Revenue and Profitability - For the three months ended September 30, 2025, revenues amounted to $6.1 million, a 48.8% increase from $4.1 million in the same period of 2024[270]. - Gross profit for the same period was $1.1 million, compared to $0.5 million in 2024, reflecting a significant improvement in profitability[270]. - Total revenue increased by $2.0 million, or 49.5%, from $4.1 million in Q3 2024 to $6.1 million in Q3 2025[294]. - Revenue from cross-border freight solutions rose by $0.7 million, or 16.7%, from $4.1 million in Q3 2024 to $4.8 million in Q3 2025, driven mainly by cross-border airfreight solutions[297]. - Revenue from cross-border ocean freight solutions decreased by $0.4 million, or 21.9%, from $1.8 million in Q3 2024 to $1.4 million in Q3 2025, due to a drop in processed volume from 1,430 TEU to 1,331 TEU[298]. - Revenue from cross-border airfreight solutions increased by $1.1 million, or 48.2%, from $2.2 million in Q3 2024 to $3.3 million in Q3 2025, despite a decrease in volume from approximately 7,273 tons to 5,776 tons[299]. - Revenue from Asia-based customers for cross-border freight solutions increased by $1.2 million, or 43.0%, from $2.8 million in Q3 2024 to $4.0 million in Q3 2025[301]. - Revenue from U.S.-based customers for cross-border freight solutions decreased by $0.5 million, or 41.4%, from $1.2 million in Q3 2024 to $0.7 million in Q3 2025[303]. - Total gross profit increased by $586.2 million, or 112.2%, from $522.5 million in Q3 2024 to $1.1 million in Q3 2025[296]. Operating Expenses and Losses - Total operating expenses rose by $530.3 million, or 28.7%, from $1.9 million in Q3 2024 to $2.4 million in Q3 2025[294]. - Net loss for Q3 2025 was $1.4 million, compared to a net loss of $1.3 million in Q3 2024, reflecting a slight increase in loss by $21,809[294]. - Selling expenses amounted to $0.2 million for the three months ended September 30, 2025, driven by salaries, software, and advertising expenses related to the new pharmaceutical distribution service[309]. - General and administrative expenses increased by $0.3 million, or 14.7%, from $1.8 million for the three months ended September 30, 2024, to $2.1 million for the same period in 2025[310]. - Interest expenses increased by $168,331, or 598.8%, from $28,110 for the three months ended September 30, 2024, to $196,441 for the same period in 2025[313]. Cash Flow and Financial Position - Net cash used in operating activities was $4,016,518 for the three months ended September 30, 2025, compared to $1,402,784 in the same period of 2024[322]. - Cash balance as of September 30, 2025, was $4.5 million, with current assets of $15.0 million and current liabilities of $9.8 million, resulting in a current ratio of 1.5[319]. - Net cash used in investing activities was $108,800 for the three months ended September 30, 2025, primarily due to an additional loan to a third party[326]. - Net cash provided by financing activities decreased to $3,672,316 for the three months ended September 30, 2025, from $4,044,402 in the same period of the prior year, primarily due to a smaller scale of financing activities[327]. - Capital expenditures were nil for the three months ended September 30, 2025, compared to $38,279 for the same period in 2024[328]. - The company expects capital expenditures to increase in the future as the business develops and plans to fund these expenditures with existing cash, loan proceeds, and private placements[329]. Business Operations and Market Environment - As of September 30, 2025, the company had fulfilled over 58,500 cross-border supply chain solution orders with an aggregate assessed value of $1.0 billion[269]. - The company has established collaborations with almost all major global ocean and air carriers, forwarding 37,300 TEU of container loads and 75,100 tons of air cargo as of September 30, 2025[267]. - The introduction of a new revenue stream from the distribution of pharmaceutical and medical products began in fiscal year 2025, creating opportunities but also exposing the company to additional risks[272]. - The U.S. has permanently eliminated the $800 de minimis threshold for duty-free shipments, increasing customs processing complexity and potentially reducing low-value parcel volumes[284]. - Recent U.S. tariff policies have created a challenging trade environment, significantly disrupting U.S.-China commerce and increasing operational complexities[282]. - The company aims to expand its customer base and improve service quality to achieve sustainable business growth, having served over 400 customers as of September 30, 2025[271]. - The company plans to continue monitoring the impact of COVID-19 and adapt its business operations as necessary to maintain service levels and profitability[281]. Accounting and Financial Reporting - The company prepares its financial statements in conformity with U.S. GAAP, which requires significant judgments and estimates that could materially affect reported amounts[330]. - Critical accounting estimates may have a material impact on the presentation of financial condition and results of operations, particularly those requiring subjective judgments[331]. - Common stock warrants are classified as either equity or liability instruments based on specific terms and assessments, with equity-classified warrants estimated using the Black-Scholes option-pricing model[332]. - The fair value of equity-classified warrants is determined at issuance, reflecting assumptions about market conditions and the company's stock[332]. - The company periodically reviews new accounting standards and their applicability to its financial statements[334].

Explanatory Notes Defines key terms and currency used throughout the Annual Report on Form 10-K, including 'Lakeside,' 'the Company,' 'we,' 'us,' and 'our' referring to Lakeside Holding Limited and its consolidated subsidiaries, along with specific entity and currency definitions - Defines key terms used throughout the Annual Report on Form 10-K, including 'Lakeside,' 'the Company,' 'we,' 'us,' and 'our' referring to Lakeside Holding Limited and its consolidated subsidiaries. It also specifies 'ABL' for American Bear Logistics Corp., 'Sichuan Hupan' for Sichuan Hupan Jincheng Enterprise Management Co., Ltd., and 'Hupan Pharmaceutical' for Hupan Pharmaceutical (Hubei) Co., Ltd., along with currency definitions (RMB and US$)[12](index=12&type=chunk) Cautionary Note Regarding Forward-Looking Statements This section warns investors that the Annual Report contains forward-looking statements subject to substantial risks and uncertainties, and actual results may differ materially - This section highlights that the Annual Report contains forward-looking statements subject to substantial risks and uncertainties, identifiable by words like 'anticipate,' 'believe,' 'expect,' 'plan,' 'will,' or 'would.' Investors are cautioned not to unduly rely on these statements as predictions of future events, as actual results may differ materially[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) - Key risk factors affecting forward-looking statements include changes in the competitive environment, currency fluctuations, accounting estimate changes, compliance challenges with laws and regulations, intellectual property protection, personnel retention, natural disasters, system disruptions, technology development, third-party actions, and business expansion costs[15](index=15&type=chunk) PART I Part I covers the company's business operations, risk factors, unresolved staff comments, cybersecurity, properties, legal proceedings, and mine safety disclosures [Item 1. Business](index=7&type=section&id=Item%201.%20Business) Lakeside Holding Limited is a U.S.-based integrated cross-border supply chain solution provider with a focus on the Asian market, offering ocean and air freight solutions, customs clearance, warehousing, and U.S. domestic ground transportation. The company expanded into pharmaceutical distribution in China in FY2025. It leverages a strong network, technology platform, and regional warehousing to support its operations and has achieved significant growth since its inception in 2018 [Overview](index=7&type=section&id=Overview) Lakeside Holding Limited provides integrated cross-border supply chain solutions, including ocean/air freight, customs, warehousing, and U.S. ground transport, expanding into pharmaceutical distribution in China in FY2025 - Lakeside Holding Limited is a U.S.