UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2025

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

For the transition period from to .

Commission File No. 001-42140

Lakeside Holding Limited

(Exact name of registrant as specified in its charter)

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

1475 Thorndale Avenue, Suite A

Itasca, Illinois 60143

(Address of principal executive offices) (Zip Code)

(224) 446-9048

(Registrant’s telephone number, including area code)

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

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

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

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

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

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

As of the date of this report, the Registrant had 17,427,559 shares of common stock outstanding.

Lakeside Holding Limited

FORM 10-Q

For the Quarterly Period Ended September 30, 2025

INDEX

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and June 30, 2025	F-2
	Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months ended September 30, 2025 and 2024 (unaudited)	F-3
	Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended September 30, 2025 and 2024 (unaudited)	F-4
	Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2025 and 2024 (unaudited)	F-5
	Notes to Condensed Consolidated Financial Statements (unaudited)	F-6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	14
Item 4.	Controls and Procedures	14

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	15
Item 1A.	Risk Factors	15
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3.	Defaults Upon Senior Securities	15
Item 4.	Mine Safety Disclosures	15
Item 5.	Other Information	15
Item 6.	Exhibits	16
	Signatures	17

EXPLANATORY NOTE

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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

●

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

●

our competitive position;

●

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

●

the timing of the introduction of new solutions and services;

●

the likelihood of success in and impact of litigation;

●

our protection or enforcement of our intellectual property rights;

●

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

●

our ability to keep up with rapid technological change;

●

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

●

our anticipated use of proceeds from our initial public offering.

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

LAKESIDE HOLDING LIMITED

INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Page
Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and June 30, 2025	F-2
Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) for the three months ended September 30, 2025 and 2024 (unaudited)	F-3
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three months ended September 30, 2025 and 2024 (unaudited)	F-4
Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2025 and 2024 (unaudited)	F-5
Notes to Condensed Consolidated Financial Statements (unaudited)	F-6 – F-45

F-1

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2025 (UNAUDITED) AND JUNE 30, 2025

	As of September 30, 2025 (unaudited)			As of June 30, 2025
ASSETS
CURRENT ASSETS
Cash	$	4,539,636		$	4,956,060
Accounts receivable – third parties, net of credit loss allowance of $171,613 and $87,728		3,091,279			2,895,580
Accounts receivable – related party, net of credit loss allowance of $nil and $nil		352,896			396,331
Note receivable		13,873			65,152
Prepayment, deposit and other receivable – third parties		4,948,382			449,977
Other receivable – related party		1,146,844			869,430
Contract assets		49,392			119,054
Inventories, net		131,986			96,534
Right of return asset		80,554			141,687
Loan receivable from related parties		386,541			277,741
Loan receivable from a third party		253,107			11,380
Total current assets		14,994,490			10,278,926

NON-CURRENT ASSETS
Long- term investment		15,741			15,741
Property and equipment at cost, net of accumulated depreciation		409,393			389,421
Intangible assets, net		344,069			365,440
Right of use operating lease assets		2,687,972			3,158,202
Right of use financing lease assets		85,197			93,797
Deposit and prepayment		98,327			103,934
Total non-current assets		3,640,699			4,126,535
TOTAL ASSETS	$	18,635,189		$	14,405,461

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payables – third parties	$	2,539,331		$	2,494,217
Accounts payables – related parties		104,682			65,237
Accrued liabilities and other payables		2,157,881			2,119,994
Current portion of obligations under operating leases		1,593,788			2,323,290
Current portion of obligations under financing leases		44,968			47,035
Loans payable, current		2,271,368			1,300,112
Contract liabilities		33,530			15,355
Tax payable		358,607			312,903
Due to shareholders		142,826			-
Due to a related party		260,144			-
Convertible debts - current		133,198			910,675
Refund liabilities		198,806			77,235
Total current liabilities		9,839,129			9,666,053

