Lakeside Holding Ltd
For the period ended Dec 31, 2025. Filed Feb 19, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Dec 31, 2025 · Filed Feb 19, 2026
QNME$0.37+9.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-19.
0001213900-25-112601
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-12-31; filed 2026-02-19.
0001213900-26-018466
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 151 current paragraphs.
63 unchanged; 39 reworded; 35 added; 3 removed; 0 previous and 14 current paragraphs rearranged.
Tables are not compared: 9 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
For the three months ended December 31, 2025 and 2024, our revenues amounted to approximately $7.0 million and approximately $3.6 million, respectively, and our gross profit (loss) amounted to approximately $1.9 million and approximately $(0.1) million during the same periods, respectively.
Current report
Revenues from our cross-border airfreight solutions increased by approximately $1.6 million or 81.0%, from approximately $2.0 million for the three months ended December 31, 2024, to approximately $3.6 million for the three months ended December 31, 2025. The increase was primarily due to (i) increase in our volume of cross-border air freight processed from approximately 4,459 tons for the three months ended December 31, 2024, to approximately 5,365 tons for the three months ended December 31, 2025, and (ii) stronger demand of value-added services, such as warehouse repackaging and related handling services.
Current report
The increase in revenues from Asia-based customers for the three months ended December 31, 2025 was primarily driven by strengthened relationships with key clients. During the three months ended December 31, 2024, the Company experienced reduced volumes from Asia-based customers due to delays and temporary suspensions of certain cross-border logistics projects amid heightened U.S.–China trade tensions, particularly affecting e-commerce customers. During the three months ended December 31, 2025, project activity gradually resumed as trade conditions improved, resulting in higher revenue from Asia-based customers.
Current report
Our cost of revenues from the distribution of pharmaceuticals increased by approximately $1.1 million, or 880.8%, from approximately $0.1 million for the three months ended December 31, 2024, to approximately $1.2 million for the three months ended December 31, 2025.
Current report
Our gross margin for cross-border freight solutions was 14.5% for the three months ended December 31, 2025, compared to (4.1)% for three months ended December 31, 2024. The increase in gross margin was primarily attributable to combined effect of (i) the easing of trade tensions and the stabilization of cross-border trade policies resulted in an increase in shipment volumes. This volume growth allowed for better absorption of fixed costs and improved pricing power across our primary freight lane, and (ii) decreased warehouse labor costs, as discussed above.
Current report
Our gross margin for distribution of pharmaceutical was 51.1% for the three months ended December 31, 2025, compared to 44.2% for three months ended December 31, 2024. Increase in gross margin was mainly due to new products with higher profit margin.
Current report
For the Six Months Ended December 31, 2025 Compared to the Six Months Ended December 31, 2024
Current report
Revenues
Current report
Our total revenues from cross-border freight solutions increased by approximately $1.9 million, or 25.1%, from approximately $7.5 million for the six months ended December 31, 2024, to approximately $9.3 million for the six months ended December 31, 2025. The increase was mainly due to increase in revenue from cross-border airfreight solutions.
Current report
Revenues from our cross-border ocean freight solutions decreased by approximately $0.8 million, or 25.9%, from approximately $3.2 million for the six months ended December 31, 2024, to approximately $2.4 million for the six months ended December 31, 2025. This reduction was primarily due to a decrease in the volume of cross-border ocean freight processed and forwarded, dropping from 2,476 TEU in the six months ended December 31, 2024, to 2,356 TEU for the six months ended December 31, 2025.
Current report
Revenues by Customer Geographic
Current report
Revenues from cross-border freight solutions for the Asia-based customers increased by approximately $2.5 million, or 45.8%, from approximately $5.6 million for the six months ended December 31, 2024, to approximately $8.1 million for the six months ended December 31, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by approximately $0.7 million, or 35.6%, from approximately $1.9 million for the six months ended December 31, 2024 to approximately $1.2 million for the same period in 2025.