-based integrated cross-border supply chain solution provider focusing on the Asian market, including China and South Korea[22](index=22&type=chunk) - The company offers customized cross-border ocean and air freight solutions, including freight consolidation and forwarding, customs clearance, warehousing and distribution, and U.S. domestic ground transportation services[22](index=22&type=chunk) - In FY2025, Lakeside expanded into pharmaceutical distribution through its subsidiary Hupan Pharmaceutical, supplying infusion fluids in Wuhan, China[22](index=22&type=chunk)[27](index=27&type=chunk) Operational Highlights (as of June 30, 2025) | Metric | Value | | :----------------------------------- | :----------------------------------- | | Warehousing & Distribution Centers | 3 (Illinois & Texas) | | Aggregate Gross Feet Area | ~142,484 sq ft | | Aggregate Daily Floor Load Capacity | Up to 3,000 cubic meters | | Customs Clearance (Aggregate Assessed Value) | Over $54.0 million | | Total Cross-border Supply Chain Orders Fulfilled | Over 55,000 | | Total Assessed Value of Fulfilled Orders | $1.0 billion | | Orders Completed in FY2025 | 14,000 | | U.S. States Served | ~48 | | Service Provider Network (Domestic Ground) | Over 200 carriers, ~60,000 drivers, 150 terminals | | Cross-border Shipments (FY2025) | 35,900 TEU (ocean), 69,300 tons (air) | [Our Solutions and Services](index=7&type=section&id=Our%20Solutions%20and%20Services) The company offers tailored cross-border ocean and airfreight solutions, customs clearance, warehousing, U.S. domestic ground transportation, and new pharmaceutical distribution services in China - The company primarily offers tailored cross-border ocean and airfreight solutions for transporting goods into the U.S[28](index=28&type=chunk) - Services include cross-border freight consolidation and forwarding (as NVOCC and indirect air carrier), customs clearance (in collaboration with licensed experts), warehousing and distribution (at regional centers in Illinois and Texas), and U.S. domestic ground transportation (full-truckload and less-than-truckload)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - A new Pharmaceutical Distribution Service was introduced in FY2025 through Hupan Pharmaceutical, involving product sourcing from manufacturers and distribution to customers in Mainland China, supported by a specialized license[34](index=34&type=chunk) [Service Providers and Suppliers](index=8&type=section&id=Service%20Providers%20and%20Suppliers) Lakeside leverages an extensive network of global freight carriers and U.S. domestic ground transportation providers, also sourcing pharmaceutical products from multiple suppliers - Lakeside has an extensive network of global freight carriers and U.S. domestic ground transportation carriers, collaborating with major players for ocean and air shipments[35](index=35&type=chunk) - As of June 30, 2025, the company collaborated with major global ocean and air carriers for over **35,900 TEU** of container loads and **69,300 tons** of air cargo, and over **200 domestic ground transportation carriers**[35](index=35&type=chunk) - For pharmaceutical distribution, the company sourced approximately **6.5 million units** from **7 suppliers** and delivered to **47 customers** in FY2025, noting readily available competitive sources[37](index=37&type=chunk) [Technology](index=9&type=section&id=Technology) The company uses a proprietary cloud-based platform for operational efficiency, route optimization, real-time quotes, and an intelligent warehousing system, all supported by robust data security - The company utilizes a highly scalable proprietary cloud-based technology platform, the American Bear Logistics Data Tool Management Platform, to streamline services and enhance operational efficiency[39](index=39&type=chunk) - The platform optimizes route-building and pricing, provides automated real-time fee quotes, and supports contractual account management, document generation, and recordkeeping[39](index=39&type=chunk) - An intelligent warehousing system manages storage remotely, prevents stockouts, enables intelligent replenishment and order fulfillment, and sends inventory alerts[40](index=40&type=chunk) - Data security is maintained through an internal data security management policy, firewalls, and continuous monitoring and improvement of privacy policies[42](index=42&type=chunk) [Competition](index=9&type=section&id=Competition) The integrated cross-border supply chain market is highly fragmented and competitive, with factors like service quality, technology, and resources influencing market position - The integrated cross-border supply chain solution market is highly fragmented and competitive, especially for providers focusing on the Asian market[43](index=43&type=chunk) - Competition factors include customer relationships, service quality, transportation modes, technology infrastructure, and industry experience[45](index=45&type=chunk) - Competitors may possess greater financial/operational resources, brand recognition, or longer operating histories, potentially allowing them to respond more quickly to market changes[44](index=44&type=chunk) [Sales and Marketing](index=10&type=section&id=Sales%20and%20Marketing) Marketing efforts focus on enhancing brand awareness and reputation, primarily attracting new customers through testimonials, referrals, and participation in trade events - Brand recognition is crucial for customer acquisition and retention. Marketing efforts focus on enhancing brand awareness and reputation[46](index=46&type=chunk) - New customers are primarily attracted through testimonials and referrals from existing clients. The company also attends international trade fairs, exhibitions, conferences, and local chamber of commerce events[46](index=46&type=chunk) [Intellectual Property](index=10&type=section&id=Intellectual%20Property) The company protects its proprietary technology and brand through trademarks, confidentiality agreements, and non-disclosure procedures - The company protects its proprietary technology and brand through trademarks (e.g., American Bear Logistics), confidentiality procedures, and non-disclosure agreements[47](index=47&type=chunk)[48](index=48&type=chunk) [Insurance](index=10&type=section&id=Insurance) Lakeside maintains comprehensive commercial automobile, general liability, cargo legal liability, and property insurance coverage with reasonable limits and deductibles - Lakeside maintains commercial automobile and trucker's liability, commercial general liability, cargo legal liability, and property coverage, with limits and deductibles deemed reasonable[49](index=49&type=chunk) [Seasonality](index=10&type=section&id=Seasonality) Revenue and profitability typically peak in the fourth calendar quarter due to increased demand during the holiday season, boosting supply chain solution needs - Revenue and profitability are typically higher in the fourth quarter of the calendar year due to increased demand during the holiday season, which boosts the need for supply chain solutions[50](index=50&type=chunk) [Employees](index=10&type=section&id=Employees) As of June 30, 2025, the company had 94 full-time, non-unionized employees, fostering an equitable and inclusive work environment - As of June 30, 2025, the company had **94 full-time employees**, none of whom are unionized or under collective bargaining agreements[51](index=51&type=chunk) - The company fosters an equitable, inclusive, and diverse work environment, providing equal opportunities for growth and development[52](index=52&type=chunk) [Government Regulations](index=11&type=section&id=Government%20Regulations) U.S. operations are governed by various laws requiring licenses for ocean/air freight, customs, and warehousing, while China pharmaceutical distribution requires a specific license and regulatory compliance - The company's U.S. operations are governed by U.S. laws and regulations, requiring licenses such as ocean transportation intermediary (NVOCC), indirect air carrier, and container freight station[53](index=53&type=chunk) - Air freight forwarding services are regulated by the Federal Aviation Act and TSA, requiring adherence to security protocols and periodic audits[57](index=57&type=chunk) - Ocean freight forwarding services (NVOCC) are regulated by the FMC, requiring tariff filing, surety bonds, and compliance with the Shipping Act of 1984[58](index=58&type=chunk)[59](index=59&type=chunk) - Freight forwarder liability is generally limited by international agreements (e.g., Carriage of Goods by Sea Act, Montreal Convention) and depends on insurance coverage and the forwarder's role (principal vs. agent)[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk) - Compliance with Export Administration Regulations (EAR) is mandatory for forwarding agents, requiring due diligence, accurate export data filing, and adherence to documentation requirements[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - Customs examinations are mandated by CBP for all cargo entering the U.S., facilitated by electronic systems, and TSA enforces air cargo security screening[67](index=67&type=chunk) - Warehousing and distribution services, including Container Freight Stations (CFS), must comply with U.S. Customs regulations (19 CFR Part 19) and TSA-approved security programs for indirect air carriers[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - Data protection and security are governed by laws like the Privacy Act of 1974 and GDPR, requiring safeguards for sensitive customer and employee data[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) - Pharmaceutical product distribution in China requires a Pharmaceutical Operation License and is supervised by the State Administration for Market Regulation, with Hubei Pharmaceutical passing an on-site inspection in August 2025[75](index=75&type=chunk) [Item 1A. Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Lakeside Holding Limited is not required to provide detailed risk factor information in this section. For risks related to the company and its operations, readers are directed to the 'Risk Factors' section in the prospectus dated April 21, 2025, filed with the SEC - The company is a smaller reporting company and refers to its prospectus dated April 21, 2025, for detailed risk factors[77](index=77&type=chunk) [Item 1B. Unresolved Staff Comments](index=15&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) As a smaller reporting company, Lakeside Holding Limited is not required to provide information regarding unresolved staff comments - The company is a smaller reporting company and is not required to provide information on unresolved staff comments[78](index=78&type=chunk) [Item 1C. Cybersecurity](index=15&type=section&id=Item%201C.%20Cybersecurity) Lakeside Holding Limited maintains procedures for identifying, assessing, and managing material cybersecurity risks to protect its systems and information. Significant incidents are reviewed by senior management for materiality. The board of directors directly oversees risk management, including cybersecurity, and reviews related disclosures. As of the report date, no material cybersecurity incidents or threats have affected the company - The company has procedures for identifying, assessing, and managing material cybersecurity risks to protect confidentiality, integrity, and availability of critical systems and information[79](index=79&type=chunk) - Significant security incidents are reviewed by the CEO and COO, with IT department assistance, to determine materiality and disclosure requirements[80](index=80&type=chunk) - The board of directors directly administers cybersecurity oversight, ensuring risks to information assets are managed appropriately and reviewing related disclosures[82](index=82&type=chunk) - As of the report date, no material cybersecurity incidents or threats have affected or are reasonably likely to materially affect the company's business, strategy, results of operations, or financial condition[81](index=81&type=chunk) [Item 2. Properties](index=15&type=section&id=Item%202.%20Properties) Lakeside Holding Limited leases several facilities in the U.S. and China. In Illinois, it leases approximately 65,981 sq ft for its U.S. headquarters and a regional warehousing center, and another 56,264 sq ft for an ocean operation office and warehousing. In Texas, it leases 46,657 sq ft for a regional warehousing center. In China, it leases two premises in Wuhan (565 sq m for pharmaceutical distribution, including a warehouse not yet in use) and two in Chengdu (468 sq m for office and employee dormitories). The company believes current facilities are sufficient and additional ones will be available for expansion - The company leases approximately **65,981 sq ft** in Itasca, Illinois, for its U.S. headquarters and a regional warehousing and distribution center, with the lease expiring in April 2026[83](index=83&type=chunk) - Another regional warehousing and distribution center is leased in Irving, Texas, covering approximately **46,657 sq ft**, with the lease expiring in May 2029[83](index=83&type=chunk) - An additional facility in Bensenville, Illinois, covering **56,264 sq ft**, houses an ocean operation office and another regional warehousing and distribution center, with the lease expiring in April 2026[83](index=83&type=chunk) - In China, the company leases two premises in Wuhan (**565 sq m** for pharmaceutical distribution, including a warehouse not yet in use) and two in Chengdu (**468 sq m** for office and employee dormitories)[84](index=84&type=chunk)[85](index=85&type=chunk) [Item 3. Legal Proceedings](index=15&type=section&id=Item%203.%20Legal%20Proceedings) Lakeside Holding Limited is not currently a party to any legal proceedings, investigations, or claims that management believes are likely to have a material adverse effect on its business, financial condition, or results of operations - The company is not currently involved in any legal proceedings, investigations, or claims deemed to have a material adverse effect on its business or financial condition[87](index=87&type=chunk) [Item 4. Mine Safety Disclosures](index=15&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Lakeside Holding Limited - This item is not applicable[88](index=88&type=chunk) PART II Part II details the market for the registrant's common equity, management's discussion and analysis of financial condition, financial statements, and controls and procedures [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=17&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Lakeside Holding Limited's common stock trades on the Nasdaq Capital Market under the symbol 'LSH', with approximately 20 record holders, no cash dividends paid, and an IPO completed in July 2024 - Lakeside Holding Limited's common stock trades on the Nasdaq Capital Market under the symbol 'LSH'[91](index=91&type=chunk) - As of October 10, 2025, there were approximately **20 holders of record** of the common stock[91](index=91&type=chunk) - The company has never declared or paid cash dividends and does not anticipate doing so in the future[92](index=92&type=chunk) IPO Proceeds and Use (as of report date) | Metric | Amount | | :----------------------------------- | :----------------------------------- | | IPO Completion Date | July 1, 2024 | | Shares Offered | 1,500,000 | | Price Per Share | $4.50 | | Aggregate Gross Proceeds | ~$6.75 million | | Total Net Proceeds | ~$5.35 million | | Use of Proceeds: Marketing & Business Expansion | ~$3.3 million | | Use of Proceeds: Working Capital | ~$2.4 million | - No purchases of equity securities by the issuer or affiliated purchasers occurred during the fourth quarter of the fiscal year ended June 30, 2025[97](index=97&type=chunk) [Item 6. Reserved](index=17&type=section&id=Item%206.%20Reserved) This item is intentionally reserved and contains no information - This item is reserved[98](index=98&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes Lakeside's financial condition and operational results for FY2025 and FY2024, covering business overview, key performance factors, revenue/cost components, liquidity, and accounting policies [Overview](index=18&type=section&id=Overview) Lakeside Holding Limited is a U.S.-based integrated cross-border supply chain provider focused on Asia, expanding into pharmaceutical distribution in China in FY2025, serving over 400 customers - Lakeside Holding Limited is a U.S.-based integrated cross-border supply chain solution provider with a strategic focus on the Asian market, offering ocean and air freight solutions, customs clearance, warehousing, and U.S. domestic ground transportation[100](index=100&type=chunk) - The company was founded in Chicago in 2018 and serves **over 400 customers**, having fulfilled **over 55,000 cross-border supply chain solution orders** as of June 30, 2025[101](index=101&type=chunk) - In FY2025, Lakeside expanded into pharmaceutical distribution through the acquisition of Hupan Pharmaceutical, supplying infusion fluids in Wuhan, China[105](index=105&type=chunk) Key Financials (FY2025 vs. FY2024) | Metric | FY2025 (USD) | FY2024 (USD) | | :---------------- | :------------- | :------------- | | Revenues | $17.8 million | $18.3 million | | Gross Profit | $2.9 million | $3.7 million | [Key Factors Affecting Our Results of Operations](index=19&type=section&id=Key%20Factors%20Affecting%20Our%20Results%20of%20Operations) Performance is influenced by customer base expansion, cost control, service quality, strategic acquisitions, and U.S. tariff policies impacting cross-border trade - The company's results depend on its ability to expand and maintain its customer base, including attracting new customers and retaining existing ones by improving service quality and variety[108](index=108&type=chunk) - The introduction of pharmaceutical distribution in FY2025 creates new customer opportunities but also introduces risks such as heightened regulatory requirements, increased working capital exposure from inventory, and greater operational complexity[109](index=109&type=chunk) - Controlling costs, including transportation, warehousing, customs, and freight arrangement charges, is critical. These costs are influenced by factors like wage rates, fuel prices, and leasing costs, which are beyond the company's control[110](index=110&type=chunk) - Maintaining high-quality service standards is crucial, especially with the expansion into pharmaceutical distribution, which requires specialized handling, temperature-controlled storage, and strict compliance with healthcare regulations[113](index=113&type=chunk)[114](index=114&type=chunk) - Strategic acquisitions and investments are pursued to expand global footprints, diversify service offerings, and advance technologies, though successful execution and integration are key to impacting results[115](index=115&type=chunk) - Uncertainty from recent U.S. tariff policies and regulations, such as the elimination of the $800 de minimis threshold and new tariffs on Chinese goods, has significantly disrupted U.S.