NON-CURRENT LIABILITIES
Loans payable, non-current		147,735			60,398
Loan payable to a related party		124,176			124,176
Deferred tax liabilities		61,111			83,100
Obligations under operating leases, non-current		1,448,459			1,559,782
Obligations under financing leases, non-current		60,249			66,267
Total non-current liabilities		1,841,730			1,893,723
TOTAL LIABILITIES	$	11,680,859		$	11,559,776

Commitments and Contingencies

EQUITY
Common stocks, $0.0001 par value, 200,000,000 shares authorized, 17,427,559 and 10,500,000 issued and outstanding as of September 30, 2025 and June 30, 2025, respectively		1,743			1,050
Additional paid-in capital		13,512,515			8,084,275
Statutory reserve		74,608			63,416
Deficits		(6,683,779	)		(5,315,371	)
Accumulated other comprehensive income		49,243			12,315
Total equity		6,954,330			2,845,685

TOTAL LIABILITIES AND EQUITY	$	18,635,189		$	14,405,461

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

F-2

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)

AND COMPREHENSIVE INCOME (LOSS)

FOR THE PERIODS ENDED SEPTEMBER 30, 2025 AND 2024

(UNAUDITED)

	For The Three Months Ended September 30,
	2025			2024
Revenue from cross-border freight solutions – third party	$	4,181,714		$	3,599,787
Revenue from cross-border freight solutions – related parties		580,160			481,767
Revenue from distribution of pharmaceutical products – third parties		1,338,015			-
Total revenue		6,099,889			4,081,554

Cost of revenue from cross-border freight solutions – third party		3,733,846			2,994,285
Cost of revenue from cross-border freight solutions – related party		466,506			564,730
Cost of revenue from pharmaceutical products – third parties		790,770			-
Total cost of revenue		4,991,122			3,559,015
Gross profit		1,108,767			522,539

Operating expenses:
Selling expenses		189,411			-
General and administrative expenses		2,107,655			1,837,206
Provision of allowance for expected credit loss		83,325			12,837
Total operating expenses		2,380,391			1,850,043

Loss from operations		(1,271,624	)		(1,327,504	)

Other income (expense)
Other income, net		146,839			109,788
Interest expense		(196,441	)		(28,110	)
Total other (expense) income		(49,602	)		81,678

Loss before income taxes		(1,321,226	)		(1,245,826	)
Income tax expense		35,990			89,581
Net loss		(1,357,216	)		(1,335,407	)

Other comprehensive (loss) income:
Foreign currency translation gain		36,928			12,993
Comprehensive loss	$	(1,320,288	)	$	(1,322,414	)

Loss per share – basic and diluted	$	(0.09	)	$	(0.18	)
Weighted Average Shares Outstanding – basic and diluted		14,733,489			7,500,000

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

F-3

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024

(UNAUDITED)

	Common Shares		Amount		Subscription Receivable			Additional Paid in Capital		Deficits			Accumulated Other Comprehensive Income		Total
Balance at June 30, 2024		6,000,000	$	600	$	(600	)	$	642,639	$	(5,819	)	$	2,972	$	639,792
Paid in capital		—		—		600			—		—			—		600
Net loss for the three months ended September 30, 2024		—		—		—			—		(1,335,407	)		—		(1,335,407	)
Initial public offering, net of share issuance costs		1,500,000		150		—			4,300,152		—			—		4,300,302
Foreign currency translation adjustment		—		—		—			—		—			12,993		12,993
Balance at September 30, 2024		7,500,000	$	750	$	—		$	4,942,791	$	(1,341,226	)	$	15,965	$	3,618,280