Current report
Cost of Revenues
Current report
Our cost of revenues from cross-border freight solutions increased by approximately $1.0 million, or 14.6%, from approximately $7.1 million for the six months ended December 31, 2024, to approximately $8.1 million for the six months ended December 31, 2025. The increase in cost of revenues was mainly due to the combined effects of:
Current report
Our cost of revenues from the distribution of pharmaceuticals was approximately $2.0 million and approximately $0.1 million for the six months ended December 31, 2025 and 2024, respectively. Increase was consistent with increase in revenue from distribution of pharmaceuticals.
Current report
Gross Profit
Current report
Our overall gross profit was approximately $3.0 million and approximately $0.5 million for the six months ended December 31, 2025 and 2024, respectively.
Current report
Our gross margin for cross-border freight solutions was 13.1% and 5.1% for the six months ended December 31, 2025 and 2024, respectively. The increase in gross margin was primarily attributable to strategically increase our proportion of high-margin value-added services. These services command higher pricing compared to traditional freight, shifting our revenue mix toward more profitable activities.
Current report
Our gross margin for the distribution of pharmaceutical was 47.5% for six months ended December 31, 2025. compared to 44.2% for six months ended December 31, 2024. Slightly increase in gross margin was mainly due to we offer new products with higher profit margin.
Current report
Selling Expenses
Current report
General and Administrative Expenses
Current report
Other Income, net
Current report
Our other income, net, increased by $80,839, or 40.1%, from $201,541 for the six months ended December 31, 2024, to $282,380 for the six months ended December 31, 2025. The increase was primarily due to increase in interest income in connection with a third-party loan.
Current report
Interest Expenses
Current report
Loss Before Income Taxes
Current report
Income Tax Expense
Current report
Net loss
Current report
As a result of the foregoing, we had a net loss of approximately $2.9 million and of approximately $3.3 million for the six months ended December 31, 2025 and 2024, respectively.
Current report
As of December 31, 2025, our liquidity position is significantly influenced by a material loan receivable from an unaffiliated third party. The gross principal balance is governed by a loan agreement dated July 3, 2025, bearing interest at 4.35% per annum with a maturity date of July 3, 2026.
Current report
At December 31, 2025, the carrying value of this receivable was approximately $6.6 million, net of an allowance for credit losses of $288,000. This net balance represents 32.3% of our total current assets, constituting a significant concentration of credit risk.
Current report
Our ability to fund future operating activities and working capital requirements is partially dependent on the timely collection of this principal and interest. While we continue to monitor the counterparty’s creditworthiness and currently believe they maintain the financial capacity to meet their obligations, the recorded allowance reflects our estimate of expected credit losses under the CECL (Current Expected Credit Loss) model. Any material default or significant delay in payment by this third party could adversely impact our short-term liquidity and necessitate alternative financing. There can be no assurance that the balance will be collected in full in accordance with its contractual terms.
Current report
Allowance of expected credit losses on loan receivable from a third party
Current report
The Company accounts for its allowance for credit losses on loan receivables in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 326, Financial Instruments—Credit Losses (“ASC 326”). The Company assesses the credit risk of its third-party loan receivables at each reporting date to ensure that the allowance reflects management’s current estimate of expected credit losses over the contractual life of the instrument.
Current report
The measurement of the allowance for expected credit losses is primarily determined using a Probability of Default (“PD”) and Loss Given Default (“LGD”) methodology. This assessment considers whether the borrower meets its contractual obligations and involves an evaluation of the borrower’s historical performance, current financial condition, and the value of any underlying collateral.
Current report
The PD × LGD model includes various assumptions, including the selection of forward-looking macroeconomic forecasts (such as interest rate environments), the borrower’s credit rating, and estimated recovery rates. This assessment, which requires the use of significant professional judgment, is conducted at the time of loan inception and as of each subsequent quarterly period end date while the loan is outstanding. These assumptions reflect management’s best estimates based on current and supportable information, but they involve inherent uncertainties based on economic and market conditions generally outside of the Company’s control. Changes in these estimates are recognized in the Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) in the period in which they occur.
Removed paragraphs (3)
Previous report
Our cost of revenues from the distribution of pharmaceuticals was $0.8 million for the three months ended September 30, 2025. We did not generate any revenue from this segment in the same period of the prior year.