-China commerce, increasing costs and operational complexities for cross-border freight[119](index=119&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) [Key Components of Results of Operations](index=21&type=section&id=Key%20Components%20of%20Results%20of%20Operations) Revenues derive from cross-border freight and pharmaceutical distribution, with costs including transportation, warehousing, product costs, and operating expenses like selling and general & administrative - Revenues are primarily generated from customized cross-border ocean and air freight solutions, including consolidation, customs clearance, warehousing, and U.S. domestic ground transportation. Since December 2024, revenues also include pharmaceutical and medical product distribution[124](index=124&type=chunk)[125](index=125&type=chunk) - Cost of Revenues for freight solutions includes transportation, warehouse charges, customs fees, freight arrangement, and overhead. For pharmaceutical distribution, it comprises the cost of products from manufacturers[126](index=126&type=chunk)[127](index=127&type=chunk) - Selling Expenses cover salaries, advertising, and travel for the sales team, plus transportation costs for pharmaceutical products[127](index=127&type=chunk) - General and Administrative Expenses include salaries, staff benefits, repair and maintenance, depreciation, amortization, lease expenses, travel, legal and professional fees, and insurance[128](index=128&type=chunk) - Other Income primarily consists of rental income, while Interest Expenses are mainly from finance leases, convertible debts, equipment/vehicle loans, and late credit card payments. Income Tax Expenses include U.S. federal, state, and PRC enterprise income taxes[129](index=129&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Total revenues decreased by 2.9% in FY2025 due to reduced freight solutions, despite new pharmaceutical distribution, leading to a significant increase in net loss Consolidated Statements of Operations and Comprehensive Income (Loss) Summary (Years Ended June 30, 2025 and 2024) | Metric | 2025 Amount (USD) | 2025 % of Revenue | 2024 Amount (USD) | 2024 % of Revenue | Amount Change (USD) | Percentage Change | | :------------------------------------------ | :------------------ | :---------------- | :------------------ | :---------------- | :------------------ | :------------------ | | Revenue from cross border freight solutions | $15,027,960 | 84.5% | $18,315,155 | 100.0% | $(3,287,195) | (17.9)% | | Revenue from distribution of pharmaceutical products | $2,762,465 | 15.5% | — | — | $2,762,465 | N/A | | **Total revenue** | **$17,790,425** | **100.0%** | **$18,315,155** | **100.0%** | **$(524,730)** | **(2.9)%** | | Cost of revenue from cross border freight solutions | $13,699,648 | 77.0% | $14,599,198 | 79.7% | $(899,550) | (6.2)% | | Cost of revenue from pharmaceutical products | $1,212,318 | 6.8% | — | — | $1,212,318 | N/A | | **Total cost of revenue** | **$14,911,966** | **83.8%** | **$14,599,198** | **79.7%** | **$312,768** | **2.1%** | | Gross profit from cross border freight solutions | $1,328,312 | 8.8% | $3,715,957 | 20.3% | $(2,387,645) | (64.3)% | | Gross profit from pharmaceutical products | $1,550,147 | 56.1% | — | — | $1,550,147 | N/A | | **Gross profit** | **$2,878,459** | **16.2%** | **$3,715,957** | **20.3%** | **$(837,498)** | **(22.5)%** | | Selling expenses | $393,290 | 2.2% | $2,500 | — | $390,790 | 15,631.6% | | General and administrative expenses | $7,410,906 | 41.7% | $4,138,190 | 22.6% | $3,272,716 | 79.1% | | **Loss from operations** | **$(4,959,169)** | **(27.9)%** | **$(526,041)** | **(2.9)%** | **$(4,433,128)** | **842.7%** | | Other income, net | $416,192 | 2.3% | $338,435 | 1.8% | $77,757 | 23.0% | | Interest expense | $(401,282) | (2.3)% | $(108,008) | (0.6)% | $(293,274) | 271.5% | | **Net loss** | **$(5,246,136)** | **(29.5)%** | **$(228,277)** | **(1.2)%** | **$(5,017,859)** | **2,198.1%** | - Total revenues decreased by **2.9%** to **$17.8 million** in FY2025, primarily due to a **17.9% decrease** in cross-border freight solutions revenue, offset by **$2.8 million** from new pharmaceutical distribution[134](index=134&type=chunk)[137](index=137&type=chunk) - Cross-border ocean freight solutions revenue decreased by **26.6%** to **$5.8 million**, driven by a reduction in processed TEU from **5,458 to 4,609**. Cross-border airfreight solutions revenue decreased by **11.4%** to **$9.2 million**, with processed tonnage dropping from **26,160 to 21,511**[135](index=135&type=chunk)[136](index=136&type=chunk) - The decline in freight revenues was attributed to U.S. policy changes (termination of $800 de minimis rule, new tariffs, discontinuation of expedited customs clearance) and a slowdown in consumer spending[134](index=134&type=chunk) - Cost of revenues from cross-border freight solutions decreased by **6.2%** to **$13.7 million**, mainly due to reduced transportation and delivery costs and customs charges, partially offset by increased warehouse service charges and overhead costs[143](index=143&type=chunk)[144](index=144&type=chunk) - Overall gross profit decreased by **22.5%** to **$2.9 million**. Gross margin for cross-border freight solutions significantly declined from **20.3% to 8.8%**, while pharmaceutical distribution achieved a **56.1% gross margin** (**38.4%** excluding favorable discounts)[145](index=145&type=chunk)[146](index=146&type=chunk) - Selling expenses surged by **15,631.6%** to **$0.4 million**, primarily due to salaries for the sales team and advertising for the new pharmaceutical distribution service. General and administrative expenses increased by **79.1%** to **$7.4 million**, driven by higher salaries, employee benefits, and professional fees associated with operating as a listed company and the new business segment[147](index=147&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk) - Net loss increased significantly by **2,198.1%** to **$5.2 million** in FY2025, primarily due to decreased gross profit, increased operating expenses, and higher interest expenses[154](index=154&type=chunk)[158](index=158&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) Working capital is funded by operations and financing activities, with cash used in operations increasing significantly in FY2025, offset by substantial financing proceeds from IPO and private placements Liquidity and Capital Resources (as of June 30, 2025) | Metric | Amount (USD) | | :-------------------------- | :------------- | | Cash Balance | $5.0 million | | Current Assets | $10.3 million | | Current Liabilities | $9.7 million | | Current Ratio | 1.06:1 | | Positive Working Capital | $0.6 million | | Total Stockholders' Equity | $2.8 million | | Accounts Receivable (net) | $3.3 million | | Credit Loss Allowance | $87,728 | - Historically, working capital needs have been funded through operations, convertible debts, private placements, loans, IPOs, and stockholder loans[161](index=161&type=chunk) Summary of Cash Flows (Years Ended June 30, 2025 and 2024) | Cash Flow Activity | 2025 (USD) | 2024 (USD) | | :-------------------------------- | :----------- | :----------- | | Net cash used in operating activities | $(2,655,006) | $(53,640) | | Net cash used in investing activities | $(688,261) | $(78,799) | | Net cash provided by financing activities | $8,166,465 | $78,755 | | Effect of exchange rate changes on cash | $9,312 | $3,216 | | Net increase (decrease) in cash | $4,832,510 | $(50,468) | | Cash, beginning of the year | $123,550 | $174,018 | | Cash, end of the year | $4,956,060 | $123,550 | - Net cash used in operating activities increased significantly to **$2.7 million** in FY2025 from **$53.6K** in FY2024, primarily due to a higher net loss, partially offset by decreased cash outflow from working capital[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - Net cash used in investing activities increased to **$688K** in FY2025, mainly due to the acquisition of Hupan Pharmaceutical (**$276K net outflow**), loans to related parties (**$278K**), and property/warehouse renovations[166](index=166&type=chunk) - Net cash provided by financing activities increased substantially to **$8.2 million** in FY2025, driven by net proceeds from the IPO (**$5.4 million**), private placement (**$3.0 million**), and convertible debts (**$1.2 million**)[168](index=168&type=chunk) - Capital expenditures increased to **$150,904** in FY2025 (from nil in FY2024) and are expected to rise, funded by existing cash, loans, convertible debts, and private placement