	Common Shares		Amount		Additional Paid in Capital		Deficits			Accumulated Other Comprehensive Income		Statutory Reserves		Total
Balance at June 30, 2025		10,500,000	$	1,050	$	8,084,275	$	(5,315,371	)	$	12,315	$	63,416	$	2,845,685
Net loss for the three months ended September 30, 2025		—		—		—		(1,357,216	)		—		—		(1,357,216	)
Statutory reserve		—		—		—		(11,192	)		—		11,192		—
Foreign currency translation gain		—		—		—		—			36,928		—		36,928
Common stock issued for consulting services		2,300,000		230		1,915,970		—			—		—		1,916,200
Issuance of common shares upon exercise of Convertible note		820,330		82		512,651		—			—		—		512,733
Issuance of common shares - Private placement		3,807,229		381		2,999,619		—			—		—		3,000,000
Balance at September 30, 2025		17,427,559	$	1,743	$	13,512,515	$	(6,683,779	)	$	49,243	$	74,608	$	6,954,330

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

F-4

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE PERIOD ENDED SEPTEMBER 30, 2025 AND 2024

(UNAUDITED)

	For the Three Months Ended September 30,
	2025			2024
Cash flows from operating activities:
Net loss	$	(1,357,216	)	$	(1,335,407	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation – G&A		25,898			17,995
Depreciation – cost of revenue		24,667			18,164
Amortization of intangible asset		21,371			—
Straight line lease expense of operating leases		527,261			466,723
Depreciation of right-of-use finance assets		8,600			7,595
Amortization of discount and bond issuance cost		69,602			—
Provision of allowance for expected credit loss		83,325			12,837
Deferred tax expense		(21,989	)		89,581
Interest income		(60,561	)		—
Stock-based compensation expense for consulting services		359,239			—
Changes in operating assets and liabilities:
Accounts receivable – third parties		(279,024	)		282,864
Accounts receivable – related parties		43,435			257,924
Note receivable		51,279			—
Contract assets		69,662			88,205
Inventories, net		(35,452	)		—
Right of return assets		61,133			—
Other receivable – related parties		(82,118	)		(77,812	)
Prepayment, deposit and other receivable – third parties		(2,935,837	)		(176,572	)
Accounts payables – third parties		45,114			(402,895	)
Accounts payables – related parties		39,445			(156,850	)
Contract liabilities		18,175			—
Accrued expense and other payables		37,887			(24,876 ）
Refund liabilities		121,571			—
Tax payable		45,704			—
Operating lease liabilities		(897,689	)		(470,260	)
Net cash used in operating activities		(4,016,518	)		(1,402,784	)

Cash flows from investing activities:
Purchase of property and equipment		—			(5,772	)
Prepayment for system installation		—			(32,507	)
Loan to related parties		(108,800	)		—
Net cash used in investing activities		(108,800	)		(38,279	)

Cash flows from financing activities:
Proceeds from loans		1,237,766			—
Repayment of loans		(228,997	)		(265,456	)
Repayment of principal of convertible debts		(334,346	)		—
Repayment of equipment and vehicle loans		(20,530	)		(27,990	)
Principal payment of finance lease liabilities		(8,085	)		(7,632	)
Proceeds from initial public offering, net of share issuance costs		—			5,351,281
Proceeds from a private placement		3,000,000			—
Advance to a third party		(181,166	)		—
Advances to related parties		(195,296	)		(126,227	)
Proceeds from shareholders		142,826			—
Proceeds from related party		260,144			—
Repayment to shareholders		-			(879,574	)
Net cash provided by financing activities		3,672,316			4,044,402

Effect of exchange rate changes on cash		36,578			12,386
Net (decrease) increase in cash		(416,424	)		2,615,725
Cash, beginning of the period		4,956,060			123,550
Cash, end of the period	$	4,539,636		$	2,739,275

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income tax	$	13,832		$	—
Cash paid for interest	$	156,637		$	6,274

SUPPLEMENTAL SCHEDULE OF NON-CASH ACTIVITIES
Convertible notes converted to common shares	$	512,733		$	—
Issuance of common shares in exchange for consulting service	$	1,916,200			—
Property additions included in loan payable	$	69,219			—
Right of use assets obtained in exchange for operating lease obligations	$	—		$	2,094,498

