733, which was reclassified to stockholders’ equity. Accordingly, the Company recorded an increase to common stock of $82 (reflecting the par value of shares issued) and an increase to additional paid-in capital of $512,651.

Common Shares Issued for Service

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

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

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

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

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

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

F-42

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 16 — STOCKHOLDERS’ EQUITY (cont.)

Common Stocks (cont.)

Common Shares Issued for Service (cont.)

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

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

For the ~~six~~nine months ended ~~December~~ March 31, ~~2025~~2026, the Company issued 5,300,000 shares of its common stock in connection with consulting agreements. In connection with these issuances, the Company recognized consulting expense of $~~940~~2,~~860~~089,460, recorded prepaid consulting services of $32,~~481~~333,~~840~~240, and increased additional paid-in capital by $4,422,170 during the period.

As of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, 34,427,559 and 10,500,000 common shares were issued and outstanding, respectively, with par value of $0.0001.

Representative’s Warrants

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

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

As of ~~December~~March 31, ~~2025~~2026, 75,000 warrants in connection with IPO funding was outstanding, with an exercise price of $4.5 and remaining life of 3.525 years.

F-4443

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1716 — STOCKHOLDERS’ EQUITY (cont.)

Common stock purchase warrants

As of ~~December~~March 31, ~~2025~~2026, 318,827 warrants in connection with the first closing of the first tranche of the Notes were outstanding, with an exercise price of $1.9098 and remaining life of 43.1893 years.

As of ~~December~~March 31, ~~2025~~2026, 202,082 warrants in connection with the second closing of the first tranche of the Notes were outstanding, with an exercise price of $1.929 and remaining life of 4.3106 years.

Subscription receivable

During the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, the Company entered into a private placement agreement. As of ~~December~~March 31, ~~2025~~2026, a total of $21,~~530~~427,~~508~~769 of the gross ~~proceeds~~ proceeds related to these shares had not yet been received by the Company.

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

Statutory reserves

The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve as determined pursuant to PRC statutory laws totaled approximately $8688,~~099~~ 662 and $63,416 as of ~~December~~March 31, ~~2025~~2026 and June 30, 2025, respectively.

NOTE 1817 — LOSS PER SHARE

For the three and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, all potentially dilutive securities, including the convertible debenture and warrants, were excluded ~~from~~ from the calculation of diluted loss per share because the Company was in a loss position. Their inclusion would have been antidilutive.

	For the Three Months Ended December 31,
	Nine Months Ended March 31,						Three Months Ended March 31,
	2025			2024
	2026			2025			2026			2025
Net loss attributable to the Company	$	(1,583,681	)		(1,946,820	)
Net loss from continuing operations	$	(3,452,877	)	$	(1,529,602	)	$	(1,528,811	)	$	(376,960	)
Weighted average number of common shares outstanding – Basic and Diluted		19,569,950			7,500,000
Net income (loss) from discontinued operation		654,388			(2,823,421	)		1,671,219			(693,836	)
Loss per share – Basic and Diluted	$	(0.08	)		(0.26	)
Net (loss) income attributable to the Company	$	(2,798,489	)	$	(4,353,023	)	$	142,408		$	(1,070,796	)
Weighted average number of common shares outstanding – Basic and Diluted		22,826,266			7,500,000			34,427,559			7,500,000
Basic and Diluted Net Income (Loss) per Common Share
Continuing operations	$	(0.15	)	$	(0.20	)	$	(0.04	)	$	(0.05	)
Discontinued operations, net of tax	$	0.03		$	(0.38	)	$	0.05		$	(0.09	)
Total Basis and diluted earnings (loss) per share attributable to the Company	$	(0.12	)	$	(0.58	)	$	0.01		$	(0.14	)

	For the Six Months Ended December 31,
	2025			2024
Net loss attributable to the Company	$	(2,940,897	)		(3,282,227	)
Weighted average number of common shares outstanding – Basic and Diluted		17,151,720			7,500,000
Loss per share – Basic and Diluted	$	(0.17	)		(0.44	)

F-44

F-45

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 19 18 — SEGMENT REPORTING

The Company follows Financial Accounting Standards Board (FASB”) Accounting Standards codification “ASC”) Topic 280, Segment Reporting, as amended by Accounting Standards Update (“ASU”) No.2023-07. Segment Reporting Topic 280: Improvements to Reportable Segment Disclosures, the Company continually monitors the reportable segments for changes in fact and circumstances to determine whether changes in the identification or aggregation of operating segments are necessary. An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.

The Company’s chief operating decision maker (“CODM”) is Mr. ~~Henry~~Yang ~~Liu~~Li, the ~~CEO~~Principal Executive Officer. The CODM regularly reviews financial information, including segment revenue, gross profit, significant segment expenses (selling expenses and general and administrative expenses), segment net income (loss), and segment assets to evaluate segment performance and allocate resources accordingly.

Based on internal management reporting and assessment, the Company concludes that it has two reporting segments listed as below for the ~~six~~nine months ended ~~December~~March 31, 2025 ~~and 2024~~. The Company and its subsidiaries are located either in the U.S. or China. The Company is primarily engaged in the business of providing customized cross-border freight solutions in the U.S. and distribution of pharmaceutical products in China. Segment net income (loss) excludes general corporate administrative expenses and selling expenses including corporate functional costs relating to professional expenses, payroll expense of management, and interest expenses in connection with convertible debt that are managed centrally at the corporate level and are excluded from the measure of segment performance reviewed by the CODM.

~~The~~During ~~summary~~the nine months ended March 31, 2026, the Company completed disposal of ~~key~~its ~~information~~customized cross-border freight solutions in the U.S segment (the “Disposed bySegment”). ~~segments~~The ~~for~~results of operations of the ~~six~~Disposed ~~months~~Segment ~~ended~~have ~~December~~been 31classified as discontinued operations in the condensed consolidated financial statements for all periods presented, ~~2025~~in ~~was~~accordance aswith ~~follows:~~ ASC 205-20. See Note 15. “Discontinued Operations” for additional information regarding the ABL Chicago disposal.

	Cross-border freight solutions (U.S.)			Pharmaceutical distribution (China)		Holding			Total for the six months ended December 31, 2025
Revenue from external customers	$	8,110,140			3,780,654		—			11,890,794
Revenue from related parties	$	1,221,728			—		—			1,221,728
Cost of revenue	$	8,108,196			1,985,266		—			10,093,462
Gross profit	$	1,223,672			1,795,388		—			3,019,060
Selling expense	$	—			1,074,293		18,951			1,093,244
General and administrative expense	$	2,132,762			356,740		1,828,511			4,318,013
Depreciation & amortization	$	78,903			23,172		43,642			145,717
Income tax expense	$	—			81,039		—			81,039
Long-lived assets	$	2,297,112			418,551		373,566			3,089,229
Segment assets	$	6,421,111			3,725,331		14,153,766			24,300,208
Segment profit (loss)	$	(1,016,831	)		222,675		(2,146,741	)		(2,940,897	)

Following the disposal, the Company operates as a single reporting segment consisting of distribution of pharmaceutical products in China. Prior period segment information has been recast to conform to the current period presentation.

~~The~~Segment ~~summary~~net ofincome ~~key~~(loss) excludes ~~information~~general bycorporate ~~segments~~administrative expenses and selling expenses including corporate functional costs relating to professional ~~for~~expenses, payroll expense of management, and interest expenses in connection with convertible debt that are managed centrally at the ~~six~~corporate level ~~months~~and ~~ended~~are ~~December~~excluded ~~31,~~from ~~2024~~the ~~was~~measure asof ~~follows:~~ segment performance reviewed by the CODM.

	Cross-border freight solutions (U.S.)			Pharmaceutical distribution (China)			Others			Total for the six months ended December 31, 2024
Revenue from external customers	$	6,702,063		$	218,086		$	–		$	6,920,149
Revenue from related parties	$	756,994		$	–		$	–		$	756,994
Cost of revenue	$	7,075,044		$	121,791		$	–		$	7,196,835
Gross profit	$	384,013		$	96,295		$	–		$	480,308
Depreciation & amortization	$	86,685		$	447		$	–		$	87,132
Income tax provision	$	89,581		$	–		$	–		$	89,581
Capital expenditure	$	181,963		$	74,351		$	–		$	256,314
Long-lived assets	$	4,582,950		$	816,826		$	–		$	5,399,776
Segment assets	$	7,092,574		$	1,949,879		$	794,673		$	9,837,126
Segment loss	$	(2,129,585	)	$	(334,567	)	$	(818,075	)	$	(3,282,227	)

The summary of key information by segments for the nine months ended March 31, 2026 was as follows:

F-46

	Pharmaceutical distribution (China)		Holding			Total for the nine months ended March 31, 2026
Revenue from external customers	$	5,108,387	$	-		$	5,108,387
Cost of revenue	$	2,333,460	$	-		$	2,333,460
Gross profit	$	2,774,927	$	-		$	2,774,927
Selling expense	$	1,785,669	$	19,128		$	1,804,797
General and administrative expense	$	481,389	$	3,401,777		$	3,883,166
Depreciation & amortization	$	36,556	$	65,475		$	102,031
Income tax expense	$	126,661	$	(16,029	)	$	110,632
Long-lived assets	$	400,377	$	334,612		$	734,989
Segment assets	$	3,774,605	$	14,006,046		$	17,780,651
Segment profit (loss)	$	246,745	$	(3,699,622	)	$	(3,452,877	)

The summary of key information by segments for the nine months ended March 31, 2025 was as follows:

	Pharmaceutical distribution (China)		Holdings			Total for the nine months ended March 31, 2025
Revenue from external customers	$	715,362	$	–		$	715,362
Cost of revenue	$	240,966	$	–		$	240,966
Gross profit	$	474,396	$	–		$	474,396
Depreciation & amortization	$	4,262	$	32,946		$	37,208
General and administrative expense	$	246,685	$	1,556,794		$	1,803,479
Income tax provision	$	26,608	$	(8,014	)	$	18,594
Capital expenditure	$	155,991	$	–		$	155,991
Long-lived assets	$	348,179	$	493,157		$	841,336
Segment assets	$	1,090,942	$	2,224,881		$	3,315,823
Segment profit (loss)	$	70,616	$	(1,600,218	)	$	(1,529,602	)

F-45

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2019 — COMMITMENTS AND CONTINGENCIES

Contractual Commitments

As of ~~December~~March 31, ~~2025~~2026, the Company’s contractual obligations consist of the following:

Contractual Obligations	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Operating lease obligations	$	2214,~~923,751~~004	$	183,~~446,467~~646		194,~~191,374~~806		~~285~~35,~~910~~552		—
Finance lease obligations		109,026		47,667		43,312		18,047		—
Vehicle loans		67,201		16,483		30,431		20,287		—
Vehicle loans		145,413		51,613		67,802		25,998		—
Other loans		169,216		169,216		—-		—		—
Equipment loans		16,882		15,434		1,448		—		—
Convertible debts		70,000		70,000		—		—		—
Other loans		2,497,286		2,469,950		27,336		—		—
Total	$	520,421	$	339,345		125,237		55,839		—
Convertible debts		105,000		105,000		—		—		—
Loan payable to a related party		124,176		—		124,176		—		—
Total	$	5,921,534	$	4,136,131		1,455,448		329,955		—

Contingencies

The Company may be involved in certain legal proceedings, claims and disputes arising from the commercial operations, which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on the Company’s unaudited consolidated financial position or results of operations or liquidity as of ~~December~~March 31, ~~2025~~2026.

NOTE 2120 — ASSETS ACQUISITION

Hupan Pharmaceutical (Hubei) Co., Ltd acquisition

On November 5, 2024, the Company entered into an equity transfer agreement (the “Equity Transfer Agreement”) with Hubei Haoyaoshi Zhenghe Pharmacy Chain Co., Ltd and Hubei Huayao Pharmaceutical Co., Ltd to acquire 100% of the equity interests in Hupan Pharmaceutical (Hubei) Co., Ltd (“Hupan Pharmaceutical”), a pharmaceutical distribution and supply chain service provider headquartered in Wuhan, China.

Pursuant to the Equity Transfer Agreement, Sichuan Hupan will acquire the entirety of the equity interests that Hubei Haoyaoshi Zhenghe Pharmacy Chain Co., Ltd and Hubei Huayao Pharmaceutical Co., Ltd. hold in Hupan Pharmaceutical, for a total consideration of RMB4.0 million (US$552,730).

The acquisition was accounted for as an asset acquisition because the acquisition was related to the pharmaceutical distribution license, a single asset. The acquisition was closed on November 21, 2024. The following table summarizes the fair value of the identifiable assets:

	Amount

Total consideration in cash	$	552,730

Assets acquired and liabilities assumed:
Cash acquired		9
Original paid in capital paid to Hupan Pharmaceutical		276,365
Intangible assets – license of pharmaceutical distribution		418,867
Other payables		(37,794	)
Deferred tax liabilities		(104,717	)
Total assets acquired	$	552,730

The Company recorded impairment of intangible assets of nil for the three and ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025.

~~F-47~~NOTE 21 — SUBSEQUENT EVENTS

~~LAKESIDE~~The ~~HOLDING~~Company ~~LIMITED~~evaluated all ~~NOTES~~events TOand ~~CONDENSED~~transactions ~~CONSOLIDATED~~that ~~FINANCIAL~~occurred ~~STATEMENTS~~after March 31, 2026 up through the date the unaudited condensed consolidated financial statements were issued, and unless disclosed below, there are not any material subsequent events that require disclosure in these unaudited condensed consolidated financial statements.