Previous report
Our gross margin for cross-border freight solutions was 11.8% for the three months ended September 30, 2025, compared to 12.8% for three months ended September 30, 2024. The decrease in gross margin was primarily attributable to increased overhead costs allocated, as discussed above.
Previous report
Our gross margin for the distribution of pharmaceutical was 40.9% for three months ended September 30, 2025. This is a new business segment in the current year and therefore no gross margin was reported in the same period of the prior year. The gross margin of the distribution of pharmaceutical was 56.1% for the fiscal year 2025, from the inception to June 30, 2025. This comparatively lower margin was primarily due to favorable purchase discounts offered by our suppliers, who extended these incentives to support the establishment of a long-term partnership as we entered this market as a new customer, in fiscal year 2025. Excluding the impact of the favorable purchase discounts, the gross margin for pharmaceutical distribution in fiscal year 2025 would be approximately 38.4%, which is comparable to the current quarter.
Reworded paragraphs (39)
Previous wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. All amounts included herein with respect to the three months ended September 30, 2025 and 2024 are derived from our audited consolidated financial statements included elsewhere in this Report. Our financial statements have been prepared in accordance with the U.S. GAAP.
Current wording
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Report. In addition to historical consolidated financial information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our actual results could differ materially from those discussed in the forward-looking statements. All amounts included herein with respect to the three and six months ended December 31, 2025 and 2024 are derived from our audited consolidated financial statements included elsewhere in this Report. Our financial statements have been prepared in accordance with the U.S. GAAP.
Previous wording
We are a U.S.-based integrated cross-border supply chain solution provider with a strategic focus on the Asian market including China and South Korea. We primarily provide customized cross-border ocean freight solutions and airfreight solutions in the U.S. that specifically cater to our customers’ requirements and needs in transporting goods into the U.S. We offer a wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.
Current wording
We are a U.S.-based integrated cross-border supply chain solution provider with a strategic focus on the Asian market including China. We primarily provide customized cross-border ocean freight solutions and airfreight solutions in the U.S. that specifically cater to our customers’ requirements and needs in transporting goods into the U.S. We offer a wide variety of integrated services under our cross-border ocean freight solutions and cross-border airfreight solutions, including (i) cross-border freight consolidation and forwarding services, (ii) customs clearance services, (iii) warehousing and distribution services and (iv) U.S. domestic ground transportation services.
Previous wording
Founded in Chicago, Illinois in 2018, we are an Asian American-owned business rooted in the U.S. with in-depth understanding of both the U.S. and Asian international trading and logistics service markets. Our customers are typically Asia- and U.S.-based logistics service companies serving large e-commerce platforms, social commerce platforms and manufacturers to sell and transport consumer and industrial goods made in Asia into the U.S. As of September 30, 2025, we had served over 400 customers to fulfill over 58,500 cross-border supply chain solution orders.
Current wording
Founded in Chicago, Illinois in 2018, we are an Asian American-owned business rooted in the U.S. with in-depth understanding of both the U.S. and Asian international trading and logistics service markets. Our customers are typically Asia- and U.S.-based logistics service companies serving large e-commerce platforms, social commerce platforms and manufacturers to sell and transport consumer and industrial goods made in Asia into the U.S.
Previous wording
We have established an extensive collaboration network of service providers, including global freight carriers for our cross-border freight consolidation and forwarding services as well as domestic ground transportation carriers for our U.S. domestic transportation services. As of September 30, 2025, we had collaborated with almost all major global ocean and air carriers to forward 37,300 TEU of container loads and 75,100 tons of air cargo. As of September 30, 2025, we had also cooperated with over 200 domestic ground transportation carriers, including almost all major U.S. domestic ground transportation carriers, on a long-term, short-term or order basis, as the case may be.
Current wording
We have established an extensive collaboration network of service providers, including global freight carriers for our cross-border freight consolidation and forwarding services as well as domestic ground transportation carriers for our U.S. domestic transportation services.