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

F-5

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION

Lakeside Holding Limited (the “Company”), is a holding company established on August 28, 2023 under the laws of the State of Nevada. The Company, acting through its subsidiary, is primarily engaged in providing customized cross-border ocean freight solutions and airfreight solutions. On July 1, 2024, the Company closed its initial public offering (“IPO”) of 1,500,000 shares of its common stock at an IPO price of $4.50 per share for aggregate gross proceeds of approximately $6.75 million from the offering (Note 17). In connection with the offering, the Company’s common shares began trading on the Nasdaq Capital Market under the trading symbol “LSH.”

As of September 30, 2025, the Company’s subsidiaries are as follows:

Name	Date of Incorporation/ Acquisition	Jurisdiction of Formation	Percentage of direct/indirect Economic Ownership		Principal Activities
Parent Company
Lakeside Holding Limited	August 28, 2023	Nevada		Parent	Holding company
Subsidiaries/companies with ownership
American Bear Logistics Corp. (“ABL Chicago”)	February 5, 2018	Illinois		100%	Logistics services
Sichuan Hupan Jincheng Enterprise Management Co., Ltd (“Sichuan Hupan”)	July 10, 2024	Sichuan, China		100%	Exploring business opportunities in China
Hupan Pharmaceutical (Hubei) Co., Ltd (“Hupan Pharmaceutical”)	November 21, 2024	Hubei, China		100%	Medical injection and pharmaceutical distributor

Reorganization

A reorganization of the legal structure was completed on September 23, 2023 (“The Reorganization”). The Reorganization involved the incorporation of Lakeside Holding Limited and the transfer the shares of American Bear Logistics Corp (“ABL Chicago”) to the Company.

Prior to the Reorganization, Mr. Henry Liu, the Chief Executive Officer (“CEO”), and Mr. Shuai Li, the President, each owned 50% equity interest of the ABL Chicago (collectively, the “Controlling Group”). On September 23, 2023, the Controlling Group transferred their 100% equity interest in ABL Chicago to the Company for a consideration of $1,000. Upon this Reorganization, the Company ultimately owns 100% equity interest of ABL Chicago.

As part of the series of reorganization transactions to be completed before the offering, a 120-for-1 share split was conducted by the Company on March 29, 2024. After the share split, the issued share capital of the Company consists of $600 divided into 6,000,000 common shares, par value of $0.0001 each.

F-6

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 — ORGANIZATION AND BUSINESS DESCRIPTION (cont.)

Reorganization (cont.)

Before and after the Reorganization, the Company, together with its subsidiaries, is effectively controlled by the same Controlling Group, and therefore the Reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements in accordance with ASC 805-50-45-5.

On July 1, 2024, the Company closed its IPO of 1,500,000 shares of its common stock at an IPO price of $4.50 per share for aggregate gross proceeds of approximately $6.75 million from the offering. The total net proceeds to the Company from the IPO, after deducting discounts, expense allowance, deferred IPO cost and expenses, were approximately $5.35 million (Note 17).

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied. The accompanying unaudited condensed consolidated financial statements include the financial statements of Lakeside Holding Limited and its subsidiaries. All inter-company balances and transactions have been eliminated upon consolidation.

Use of estimates and assumptions

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

Cash

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

As of September 30, 2025 and June 30, 2025, the Company had approximately $4.5 million and $5.0 million of cash in banks, most held in the banks located in the mainland of China and in the United States, respectively. Most of cash balance as of September 30, 2025 and June 30, 2025 were denominated in RMB.