~~(UNAUDITED)~~F-46

NOTE 22 — SUBSEQUENT EVENTS

The Company evaluated all events and transactions that occurred after December 31, 2025 up through the date the unaudited condensed consolidated financial statements were issued, and unless disclosed below, there are not any material subsequent events that require disclosure in these unaudited condensed consolidated financial statements.

Proposed disposal of a subsidiary

On January 9, 2026, the Board of Directors recommended the sale of 100% of the issued and outstanding shares of American Bear Logistics Corp. (“ABL Chicago”) to an unaffiliated third party for nominal consideration of $1.00, with the purchaser assuming all liabilities of ABL Chicago. The decision was driven by ABL Chicago’s recurring operating challenges and negative net asset position. The Company determined that divesting ABL Chicago will allow management to focus resources on core operations and eliminate exposure to ABL Chicago ’s ongoing and contingent liabilities.

The transaction is subject to the satisfaction of customary closing conditions, including stockholder approval at the Annual Meeting scheduled for February 12, 2026. On February 12, 2026, the sale of 100% of the issued and outstanding shares of ABL Chicago was duly approved and adopted. The closing is anticipated to occur in the third quarter of fiscal 2026.

As of December 31, 2025, the major classes of assets and liabilities of ABL Chicago to be disposed of were as follows:

	Amount
Cash	$	151,691
Accounts receivable, net		2,157,121
Prepaid expenses and other current assets		1,880,187
Property and equipment, net		149,916
Right-of-use assets - operating lease and finance lease		2,066,455
Other assets		15,741
Total Asset	$	6,421,111
Accounts payable and accrued expenses		2,783,603
Lease liabilities - operating lease and finance lease		2,536,643
Loan payable		2,133,313
Other liabilities		3,841,579
Total liabilities	$	11,295,138

As of December 31, 2025, ABL Chicago had a net liability position of approximately $4.9 million.

Because the disposal would be completed after the period end, no adjustment has been made to the accompanying condensed consolidated financial statements. The Company will evaluate the accounting impact of the transaction, including any gain or loss on disposal and discontinued operations presentation, upon closing.

Nasdaq Minimum Bid Price Notification

On January 7, 2026, the Company received a deficiency notice from Nasdaq indicating that its common stock failed to maintain a minimum bid price of $1.00 per share over the previous 30 consecutive business days, as required by Nasdaq Listing Rule 5550(a)(2). The Company has 180 calendar days, or until July 7, 2026, to regain compliance by maintaining a closing bid price of at least $1.00 for a minimum of ten consecutive business days.

If compliance is not achieved by the deadline, the Company may be eligible for an additional 180-day grace period, provided it meets other listing requirements and signals its intent to cure the deficiency, potentially through a reverse stock split. Failure to regain compliance or qualify for an extension will result in a delisting notification, which the Company may appeal. The notice currently has no immediate impact on the listing or trading of the Company’s common stock.

Authorized common stock and preferred stock

On February 12, 2026, the Company’s stockholders approved an amendment to the Company’s Articles of Incorporation to increase the authorized shares of Common Stock to 2,000,000,000 shares and authorize 1,000,000,000 shares of “blank check” preferred stock. This authorization grants the Board of Directors the express authority to determine the voting rights, designations, preferences, and qualifications of such preferred stock without further stockholder action.

F-48

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our ~~consolidated~~unaudited condensed consolidated financial statements and the related notes included elsewhere in this Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. All amounts included herein with respect to the three and ~~six~~ nine months ended ~~December~~ March 31, ~~2025~~2026 and ~~2024~~2025 are derived from our ~~audited~~unaudited condensed consolidated financial statements included elsewhere in this Report. Our financial statements have been prepared in accordance with the U.S. GAAP.

Overview

WePrior ~~are~~to February 12, 2026, we operated as a U.S.-based integrated cross-border supply chain ~~solution~~solutions provider with a strategic focus on the Asian market, including China., Wethrough ~~primarily~~ABL ~~provide~~Chicago, ~~customized cross-border~~and ~~ocean~~were ~~freight~~also ~~solutions~~engaged ~~and~~in ~~airfreight~~the ~~solutions~~distribution of pharmaceutical products in ~~the~~China Uthrough Hupan Pharmaceutical.~~S. that~~ On ~~specifically~~February ~~cater~~12, 2026, we transferred the operations of ABL Chicago to ~~our~~an ~~customers’~~unrelated ~~requirements~~ third party, which obtained operational control and substantially ~~needs~~all ineconomic ~~transporting~~interests ~~goods~~associated ~~into~~with the Ubusiness.~~S. We~~ ~~offer~~Following athe ~~wide~~transfer, ~~variety~~we ceased substantive involvement in ABL Chicago’s operations. Accordingly, the operations of ~~integrated~~ABL ~~services~~Chicago ~~under~~were classified as discontinued operations in our ~~cross-border~~condensed ~~ocean~~consolidated ~~freight solutions~~financial ~~and~~statements. ~~cross-border~~The ~~airfreight~~disposal represents ~~solutions,~~a ~~including~~strategic ~~(i) cross-border~~shift ~~freight~~in ~~consolidation~~our business operations and ~~forwarding~~allows ~~services,~~management ~~(ii) customs clearance~~to ~~services,~~further ~~(iii) warehousing~~streamline resources and ~~distribution~~focus ~~services~~on the development and ~~(iv) U.S. domestic~~expansion ~~ground~~of ~~transportation~~our ~~services~~pharmaceutical distribution business.

~~Founded~~Our incontinuing ~~Chicago, Illinois~~operations inare ~~2018,~~focused weon ~~are~~the andistribution ~~Asian~~of ~~American-owned~~pharmaceutical ~~business~~products ~~rooted~~ in ~~the~~China Uthrough Hupan Pharmaceutical.~~S. with~~ ~~in-depth~~Revenue ~~understanding~~from ofcontinuing ~~both~~pharmaceutical operations ~~the~~was ~~U.S. and~~primarily ~~Asian international~~derived ~~trading~~from infusion products, specialty prescription drugs, and ~~logistics~~medical ~~service~~nutrition ~~markets~~products. ~~Our~~We ~~customers~~procure ~~are~~products from ~~typically~~manufacturers, ~~Asia-~~store the products at designated warehouses, and ~~U.S.-based~~distribute ~~logistics~~them ~~service~~to ~~companies~~hospitals, ~~serving large~~distributors ~~e-commerce~~and ~~platforms~~other healthcare providers, primarily ~~social~~through ~~commerce~~agents. ~~platforms~~The ~~and~~Company ~~manufacturers~~operates towithin ~~sell~~a ~~and~~highly ~~transport~~regulated ~~consumer~~healthcare environment and ~~industrial~~generates ~~goods~~revenue ~~made~~through insales ~~Asia~~to ~~into~~distributors, ~~the~~hospitals, Uand clinics.S.

WeThe ~~have~~Company ~~established~~continually anevaluates potential ~~extensive~~opportunities ~~collaboration~~to ~~network~~expand and diversify its business operations. Smart Reserve Holding LTD and Smart Reserve Inc were formed in connection with the Company’s preliminary evaluation of ~~service~~potential ~~providers,~~opportunities ~~including~~relating ~~global~~to ~~freight~~digital ~~carriers~~asset ~~for~~business ~~our~~activities. ~~cross-border~~As ~~freight~~of ~~consolidation~~the ~~and~~date ~~forwarding~~of ~~services~~this asreport, ~~well~~the asCompany ~~domestic~~has ~~ground~~not ~~transportation~~commenced ~~carriers~~any ~~for~~such ~~our~~business Uand has not adopted any concrete operational plan relating thereto.~~S. domestic~~ ~~transportation~~Any future expansion initiatives may be affected by factors including market conditions, capital availability, regulatory developments, ~~services~~operational execution, technological requirements, and management resources.

WeThe ~~operate~~Company’s ~~three~~results ~~massive~~of ~~and hyper-busy~~operations ~~regional~~for ~~warehousing~~the ~~and~~period ~~distribution~~reflect ~~centers in~~ the performance ~~U.S.,~~of inits ~~Illinois~~continuing ~~and~~pharmaceutical ~~Texas.~~distribution Inbusiness, ~~addition~~and ~~to our self-operated regional centers~~accordingly, weprior ~~maintain~~period ~~close~~results ~~contact~~have ~~with~~been ~~warehouses~~recast ~~and~~to ~~distribution~~present the ~~terminals~~disposed inbusiness ~~almost~~as ~~all~~discontinued ~~transportation~~operations ~~hubs~~where ~~in the U~~applicable.~~S. which we~~ ~~have~~Management ~~cooperated~~evaluates in the ~~past~~performance toof ~~support~~ the ~~warehousing~~continuing ~~and~~operations ~~distributing~~based on ~~services~~revenue ofgrowth, ~~our~~gross ~~cross-border freight in case such freight requires storage~~margin, ~~fulfilment,~~operating ~~transloading~~efficiency, ~~palletizing, packaging or distribution in states other than Illinois~~ and ~~Texas~~working capital.

Leveraging our strong cross-border supply chain service capabilities, extensive service provider network of cross-border freight carriers and U.S. domestic ground transportation carriers, massive and hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build up our brand and reputation and have achieved fast growth since our inception.

For the three months ended December 31, 2025 and 2024, our revenues amounted to approximately $7.0 million and approximately $3.6 million, respectively, and our gross profit (loss) amounted to approximately $1.9 million and approximately $(0.1) million during the same periods, respectively.

For the six months ended December 31, 2025 and 2024, our revenues amounted to approximately $13.1 million and approximately $7.7 million, respectively, and our gross profit amounted to approximately $3.0 million and approximately $0.5 million during the same periods, respectively.

Key Factors Affecting Our Results of Operations

We believe the most significant factors that affect our business and results of operations include the following:

~~Our~~Regulatory ~~Ability~~Environment toin ~~Expand Our Customer Base~~China

~~Our~~The ~~results~~pharmaceutical ~~of operations~~industry ~~are~~in ~~dependent~~China ~~upon~~is ~~our~~subject ~~ability~~ to ~~expand~~extensive ~~and~~government ~~maintain~~regulation, ~~our~~including ~~customer~~pricing ~~base.~~controls, Wetendering ~~will~~processes, ~~continue~~and toreimbursement ~~expand~~policies. ~~our customer base to achieve a sustainable~~Government ~~business~~initiatives, ~~growth.~~such Weas ~~aim~~centralized toprocurement ~~attract~~programs ~~new customers~~ and ~~maintain~~healthcare ~~our~~reforms, ~~existing~~may ~~customers.~~affect Weproduct ~~plan~~pricing, tosales ~~improve~~volumes, ~~the quality~~ and ~~expand~~margin ~~the variety of our services to obtain more customers~~levels.

~~During~~Supplier ~~fiscal year 2025, we introduced a new revenue stream through the distribution of pharmaceutical~~ and ~~medical~~Manufacturer products. Under this model, we purchase products directly from manufacturers, store them in designated warehouses, and deliver them to customers’ warehouses or other specified locations. While this business expansion creates opportunities to reach new customers in the healthcare sector. It also exposes us to additional risks compared with our traditional cross-border logistics services. These risks include heightened regulatory and compliance requirements for the handling and distribution of medical products, increased working capital exposure from holding inventory, and greater operational complexity in maintaining product quality and safety. Successfully expanding our customer base in this new segment will depend on our ability to manage these risks effectively while maintaining high service standards and compliance with applicable regulations.Relationships

~~Our~~The ~~Ability~~Company torelies ~~Control~~on ~~Costs~~relationships with pharmaceutical manufacturers and suppliers for product sourcing. Changes in supply terms, pricing arrangements, or product availability may impact revenue and gross margins.

~~Our~~Customer ~~results~~Concentration ~~of operations are affected by our ability to control costs including transportation~~ and ~~delivery~~Hospital costs, warehouse service charges, custom declaration and terminal charges, freight arrangement charges and other overhead cost allocation, which may be subject to factors, including, among other things, fluctuations in wage rates, fuel prices, toll fees, and leasing costs. Effective cost-control measures have a direct impact on our financial condition and results of operations. For example, our cross-border freight carrier and U.S. domestic ground transportation carrier services providers use large quantities of fuel to operate vehicles, and therefore, hence the higher fuel cost incurred by them may causes our higher fee rates cost charged on us by such the service providers. The availability and price of fuel and third-party transportation capacity are subject to political, economic, and market factors that are beyond our control. We also incur a significant amount of costs in relation to transportation and labor. Any unexpected increase in these costs, which is subject to factors beyond our control, could adversely impact our profitability. We have adopted, and expect to adopt, additional cost control measures. However, the measures we have adopted or will adopt in the future may not be as effective as expected. If we are not able to effectively control our costs and adjust the level of fee rates based on operating costs and market conditions, our profitability and cash flow may be adversely affected.Demand

~~With~~A ~~the~~significant ~~introduction~~portion of the ~~our~~Company’s ~~new~~sales ~~pharmaceutical~~is ~~and~~generated ~~medical~~from ~~product~~hospitals ~~distribution~~and ~~business~~large indistributors. ~~fiscal~~Purchasing ~~year 2025~~patterns, ~~our~~tender ~~cost structure has become more complex. Unlike our traditional cross-border logistics services~~cycles, ~~which~~and ~~are~~changes ~~largely variable~~ in ~~nature,~~hospital demand ~~the~~or ~~new~~procurement ~~business~~policies ~~requires~~can uslead to ~~hold~~fluctuations ~~inventory, maintain~~in ~~specialized warehouse conditions, and comply with more stringent product handling standards~~revenue. ~~These~~During ~~factors~~the ~~may~~nine ~~increase~~months ~~fixed operating~~ended ~~costs,~~March ~~including storage~~31, ~~insurance~~2026, ~~and~~we ~~quality~~have ~~control~~generated ~~expenses. Consequently, our ability to control costs in this new business~~revenue ~~segment~~from ~~will~~the ~~depend~~distribution ~~not~~of ~~only~~pharmaceutical onproducts ~~fuel~~from ~~and~~59 ~~labor~~customers, ~~trends~~of ~~but~~which, ~~also~~four oncustomers ~~our~~took ~~efficiency~~over in10% ~~managing~~of ~~inventory~~the ~~turnover and compliance-related expenses~~revenue.