Previous wording
We operate three massive and hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas. With an aggregate gross feet area of approximately 142,484 square feet and 52 docks, our regional warehousing and distribution centers have an aggregate daily floor load of up to 3,000 cubic meters of freight. In addition to our self-operated regional centers, we maintain close contact with over 150 warehouses and distribution terminals in almost all transportation hubs in the U.S. which we have cooperated in the past to support the warehousing and distributing services of our cross-border freight in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution in states other than Illinois and Texas. As of September 30, 2025, we had assisted with the customs clearance, in conjunction with our other service offerings, of cross-border freight of an aggregate assessed value of over $63.0 million.
Current wording
We operate three massive and hyper-busy regional warehousing and distribution centers in the U.S., in Illinois and Texas. In addition to our self-operated regional centers, we maintain close contact with warehouses and distribution terminals in almost all transportation hubs in the U.S. which we have cooperated in the past to support the warehousing and distributing services of our cross-border freight in case such freight requires storage, fulfilment, transloading, palletizing, packaging or distribution in states other than Illinois and Texas.
Previous wording
Leveraging our strong cross-border supply chain service capabilities, extensive service provider network of cross-border freight carriers and U.S. domestic ground transportation carriers, massive and hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build up our brand and reputation and have achieved fast growth since our inception. As of September 30, 2025, we had fulfilled over 58,500 cross-border supply chain solution orders for freight of an aggregate assessed value of $1.0 billion, delivered to thousands of business and residential addresses in approximately 48 U.S. states.
Current wording
Leveraging our strong cross-border supply chain service capabilities, extensive service provider network of cross-border freight carriers and U.S. domestic ground transportation carriers, massive and hyper-busy regional warehousing and distribution centers as well as deep understanding of the Asian market, we have been able to build up our brand and reputation and have achieved fast growth since our inception.
Previous wording
For the three months ended 30, 2025 and 2024, our revenues amounted to $6.1 million and $4.1 million, respectively, and our gross profit amounted to $1.1 million and $0.5 million during the same periods, respectively.
Current wording
For the six months ended December 31, 2025 and 2024, our revenues amounted to approximately $13.1 million and approximately $7.7 million, respectively, and our gross profit amounted to approximately $3.0 million and approximately $0.5 million during the same periods, respectively.
Previous wording
Our results of operations are dependent upon our ability to expand and maintain our customer base. As of September 30, 2025, we had served over 400 customers to fulfill over 58,500 cross-border supply chain solution orders. We will continue to expand our customer base to achieve a sustainable business growth. We aim to attract new customers and maintain our existing customers. We plan to improve the quality and expand the variety of our services to obtain more customers.
Current wording
Our results of operations are dependent upon our ability to expand and maintain our customer base. We will continue to expand our customer base to achieve a sustainable business growth. We aim to attract new customers and maintain our existing customers. We plan to improve the quality and expand the variety of our services to obtain more customers.
Previous wording
Selling Expenses. Our selling expenses primarily include salaries expense, advertising expenses, software expense, and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.
Current wording
Selling Expenses. Our selling expenses primarily include salaries expense, advertising expenses, marketing expense of a system, and traveling expense of sales team engaged in developing potential customers and maintaining customer relationships and transportation cost for selling pharmaceutical products.
Previous wording
Other Income. Our other income primarily consists of rental income.
Current wording
Other Income. Our other income primarily consists of rental income and interest income in connection with a third-party loan.
Previous wording
The following table summarizes the results of consolidated statements of operations and comprehensive income (loss) for the three months ended September 30, 2025 and 2024 in U.S. dollars.
Current wording
The following table summarizes the results of consolidated statements of operations and comprehensive income (loss) for the three months and six months ended December 31, 2025 and 2024 in U.S. dollars.
Previous wording
Our total revenues from cross-border freight solutions increased by $0.7 million, or 16.7%, from $4.1 million for the three months ended September 30, 2024, to $4.8 million for the three months ended September 30, 2025. The increase was mainly due to increase in revenue from cross-border airfreight solutions.
Current wording
Our total revenues from cross-border freight solutions increased by approximately $1.2 million, or 35.3%, from approximately $3.4 million for the three months ended December 31, 2024, to approximately $4.6 million for the three months ended December 31, 2025. The increase was mainly due to increase in revenue from cross-border airfreight solutions.