F-7

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Accounts receivable, net

Accounts receivables are carried at the original invoiced amount less an estimated allowance for expected credit losses based on the probability of future collection. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. The Company grant credit to customers, without collateral, under normal payment terms. The Company uses a loss rate method to estimate allowance for credit losses for accounts receivable from cross-border freights solutions and aging schedule to estimate the allowance for credit losses for accounts receivable from distribution of pharmaceutical products respectively. Loss-rate approach is based on the historical loss rates. The Company evaluates the expected credit loss of accounts receivable based on customer financial condition and historical collection information adjusted for current market economic conditions and forecasts of future economic performance when appropriate. For those past due balances over one year and other higher risk receivables identified by the Company are reviewed individually for collectability. The Company writes off potentially uncollectible accounts receivable against the allowance for credit losses if it is determined that the amounts will not be collected. As of September 30, 2025 and June 30, 2025, the Company recorded the allowance of credit loss of $171,613 and $87,728, respectively.

Notes receivable, net

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

As of September 30, 2025 and June 30, 2025, the Company held notes receivable totaling $13,873 and $65,152, all of which are expected to be collected within twelve months and are classified as current assets. The Company recognized $nil allowance for expected credit loss on bank notes receivable during the reporting periods, as all the acceptance notes were endorsed to suppliers for accounts payable payments.

Inventories, net

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

Investment in other entity

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

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

F-8

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Property and equipment

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

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

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

Intangible Assets, net

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

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

Accounts payable

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

Impairment of long-lived asset

Long-lived assets, including plant, property and equipment and intangible asset, are evaluated for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying amount may not be fully recoverable or that the useful life is shorter than the Company had originally estimated. When these events occur, the Company evaluates the impairment by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value of the assets over the fair value of the assets. The Company reviews the impairment of its right-of-use assets and intangible asset consistent with the approach applied for its other long-lived assets. No impairment charge was recognized for the three months ended September 30, 2025 and 2024, respectively.

F-9

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Asset acquisition

When an acquisition is related to a single asset or a group of similar assets, or does not meet the definition of a business combination, as the acquired entity does not have an input and a substantive process that together significantly contribute to the ability to create outputs, we account for the acquisition as an asset acquisition. In an asset acquisition, any direct acquisition-related transaction costs are capitalized as part of the purchase consideration. Deferred taxes are recorded on temporary book/tax differences in an asset acquisition using the simultaneous equations method and adjusted the assigned value of the non-monetary assets acquired to include the deferred tax liability (see Note 21).

Leases

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

Operating Leases

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

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

Finance leases

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

F-10

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Related parties

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

Fair value of financial instruments

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

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

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

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

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

Convertible debts

In accordance with ASC 470, Debt (“ASC 470”) the Company records its 7% original issue discount secured convertible promissory notes (“Notes”) at the aggregate principal amount, less discount. The Company evaluated the loan portion of the Notes with the conversion feature and the detachable warrant under the guidance of ASC 470-20, “Debt with Conversion and Other Options, as amended by ASU 2020-06” and ASC 815, “Derivatives and Hedging.” The Company determined that the warrant met the criteria for equity classification under ASC 815-40. Accordingly, the fair value of the warrant was recorded as a component of additional paid-in capital. Following the adoption of ASU 2020-06, the Notes are recorded as a single unit within liabilities in the unaudited condensed consolidated balance sheets as the conversion features within the Notes are not derivatives that require bifurcation and the Notes do not involve a substantial premium. The Convertible debt is subsequently accounted for at amortized cost in accordance with the interest method described in ASC 835-30 (see Note 13).

F-11

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Convertible debts (cont.)

Debt issuance costs

Direct and incremental costs and original issue discounts and premiums incurred in connection with the issuance of long-term debt are deferred and amortized to interest expense using the effective interest method or, if the amounts approximate the effective interest method, on a straight-line basis. All debt issuance costs are presented as a direct reduction of debt on the unaudited condensed consolidated balance sheets. Approximately $69,602 were amortized to interest expense during the three months ended September 30, 2025.

Common stock warrants

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

Revenue recognition

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

SEC Form 10-Q filed by Lakeside Holding Limited