WePricing ~~have~~Pressure ~~implemented,~~ and ~~expect~~ to continue adopting, additional cost-control measures to mitigate these risks. However, such measures may not always be as effective as anticipated. If we are unable to effectively control our operating costs or adjust our pricing in response to changing market conditions, our profitability and cash flows may be adversely affected.Competition

~~Our~~The ~~Ability~~Company tooperates ~~Provide~~in ~~High-quality~~a competitive ~~Services~~market with pressure from both domestic and international pharmaceutical distributors. Competitive pricing dynamics and participation in government bidding processes may compress margins.

Our results of operations depend on our ability to maintain and further enhance our service quality. Together with our network of service providers, we provide integrated cross-border ocean and air freight supply chain solutions and services to our customers. If we or our service providers are unable to provide express delivery services in a timely, reliable, safe and secure manner, our reputation and customer loyalty could be negatively affected. In additional, if our customer service personnel fail to satisfy customer needs or respond effectively to customer complaints, we may lose potential or existing customers and experience a decrease in customer orders, which could have a material adverse effect on our business, financial condition and results of operations.1

2Product types and composition

AsDuring wethe ~~expand~~nine ~~into~~months ~~pharmaceutical~~ended ~~and~~March ~~medical~~31, ~~product distribution~~2026, ~~maintaining~~the ~~high-quality~~pharmaceutical ~~service~~products ~~standards~~we ~~becomes~~distribute ~~even~~mainly ~~more~~consist ~~critical.~~of ~~This~~infusion ~~new business line involves additional operational requirements~~drugs, ~~such~~specialty ~~as temperature-controlled storage~~foods, ~~specialized handling,~~ and ~~compliance~~therapeutic ~~with healthcare product regulations~~drugs. ~~Any lapse in these areas could result in regulatory penalties, product spoilage, or loss of customer trust. Compared to~~The ~~our~~profitability ~~existing~~level ~~logistics operations, the consequences~~ of ~~service~~different ~~failures~~products ~~in this segment could be more severe~~varies, ~~given~~and the ~~sensitive~~proportion ~~nature~~ of ~~medical~~various products ~~and~~affects ~~the~~our ~~higher~~gross ~~expectations~~profit ~~of healthcare customers~~level. ~~Ensuring consistent service quality will therefore require enhanced employee training, strengthened supplier oversight, and continuous monitoring of compliance procedures.~~

~~Strategic~~Accounts ~~Acquisitions~~receivable ~~and Investments~~collection

~~Our~~The ~~results~~current ofpayment ~~operations~~term provided ~~also~~by ~~depend~~us onto our ~~ability~~main tocustomers ~~pursue~~is ~~strategic~~between ~~acquisitions~~60-90 ~~and~~days; ~~investments~~while inthe ~~expanding~~payment ~~our~~term ~~global~~from ~~footprints,~~the ~~diversifying~~supplier ~~our~~is ~~service offerings,~~60 ~~and advancing our technologies~~days. WeThere ~~may~~is ~~selectively~~also ~~pursue~~a ~~mergers,~~situation ~~acquisitions,~~of ~~investments, joint ventures and partnerships~~prepaying ~~that~~payment ~~we believe are strategic and complementary~~ to ~~our~~the ~~operations~~supplier. ~~and~~If ~~technology.~~the ~~However,~~accounts wereceivable cannot ~~assure~~be ~~you~~collected ~~that~~in wea ~~will~~timely ~~make~~manner ~~prudent decisions at all times. Our ability to successfully execute~~ or ~~effectively~~there ~~operate,~~are ~~integrate,~~identifiable ~~leverage~~uncollectible ~~and grow these investments or~~balances, ~~strategic~~our ~~partnerships~~cash ~~could~~flow ~~impact~~in ~~our~~operating ~~results~~activities ofmay ~~operations~~be ~~and~~negatively ~~financial conditions~~affected.

InForeign ~~response~~Currency to governmental directives and recommended safety measures, we have implemented personal safety measures at all of our facilities. However, these measures may not be sufficient to mitigate the risk of infection by COVID-19. If a significant number of our employees, or third parties performing key functions, including our chief executive officer and members of our board of directors, become ill, our business may be further adversely impacted.Fluctuations

~~The~~As ~~impact~~the ofCompany ~~COVID-19~~operates ~~pandemic~~primarily ~~on us~~ in ~~the~~China ~~future~~while ~~will~~reporting ~~depend~~in onUnited ~~future~~States ~~developments~~Dollar ~~which~~(“USD”), ~~are~~fluctuations ~~highly~~in ~~unpredictable~~foreign ~~and~~exchange ~~beyond our control~~rates, ~~such~~particularly asbetween the ~~frequency,~~ ~~duration~~Renminbi and ~~severity of~~ the ~~resurgence~~reporting ~~of COVID-19 and the emergence of new variants~~currency, ~~as well as the measures that~~ may ~~be taken by governments around the world in response to these developments, the~~ impact ofreported ~~the~~revenue ~~pandemic on the global economy~~ and ~~the measures taken by governments to stimulate the general economy~~profitability. ~~Therefore, we cannot guarantee that the pandemic will not continue to have an adverse effect on our business and results of operations in the future, which may be material.~~

We will continue to actively monitor the situation and may take further actions that alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, service providers and stockholders.

Uncertainty and Impacts on the Recent U.S. Tarriff Policies and Regulations

Our results of operations also depend on our ability to respond with the recent tariff and other restrictions placed on imports. Since February 2025, trade between the U.S. and China has remained under tight restrictions and elevated trade barriers. While some temporary relief measures and exemptions were granted, most U.S. tariffs on Chinese goods remain in place, particularly affecting key sectors such as agriculture, automobiles, industrial materials, and consumer goods. These trade measures have significantly disrupted U.S.-China commerce, reducing exports in certain categories and forcing companies on both sides to adjust supply chains, pricing, and sourcing strategies. Despite some ongoing negotiations, the overall trade environment remains challenging and uncertain, with cross-border business continuing to face heightened costs and operational complexities.

In May 2025, the US and China agreed to a truce to lower import taxes on goods being traded between the two countries for 90 days. Under the terms of the agreement, both countries committed to pausing the imposition of new tariffs and partially rolling back existing duties on select goods, primarily in the technology, agricultural, and consumer product sectors. Although the agreement marks a major de-escalation of the trade war between the two countries, there is still a high degree of uncertainty surrounding U.S. tariff policy, how it will be implemented, and how other countries will react to it. It also remains uncertain whether increased tariffs and trade tensions will create further disruptions and uncertainties to the international trade and lead to a downturn in the global economy.

As of August 29, 2025, the United States has permanently eliminated the $800 de minimis threshold that previously allowed low-value shipments to enter the country duty-free. This change applies to all international shipments, regardless of value, origin, or shipping method. The decision was made to strengthen trade enforcement and address concerns over illicit trade practices. All imports, including those valued under $800, are now subject to applicable duties and taxes. These changes increase the complexity of customs processing, slow clearance times, and reduce the volume of low-value parcels traditionally handled by freight forwarders.

Moreover, increasing trade protectionism may cause an increase in (i) the cost of goods exported from regions globally, particularly from the Asia-Pacific region, (ii) the length of time required to transport goods and (iii) the risks associated with exporting goods. Such increases may further reduce the quantity of goods to be shipped, extend shipping schedules, increase voyage costs, and other associated costs, which could have an adverse impact on our customers’ business, operating results and financial condition and could thereby affect their ability to make timely payments to us and their order quantities. This could have a material adverse effect on our business, operating results, cash flows and financial condition.

We will continue to actively monitor the situation and consider strategic adaptation to maintain service levels and profitability.

Key Components of Results of Operations

Revenues. We generate revenues primarily byfrom ~~providing~~the ~~customized~~distribution ~~cross-border~~of ~~ocean~~pharmaceutical ~~freight solutions~~ and ~~airfreight~~medical ~~solutions~~products tosince ~~customers~~December ~~that~~2024. ~~specifically cater~~We toorder ~~their~~from ~~requirements and needs in transporting goods into~~ the ~~U.S. Under the service agreements with our customers~~manufacturer, ~~we offer~~ areceive ~~wide~~and ~~variety~~carry ofthe ~~integrated~~products ~~services~~at ~~under~~a ~~our~~designated ~~cross-border ocean freight solutions and cross-border airfreight solutions~~warehouse, ~~including (i) cross-border freight consolidation~~ and ~~forwarding~~deliver ~~services,~~the ~~(ii) customs~~products ~~clearance~~to ~~services,~~the ~~(iii) warehousing~~customers’ ~~and distribution~~warehouses ~~services~~or ~~and~~designated ~~(iv) U~~locations.~~S. domestic ground transportation services.~~

~~From~~Cost ~~December~~of ~~2024, we started~~Revenues. Our tocost ~~generate~~of revenues from the distribution of pharmaceutical and medical products. Wecomprises ~~order~~cost ~~from~~of ~~the~~pharmaceutical ~~manufacturer, receive and carry the~~ products atfrom ~~a designated warehouse~~manufacturers, less discount and ~~deliver the products to the customers’ warehouses or designated locations~~rebate.

~~Cost~~Selling ~~of Revenues~~Expenses. Our ~~cost~~selling ofexpenses ~~revenues~~primarily ~~from~~include ~~customized~~salaries ~~cross-border ocean and air freight solutions mainly comprises transportation and delivery costs~~expense, ~~warehouse service~~advertising ~~charges~~expenses, ~~custom~~marketing ~~declaration~~expense ~~and~~of ~~terminal~~a ~~charges~~system, ~~freight~~entertainment ~~arrangement~~expenses ~~charges~~ and ~~other~~traveling expense ~~overhead~~of ~~cost~~sales ~~allocation~~team ~~which~~engaged ~~includes operating~~in ~~and~~developing ~~financing~~potential ~~lease-related~~customers ~~costs,~~and ~~depreciation~~maintaining ~~expenses~~customer ofrelationships ~~property~~ and ~~equipment~~transportation ~~and~~cost ~~other~~for ~~miscellaneous~~selling pharmaceutical ~~expenses~~products.

Our cost of revenues from the distribution of pharmaceutical and medical products comprises cost of pharmaceutical products from manufacturers.

Selling Expenses. Our selling expenses primarily include salaries expense, advertising expenses, marketing expense of a system, and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.

General and Administrative Expenses. Our general and administrative expenses primarily include salaries and staff benefits, repair and maintenance expenses, depreciation on property and equipment, amortization on intangible assets, lease expenses warehouses used for administrative purpose and office premises, travelling and entertainment expenses, bank charges, legal and professional fees, insurance expenses and other office expenses.

Other Income. Our other income primarily consists of ~~rental income and~~ interest income in connection with a third-party loan.

Interest Expenses. Our interest expenses primarily consist of the interest expenses incurred for ~~finance leases,~~ convertible debts, ~~equipment loans, vehicle loans~~ and other loans ~~and interest for late credit card payment~~.

Income Tax Expenses. Our income tax expenses consist primarily of ~~U.S. federal, state income taxes, replacement tax in the state of Illinois and~~ PRC enterprise income tax.

Results of Operations

~~The~~Continuing ~~following table summarizes the results of consolidated statements of operations and comprehensive income (loss) for the three months and six months ended December 31, 2025 and 2024 in U.S. dollars.~~Operation

	For the Six Months Ended December 31,						For the Three Months Ended December 31,
	2025			2024			2025			2024
Revenue from cross-border freight solutions – third party	$	8,110,140		$	6,702,063		$	3,928,426		$	3,102,276
Revenue from cross-border freight solutions – related parties		1,221,728			756,994			641,568			275,227
Revenue from distribution of pharmaceutical products - third parties		3,780,654			218,086			2,442,639			218,086
Total revenue		13,112,522			7,677,143			7,012,633			3,595,589
Cost of revenue from cross-border freight solutions – third party		7,286,059			6,153,994			3,552,213			3,159,709
Cost of revenue from cross-border freight solutions – related party		822,137			921,050			355,631			356,320
Cost of revenue from pharmaceutical products - third parties		1,985,266			121,791			1,194,496			121,791
Total cost of revenue		10,093,462			7,196,835			5,102,340			3,637,820
Gross profit (loss)		3,019,060			480,308			1,910,293			(42,231	)
Operating expenses:
Selling expenses		1,093,244			54,488			903,833			54,488
General and administrative expenses		4,318,013			3,749,059			2,210,358			1,911,853
Provision (reversal) of allowance for expected credit loss for account receivable		82,151			1,956			(1,174	)		(10,881	)
Provision of allowance for expected credit loss on loan receivable from a third party		288,000			—			288,000			—
Total operating expenses		5,781,408			3,805,503			3,401,017			1,955,460
Loss from operations		(2,762,348	)		(3,325,195	)		(1,490,724	)		(1,997,691	)
Other income (expense)
Other income, net		282,380			201,541			135,541			91,753
Interest expense		(379,890	)		(68,992	)		(183,449	)		(40,882	)
Total other income (expense)		(97,510	)		132,549			(47,908	)		50,871
Loss before income taxes		(2,859,858	)		(3,192,646	)		(1,538,632	)		(1,946,820	)
Income tax expense		81,039			89,581			45,049			—
Net loss attributable to the Company		(2,940,897	)		(3,282,227	)		(1,583,681	)		(1,946,820	)
Other comprehensive (loss) income:
Foreign currency translation income		204,978			(12,186	)		168,050			(25,179	)
Comprehensive (loss) income attributable to the Company	$	(2,735,919	)	$	(3,294,413	)	$	(1,415,631	)	$	(1,971,999	)

Our continuing operations are focused on the distribution of pharmaceutical products in China. Revenue from continuing pharmaceutical operations was primarily derived from infusion products, specialty prescription drugs, and medical nutrition products. The Company operates within a highly regulated healthcare environment and generates revenue through sales to hospitals through agent, and other healthcare providers.