offerings[169](index=169&type=chunk)[170](index=170&type=chunk) [Critical Accounting Policies and Estimates](index=30&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statement preparation involves significant judgments and estimates, particularly for common stock warrants, classified as equity or liability based on specific terms - The preparation of consolidated financial statements requires management to make significant judgments, estimates, and assumptions, which can materially affect reported amounts[172](index=172&type=chunk) - A critical accounting estimate is the accounting for common stock warrants, classified as either equity or liability based on specific terms and authoritative guidance (ASC 480 and ASC 815). The fair value of equity-classified warrants is estimated using the Black-Scholes option-pricing model[174](index=174&type=chunk) [Recent Accounting Pronouncements](index=30&type=section&id=Recent%20Accounting%20Pronouncements) The company adopted ASU 2020-06 and ASU 2023-07 in FY2025/2024 and is evaluating the impact of several other ASUs effective in future fiscal years - The company adopted ASU 2020-06 (Debt with Conversion and Other Options) in FY2025 using the retrospective approach, which impacts the accounting for convertible instruments[300](index=300&type=chunk) - ASU 2023-07 (Segment Reporting) was adopted in April 2024, improving reportable segment disclosure requirements, including significant segment expenses and CODM information[301](index=301&type=chunk) - The company is evaluating the impact of ASU 2023-09 (Income Taxes) and ASU 2024-03 (Income Statement – Expense Disaggregation Disclosures), effective for fiscal years ending June 30, 2026, and June 30, 2028, respectively[302](index=302&type=chunk)[304](index=304&type=chunk) - ASU 2024-04 (Induced Conversions of Convertible Debt Instruments) and ASU 2025-03 (Business Combinations and Consolidation) are effective for fiscal years ending June 30, 2027, and June 30, 2028, respectively, with the company evaluating their impact[305](index=305&type=chunk)[306](index=306&type=chunk) - ASU 2025-07 (Derivatives and Hedging and Revenue from Contracts with Customers) was issued in September 2025, clarifying derivative accounting and share-based noncash consideration, effective for FY2028[307](index=307&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=30&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Lakeside Holding Limited is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[176](index=176&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=31&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Lakeside's audited consolidated financial statements for FY2025 and FY2024, prepared under U.S. GAAP, including the auditor's opinion, balance sheets, income statements, equity changes, cash flows, and detailed notes [Independent Registered Public Accounting Firm](index=32&type=section&id=Independent%20Registered%20Public%20Accounting%20Firm) ZH CPA, LLC issued an unqualified opinion on the consolidated financial statements for FY2025 and FY2024, confirming conformity with U.S. GAAP - ZH CPA, LLC, the independent registered public accounting firm (PCAOB ID: 6413), issued an unqualified opinion, stating that the consolidated financial statements present fairly, in all material respects, the financial position and results of operations for the years ended June 30, 2025 and 2024, in conformity with U.S. GAAP[181](index=181&type=chunk) - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement and evaluating accounting principles and estimates[183](index=183&type=chunk)[184](index=184&type=chunk) [Consolidated Balance Sheets](index=33&type=section&id=Consolidated%20Balance%20Sheets) The balance sheets present the company's financial position as of June 30, 2025, and 2024, detailing assets, liabilities, and equity Consolidated Balance Sheets (as of June 30, 2025 and 2024) | ASSETS | June 30, 2025 (USD) | June 30, 2024 (USD) | | :---------------------------------------------------------------- | :------------------ | :------------------ | | **CURRENT ASSETS** | | | | Cash | $4,956,060 | $123,550 | | Accounts receivable – third parties, net | $2,895,580 | $2,082,152 | | Accounts receivable – related party, net | $396,331 | $763,285 | | Note receivable | $65,152 | - | | Prepayment and other receivable – third parties | $449,977 | - | | Other receivable – related party | $869,430 | $441,279 | | Contract assets | $119,054 | $129,506 | | Inventories, net | $96,534 | - | | Right of return asset | $141,687 | - | | Loan receivable from related parties | $277,741 | - | | Loan receivable from a third party | $11,380 | - | | **Total current assets** | **$10,278,926** | **$3,539,772** | | **NON-CURRENT ASSETS** | | | | Investment in other entity | $15,741 | $15,741 | | Property and equipment at cost, net | $389,421 | $344,883 | | Intangible assets, net | $365,440 | - | | Right of use operating lease assets | $3,158,202 | $3,471,172 | | Right of use financing lease assets | $93,797 | $37,476 | | Deferred tax asset | - | $89,581 | | Deferred offering costs | - | $1,492,798 | | Deposit and prepayment | $103,934 | $202,336 | | **Total non-current assets** | **$4,126,535** | **$5,653,987** | | **TOTAL ASSETS** | **$14,405,461** | **$9,193,759** | | **LIABILITIES AND EQUITY** | | | | **CURRENT LIABILITIES** | | | | Accounts payables – third parties | $2,494,217 | $1,161,858 | | Accounts payables – related parties | $65,237 | $227,722 | | Accrued liabilities and other payables | $2,119,994 | $1,335,804 | | Current portion of obligations under operating leases | $2,323,290 | $1,186,809 | | Current portion of obligations under financing leases | $47,035 | $37,619 | | Loans payable, current | $1,300,112 | $746,962 | | Contract liabilities | $15,355 | - | | Dividend payable | - | $98,850 | | Tax payable | $312,903 | $79,825 | | Due to shareholders | - | $1,018,281 | | Convertible debts - current | $910,675 | - | | Refund liabilities | $77,235 | - |

Revenue Performance - Total revenues for Q3 FY2025 were $3.80 million, a decrease of 14.7% from $4.46 million in Q3 FY2024[6] - Revenues from third-party cross-border freight solutions decreased to $2.86 million, down 25.4% from $3.82 million year-over-year[6] - For the nine months ended March 31, 2025, total revenues were $11.48 million, a decrease of 15.1% from $13.53 million in the same period of FY2024[10] - Total revenue for the nine months ended March 31, 2025, was $11,480,283, a decrease of 15.2% from $13,525,342 in the same period of 2024[30] - Revenues from Asia-based customers for the nine months increased to $9.1 million, up from $8.1 million in the prior year[17] Operating Expenses - Operating expenses for Q3 FY2025 increased to $1.79 million, up from $0.94 million in Q3 FY2024[8] - Operating expenses for the nine months ended March 31, 2025, were $5,595,537, significantly higher than $2,898,660 in the same period of 2024[30] Net Loss and Profitability - The net loss attributable to the Company for Q3 FY2025 was $1.07 million, compared to a net income of $0.01 million in Q3 FY2024[9] - The loss from operations for the nine months ended March 31, 2025, was $4.40 million, compared to a loss of $0.21 million for the same period in FY2024[13] - Net loss attributable to the Company for the nine months ended March 31, 2025, was $4,353,023, compared to a net loss of $227,268 in the same period of 2024[30] - The company reported a comprehensive loss of $4,361,626 for the nine months ended March 31, 2025, compared to a comprehensive loss of $227,171 in the same period of 2024[30] Cash Flow and Assets - Cash at the end of the period increased to $1,499,257 as of March 31, 2025, from $123,550 at the beginning of the period[33] - Cash flows from operating activities resulted in a net cash used of $2,171,304 for the nine months ended March 31, 2025, compared to a net cash provided of $161,644 in the same period of 2024[32] - Total current assets increased to $5,012,413 as of March 31, 2025, from $3,539,772 as of June 30, 2024[28] Liabilities - Total liabilities rose to $9,189,975 as of March 31, 2025, compared to $8,553,967 as of June 30, 2024[28] Acquisition and Growth Strategy - The acquisition of Hupan Pharmaceutical contributed $715,362 to revenues for the nine months ended March 31, 2025[5] - The Company is focused on expanding its footprint in China's pharmaceutical distribution market and integrating Hupan Pharmaceutical into its operations[4] Share Information - The weighted average shares outstanding for basic and diluted earnings per share increased to 7,500,000 as of March 31, 2025, from 6,000,000 in the same period of 2024[30] IPO and Funding - The Company raised approximately $6.75 million from its IPO on July 1, 2024, to support growth strategies[5]