Previous wording
Revenues from our cross-border ocean freight solutions decreased by $0.4 million, or 21.9%, from $1.8 million for the three months ended September 30, 2024, to $1.4 million for the three months ended September 30, 2025. This reduction was primarily due to a decrease in the volume of cross-border ocean freight processed and forwarded, dropping from 1,430 TEU in the three months ended September 30, 2024, to 1,331 TEU for the three months ended September 30, 2025.
Current wording
Revenues from our cross-border ocean freight solutions decreased by approximately $0.4 million, or 31.2%, from approximately $1.4 million for the three months ended December 31, 2024, to approximately $0.9 for the three months ended December 31, 2025. This reduction was primarily due to a decrease in the volume of cross-border ocean freight processed and forwarded, dropping from 1,046 TEU in the three months ended December 31, 2024, to 1,025 TEU for the three months ended December 31, 2025.
Previous wording
Revenues from cross-border freight solutions for the Asia-based customers increased by $1.2 million, or 43.0%, from $2.8 million for the three months ended September 30, 2024, to $4.0 million for the three months ended September 30, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by $0.5 million, or 41.4%, from $1.2 million for the three months ended September 30, 2024 to $0.7 million for the same period in 2025.
Current wording
Revenues from cross-border freight solutions for the Asia-based customers increased by approximately $1.3 million, or 48.8%, from approximately $2.8 million for the three months ended December 31, 2024, to approximately $4.1 million for the three months ended December 31, 2025. Revenues from cross-border freight solutions for the U.S.-based customers decreased by approximately $0.1 million, or 23.8%, from approximately $0.6 million for the three months ended December 31, 2024 to approximately $0.5 million for the same period in 2025.
Previous wording
Our customers for the distribution of pharmaceutical products are located in China, as we specifically target the Chinese market.*** ***For the three months ended September 30, 2025, our total revenue from pharmaceutical product distribution amounted to $1.3 million. We did not generate any revenue from this segment in the same period of the prior year.
Current wording
Our customers for the distribution of pharmaceutical products are located in China, as we specifically target the Chinese market.*** For the three months ended December 31, 2025, our total revenue from pharmaceutical product distribution amounted to approximately $2.4 million. For the three months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to approximately $0.2 million. ***
Previous wording
Our cost of revenues from cross-border freight solutions decreased by$0.6 million, or 18.0%, from $3.6 million for the three months ended September 30, 2024, to $4.2 million for the three months ended September 30, 2025. The decrease in cost of revenues was mainly due to the combined effects of:
Current wording
Our cost of revenues from cross-border freight solutions increased by approximately $0.4 million, or 11.1%, from approximately $3.5 million for the three months ended December 31, 2024, to approximately $3.9 million for the three months ended December 31, 2025. The increase in cost of revenues was mainly due to the combined effects of:
Previous wording
Our overall gross profit was $1.1 million for the three months ended September 30, 2025, compared to $0.5 million in the same period of the prior year.
Current wording
Our overall gross profit was approximately $1.9 million for the three months ended December 31, 2025, compared to gross loss of approximately $0.04 million in the same period of the prior year.
Previous wording
Our selling expenses amounted to $0.2 million for the three months ended September 30, 2025, compared to a nominal amount for the same period in 2024. The increase was primarily driven by the salaries for our sales team, software expenses and the advertising expense amounted to $0.2 million, both of which were incurred in connection with the launch of our new pharmaceutical distribution service during the year.
Current wording
Our selling expenses amounted to approximately $0.9 million for the three months ended December 31, 2025, compared to approximately $0.05 million for the same period in 2024. The increase was primarily driven by the salaries for our sales team, marketing expense of a system and the advertising expense amounted to approximately $0.7 million, both of which were incurred in connection with the launch of our new pharmaceutical distribution service during the year.