5Discontinued Operation

~~For~~ABL Chicago is a U.S.-based integrated cross-border supply chain solution provider with a strategic focus on the ~~Three~~Asian ~~Months~~market ~~Ended~~including ~~December~~China. ~~31,~~We primarily provide ~~2025~~customized ~~Compared~~cross-border ocean freight solutions and airfreight solutions in the U.S. that specifically cater to our customers’ requirements and needs in transporting goods into the ~~Three~~U.S. ~~Months~~We ~~Ended~~offer ~~December~~a 31wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, ~~2024~~ including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.

The following table summarizes our consolidated results of operations and percentages of certain items in relation to total revenues for the three months ended December 31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.2

	For the three months ended December 31,
	2025					2024
Revenues	Amount		% of total Revenues			Amount			% of total Revenues			Amount Increase (Decrease)			Percentage Increase (Decrease)
Revenue from cross-border freight solutions
Cross-border ocean freight solutions	$	945,533		13.5	%	$	1,374,805			38.2	%	$	(429,272	)		(31.2	)%
Cross-border airfreight solutions		3,624,461		51.7	%		2,002,698			55.7	%		1,621,763			81.0	%
Subtotal		4,569,994		65.2	%		3,377,503			93.9	%		1,192,491			35.3	%
Revenue from distribution of pharmaceutical products		2,442,639		34.8	%		218,086			6.1	%		2,224,553			1,020.0	%
Total revenues		7,012,633		100.0	%		3,595,589			100.0	%		3,417,044			95.0	%
Cost of revenues – cross-border freight solution		3,907,844		55.8	%		3,516,029			97.8	%		391,815			11.1	%
Cost of revenues – pharmaceutical products		1,194,496		17.0	%		121,791			3.4	%		1,072,705			880.8	%
Total cost of revenues		5,102,340		72.8	%		3,637,820			101.2	%		1,464,520			40.3	%
Gross profit – cross-border freight solution		662,150		14.5	%		(138,526	)		(4.1	)%		800,676			(578.0	)%
Gross profit – pharmaceutical products		1,248,143		51.1	%		96,295			44.2	%		1,151,848			1,196.2	%
Total gross profit (loss)	$	1,910,293		27.2	%	$	(42,231	)		(1.2	)%	$	1,952,524			(4,623.4	)%

On February 12, 2026, the sale of 100% of the issued and outstanding shares of ABL Chicago was duly approved and adopted by the Company’s shareholders. Accordingly, the Company consummated the transfer of the ABL Chicago business. Immediately prior to the Transaction, the Company forgave $3,402,808 of amounts due from The Company recorded a gain on the sale of the ABL Chicago business in the amount of $2,556,315 as follows:

Cash consideration for sale of ABL Chicago	$	1

Less: book value of assets sold:
Cash		167,536
Accounts receivable – third parties, net		1,078,847
Accounts receivable – related party, net		358,246
Prepaid expenses and other as sets		337,616
Other receivable – related parties		1,141,959
Loan receivable – related parties		386,541
Contract assets		43,365
Investment in other entity		15,741
Property and equipment, net		132,366
Right of use operating lease assets, net		1,697,873
Right of use financing lease assets, net		71,692
Net book value of assets sold		5,431,782

Add: Liabilities assumed by buyer
Accounts payable– third parties		1,907,730
Accounts payable– related party		153,353
Accrued expenses and other liabilities		794,091
Obligations under operating leases		2,150,449
Obligations under financing leases		92,323
Tax payable		79,825
Other loan payable		2,243,159
Due to a related party		260,144
Due to shareholder		182,846
Amounts due to ultimate holding company		3,402,808
Loan payable to related party		124,176
Total liabilities assumed		11,390,904

Less: Amounts due from ABL Chicago		3,402,808

Gain on Sale of ABL Chicago	$	2,556,315

The following table summarizes the results of condensed consolidated statements of operations and comprehensive income (loss) for the three months and nine months ended March 31, 2026 and 2025 in U.S. dollars.

	Nine Months Ended March 31,						Three Months Ended March 31,
	2026			2025			2026			2025
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	5,108,387		$	715,362		$	1,327,733		$	497,276
Cost of revenue		2,333,460			240,966			348,194			119,175
Gross profit		2,774,927			474,396			979,539			378,101

Operating expenses:
Selling expenses		1,804,797			158,117			711,553			103,629
General and administrative expenses		3,883,166			1,803,479			1,697,915			603,979
Provision of allowance for expected credit loss on accounts receivable		133,772			-			84,261			-
Provision of allowance for expected credit loss on loan receivable		350,000			-			62,000			-
Total operating expenses		6,171,735			1,961,596			2,555,729			707,608

Loss from operations		(3,396,808	)		(1,487,200	)		(1,576,190	)		(329,507	)

Other income (expense)
Other income, net		203,918			16,733			103,705			11,682
Interest expense		(149,355	)		(40,541	)		(26,733	)		(40,541	)
Total other income (expense)		54,563			(23,808	)		76,972			(28,859	)

Loss before income taxes		(3,342,245	)		(1,511,008	)		(1,499,218	)		(358,366	)
Income tax expense		110,632			18,594			29,593			18,594
Net loss from continuing operations		(3,452,877	)		(1,529,602	)		(1,528,811	)		(376,960	)

Income (loss) from discontinued operation, net of tax provision:
Loss from discontinued operation before the sale of ABL Chicago		(1,901,927	)		(2,823,421	)		(885,096	)		(693,836	)
Gain on sale of ABL Chicago		2,556,315			-			2,556,315			-
Net income (loss) from discontinued operation		654,388			(2,823,421	)		1,671,219			(693,836	)

NET (LOSS) INCOME		(2,798,489	)		(4,353,023	)		142,408			(1,070,796	)

Other comprehensive income (loss):
Foreign currency translation income (loss)		393,103			(8,603	)		188,125			3,583
Comprehensive income (loss) attributable to the Company	$	(2,405,386	)	$	(4,361,626	)	$	330,533		$	(1,067,213	)

For the Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025

The following table summarizes our consolidated results of operations and percentages of certain items in relation to total revenues for the three months ended March 31, 2026 and 2025, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.

	For the three months ended March 31,
	2026					2025
	Amount		% of total Revenues			Amount		% of total Revenues			Amount Increase (Decrease)		Percentage Increase (Decrease)
Revenue	$	1,327,733		100.0	%	$	497,276		100.0	%	$	830,457		167.0	%
Cost of revenue		348,194		26.2	%		119,175		24.0	%		229,019		192.2	%
Gross profit	$	979,539		73.8	%	$	378,101		76.0	%	$	601,438		159.1	%

Revenues

~~Our~~Revenue ~~total~~from ~~revenues~~the ~~from~~distribution ~~cross-border freight~~of ~~solutions~~pharmaceutical ~~increased~~products increased by approximately $10.28 million, or 35167.30%, from approximately $30.45 million for the three months ended ~~December~~ March 31, ~~2024,~~2025 to approximately $41.6 3 million for the three months ended ~~December~~March 31, ~~2025~~2026. ~~The~~This increase was ~~mainly~~primarily ~~due~~attributable to ~~increase~~the incontinued ~~revenue~~expansion of our pharmaceutical ~~from~~distribution ~~cross~~business, which commenced operations in December 2024, and reflects the early-~~border~~stage ~~airfreight~~growth ~~solutions~~trajectory of this segment.

~~Revenues~~The ~~from~~growth ~~our~~in ~~cross-border~~revenue was ~~ocean~~mainly ~~freight~~driven ~~solutions~~by ~~decreased~~increased bysales ~~approximately~~of ~~$0.4~~infusion ~~million~~products, orwhich ~~31.2%,~~accounted ~~from~~for approximately ~~$1.4~~99% ~~million~~and ~~for~~93% ~~the~~of ~~three~~total ~~months~~pharmaceutical ~~ended~~distribution ~~December~~revenue ~~31, 2024, to approximately $0.9~~ for the three months ended ~~December~~March 31, ~~2025.~~2026 ~~This reduction was primarily due to a decrease in the volume of cross-border ocean freight processed~~ and ~~forwarded~~2025, ~~dropping~~respectively. Revenue from ~~1,046~~infusion ~~TEU~~products inincreased ~~the~~by ~~three~~approximately ~~months~~$0.9 million ~~ended~~period ~~December~~over 31period, ~~2024, to~~reflecting ~~1,025~~both ~~TEU~~higher ~~for~~sales ~~the~~volume ~~three~~and ~~months~~broader ~~ended~~market ~~December 31, 2025~~penetration.

6A key contributor to this increase was the expansion of the Company’s customer base, with the number of active customers increasing from 4 to 12 during the period. This growth was supported by the Company’s dedicated sales team, which has focused on developing new customer relationships, enhancing engagement with existing customers, and participating in hospital and distributor procurement processes. As a result, the Company experienced increased order volumes and improved sales coverage across its target market.

~~Revenues~~Cost from our cross-border airfreight solutions increased by approximately $1.6 million or 81.0%, from approximately $2.0 million for the three months ended December 31, 2024, to approximately $3.6 million for the three months ended December 31, 2025. The increase was primarily due to (i) increase in our volume of ~~cross-border~~Revenues ~~air freight processed from approximately 4,459 tons for the three months ended December 31, 2024, to approximately 5,365 tons for the three months ended December 31, 2025,~~ and ~~(ii)~~Gross ~~stronger~~Profit ~~demand of value-added services, such as warehouse repackaging and related handling services.~~

~~Starting~~Cost ~~from~~of ~~December 2024, we established a new~~ revenue ~~stream~~from ~~through~~ the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. Revenues from distribution of pharmaceutical products increased by approximately $20.2 million, or ~~1,020~~192.02%, from approximately $0.21 million for the three months ended ~~December~~March 31, ~~2024,~~ 2025 to approximately $20.4 3 million for the three months ended ~~December~~March 31, ~~2025~~2026. The increase was primarily driven by higher sales volume, consistent with the significant growth in revenue during the period as the Company continued to expand its pharmaceutical distribution operations.

~~Revenues~~Despite the increase in revenue, gross profit margin decreased from approximately 76.0% for the three months ended March 31, 2025 to approximately 73.8% for the three months ended March 31, 2026. The decline in gross margin was primarily attributable to changes in supplier incentives, specifically a reduction in purchase rebates offered by ~~Customer~~suppliers ~~Geographic~~in the current period compared to the prior-year period. In the prior-year period, higher proportion of purchase rebates received from suppliers, which contributed to an elevated gross margin during the initial phase of operations. Gross margin without purchase rebate was 43.3% and 41.6% for the three months ended March 31, 2026 and 2025, respectively.

	For the three months ended December 31,
	2025					2024
Revenues	Amount		% of total Revenues			Amount		% of total Revenues			Amount Increase (Decrease)			Percentage Increase (Decrease)
Revenue from cross-border freight solutions
Asia-based customers	$	4,091,677		58.4	%	$	2,750,202		76.5	%	$	1,341,475			48.8	%
U.S.-based customers		478,317		6.8	%		627,301		17.4	%		(148,984	)		(23.8	)%
		4,569,994		65.2	%		3,377,503		93.9	%		1,192,491			35.3	%
Revenue from distribution of pharmaceuticals
Asia-based customers		2,442,639		34.8	%		218,086		6.1	%		2,224,553			1,020.0	%
Total revenues	$	7,012,633		100.0	%	$	3,595,589		100.0	%	$	3,417,044			95.0	%

Revenues from cross-border freight solutions for the Asia-based customers increased by approximately $1.3 million, or 48.8%, from approximately $2.8 million for the three months ended December 31, 2024, to approximately $4.1 million for the three months ended December 31, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by approximately $0.1 million, or 23.8%, from approximately $0.6 million for the three months ended December 31, 2024 to approximately $0.5 million for the same period in 2025.

The increase in revenues from Asia-based customers for the three months ended December 31, 2025 was primarily driven by strengthened relationships with key clients. During the three months ended December 31, 2024, the Company experienced reduced volumes from Asia-based customers due to delays and temporary suspensions of certain cross-border logistics projects amid heightened U.S.–China trade tensions, particularly affecting e-commerce customers. During the three months ended December 31, 2025, project activity gradually resumed as trade conditions improved, resulting in higher revenue from Asia-based customers.

We also assigned dedicated teams to manage high-value accounts, which led to an increase in their shipment volumes. In addition, revenue growth was supported by an expansion of value-added logistics services, reflecting higher demand for services such as repackaging, handling, and customized solutions.

The decrease in revenue from the U.S.-based customers for the three months ended December 31, 2025, compared to the same period in 2024, was primarily driven by a decrease in shipment volumes serving e-commerce platforms and concerns over a potential economic downturn and reduced consumer spending power in the U.S., which led to lower shipment volumes.

Our customers for the distribution of pharmaceutical products are located in China, as we specifically target the Chinese market. For the three months ended December 31, 2025, our total revenue from pharmaceutical product distribution amounted to approximately $2.4 million. For the three months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to approximately $0.2 million.