Financial Performance - For the nine months ended March 31, 2025, total revenues were $11.5 million, a decrease of 14.8% from $13.5 million in the same period of 2024[252]. - Gross profit for the nine months ended March 31, 2025, was $1.2 million, down from $2.7 million in the same period of 2024, indicating a decline of 55.6%[252]. - Total revenue for the three months ended March 31, 2025, was $3,803,140, a decrease of $657,623 or 14.7% compared to $4,460,763 for the same period in 2024[273]. - Total revenues decreased by $2.8 million, or 20.4%, from $13.5 million for the nine months ended March 31, 2024, to $10.7 million for the nine months ended March 31, 2025[299]. - Gross profit for the nine months ended March 31, 2025, was $1.2 million, a decrease of $1.5 million or 55.5% compared to $2.7 million for the same period in 2024[298]. - Gross profit decreased by $1.5 million, or 55.5%, to $1.2 million, with a gross margin for cross-border freight solutions dropping to 6.7% from 19.9%[307]. - Gross profit for the three months ended March 31, 2025, was $715,851, a decrease of $259,713 or 26.6% compared to $975,564 in Q1 2024[273]. - The company reported a net loss of $1.1 million for the three months ended March 31, 2025, compared to a net income of $12,768 for the same period in 2024[296]. - The net loss for the nine months ended March 31, 2025, was $4,353,023, which is an increase of $4,122,730 compared to the prior year[327]. Revenue Breakdown - Revenue from cross-border freight solutions decreased by $1.2 million, or 25.9%, from $4.5 million in Q1 2024 to $3.3 million in Q1 2025, primarily due to a decline in volume from airfreight solutions[274]. - Revenue from cross-border ocean freight solutions fell by $0.8 million, or 39.6%, from $2.1 million in Q1 2024 to $1.3 million in Q1 2025, attributed to reduced container volumes and increased competition[275]. - Revenue from cross-border airfreight solutions decreased by $0.3 million, or 13.5%, from $2.3 million in Q1 2024 to $2.0 million in Q1 2025, driven by a decline in processed volume due to trade policy uncertainties[276]. - Revenue from Asia-based customers for cross-border freight solutions decreased by $1.0 million, or 25.4%, from $3.8 million in Q1 2024 to $2.8 million in Q1 2025[279]. - Revenue from U.S.-based customers for cross-border freight solutions decreased by $0.1 million, or 28.8%, from $0.6 million in Q1 2024 to $0.5 million in Q1 2025[279]. - Revenue from Asia-based customers for cross-border freight solutions increased by $0.3 million, or 3.6%, to $8.4 million, while revenue from U.S.-based customers decreased by $3.0 million, or 56.5%, to $2.4 million[303][304]. Operational Developments - As of March 31, 2025, the company had fulfilled over 51,500 cross-border supply chain solution orders with an aggregate assessed value of $1.0 billion[250]. - The company has established collaborations with almost all major global ocean and air carriers, forwarding 34,900 TEU of container loads and 63,300 tons of air cargo as of March 31, 2025[248]. - The company operates three regional warehousing and distribution centers with a total area of approximately 142,484 square feet and a daily floor load capacity of up to 3,000 cubic meters[249]. - The company has cooperated with over 200 domestic ground transportation carriers to enhance its service offerings[248]. - The company acquired 100% equity interest in Hupan Pharmaceutical, expanding its business segment into pharmaceutical distribution and supply chain services[251]. - The company established a new revenue stream in December 2024, generating $0.5 million from pharmaceutical product distribution in Q1 2025, with no revenue from this segment in the prior year[277]. Cost and Expenses - Selling expenses increased to $0.1 million for the three months ended March 31, 2025, compared to nil for the same period in 2024, driven by salaries for the new pharmaceutical distribution service[287]. - General and administrative expenses rose by $0.7 million, or 74.6%, from $1.0 million for the three months ended March 31, 2024, to $1.7 million for the same period in 2025[288]. - General and administrative expenses increased by $2.6 million, or 93.7%, to $5.4 million, representing 47.3% of total revenues for the nine months ended March 31, 2025[311]. - Interest expenses increased by $76,866, or 96.8%, to $156,266 for the nine months ended March 31, 2025, primarily due to late credit card payments and convertible note interest[316]. Future Outlook - The company aims to expand its customer base and improve service quality to achieve sustainable business growth[253]. - The impact of COVID-19 and recent U.S. tariff policies may adversely affect the company's operations and financial condition in the future[258][260]. - The company anticipates further revenue declines in the next quarter due to competitive pressures and new tariffs affecting cross-border trade[278]. - The company plans to sublease one of its warehouses in Chicago in the next fiscal quarter to mitigate costs and improve gross profit margin[283]. - The company expects capital expenditures to increase in the future as the business continues to develop and expand[331]. Cash Flow and Financial Position - Net cash used in operating activities for the nine months ended March 31, 2025, was $(2,171,304), a significant increase compared to $161,644 for the same period in 2024[325][326]. - Net cash used in investing activities was $1,227,150 for the nine months ended March 31, 2025, primarily due to a cash payment of $552,721 for intangible assets through the acquisition of Hupan Pharmaceutical[328]. - Net cash provided by financing activities was $4,782,547 for the nine months ended March 31, 2025, compared to a net cash used of $67,964 in the same period of the prior year[329]. - Capital expenditures amounted to $337,954 for the nine months ended March 31, 2025, compared to $0 for the same period in 2024[330]. - As of March 31, 2025, total stockholders' equity was $0.8 million, with a current ratio of 0.73:1 and negative working capital of $1.7 million[321]. - As of March 31, 2025, total contractual obligations amounted to $6,730,831, with $4,135,777 due within one year[332]. - The company had a cash increase of $1,375,707 for the nine months ended March 31, 2025, compared to an increase of $18,097 in the same period of 2024[324]. - The company had a loan of $561,901 to a third party during the nine months ended March 31, 2025[328]. - There were no off-balance sheet arrangements that could materially affect the company's financial condition as of March 31, 2025[333].

Core Viewpoint - Lakeside Holding Limited reported a decline in revenues for the third quarter and first nine months of fiscal 2025, primarily due to challenges in the cross-border freight sector, but is optimistic about growth opportunities in the pharmaceutical distribution market following the acquisition of Hupan Pharmaceutical [2][4]. Financial Performance - Total revenues for Q3 FY2025 were $3.80 million, down from $4.46 million in Q3 FY2024, with contributions from cross-border freight solutions decreasing [5]. - Revenues from third-party cross-border freight solutions were $2.86 million, down from $3.82 million year-over-year, while pharmaceutical distribution generated $0.50 million, a new revenue stream [5][10]. - For the nine months ended March 31, 2025, total revenues were $11.48 million, compared to $13.53 million for the same period in FY2024 [10]. Cost and Profitability - The total cost of revenues for Q3 FY2025 was $3.09 million, leading to a gross profit of $0.72 million, down from $0.98 million in Q3 FY2024 [6]. - Operating expenses for Q3 FY2025 increased to $1.79 million from $0.94 million in the prior year, resulting in a loss from operations of $1.10 million [8]. - For the nine months ended March 31, 2025, the loss from operations was $4.40 million, compared to a loss of $0.21 million for the same period in FY2024 [12]. Strategic Initiatives - The company aims to expand its footprint in China's pharmaceutical distribution market while optimizing cross-border logistics services [3]. - Following the acquisition of Hupan Pharmaceutical, Lakeside is integrating operations to leverage synergies and explore new business opportunities [7]. - The company is focused on diversifying revenue streams and investing in high-growth areas despite challenges in the freight sector [4]. Recent Developments - Lakeside completed its IPO on July 1, 2024, raising approximately $6.75 million to support growth strategies [7]. - The acquisition of Hupan Pharmaceutical contributed $715,362 to revenues for the nine months ended March 31, 2025 [7]. - A convertible debt financing agreement for up to $4.5 million was announced on March 5, 2025, to provide additional working capital [7]. Geographic Revenue Distribution - For Q3 FY2025, revenues from Asia-based customers were $3.3 million, down from $3.8 million in the same period of the prior year, while U.S.-based customer revenues were $0.5 million [14]. - For the nine months ended March 31, 2025, revenues from Asia-based customers totaled $9.1 million, an increase from $8.1 million in the prior year, while U.S.-based customer revenues decreased to $2.4 million from $5.4 million [16].