Previous wording
Our 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 three months ended September 30, 2025. These expenses represented 34.6% and 45.0% of our total revenues for the three months ended September 30, 2025 and 2024, respectively. The increase was mainly due to increase in our professional expense and our new pharmaceutical distribution segment in the second quarter of the fiscal year ended June 30, 2025 contributed to the rise in operating costs.
Current wording
Our general and administrative expenses increased by approximately $0.3 million, or 15.6%, from approximately $1.9 million for the three months ended December 31, 2024, to approximately $2.2 million for the three months ended December 31, 2025. These expenses represented 31.5% and 53.2% of our total revenues for the three months ended December 31, 2025 and 2024, respectively. The increase was mainly due to increase in our consultancy service fee and our new pharmaceutical distribution segment in the second quarter of the fiscal year ended June 30, 2025 contributed to the rise in operating costs.
Previous wording
Our professional fees increased by $0.3 million, or 67.8%, from $0.3 million for the three months ended September 30, 2024, to $0.6 million for the three months ended September 30, 2025. Our professional fee represented 27.1% and 18.5% of our total general and administrative expenses for the three months ended September 30, 2025 and 2024, respectively. The increase was primarily due to advisory and consulting expenses strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.
Current wording
Our professional fees increased by approximately $0.5 million, or 254.2%, from approximately $0.2 million for the three months ended December 31, 2024, to approximately $0.8 million for the three months ended December 31, 2025. Our professional fee represented 34.6% and 11.3% of our total general and administrative expenses for the three months ended December 31, 2025 and 2024, respectively. The increase was primarily due to advisory and consulting expenses strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.
Previous wording
Our other income, net, increased by $37,051, or 33.7%, from $109,788 for the three months ended September 30, 2024, to $146,839 for the three months ended September 30, 2025. The increase was primarily due to increase in interest income of $60,561 in connection with a third-party loan, which was partly offset by slightly decrease in rental income by $14,945.
Current wording
Our other income, net increased by $43,788, or 47.7%, from $91,753 for the three months ended December 31, 2024, to $135,541 for the three months ended December 31, 2025. The increase was primarily due to increase in interest income of $39,491 in connection with a third-party loan.
Previous wording
Our 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 three months ended September 30, 2025. The increase in interest expense was mainly due to higher outstanding interest-bearing loans and interest expense in connection with the convertible note.
Current wording
Our interest expenses increased by $142,567, or 348.7%, from $40,882 for the three months ended December 31, 2024, to $183,449 for the three months ended December 31, 2025. The increase in interest expense was mainly due to higher outstanding interest-bearing loans and interest expense in connection with the convertible note.
Previous wording
We had a net loss before income taxes of $1.3 million and $1.2 million for the three months ended September 30, 2025 and 2024, respectively. We were in a loss position before income taxes for the three months ended September 30, 2025, primarily attributable to the net effects of: (i) the rise in operating expenses, which was partly offset by an increase in gross profit due to the new business segment for the three months ended September 30, 2025 as mentioned above.
Current wording
We had a net loss before income taxes of approximately $1.5 million and approximately $1.9 million for the three months ended December 31, 2025 and 2024, respectively. We were in a loss position before income taxes for the three months ended December 31, 2025, primarily attributable to the net effects of: (i) the rise in operating expenses, which was partly offset by an increase in gross profit due to the new business segment for the three months ended December 31, 2025 as mentioned above.
Previous wording
We had income tax expenses of $35,990 and $89,581 for the three months ended September 30, 2025 and 2024, respectively. A current income tax provision of $57,979 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the three months ended September 30, 2025.
Current wording
We had income tax expenses of $45,049 and $nil for the three months ended December 31, 2025 and 2024, respectively. A current income tax provision of $46,554 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the three months ended December 31, 2025.
Previous wording
Based on management’s assessment of future taxable income, the Company determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred tax assets. We recognized a recovery of deferred income tax credit of $21,989 due to amortization of intangible assets, resulting in a net income tax expense of $35,990 for the three months ended September 30, 2025.
Current wording
Based on management’s assessment of future taxable income, the Company determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred tax assets. We recognized a deferred income tax credit of $1,505 due to amortization of intangible assets, resulting in a net income tax expense of $45,049 for the three months ended December 31, 2025.