Cost of Revenues

A breakdown of our cost of revenues for the three months ended December 31, 2025 and 2024 is as follows:

	For the three months ended December 31,				Amount Increase			Percentage Increase
	2025		2024		(Decrease)			(Decrease)
Cost of revenue from cross-border freight solutions
Transportation and delivery costs	$	1,698,675	$	1,401,927	$	296,748			21.2	%
Warehouse service charges		702,377		867,098		(164,721	)		(19.0	)%
Custom declaration and terminal charges		863,749		583,471		280,278			48.0	%
Freight arrangement charges		65,966		128,205		(62,239	)		(48.5	)%
Overhead cost		577,077		535,328		41,749			7.8	%
Subtotal		3,907,844		3,516,029		391,815			11.1	%
Cost of revenue from distribution of pharmaceuticals
Cost of goods sold		1,194,496		121,791		1,072,705			880.8	%
Total cost of revenue	$	5,102,340	$	3,637,820	$	1,464,520			40.3	%

Our cost of revenues from cross-border freight solutions increased by approximately $0.4 million, or 11.1%, from approximately $3.5 million for the three months ended December 31, 2024, to approximately $3.9 million for the three months ended December 31, 2025. The increase in cost of revenues was mainly due to the combined effects of:

(i) an increase in transportation and delivery costs, including trucking, drayage, chassis rental, freight, and delivery costs during the three months ended December 31, 2025, which was primarily due to an increase in delivery services provided to customers. Both revenue from transportation services and the associated delivery costs increased in line with the change in service;

(ii) an increase in customs declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the three months ended December 31, 2025, resulting from an increase in the volume of cross-border freight we handled, particularly airfreight, during the same period;

(iii) an increase in overhead costs, mainly comprising warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the three months ended December 31, 2025. The increase in balance was mainly attributable to the annual rent adjustment; which was partly offset by

(iv) a decrease in warehouse service charges, primarily representing labor costs at our regional warehousing and distribution centers during the three months ended December 31, 2025, was mainly driven by reduced contractor labor cost due to a strategic shift in our staffing model. We transitioned away from high-volume, general temporary staffing in favor of retaining a core group of highly skilled and experienced contract personnel. By prioritizing the retention of contractors with deep institutional knowledge of our workflows, we achieved a higher units-per-labor-hour (UPH) ratio and significantly reduced the overhead associated with onboarding and training. This stabilization of the workforce allowed us to absorb increased throughput demand with a lower total headcount, effectively reducing our variable cost per shipment while maintaining high accuracy and safety standard; and

(v) a decrease in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight and airfreights from the U.S. to China, during the three months ended December 31, 2025, primarily due to a decrease in the volume of cross-border ocean arrangements, from the U.S. to China.

Our cost of revenues from the distribution of pharmaceuticals increased by approximately $1.1 million, or 880.8%, from approximately $0.1 million for the three months ended December 31, 2024, to approximately $1.2 million for the three months ended December 31, 2025.

Gross Profit

Our overall gross profit was approximately $1.9 million for the three months ended December 31, 2025, compared to gross loss of approximately $0.04 million in the same period of the prior year.

Our gross margin for cross-border freight solutions was 14.5% for the three months ended December 31, 2025, compared to (4.1)% for three months ended December 31, 2024. The increase in gross margin was primarily attributable to combined effect of (i) the easing of trade tensions and the stabilization of cross-border trade policies resulted in an increase in shipment volumes. This volume growth allowed for better absorption of fixed costs and improved pricing power across our primary freight lane, and (ii) decreased warehouse labor costs, as discussed above.

Our gross margin for distribution of pharmaceutical was 51.1% for the three months ended December 31, 2025, compared to 44.2% for three months ended December 31, 2024. Increase in gross margin was mainly due to new products with higher profit margin.

Selling Expenses

Our selling expenses amounted to approximately $0.97 million for the three months ended ~~December~~March 31, ~~2025~~2026, compared to approximately $0.051 million for the same period in ~~2024~~in 2025. The increase was primarily driven by the salaries for our sales team, marketing expense of a system, ~~and~~entertainment expenses and the advertising expense amounted to approximately $0.76 million, both of which were incurred in connection with the launch of our new pharmaceutical ~~distribution~~ distribution service during the year.

General and Administrative Expenses

Our general and administrative expenses increased by approximately $01.31 million, or 15181.61%, from approximately $10.96 million for the three months ended ~~December~~March 31, ~~2024~~2025, to approximately $21.27 million for the three months ended ~~December~~March 31, ~~2025~~2026. ~~These expenses represented 31.5% and 53.2% of our total revenues for the three months ended December 31, 2025 and 2024, respectively.~~ The increase was ~~mainly~~primarily ~~due~~attributable to ~~increase~~an inapproximately ~~our consultancy service~~$1.2 ~~fee~~million ~~and~~increase ~~our new pharmaceutical distribution segment~~ in ~~the~~professional ~~second~~fees, ~~quarter~~partially ofoffset ~~the~~by ~~fiscal~~an ~~year~~approximately ~~ended~~$0.1 ~~June~~million ~~30,~~decrease ~~2025~~in ~~contributed~~salaries toand ~~the~~insurance ~~rise in operating costs~~expenses.

~~Our professional fees increased by approximately $0.~~5 million, or 254.2%, from approximately $0.2 million for the three months ended December 31, 2024, to approximately $0.8 million for the three months ended December 31, 2025. Our professional fee represented 34.6% and 11.3% of our total general and administrative expenses for the three months ended December 31, 2025 and 2024, respectively. The increase was primarily due to advisory and consulting expenses strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.

Our professional fees increased by approximately $1.2 million, or 598.5%, from approximately $0.2 million for the three months ended March 31, 2025, to approximately $1.4 million for the three months ended March 31, 2026. Our professional fee represented 84.5% and 34.0% of our total general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively. The increase was primarily due to advisory and consulting expenses strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.

Other Income, net

Our other income, net increased by $4392,~~788~~023, or 47787.7%, from $9111,~~753~~682 for the three months ended ~~December~~March 31, ~~2024~~2025, to $~~135~~103,~~541~~705 for the three months ended ~~December~~March 31, ~~2025~~2026. The increase was primarily due to increase in interest income of $3977,~~491~~713 in connection with a third-party loan.

Interest Expenses

Our interest expenses ~~increased~~decreased by $~~142~~13,~~567~~808, or ~~348~~34.71%, from $40,~~882~~541 for the three months ended ~~December~~March 31, ~~2024~~2025, to $~~183~~26,~~449~~733 for the three months ended ~~December~~March 31, ~~2025.~~ ~~The increase in interest expense was mainly due to higher outstanding interest-bearing loans and interest expense in connection with the convertible note~~2026.

Loss Before Income Taxes

We had a net loss before income taxes of approximately $1.5 million and approximately $10.94 million for the three months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively. We were in a loss position before income taxes for the three months ended ~~December~~March 31, ~~2025~~2026, primarily attributable to the net effects of: (i) the rise in operating expenses, which was partly offset by an increase in gross profit due to the new business segment for the three months ended ~~December~~March 31, ~~2025~~2026 as mentioned above.

Income Tax Expense

We had income tax ~~expenses~~expense of $4529,~~049~~593 and $~~nil~~18,594 for the three months ended ~~December~~March 31, ~~2025~~2026 and ~~2024, respectively~~2025. A current income tax provision of $4684,~~554~~954 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the three months ended ~~December~~March 31, ~~2025~~2026.

Based on management’s assessment of future taxable income, the Company determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred tax assets. We recognized a deferred income tax credit of $127,~~505~~069 due to credit loss allowance and amortization of intangible assets, and a deferred income tax credit of $28,292 due to expected sales return, resulting in a net income tax ~~expense~~credit of $4555,~~049~~361 for the three months ended ~~December~~March 31, ~~2025~~2026.

WeA ~~did not have~~ current income tax provision in ~~the~~of ~~three~~$26,608 ~~months~~was ~~ended~~recognized ~~December~~for ~~31,~~a ~~2024,~~subsidiary ~~due~~with to net ~~operating~~assessable ~~loss,~~income ~~and~~while weno ~~recognized~~current ~~a net deferred~~ income tax ~~asset~~provision ofwas ~~$585,198~~recognized ~~due~~for subsidiaries toin ~~temporary~~net ~~differences~~operating ~~recognized~~loss ~~and~~for ~~net~~the ~~operating~~three ~~loss~~months ~~carried~~ended ~~forward~~March 31, 2025. We ~~also~~ recognized a ~~valuation~~recovery ~~allowance~~ of ~~$585,198 to write off our~~ deferred income tax ~~asset~~of ~~since~~$8,014 wedue ~~are uncertain that we will be able~~ to ~~utilize~~amortization of ~~the~~intangible ~~deferred tax asset to offset future taxable income~~assets, resulting in a net income tax expense of $~~nil~~18,594 infor the three months ended ~~December~~March 31, ~~2024~~2025.

Net loss from continuing operation

As a result of the foregoing, we had a net loss of approximately $1.6 5 million and approximately of $10.94 million for the three months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

106

~~For~~Result ~~the~~of ~~Six~~Discontinued ~~Months Ended December 31, 2025 Compared to the Six Months Ended December 31, 2024~~ Operation

~~The~~Net ~~following~~income ~~table~~(loss) ~~summarizes our~~from ~~consolidated~~discontinued ~~results of~~ operations ~~and percentages of certain items in relation to total revenues~~ for the ~~six~~three months ended ~~December~~ March 31, ~~2025~~2026 and ~~2024,~~2025 ~~and~~is ~~provides~~as information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.follows:

	For the Six Months Ended December 31,
	Three Months Ended March 31,
	2025						2024
	2026			2025			Amount Increase (Decrease)			Percentage Increase (Decrease)
Revenues	Amount			% of total Revenues			Amount			% of total Revenues			Amount Increase (Decrease)			Percentage Increase (Decrease)
Revenue	$	1,346,238		$	3,305,864		$	(1,959,626	)		(59.3	)%
Revenue from cross-border freight solutions
Cost of revenue		1,660,135			2,968,114			(1,307,979	)		(44.1	)%
Cross-border ocean freight solutions	$	2,380,397			18.2	%	$	3,211,396			41.8	%	$	(830,999	)		(25.9	)%
Operating expenses		496,212			1,082,426			(586,214	)		(54.2	)%
Cross-border airfreight solutions		6,951,471			53.0	%		4,247,661			55.4	%		2,703,810			63.7	%
Loss from operation		(810,109	)		(744,676	)		(65,433	)		8.8	%
Subtotal		9,331,868			71.2	%		7,459,057			97.2	%		1,872,811			25.1	%
Gain on sale of ABL Chicago		2,556,315			-			2,556,315			100.0	%
Revenue from distribution of pharmaceutical products		3,780,654			28.8	%		218,086			2.8	%		3,562,568			1,633.6	%
Other (expense) income, net		(74,987	)		50,840			(125,827	)		(247.5	)%
Total revenues		13,112,522			100.0	%		7,677,143			100.0	%		5,435,379			70.8	%
Income (loss) from discontinued operations, net of tax provision	$	1,671,219		$	(693,836	)	$	2,365,055			(340.9	)%
Cost of revenues – cross-border freight solution		8,108,196			61.8	%		7,075,044			92.2	%		1,033,152			14.6	%
Cost of revenues – pharmaceutical products		1,985,266			15.2	%		121,791			1.5	%		1,863,475			1,530.1	%
Total cost of revenues		10,093,462			77.0	%		7,196,835			93.7	%		2,896,627			40.2	%
Gross profit – cross-border freight solution		1,223,672			13.1	%		384,013			5.1	%		839,659			218.7	%
Gross profit – pharmaceutical products		1,795,388			47.5	%		96,295			44.2	%		1,699,093			1,764.5	%
Total gross profit	$	3,019,060			23.0	%	$	480,308			6.3	%	$	2,538,752			528.6	%

We recognized income from discontinued operations, net of tax, of approximately $1.7 million during the three months ended March 31, 2026, compared to loss from discontinued operations, net of tax, of approximately $0.7 million during the three months ended March 31, 2025, representing an increase of approximately $2.4 million. The income from discontinued operations of approximately $1.7 million for the three months ended March 31, 2026 is comprised of a gain on the sale of the ABL Chicago business of approximately $2.6 million, offset by an operational loss of approximately $0.8 million. The operational loss includes an approximately $0.8 million loss from business activities for the 43-day period ended February 12, 2026.

For the Nine Months Ended March 31, 2026 Compared to the Nine Months Ended March 31, 2025

The following table summarizes our consolidated results of operations and percentages of certain items in relation to total revenues for the nine months ended March 31, 2026 and 2025, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.

	For the nine months ended March 31,
	2026					2025
	Amount		% of total Revenues			Amount		% of total Revenues			Amount Increase (Decrease)		Percentage Increase (Decrease)
Revenue	$	5,108,387		100.0	%	$	715,362		100.0	%	$	4,393,025		614.1	%
Cost of revenue		2,333,460		45.7	%		240,966		33.7	%		2,092,494		868.4	%
Gross profit	$	2,774,927		54.3	%	$	474,396		66.3	%	$	2,300,531		484.9	%

Revenues

~~Our~~Revenue ~~total~~from ~~revenues~~the ~~from~~distribution ~~cross-border freight~~of ~~solutions~~pharmaceutical ~~increased~~products increased by approximately $14.94 million, or 25614.1%, from approximately $70.57 million for the ~~six~~nine months ended ~~December~~ March 31, ~~2024,~~2025 to approximately $95.3 1 million for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026. ~~The~~This increase was ~~mainly~~primarily ~~due~~attributable to ~~increase~~the incontinued ~~revenue~~expansion of our pharmaceutical ~~from~~distribution ~~cross~~business, which commenced operations in December 2024, and reflects the early-~~border~~stage ~~airfreight~~growth ~~solutions~~trajectory of this segment.