Core Viewpoint - Lakeside Holding Limited has entered into a securities purchase agreement to sell senior secured convertible promissory notes for up to $4.5 million, aimed at enhancing its working capital and expanding its operations in the Asia-Pacific market [1][2]. Company Overview - Lakeside Holding Limited is a U.S.-based cross-border supply chain solution provider focusing on the Asia-Pacific market, operating through two subsidiaries: American Bear Logistics and Hupan Pharmaceutical (Hubei) Co., Ltd. [3][5]. - The company offers tailored logistics solutions across general and specialized sectors, enhancing its service capabilities [3]. Financial Details - The company plans to utilize the net proceeds from the offering for working capital purposes, with the initial closing of the first tranche resulting in gross proceeds of approximately $930,000 from a $1 million note and associated warrants [2]. - The notes have a 7% original issue discount and 40% warrant coverage, indicating a strategic financial maneuver to raise capital [1]. Subsidiary Operations - American Bear Logistics provides customized cross-border ocean and airfreight solutions, connecting Asia-based logistics service companies and e-commerce platforms with the U.S. market [4]. - The acquisition of Hupan Pharmaceutical (Hubei) Co., Ltd. enhances Lakeside's pharmaceutical logistics and distribution capabilities within China, reflecting its commitment to integrated cross-border logistics solutions [5].

Revenue Performance - Total revenues for the three months ended December 31, 2024, decreased by $1.5 million, or 31.3%, to $3.4 million compared to $4.9 million for the same period in 2023[7] - Revenues from Asia-based customers increased by $0.1 million, or 5.7%, from $2.6 million in Q4 2023 to $2.8 million in Q4 2024, driven by a surge in volume from large e-commerce platforms[14] - Revenues from U.S.-based customers decreased by $1.7 million, or 72.9%, from $2.3 million in Q4 2023 to $0.6 million in Q4 2024, primarily due to a strategic shift toward Asia-based e-commerce customers[14] - For the six months ended December 31, 2024, total revenues decreased by $1.6 million, or 17.7%, from $9.1 million in the same period in 2023 to $7.5 million[15] - The company established a new revenue stream through the distribution of pharmaceutical products, generating $0.2 million in Q4 2024[8] - Revenues from cross-border airfreight solutions decreased by $1.3 million, or 23.4%, from $5.5 million in the six months ended December 31, 2023, to $4.2 million in the same period in 2024[15] - The Company plans to continue expanding its cross-border freight solutions, which generated $8,639,983 in revenue for the six months ended December 31, 2024[32] Profitability and Loss - Gross profit for the six months ended December 31, 2024, decreased by $1.2 million, or 71.9%, to $0.5 million, with a gross margin of 5.1% compared to 18.9% in the same period in 2023[18] - Net loss for the six months ended December 31, 2024, was $3.3 million, compared to a net loss of $0.2 million for the same period in 2023[20] - Gross profit for the six months ended December 31, 2024, was $1,712,052, compared to $480,308 for the same period in 2023, representing a significant increase of 256.3%[32] - Net loss attributable to the Company for the six months ended December 31, 2024, was $240,036, a reduction from a net loss of $3,282,227 in the same period of 2023[32] - The company reported a net loss of $3,282,227 for the six months ended December 31, 2024, compared to a net loss of $243,061 in the same period of 2023[34] Expenses and Cost Management - General and administrative expenses increased by $1.9 million, or 103.7%, from $1.8 million in the six months ended December 31, 2023, to $3.7 million in the same period in 2024[19] - Operating expenses for the six months ended December 31, 2024, were $1,963,573, down from $3,805,503 in the same period of 2023, a decrease of 48.3%[32] - The Company is focusing on reducing its operating expenses and improving profitability in the upcoming quarters[32] Cash Flow and Assets - Cash balance as of December 31, 2024, was $1,123,414, a significant increase from $123,550 as of June 30, 2024[30] - Total current assets as of December 31, 2024, increased to $4,437,350, compared to $3,539,772 as of June 30, 2024, reflecting a growth of 25.4%[30] - Total liabilities decreased to $8,190,845 as of December 31, 2024, down from $8,553,967 as of June 30, 2024, indicating a reduction of 4.3%[31] - Net cash used in operating activities was $(1,933,000), a significant decrease from $257,836 in the prior year[34] - Cash flows from investing activities resulted in a net outflow of $(1,350,498), compared to $(78,799) in the previous year[34] - The ending cash balance increased to $1,123,414, up from $340,733 at the end of the previous period[34] - Non-cash activities included right-of-use assets obtained in exchange for operating lease obligations totaling $1,445,498[35] - The company experienced a net cash outflow of $(48,893) from the deconsolidation of a subsidiary, which included a loss of $(73,151)[35] - Cash paid for interest increased to $45,953 from $15,503 in the prior year[34] - The company made a net cash payment of $(552,721) for asset acquisition during the period[34] - The company reported a significant increase in accounts receivable from third parties, totaling $424,648, compared to a decrease of $(479,056) in the previous year[34] Acquisitions - The company acquired Hupan Pharmaceutical (Hubei) Co., Ltd. for RMB 4.0 million ($0.6 million), expected to contribute $7 million in annual revenue[6]

Core Insights - Lakeside Holding Limited reported a significant decline in total revenues for the second quarter and first half of fiscal 2025, primarily due to reduced volumes in cross-border airfreight solutions [4][11][19] - The company is strategically expanding its operations, particularly in pharmaceutical logistics and partnerships with major e-commerce platforms, to position itself for long-term growth [2][5][23] Financial Performance - Total revenues decreased by $1.5 million, or 31.3%, to $3.4 million for the three months ended December 31, 2024, compared to $4.9 million for the same period in 2023 [4] - For the six months ended December 31, 2024, total revenues decreased by $1.6 million, or 17.7%, from $9.1 million in 2023 to $7.5 million [11] - The net loss for the three months ended December 31, 2024, was $1.9 million, compared to a net income of $0.06 million for the same period in 2023 [10] - The net loss for the six months ended December 31, 2024, was $3.3 million, compared to a net loss of $0.2 million for the same period in 2023 [19] Revenue Breakdown - Revenue from Asia-based customers increased by $1.3 million, or 29.4%, from $4.3 million in the six months ended December 31, 2023, to $5.6 million in 2024 [24] - Revenue from U.S.-based customers decreased by $2.9 million, or 60.2%, from $4.8 million in the six months ended December 31, 2023, to $1.9 million in 2024 [24] - Revenues from cross-border airfreight solutions decreased by $1.3 million, or 23.4%, from $5.5 million in the six months ended December 31, 2023, to $4.2 million in 2024 [14] Operational Developments - The company expanded its Dallas-Fort Worth operations, more than doubling warehouse space from 20,000 to 46,657 square feet [5] - Lakeside acquired Hupan Pharmaceutical (Hubei) Co., Ltd. for RMB 4.0 million ($0.6 million), expected to contribute $7 million in annual revenue [5] - The company established partnerships with 15 major hospitals in Wuhan and signed a sales agreement worth RMB 11.0 million ($1.5 million) with Sinopharm Holding Hubei New Special Medicine Co., Ltd. [5] Cost and Expenses - Total cost of revenues decreased by $0.2 million, or 5.6%, from $3.9 million in the three months ended December 31, 2023, to $3.6 million in 2024 [7] - General and administrative expenses increased by $0.9 million, or 94.1%, from $1.0 million in the three months ended December 31, 2023, to $1.9 million in 2024 [9] - For the six months ended December 31, 2024, general and administrative expenses increased by $1.9 million, or 103.7%, from $1.8 million in 2023 to $3.7 million in 2024 [18]

