Lakeside Holding Limited(LSH) - 2025 Q4 - Annual Report

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] 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][15][16] - 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] 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 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 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] - 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] - In FY2025, Lakeside expanded into pharmaceutical distribution through its subsidiary Hupan Pharmaceutical, supplying infusion fluids in Wuhan, China[22][27] 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 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] - 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][30][31][32][33] - 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] Service Providers and Suppliers 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] - 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] - 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] 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] - The platform optimizes route-building and pricing, provides automated real-time fee quotes, and supports contractual account management, document generation, and recordkeeping[39] - An intelligent warehousing system manages storage remotely, prevents stockouts, enables intelligent replenishment and order fulfillment, and sends inventory alerts[40] - Data security is maintained through an internal data security management policy, firewalls, and continuous monitoring and improvement of privacy policies[42] 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] - Competition factors include customer relationships, service quality, transportation modes, technology infrastructure, and industry experience[45] - Competitors may possess greater financial/operational resources, brand recognition, or longer operating histories, potentially allowing them to respond more quickly to market changes[44] Sales and Marketing 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] - 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] Intellectual Property 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][48] 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] 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] 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] - The company fosters an equitable, inclusive, and diverse work environment, providing equal opportunities for growth and development[52] Government Regulations 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] - Air freight forwarding services are regulated by the Federal Aviation Act and TSA, requiring adherence to security protocols and periodic audits[57] - Ocean freight forwarding services (NVOCC) are regulated by the FMC, requiring tariff filing, surety bonds, and compliance with the Shipping Act of 1984[58][59] - 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][61][62] - Compliance with Export Administration Regulations (EAR) is mandatory for forwarding agents, requiring due diligence, accurate export data filing, and adherence to documentation requirements[63][64][65][66] - 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] - 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][69][70][71] - 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][73][74] - 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] Item 1A. Risk Factors 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] Item 1B. Unresolved Staff Comments 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] Item 1C. Cybersecurity 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] - Significant security incidents are reviewed by the CEO and COO, with IT department assistance, to determine materiality and disclosure requirements[80] - The board of directors directly administers cybersecurity oversight, ensuring risks to information assets are managed appropriately and reviewing related disclosures[82] - 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] Item 2. Properties 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] - 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] - 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] - 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][85] Item 3. Legal Proceedings 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] Item 4. Mine Safety Disclosures This item is not applicable to Lakeside Holding Limited - This item is not applicable[88] 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 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] - As of October 10, 2025, there were approximately 20 holders of record of the common stock[91] - The company has never declared or paid cash dividends and does not anticipate doing so in the future[92] 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] Item 6. Reserved This item is intentionally reserved and contains no information - This item is reserved[98] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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] - 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] - In FY2025, Lakeside expanded into pharmaceutical distribution through the acquisition of Hupan Pharmaceutical, supplying infusion fluids in Wuhan, China[105] 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 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] - 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] - 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] - 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][114] - 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] - 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][121][122] Key Components of Results of Operations 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][125] - 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][127] - Selling Expenses cover salaries, advertising, and travel for the sales team, plus transportation costs for pharmaceutical products[127] - General and Administrative Expenses include salaries, staff benefits, repair and maintenance, depreciation, amortization, lease expenses, travel, legal and professional fees, and insurance[128] - 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] Results of Operations 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][137] - 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][136] - 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] - 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][144] - 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][146] - 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][148][149][151] - 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][158] Liquidity and Capital Resources 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] 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][164][165] - 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] - 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] - 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][170] Critical Accounting Policies and Estimates 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] - 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] Recent Accounting Pronouncements 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] - ASU 2023-07 (Segment Reporting) was adopted in April 2024, improving reportable segment disclosure requirements, including significant segment expenses and CODM information[301] - 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][304] - 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][306] - 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] Item 7A. Quantitative and Qualitative Disclosures About Market Risk 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] Item 8. Financial Statements and Supplementary Data 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 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] - The audit was conducted in accordance with PCAOB standards, assessing risks of material misstatement and evaluating accounting principles and estimates[183][184] Consolidated Balance Sheets 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 | - |