~~Revenues~~The ~~from~~growth ~~our~~in ~~cross-border airfreight~~revenue ~~solutions~~was ~~increased~~mainly driven by ~~approximately~~increased ~~$2.7~~sales ~~million~~of ~~or 63.7%~~infusion products, ~~from~~which ~~approximately~~accounted ~~$4.2 million~~ for ~~the six months ended December 31, 2024, to~~ approximately ~~$7.0~~93% ~~million~~and ~~for~~95% ~~the six months ended December 31, 2025. Despite our volume~~ of ~~cross-border~~total ~~air~~pharmaceutical ~~freight~~distribution ~~processed decreased,~~revenue ~~from approximately 11,732 tons~~ for the ~~six~~nine months ended ~~December~~March 31, ~~2024, to approximately 11,141 tons for the six months~~ ~~ended~~2026 ~~December~~and ~~31,~~ 2025, ~~our~~respectively. ~~revenue~~Revenue ~~increased~~from ~~primarily~~infusion ~~due~~products toincreased weby ~~experienced~~approximately ~~stronger~~$4.1 ~~demand~~million ofperiod ~~value-added~~over ~~services~~period, ~~such~~reflecting ~~as warehouse~~both ~~repackaging and related handling services, which generates~~ higher ~~revenue~~sales ~~per~~volume ~~shipment~~ and ~~more~~broader ~~than~~market ~~offset the impact of lower freight volumes~~penetration.

~~Revenues~~A ~~from~~key ~~our~~contributor ~~cross-border~~to this ~~ocean~~increase ~~freight~~was ~~solutions~~the ~~decreased~~expansion byof ~~approximately~~the ~~$0.8~~Company’s ~~million,~~customer ~~or 25.9%~~base, ~~from~~with ~~approximately~~the ~~$3.2~~number ~~million~~of ~~for~~active ~~the~~customers ~~six~~increasing ~~months~~from ~~ended~~8 ~~December 31, 2024,~~ to ~~approximately~~14 ~~$2.4~~during ~~million for~~ the ~~six months ended December 31, 2025~~ period. This ~~reduction~~growth was ~~primarily~~supported ~~due~~by tothe aCompany’s ~~decrease~~dedicated ~~in the~~sales ~~volume~~team, ofwhich ~~cross-border~~has ~~ocean~~focused ~~freight~~on ~~processed~~developing ~~and~~new ~~forwarded~~customer relationships, enhancing ~~dropping~~engagement ~~from~~with 2existing customers,~~476~~ ~~TEU~~and participating in ~~the~~hospital ~~six~~and ~~months~~distributor ~~ended~~procurement ~~December~~processes. ~~31,~~As ~~2024~~a result, tothe Company ~~2,356~~experienced ~~TEU~~increased ~~for~~order ~~the~~volumes ~~six~~and ~~months~~improved ~~ended~~sales ~~December~~coverage ~~31,~~across ~~2025~~its target market.

Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. For the six months ended December 31, 2025, our total revenue from pharmaceutical product distribution amounted to approximately $3.8 million. For the six months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to approximately $0.2 million.7

11Cost of Revenues and Gross Profit

~~Revenues~~Cost of revenue from the distribution of pharmaceutical products increased by ~~Customer~~approximately ~~Geographic~~$2.1 million, or 868.4%, from approximately $0.2 million for the nine months ended March 31, 2025 to approximately $2.3 million for the nine months ended March 31, 2026. The increase was primarily driven by higher sales volume, consistent with the significant growth in revenue during the period as the Company continued to expand its pharmaceutical distribution operations.

	For the Six Months Ended December 31,
	2025					2024
Revenues	Amount		% of total Revenues			Amount		% of total Revenues			Amount Increase (Decrease)			Percentage Increase (Decrease)
Revenue from cross-border freight solutions
Asia-based customers	$	8,108,536		61.8	%	$	5,559,837		72.5	%	$	2,548,699			45.8	%
U.S.-based customers		1,223,332		9.4	%		1,899,220		24.7	%		(675,888	)		(35.6	)%
		9,331,868		71.2	%		7,459,057		97.2	%		1,872,811			25.1	%
Revenue from distribution of pharmaceuticals
Asia-based customers		3,780,654		28.8	%		218,086		2.8	%		3,562,568			1,633.6	%
Total revenues	$	13,112,522		100.0	%	$	7,677,143		100.0	%	$	5,435,379			70.8	%

Despite the increase in revenue, gross profit margin decreased from approximately 66.3% for the nine months ended March 31, 2025 to approximately 54.3% for the nine months ended March 31, 2026. The decline in gross margin was primarily attributable to changes in supplier incentives, specifically a reduction in purchase rebates offered by suppliers in the current period compared to the prior-year period. In the prior-year period, higher proportion of purchase rebates received from suppliers, which contributed to an elevated gross margin during the initial phase of operations.

Revenues from cross-border freight solutions for the Asia-based customers increased by approximately $2.5 million, or 45.8%, from approximately $5.6 million for the six months ended December 31, 2024, to approximately $8.1 million for the six months ended December 31, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by approximately $0.7 million, or 35.6%, from approximately $1.9 million for the six months ended December 31, 2024 to approximately $1.2 million for the same period in 2025.

The increase in revenues from Asia-based customers for the six months ended December 31, 2025 was primarily driven by strengthened relationships with key clients. The company assigned dedicated teams to manage high-value accounts, which led to an increase in their shipment volumes. In addition, revenue growth was supported by an expansion of value-added logistics services, reflecting higher demand for services such as repackaging, handling, and customized solutions.

The decrease in revenue from the U.S.-based customers for the six months ended December 31, 2025, compared to the same period in 2024, was primarily driven by a decrease in shipment volumes serving e-commerce platforms and concerns over a potential economic downturn and reduced consumer spending power in the U.S., which led to lower shipment volumes.

Our customers for the distribution of pharmaceutical products are located in China, as we specifically target the Chinese market. For the six months ended December 31, 2025, our total revenue from pharmaceutical product distribution amounted to approximately $3.8 million. For the six months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to approximately $0.2 million.

Cost of Revenues

A breakdown of our cost of revenues for the six months ended December 31, 2025 and 2024 is as follows:

	For the Six Months Ended December 31,				Amount Increase			Percentage Increase
	2025		2024		(Decrease)			(Decrease)
Cost of revenue from cross-border freight solutions
Transportation and delivery costs	$	3,175,664	$	3,035,817	$	139,847			4.6	%
Warehouse service charges		1,600,639		1,637,200		(36,561	)		(2.2	)%
Custom declaration and terminal charges		1,991,737		1,025,095		966,642			94.3	%
Freight arrangement charges		187,653		292,545		(104,892	)		(35.9	)%
Overhead cost		1,152,503		1,084,387		68,116			6.3	%
Subtotal		8,108,196		7,075,044		1,033,152			14.6	%
Cost of revenue from distribution of pharmaceuticals
Cost of goods sold		1,985,266		121,791		1,863,475			1,530.1	%
Total cost of revenue	$	10,093,462	$	7,196,835	$	2,896,627			40.2	%

Our cost of revenues from cross-border freight solutions increased by approximately $1.0 million, or 14.6%, from approximately $7.1 million for the six months ended December 31, 2024, to approximately $8.1 million for the six months ended December 31, 2025. The increase in cost of revenues was mainly due to the combined effects of:

(i) an increase in customs declaration and terminal charges, consisting of customs fees, handling charges, and entry service fees charged by ports and terminals during the six months ended December 31, 2025. Compared to six months ended December 31, 2024, we experienced a higher frequency of ocean-based vessel discharges and thus incurred more terminal charges during the six months ended December 31, 2025, despite of the decrease in the volume of cross-border freight we handled, particularly airfreight;

(ii) an increase in transportation and delivery costs, including trucking, drayage, chassis rental, freight, and delivery costs during the six months ended December 31, 2025, which was significantly lower than the corresponding increase in revenue. This improved margin profile was primarily driven by two strategic factors: (i) We achieved greater density in our logistics network by prioritizing Full Truckload (“FTL”) shipments. By maximizing the capacity of each vehicle and reducing empty-mile or partial-load transit, we were able to scale our total shipment volume without a linear increase in trucking and fuel expenses, and (ii) shifted its service mix from standard shipping to value-added offerings, such as customized warehouse repackaging and specialized handling. These services generate higher revenue per unit compared to commoditized freight transport but incur lower incremental delivery and drayage costs; which was partly offset by

(iii) an increase in overhead costs, mainly comprising warehouse and equipment lease expenses, utilities, depreciation of property and equipment, and other direct costs during the six months ended December 31, 2025. The increase in balance was mainly attributable to the annual rent adjustment; which was partly offset by

(iv) a decrease in freight arrangement charges, mainly representing scheduling and booking fees for cross-border ocean freight and airfreights from the U.S. to China, during the six months ended December 31, 2025, primarily due to a decrease in the volume of cross-border ocean arrangements, from the U.S. to China; and

Our cost of revenues from the distribution of pharmaceuticals was approximately $2.0 million and approximately $0.1 million for the six months ended December 31, 2025 and 2024, respectively. Increase was consistent with increase in revenue from distribution of pharmaceuticals.

Gross Profit

Our overall gross profit was approximately $3.0 million and approximately $0.5 million for the six months ended December 31, 2025 and 2024, respectively.

Our gross margin for cross-border freight solutions was 13.1% and 5.1% for the six months ended December 31, 2025 and 2024, respectively. The increase in gross margin was primarily attributable to strategically increase our proportion of high-margin value-added services. These services command higher pricing compared to traditional freight, shifting our revenue mix toward more profitable activities.

Our gross margin for the distribution of pharmaceutical was 47.5% for six months ended December 31, 2025. compared to 44.2% for six months ended December 31, 2024. Slightly increase in gross margin was mainly due to we offer new products with higher profit margin.

Selling Expenses

Our selling expenses amounted to approximately $1.18 million for the ~~six~~ nine months ended ~~December~~March 31, ~~2025~~2026, compared to approximately $0.052 million for the same period in ~~2024~~ 2025. The increase was primarily ~~driven by~~attributable to the additional salaries for our sales team of approximately $0.4 million, system-related marketing expenses of aapproximately ~~system~~$0.3 million, and ~~the~~increased ~~advertising~~entertainment expense ~~amounted~~of to approximately $0.91 million~~, both~~ and advertising expense of ~~which~~approximately ~~were~~$0.7 million incurred in connection with the launch of our ~~new~~ pharmaceutical distribution service ~~in December 2024~~.

General and Administrative Expenses

Our general and administrative expenses increased by approximately $02.61 million, or 15115.23%, from approximately $31.78 million for the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025, to approximately $4.3 ~~million for the six months ended December 31, 2025~~. ~~These expenses represented 32.~~9% ~~and~~million ~~48.8% of our total revenues~~ for the ~~six~~nine months ended ~~December~~March 31, ~~2025 and 2024, respectively~~2026. The increase was mainly due to an increase in our professional ~~expense~~ ~~and our new pharmaceutical distribution segment in the second quarter of the fiscal year ended June 30, 2025 contributed to the rise in operating costs~~expense.

Our professional fees increased by approximately $02.80 million, or ~~140~~261.2 6%, from approximately $0.68 million for the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025, to approximately $12.3 7 million for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026. Our professional fee represented 3070.90% and 1441.87% of our total general and administrative expenses for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively. The increase was primarily due to advisory and consulting expenses for strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.

Other Income, net

Our other income, net, increased by $80187,~~839~~185, or ~~40.~~1,118.7%, from $~~201~~16,~~541~~733 for the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025, to $~~282~~203,~~380~~918 for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026. The increase was primarily due to an increase in interest income in connection with a third-party loan.

Interest Expenses

Our interest expenses increased by $~~310~~108,~~898~~814, or ~~450~~268.64%, from $6840,~~992~~541 for the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025, to $~~379~~149,~~890~~355 for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026. ~~The~~ The increase in interest expense was mainly due to ~~higher outstanding~~ interest~~-bearing~~ ~~loans and interest~~ expense in connection with the convertible note.

Loss Before Income Taxes

We had a net loss before income taxes of approximately $23.93 million and approximately $31.25 million for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively. We were in a loss position before income taxes for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, primarily attributable to the net effects of: (i) the rise in operating expenses, which was partly offset by an increase in gross profit due to the new business segment for the ~~six~~ nine months ended ~~December~~March 31, ~~2025~~2026 as mentioned above.

Income Tax Expense

We had income tax expenses of $81110,~~039~~632 and $8918,~~581~~594 for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively. A current income tax provision of $~~104~~189,~~533~~487 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~ 2026.

Based on management’s assessment of future taxable income, the Company determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against ~~its~~ its DTAs and did not recognize any deferred tax assets. We recognized a deferred income tax credit of $2350,~~494~~563 due to credit loss allowance and amortization of intangible assets, and a deferred income tax credit of $28,292 due to expected sales return, resulting in a net income tax ~~expense~~credit of $8178,~~039~~855 for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026.

WeA ~~did not have~~ current income tax provision of in$26,608 ~~the~~was ~~six~~recognized ~~months~~for ~~ended~~a ~~December~~subsidiary ~~31,~~with ~~2024, due to~~ net ~~operating~~assessable ~~loss,~~income ~~and~~while weno ~~recognized~~current ~~a deferred~~ income tax ~~asset~~provision ofwas ~~$959,095 due to temporary differences~~ recognized ~~and~~for subsidiaries in net operating loss ~~carried~~for ~~forward.~~the Wenine ~~also~~months ~~recognized~~ended aMarch ~~valuation allowance of $1~~31,~~048,676 to~~ ~~write~~2025. ~~off~~We ~~our~~recognized a deferred income tax ~~asset~~credit ~~since~~of we$8,014 ~~are~~due ~~uncertain that we will be able~~ to ~~utilize~~amortization of ~~the~~intangible ~~deferred tax asset to offset future taxable income~~assets, resulting in a net income tax expense of $8918,~~581~~594 infor the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025.