Financial Performance - Total revenue for the six months ended December 31, 2024, was $7.7 million, a decrease of 15.5% compared to $9.1 million for the same period in 2023[228] - Gross profit for the six months ended December 31, 2024, was $0.5 million, down from $1.7 million in the same period of 2023, representing a decline of 70.6%[228] - The company reported a net loss of $3.3 million for the six months ended December 31, 2024, compared to a net loss of $0.24 million in the same period of 2023[244] - Total revenues decreased by $1.3 million, or 26.9%, from $4.9 million in Q4 2023 to $3.6 million in Q4 2024[248] - The company reported a loss before income taxes of $1.9 million in Q4 2024, compared to income of $92,408 in Q4 2023[269] - Net loss increased to $3.3 million for the six months ended December 31, 2024, compared to a net loss of $0.2 million in the same period in 2023[298] Revenue Breakdown - Revenue from cross-border freight solutions to third parties for the six months ended December 31, 2024, was $6.7 million, compared to $8.6 million in 2023, reflecting a decrease of 22.4%[244] - Revenue from cross-border airfreight solutions fell by $1.1 million, or 35.5%, from $3.1 million in Q4 2023 to $2.0 million in Q4 2024, with volume dropping from approximately 8,217 tons to 4,459 tons[249] - Revenue from cross-border ocean freight solutions decreased by $0.4 million, or 24.2%, from $1.8 million in Q4 2023 to $1.4 million in Q4 2024, with TEU volume declining from 1,330 to 1,046[250] - Revenues from cross-border airfreight solutions fell by $1.3 million, or 23.4%, from $5.5 million in the six months ended December 31, 2023, to $4.2 million in the same period of 2024[277] - Revenues from cross-border ocean freight solutions decreased by $0.3 million, or 8.7%, from $3.5 million in the six months ended December 31, 2023, to $3.2 million in the same period of 2024[278] - Revenue from Asia-based customers increased by $0.1 million, or 5.7%, from $2.6 million in Q4 2023 to $2.8 million in Q4 2024[253] - Revenue from Asia-based customers increased by $1.3 million, or 29.4%, from $4.3 million in the six months ended December 31, 2023, to $5.6 million in the same period of 2024[280] - The company established a new revenue stream in Q4 2024 with $0.2 million from the distribution of pharmaceutical products, compared to no revenue in the same period last year[251] - The company established a new revenue stream from pharmaceutical product distribution, generating $0.2 million in revenue for the six months ended December 31, 2024[279] Expenses and Costs - The cost of revenue from cross-border freight solutions for third parties was $6.2 million for the six months ended December 31, 2024, compared to $6.3 million in 2023, indicating a slight decrease of 2.8%[244] - Cost of revenues decreased by $0.3 million, or 8.7%, from $3.9 million in Q4 2023 to $3.6 million in Q4 2024[257] - Total cost of revenue decreased by $0.2 million, or 2.1%, from $7.4 million in the six months ended December 31, 2023, to $7.2 million in the six months ended December 31, 2024[284] - General and administrative expenses increased by $0.9 million, or 94.1%, from $1.0 million in Q4 2023 to $1.9 million in Q4 2024, representing 53.2% of total revenues[263] - General and administrative expenses increased by $1.9 million, or 103.7%, from $1.8 million in the six months ended December 31, 2023, to $3.7 million in the six months ended December 31, 2024, representing 48.8% of total revenues[289] - Selling expenses amounted to $54,488 in Q4 2024, driven by salaries for the sales team related to the new pharmaceutical product business[262] - Selling expenses amounted to $54,488 for the six months ended December 31, 2024, compared to nil for the same period in 2023, driven by salaries for the new pharmaceutical product business[288] - Salaries and employee benefits expenses increased by $0.4 million, or 64.1%, from $0.6 million in Q4 2023 to $1.1 million in Q4 2024, representing 66.0% of total general and administrative expenses[264] - Professional fees surged by $0.2 million, or 1,359.3%, from $14,802 in Q4 2023 to $216,012 in Q4 2024, accounting for 11.3% of total general and administrative expenses[265] - Traveling and entertainment expenses rose by $0.2 million, or 224.8%, from $87,900 in Q4 2023 to $285,541 in Q4 2024, representing 14.9% of total general and administrative expenses[266] Cash Flow and Financial Position - Net cash used in operating activities was $1,933,000 in the six months ended December 31, 2024, including a net loss of $3,282,227[303] - Cash and cash equivalents at the end of the period were $1.1 million, compared to $340,733 at the end of the same period in 2023[302] - Cash used in operating activities increased by $2,190,836 for the six months ended December 31, 2024, primarily due to a net loss increase of $3,039,166 compared to the prior year[305] - Net cash used in investing activities was $1,350,498 for the six months ended December 31, 2024, primarily due to a net cash payment of $552,721 for intangible assets and a loan of $686,697 to a third party[306] - Net cash provided by financing activities was $4,295,361 for the six months ended December 31, 2024, compared to a net cash used of $15,538 in the same period of the prior year, driven by net proceeds of $5,351,281 from an offering[307] - Current ratio as of December 31, 2024, was 0.81:1, with current assets of $4.4 million and current liabilities of $5.4 million, resulting in negative working capital of $1.1 million[299] Business Expansion and Operations - The company fulfilled over 48,000 cross-border supply chain solution orders with an aggregate assessed value of $1.0 billion as of December 31, 2024[226] - The company acquired 100% equity interest in Hupan Pharmaceutical, expanding its business segment into pharmaceutical distribution and supply chain services[227] - The company operates three regional warehousing and distribution centers with a total area of approximately 142,484 square feet and 52 docks[225] - As of December 31, 2024, the company collaborated with over 200 domestic ground transportation carriers to enhance its service offerings[224] - The company aims to improve service quality and expand its customer base to achieve sustainable business growth[229] Future Outlook and Accounting Standards - The company expects capital expenditures to increase in the future, funded by existing cash balances and loans[309] - The company does not anticipate that recently issued accounting standards will have a material effect on its financial statements[320] - The company is evaluating the impact of ASU No. 2023-07, effective for annual periods beginning after December 15, 2023, which will require additional disclosures regarding reportable segment expenses[318] - The company plans to adopt ASU No. 2023-09 regarding income tax disclosures, effective after December 15, 2024, which will require disaggregated information about effective tax rate reconciliation[319] Contractual Obligations - Total contractual obligations as of December 31, 2024, amounted to $6,141,765, with $3,203,278 due within one year[310] - There were no off-balance sheet arrangements that could materially affect the financial condition or results of operations as of December 31, 2024[311]

Core Insights - Lakeside Holding Limited has expanded its distribution capabilities in the pharmaceutical sector through new agreements with Hubei Kelun Pharmaceutical Trading Co., Ltd. [1][3] - The agreements will enable Hupan Pharmaceutical to distribute large-volume parenteral solutions and related medical products across healthcare institutions in China, effective from January 1, 2025, to December 31, 2025 [2][3]. - This move follows a recent agreement with Sichuan Huiyu Pharmaceutical Co., Ltd., indicating Lakeside's growing partnerships with major pharmaceutical companies [3][4]. Company Overview - Lakeside Holding Limited is a U.S.-based cross-border supply chain solution provider focused on the Asia-Pacific market, operating through subsidiaries such as American Bear Logistics and Hupan Pharmaceutical [4][6]. - The company aims to deliver tailored logistics solutions that encompass both general and specialized sectors, enhancing its pharmaceutical logistics and distribution capabilities within China [6]. Strategic Developments - The recent acquisition of Hupan Pharmaceutical has allowed Lakeside to broaden its service scope and strengthen its position in the pharmaceutical distribution sector [6]. - The agreements with Kelun Pharmaceutical are seen as a testament to Lakeside's ability to build trust and relationships with leading pharmaceutical companies, ensuring efficient delivery of critical medical products [4].