Net loss from continuing operation

As a result of the foregoing, we had a net loss of approximately $23.95 million and of approximately $31.35 million for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

14Result of Discontinued Operation

Net income (loss) from discontinued operations for the nine months ended March 31, 2026 and 2025 is as follows:

	Nine Months Ended March 31,
	2026			2025			Amount Increase (Decrease)			Percentage Increase (Decrease)
Revenue	$	10,678,106		$	10,764,921		$	(86,815	)		(0.8	)%
Cost of revenue		9,768,331			10,043,158			(274,827	)		(2.7	)%
Operating expenses		2,661,614			3,633,941			(972,327	)		(26.8	)%
Loss from operation		(1,751,839	)		(2,912,178	)		1,160,339			(39.8	)%
Gain on sale of ABL Chicago		2,556,315			-			2,556,315			100.0	%
Other (expense) income, net		(150,088	)		178,338			(328,426	)		(184.2	)%
Net income (loss) from discontinued operations, before tax		654,388			(2,733,840	)		3,388,228			(123.9	)%
Income tax		-			89,581			(89,581	)		(100.0	)%
Income (loss) from discontinued operations, net of tax provision	$	654,388		$	(2,823,421	)	$	3,477,809		$	(123.2	)%

We recognized income from discontinued operations, net of tax, of approximately $0.7 million during the nine months ended March 31, 2026, compared to loss from discontinued operations, net of tax, of approximately $2.8 million during the nine months ended March 31, 2025, representing an increase of approximately $3.5 million. The income from discontinued operations, net of tax, for the nine months ended March 31, 2026 is comprised of a gain on the sale of the ABL Chicago business of approximately $2.6 million, offset by an operational loss of approximately $1.9 million. The operational loss includes an approximately $1.8 million loss from business activities for the 226-day period ended February 12, 2026.

Liquidity and Capital Resources

AsThe offollowing ~~December~~table ~~31, 2025,~~summarizes weour ~~had~~total ~~a cash balance of approximately $1.6 million. Our~~ current assets ~~were approximately $21.2 million~~, ~~and our~~ current liabilities ~~were~~ ~~approximately $10.4 million, resulting in a current ratio of 2.03~~ and ~~positive~~ working capital offrom ~~approximately~~continuing ~~$10.8~~operations ~~million. Total stockholders’ equity~~ as of ~~December~~March 31, ~~2025~~2026 ~~was~~and ~~approximately~~June ~~$12.2~~30, ~~million.~~2025, respectively:

As of December 31, 2025 and June 30, 2025, we had accounts receivable net of allowance of approximately $4.2 million and approximately $3.3 million, respectively. We periodically review our accounts receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional allowances if necessary. For accounts receivable as of December 31, 2025 and June 30, 2025, we provided a credit loss allowance of $171,609 and $87,728, respectively.

	As of March 31, 2026		As of June 30, 2025
Current assets	$	17,045,662	$	10,278,926
Current liabilities	$	3,990,869	$	9,666,053
Working capital Surplus	$	13,054,793	$	612,873

As of ~~December~~March 31, ~~2025~~2026, ~~our liquidity~~we ~~position~~had isa ~~significantly~~cash ~~influenced~~balance byof aapproximately ~~material~~$1.3 ~~loan~~million. Our ~~receivable~~current ~~from~~assets anwere ~~unaffiliated~~approximately ~~third party~~$17.0 ~~The~~million, ~~gross~~and ~~principal~~our ~~balance is~~current ~~governed~~liabilities bywere aapproximately ~~loan~~$4.0 ~~agreement~~million, ~~dated~~resulting ~~July~~in a current ratio of 4.3, ~~2025,~~and ~~bearing~~working ~~interest~~capital atsurplus ~~4.35%~~of ~~per~~approximately ~~annum~~$13.1 ~~with~~million. aTotal ~~maturity~~stockholders’ ~~date~~equity as of ~~July~~March 331, 2026 was approximately $13.6 million.

AtAs ~~December~~of March 31, 2026 and June 30, 2025, ~~the carrying~~we ~~value~~had accounts receivable net of ~~this~~allowance ~~receivable~~of ~~was~~approximately $1.9 million and approximately $61.64 million, ~~net~~respectively. ofWe anperiodically review our accounts receivable and allowance level to ensure our methodology for ~~credit~~determining ~~losses~~allowances ofis ~~$288,000.~~reasonable ~~This~~and ~~net~~to ~~balance~~accrue additional ~~represents~~allowances 32if necessary.3% For accounts receivable as of ~~our~~March ~~total~~31, ~~current~~2026 ~~assets~~and June 30, ~~constituting~~2025, we provided a ~~significant~~credit ~~concentration~~loss allowance of ~~credit~~$171,180 and ~~risk~~$33,039, respectively.

As of March 31, 2026, our liquidity position is significantly influenced by a material loan receivable from an unaffiliated third party. The gross principal balance is governed by a loan agreement dated July 3, 2025, bearing interest at 4.35% per annum with a maturity date of July 3, 2026.

As of March 31, 2026, the carrying value of this receivable was approximately $8.7 million, net of an allowance for credit losses of approximately $0.35 million. This net balance represents 49.0% of our total current assets, constituting a significant concentration of credit risk.

Our ability to fund future operating activities and working capital requirements is partially dependent on the timely collection of this principal and interest. While we continue to monitor the counterparty’s creditworthiness and currently believe they maintain the financial capacity to meet their obligations, the recorded allowance reflects our estimate of expected credit losses under the CECL (Current Expected Credit Loss) model. Any material default or significant delay in payment by this third party could adversely impact our short-term liquidity and necessitate alternative financing. There can be no assurance that the balance will be collected in full in accordance with its contractual terms.

In assessing our liquidity, we monitor and analyze our cash on hand, our ability to generate sufficient revenues sources in the future, and our operating and capital expenditure commitments. Historically, we have funded our working capital needs primarily through operations, issuances of convertible debts, private placements, loans, initial public offerings and working capital loans from stockholders. Our working capital requirements are influenced by the efficiency of our operations, the volume and dollar value of our revenue contracts, the progress in the execution of customer contracts, and the timing of accounts receivable collections.

Cash Flows

The following table sets forth a summary of our cash flows from continuing operations for the periods indicated:

	For the Six Months Ended December 31,
	For the Nine Months Ended March 31,
	2025			2024
	2026			2025
Net cash used in operating activities	$	(4,469,978	)	$	(1,933,000	)
Net cash used in operating activities - continuing operations	$	(3,041,062	)	$	(979,735	)
Net cash used in investing activities		(7,145,990	)		(1,350,498	)
Net cash used in investing activities - continuing operations		(8,497,511	)		(1,147,422	)
Net cash provided by financing activities		8,095,889			4,295,361
Net cash provided by financing activities - continuing operations		7,770,045			5,790,999
Effect of exchange rate changes on cash		205,457			(11,999	)
Net cash used in discontinued operation		(213,857	)		(2,279,749	)
Net increase in cash and cash equivalent		(3,314,622	)		999,864
Effect of exchange rate changes on cash		326,631			(8,386	)
Net (decrease) increase in cash		(3,655,754	)		1,375,707
Cash, beginning of the period		4,956,060			123,550
Cash, end of the period	$	1,~~641~~300,~~438~~306			1,~~123~~499,~~414~~257
Less: cash and cash equivalents of discontinued operations		-			241,867
Cash, end of the period for continuing operations	$	1,300,306		$	1,257,390

Operating Activities - continuing operations

Net cash used in operating activities was $43,~~469~~041,~~978~~062 in the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, ~~which~~primarily ~~included~~reflecting a net loss from continuing operations of $23,~~940~~452,~~897~~877, adjusted for non-cash items of $2,~~504~~626,~~011~~615 and changes in working capital deficits of $42,~~033~~214,~~092~~800. The non-cash items primarily included $187,~~054,794~~881 straight-line lease expense ofrelated to operating leases, $~~940~~2,~~860~~089,460 stock-based compensation for consulting expenses, $~~102~~37,~~975 depreciation included in G&A and~~919 ~~cost of revenue, $17,200~~ depreciation ~~of right-of-use finance assets~~, $98109,~~835~~753 amortization of discount and bond issuance cost, $4264,~~742~~ 112 amortization of intangible assets, $~~100~~177,~~052~~765 interest income from a third party loan, $~~288~~350,000 from provision of allowance for expected credit loss on loan receivable, $82133,~~151~~772 from provision of allowance for expected credit loss on accounts receivable and a decrease of $2378,~~494~~855 from deferred tax liabilities. The adjustments for changes in working capital mainly included an increase of $~~932~~517,~~852~~421 in accounts receivable ~~from third parties~~ due to an increase of revenues near period end, ~~an increase of $47,610 in accounts receivable – related parties, an increase~~ ~~in inventory of $27,802,~~ an increase of $32,~~000~~926,~~087~~217 in prepayment, deposit and other receivable and a payment of $170,~~341,522~~171 for operating lease liabilities, partially offset by ~~a decrease of $50,142 in contract assets,~~ an increase of $7138,~~761~~079 in ~~refund liabilities, an increase of $135,197 in~~ accounts payable ~~to related parties~~, ~~an increase of $404,825 in accounts payable to third parties,~~ a decrease of $65,152 in note receivable, ~~a decrease of $70,169 in right of return assets,~~ an increase of $35162,~~428~~204 in ~~contract~~refund liabilities, an increase of $94185,~~806~~ 250 in tax payable, and an increase of $~~389~~846,~~301~~065 in accrued liabilities and other payables and a decrease in inventory of $74,510.

15Net cash used in operating activities was $979,735 for the nine months ended March 31, 2025, including net loss from continuing operations of $1,529,602, adjusted for non-cash items for $109,895 and changes in working capital surplus of $439,972. The non-cash items primarily included $51,805 straight-line lease expense of operating leases, $5,152 depreciation expense, $32,056 amortization of intangible asset, $40,541 interest expense of convertible notes, $11,645 uncollected interest income from a third-party loan and a decrease of $8,014 from deferred tax asset. The adjustments for changes in working capital mainly included an increase of $807,540 in accrued expense and other payable, an increase of $299,114 in accounts payable and an increase of $42,168 in contract liabilities, partially offset by an increase of $337,288 in accounts receivable, an increase of $216,538 in inventories, an increase of $100,923 in prepayment, deposit and other receivable and a decrease of $80,709 in operating lease liabilities.

~~Net~~The $2,061,327 increase in cash used in operating activities ~~was~~for ~~$1,933,000 in~~ the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2026, ~~including~~compared ~~net~~to ~~loss~~the ofprior $3year,~~282,227,~~ ~~adjusted~~was ~~for non-cash items for $1,183,152 and changes in working capital of positive $166,075. The non-cash items~~ primarily included $989,003 amortization and interest expense of operating lease assets, $87,132 depreciation included in G&A and cost of revenue, $15,480 depreciation of right-of-use finance assets and $1,956 from provision of allowance for expected credit loss and a decrease of $89,581 from deferred tax asset due to ~~recognition~~ of valuation allowance. The adjustments for changes in working capital mainly included a decrease of $424,648 and $565,766 in accounts receivable — third parties and related parties, respectively, due to a decrease of revenues near period end and an increase ~~of $312,722~~ in ~~accrued~~advance ~~expense~~deposits ~~and other payable, partially offset by an increase in prepayment, deposit and other receivable~~ of $~~112~~2,~~620~~825, a294 ~~decrease~~to ~~of $742,649 in operating lease liabilities and a decrease of $156,165 in accounts payable — related parties~~suppliers.

~~The~~Investing ~~$2,536,978~~Activities ~~increase~~- ~~in cash~~continuing used in operating activities for the six months ended December 31, 2025, compared to the prior year, was primarily due to an increase in advance deposits of $2,873,260 to supplier and an increase of $1,357,500 in accounts receivable — third parties, partly offset by a decrease of $341,330 in net loss and an increase of $667,902 in accounts payable — third parties and related parties due to the timing of vendor, client, and related parties payment.operations

~~Investing~~Net ~~Activities~~cash used in investing activities was $8,497,511 and $1,147,422 for the nine months ended March 31, 2026 and 2025, respectively. Net cash used in investing activities for the nine months ended March 31, 2026, was primarily attributable to loans of $8,497,511 to a third party. The cash used in the same period of last year was primarily attributable to net cash payments of $552,721 for intangible assets through the acquisition of 100% equity interest in Hupan Pharmaceutical and a loan of $561,901 to a third party.

Net cash used in investing activities was $7,145,990 and $1,350,498 for the six months ended December 31, 2025 and 2024, respectively. Net cash used in investing activities for the six months ended December 31, 2025, was primarily attributable loans of $7,037,190 to a third party. The cash used in same period of last year was primarily attributable to loans to a third party of $686,697 and net cash payment for asset acquisition of $552,721. 11

Financing Activities - continuing operations

Net cash provided by financing activities was $87,~~095~~770,~~889~~045 and $45,~~295~~790,~~361~~ 999 for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025. The increase was primarily due to proceeds from private placement of financing activities compared with the prior period. During the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026, we generated cash inflows from ~~loan borrowings of $1,644,523,~~ private placements of $78,~~133~~236,~~492~~231, ~~advances from related parties of $260,144 and advance from shareholders of $174,626,~~ which were partially offset by $~~399~~432,~~615~~948 in principal repayments of convertible debt~~, loan repayments of $597,546 and advance to related parties of $62,779~~. During the ~~six~~nine months ended ~~December~~March 31, ~~2024~~2025, we had due to the net proceeds of $5,351,281 from the offering and net proceeds ~~from loan borrowing~~ of $~~195~~755,~~000~~512 from ~~and~~issuance aof ~~loan~~convertible ~~from~~note aand ~~third~~advances ~~party~~ of $276,365 from Hupan Pharmaceutical prior to acquisition, partly offset by repayment of $~~805~~592,~~345~~159 to shareholders ~~and loans repayment of $339~~,~~914~~ during the ~~six~~ nine months ended ~~December~~March 31, ~~2024~~2025.

Cash Flows from Discontinued Operations

Cash flows from discontinued operations are associated with the disposal of ABL Chicago. Cash used in operations of approximately $1.4 million and approximately $1.2 million for nine months ended March 31, 2026 and 2025. Net loss of ABL Chicago were the primary components of operating cash flows for nine months ended March 31, 2026 and 2025. Cash used in investing activities of approximately $0.1 million for nine months ended March 31, 2025, which is related to capital expenditures. Cash provided by financing activities of approximately $1.3 million for nine months ended March 31, 2026 due to loan borrowing. Cash used in financing activities of approximately $1.0 million for nine months ended March 31, 2025 due to advances to related parties. See Note 15. “Discontinued Operations” to our condensed consolidated financial statements for additional information.

Capital Expenditure

Our capital expenditures are incurred primarily in connection with the purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold improvement and vehicles. Our capital expenditures amounted to nil and $~~111~~32,~~080~~800 for the ~~six~~nine months ended ~~December~~March 31, ~~2025~~2026 and ~~2024~~2025, respectively.

We expect that our capital expenditures will increase in the future as our business continues to develop and expand. We intend to fund our future capital expenditures with our existing cash balance, proceeds of loans and issuance of convertible debts and private placement offering.

Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported amounts of assets, liabilities, revenue, costs and expenses, and any related disclosures. Actual results could materially differ from those estimates. Critical accounting policy is both material to the presentation of financial statements and requires management to make difficult, subjective or complex judgments that could have a material effect on financial condition or results of operations. Accounting estimates and assumptions may become critical when they are material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance.

Critical accounting estimates are estimates that require us to make assumptions about matters that were highly uncertain at the time the accounting estimate were made and if different estimates that we reasonably could have used in the current period, or changes in the accounting estimate that are reasonably likely occur from period to period, have a material impact on the presentation of our financial condition, changes in financial condition or results of operations. The management of the Company believes the following critical accounting estimate is the most significantly affected by judgments and assumptions used in the preparation of our consolidated financial statements:.

1612

Common Stock Warrants Instruments

The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the instruments are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the instruments meet all of the requirements for equity classification under ASC 815, including whether the instruments are indexed to the Company’s own ordinary shares and whether the instrument holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the instruments are outstanding. The Company determined, upon further review of the warrant agreement and the convertible debt agreement, that the common stock warrants are qualified for equity accounting treatment. The fair value of equity-classified warrants is estimated as of the date of issuance using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model includes various assumptions, including the fair market value of our common stock, expected life of stock options, the expected volatility and the expected risk-free interest rate, among others. These assumptions reflect our best estimates, but they involve inherent uncertainties based on market conditions generally outside our control.

Allowance of expected credit losses on loan receivable from a third party

The Company accounts for its allowance for credit losses on loan receivables in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326, Financial Instruments—Credit Losses (“ASC 326”). The Company assesses the credit risk of its third-party loan receivables at each reporting date to ensure that the allowance reflects management’s current estimate of expected credit losses over the contractual life of the instrument.

The measurement of the allowance for expected credit losses is primarily determined using a Probability of Default (“PD”) and Loss Given Default (“LGD”) methodology. This assessment considers whether the borrower meets its contractual obligations and involves an evaluation of the borrower’s historical performance, current financial condition, and the value of any underlying collateral.

The PD × LGD model includes various assumptions, including the selection of forward-looking macroeconomic forecasts (such as interest rate environments), the borrower’s credit rating, and estimated recovery rates. This assessment, which requires the use of significant professional judgment, is conducted at the time of loan inception and as of each subsequent quarterly period end date while the loan is outstanding. These assumptions reflect management’s best estimates based on current and supportable information, but they involve inherent uncertainties based on economic and market conditions generally outside of the Company’s control. Changes in these estimates are recognized in the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) in the period in which they occur.

Refer to Notes 2 to the condensed consolidated financial statements included in this report for further discussion of our significant accounting policies and the effect on our condensed consolidated financial statements.

Recent Accounting Pronouncements

The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued, see Note 2 - Summary Of Significant Accounting Policies in the note of financial statement.

~~Item 7A. Quantitative and Qualitative Disclosures About Market Risk.~~13

We are a smaller reporting company and are not required to provide the information required under this item.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are not required to provide the information otherwise required under this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of the end of the period covered by this report.

Based upon this evaluation, our management concluded that as of ~~December~~March 31, ~~2025~~2026, our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

●

We are lacking adequate segregation of duties and effective risk assessment; and

●

We are lacking sufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both the U.S. GAAP, and SEC guidelines.

A material weakness is a deficiency, or a combination of deficiencies, within the meaning of PCAOB Auditing Standard AS2201, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. We plan to address the weaknesses identified above by implementing the following measures:

(i)

Continuously hiring additional accounting staffs with comprehensive knowledge of U.S. GAAP and SEC reporting requirements;

(ii)

Designing and implementing formal procedures and controls supporting the Company’s period-end financial reporting process, such as controls over the preparation and review of account reconciliations and disclosures in the consolidated financial statements; and

(iii)

Ameliorating our internal audit to assist with assessment of Sarbanes-Oxley compliance requirements and improvement of internal controls related to financial reporting.

Changes in Internal Control over Financial Reporting

During the most recent fiscal quarter, there has not been any change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

1814

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

Item 1A. Risk Factors

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Initial Public Offering of Common Stock

On July 1, 2024, we closed our initial public offering (“IPO”), in which we sold 1,500,000 shares of common stock at a price to the public of $4.50 per share. The offer and sale of the shares in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-278416), which was declared effective by the Securities and Exchange Commission on June 27, 2024. We raised approximately $5.7 million in net proceeds after deducting underwriters’ discounts and commissions as well as offering. As of the date of this report, with the proceeds of the IPO, we used approximately $3.3 million for in marketing activities and business expansion and used approximately $2.4 million for working capital needs. We expect to use the remaining net proceeds for (i) investment in strengthening our cross-border supply chain capabilities, (ii) marketing activities to grow our customer base, (iii) strategic investments and potential mergers and acquisitions in the future, and (iv) general corporate purposes.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

~~None~~On May 15, 2026, the Company and an unaffiliated third-party purchaser (the “Purchaser”) entered into a share purchase agreement (the “Share Purchase Agreement”), pursuant to which the Company agreed to sell, and the Purchaser agreed to purchase, 100% of the issued and outstanding shares of American Bear Logistics Corp. The transaction was previously described in the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on January 30, 2026 (File No. 001-42140) and approved by the Company’s shareholders at the 2026 Annual Meeting of Stockholders held on February 12, 2026, the results of which were reported in the Company’s Current Report on Form 8-K filed on February 18, 2026 (File No. 001-42140). The transactions contemplated by the Share Purchase Agreement were consummated on May 16, 2026. The Share Purchase Agreement is filed as Exhibit 10.19 to this Quarterly Report on Form 10-Q.

1915

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q for the quarter ended ~~December~~March 31, ~~2025~~2026.

Exhibit Number		Description
3.1		Articles of Incorporation of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
3.2		Certificate of Amendment to the Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
3.3		Bylaws of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.3 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
4.1		Form of Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the Amendment No. 2 to Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on May 14, 2024).
4.2		Form of Convertible Promissory Notes (incorporated by reference of Exhibit 4.1 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
4.3		Form of Common Stock Purchase Warrant (incorporated by reference of Exhibit 4.2 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
10.1		Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
10.2		Form of Employment Agreement between the Registrant and Executive Officers (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
10.3		Lease Agreement, effective as of February 16, 2021, between American Bear Logistics Corp. and Prologis Targeted U.S. Logistics Fund, L.P. (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
10.4		Southlake Business Park Office/Warehouse Lease Agreement, dated as of January 11, 2021, between American Bear Logistics Corp. and Southlake Industrial, L.P. (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 (File No. 333-278416), filed with the SEC on April 1, 2024).
10.5		Lease Agreement, effective as of March 12, 2024, between American Bear Logistics Corp. and Morris Clifton Associates I, LLC (incorporated by reference to Exhibit 10.6 to the annual report on Form 10-K (File No. 001-42140), filed with the SEC on September 30, 2024).
10.6		Lease Agreement, effective as of July 18, 2024, between American Bear Logistics Corp. and Liberty Property Limited Partnership (incorporated by reference to Exhibit 10.7 to the annual report on Form 10-K (File No. 001-42140), filed with the SEC on September 30, 2024).

2016

10.7		First Amendment to Lease Agreement, effective as of August 11, 2024, between American Bear Logistics Corp. and Liberty Property Limited Partnership (incorporated by reference to Exhibit 10.8 to the quarterly report on Form 10-Q (File No. 001-42140), filed with the SEC on November 14, 2024).
10.8		English Translation of the Equity Transfer Agreement, dated November 5, 2024, entered into among Hubei Haoyaoshi Zhenghe Pharmacy Chain Co., Ltd, Hubei Huayao Pharmaceutical Co., Ltd., and Sichuan Hupan Jincheng Enterprise Management Co., Ltd. (incorporated by reference to Exhibit 10.1 to the Form 8-K (File No. 001-42140), filed with the SEC on November 8, 2024).
10.9		Form of Securities Purchase Agreement, by and between the Investor and Company (incorporated by reference of Exhibit 10.1 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
10.10		Form of Security Agreement, by and between the Investor and the Company (incorporated by reference of Exhibit 10.2 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
10.11		Form of Guarantee Agreement, by and between the Investor and ABL (incorporated by reference of Exhibit 10.3 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
10.12		Form of Pledge Agreement, by and between the Investor and Company Form of Guarantee Agreement, by and between the Investor and ABL (incorporated by reference of Exhibit 10.4 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
10.13		Form of Registration Rights Agreement, by and between the Investor and Company (incorporated by reference of Exhibit 10.5 to the Form 8-K (File No. 001-42140), filed with the SEC on March 5, 2025)
10.14		Form of Securities Purchase Agreement by and among the Company and the Purchasers In Connection With certain investors (incorporated herein by reference to Exhibit 10.1 to the Form 8-K (File No. 001-42140) filed with the SEC on June 25, 2025)
10.15		Form of Securities Purchase Agreement by and among the Company and the Purchasers In Connection With certain investors (incorporated herein by reference to Exhibit 10.1 to the Form 8-K (File No. 001-42140) filed with the SEC on July 22, 2025, which was further revised on August 11, 2025)
10.16		Form of Securities Purchase Agreement by and among the Company and the Purchasers In Connection With certain investors (incorporated herein by reference to Exhibit 10.1 to the Form 8-K (File No. 001-42140) filed with the SEC on August 8, 2025)
10.17		Form of Securities Purchase Agreement by and among the Company and the Purchasers In Connection With certain investors (incorporated herein by reference to Exhibit 10.1 to the Form 8-K (File No. 001-42140) filed with the SEC on December 19, 2025)
10.18		Form of Securities Purchase Agreement by and among the Company and the Purchasers In Connection With certain investors (incorporated herein by reference to Exhibit 10.1 to the Form 8-K (File No. 001-42140) filed with the SEC on January 5, 2026)
10.19+		Share Purchase Agreement dated May 15, 2026, by and between the Company and a third party individual
31.1		Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer.
31.2		Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer.
32.1#		Section 1350 Certifications of Principal Executive Officer.
32.2#		Section 1350 Certifications of Principal Financial Officer.
101		Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q.
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

+	Certain portions of this exhibit have been redacted in accordance with Item 601(a)(6) of Regulation S-K.

#	This certification is deemed not filed for purpose of Section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

2117

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.

	Lakeside Holding Limited
Dated: February 19, 2026	By:	/s/ Yang Li
Dated: May 19, 2026	By:	/s/ Yang Li
		Yang Li
		Joint Chief Executive Officer (Principal Executive Officer)

2218

http://fasb.org/us-gaap/2025#UsefulLifeTermOfLeaseMember The Company made the total principal repayments of $9,096 and $11,768 in connection with the equipment loans during the three months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned equipment loans amounted to $560 and $1,416 during the three months ended December 31, 2025 and 2024, respectively. The Company did not have any new equipment loan during the three months ended December 31, 2025. The Company made the total principal repayments of $18,565 and $25,523 in connection with the equipment loans during the six months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned equipment loans amounted to $1,321 and $3,056 during the six months ended December 31, 2025 and 2024, respectively. The Company did not have any new equipment loan during the six months ended December 31, 2025. During the six months ended December 31, 2025, the Company entered into a new vehicle loan with Webank for a principal amount of $69,862 at a fixed interest rate of 1.92% per annum and matures in July, 2030. The loan is secured by the related vehicle, which has been pledged as collateral. The Company made the total principal repayments of $10,151 and $16,119 in connection with the above vehicle loans during the three months ended December 31, 2025 and 2024, respectively. Interest expenses for the above-mentioned above vehicle loans amounted to $1,155 and $ 3,136 during the three months ended December 31, 2025 and 2024, respectively. The Company made the total principal repayments of $22,101 and $30,354 in connection with the above vehicle loans during the six months ended December 31, 2025 and 2024, respectively. 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March 31,
2026

June 30,
2025

Weighted-average remaining lease term (years):

Operating lease

Weighted average discount rate:

Operating lease