Previous wording
We did not have current income tax provision in the three months ended September 30, 2024, due to net operating loss, and we recognized a deferred income tax asset of $373,897 due to temporary differences recognized and net operating loss carried forward. We also recognized a valuation allowance of $463,478 to write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable income, resulting in a net deferred tax expense of $89,581 in the three months ended September 30, 2024.
Current wording
We did not have current income tax provision in the three months ended December 31, 2024, due to net operating loss, and we recognized a net deferred income tax asset of $585,198 due to temporary differences recognized and net operating loss carried forward. We also recognized a valuation allowance of $585,198 to write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable income, resulting in a net income tax expense of $nil in the three months ended December 31, 2024.*** ***
Previous wording
As a result of the foregoing, we had a net loss of $1.4 million and of $1.3 million for the three months ended September 30, 2025 and 2024, respectively.
Current wording
As a result of the foregoing, we had a net loss of $1.6 million and of $1.9 million for the three months ended December 31, 2025 and 2024, respectively.
Previous wording
Revenues from our cross-border airfreight solutions increased by $1.1 million or 48.2%, from $2.2 million for the three months ended September 30, 2024, to $3.3 million for the three months ended September 30, 2025. Despite our volume of cross-border air freight processed decreased, from approximately 7,273 tons for the three months ended September 30, 2024, to approximately 5,776 tons for the three months ended September 30, 2025, our revenue increased primarily due to we experienced stronger demand of value-added services, such as warehouse repackaging and related handling services, which generates higher revenue per shipment and more than offset the impact of lower freight volumes. revenue. For the three months ended September 30, 2025, revenues generated per tons increased by $267, or 86.6%, to $576 per tons, from $309 per tons for the same period in 2024.
Current wording
Revenues from our cross-border airfreight solutions increased by approximately $2.7 million or 63.7%, from approximately $4.2 million for the six months ended December 31, 2024, to approximately $7.0 million for the six months ended December 31, 2025. Despite our volume of cross-border air freight processed decreased, from approximately 11,732 tons for the six months ended December 31, 2024, to approximately 11,141 tons for the six months ended December 31, 2025, our revenue increased primarily due to we experienced stronger demand of value-added services, such as warehouse repackaging and related handling services, which generates higher revenue per shipment and more than offset the impact of lower freight volumes.
Previous wording
Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. For the three months ended September 30, 2025, our total revenue from pharmaceutical product distribution amounted to $1.3 million. We did not generate any revenue from this segment in the same period of the prior year.
Current wording
Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. For the six months ended December 31, 2025, our total revenue from pharmaceutical product distribution amounted to approximately $3.8 million. For the six months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to approximately $0.2 million.
Previous wording
Theincrease in revenues from Asia-based customers for the three months ended September 30, 2025 was primarily driven by strengthened relationships with key clients. The company assigned dedicated teams to manage high-value accounts, which led to an increase in their shipment volumes. In addition, revenue growth was supported by an expansion of value-added logistics services, reflecting higher demand for services such as repackaging, handling, and customized solutions.
Current wording
The increase in revenues from Asia-based customers for the six months ended December 31, 2025 was primarily driven by strengthened relationships with key clients. The company assigned dedicated teams to manage high-value accounts, which led to an increase in their shipment volumes. In addition, revenue growth was supported by an expansion of value-added logistics services, reflecting higher demand for services such as repackaging, handling, and customized solutions.
Previous wording
As of September 30, 2025, we had a cash balance of $4.5 million. Our current assets were $15.0 million, and our current liabilities were $9.8 million, resulting in a current ratio of 1.5 and positive working capital of $5.2 million. Total stockholders’ equity as of September 30, 2025 was $7.0 million.
Current wording
As of December 31, 2025, we had a cash balance of approximately $1.6 million. Our current assets were approximately $21.2 million, and our current liabilities were approximately $10.4 million, resulting in a current ratio of 2.03 and positive working capital of approximately $10.8 million. Total stockholders’ equity as of December 31, 2025 was approximately $12.2 million.
Previous wording
As of September 30, 2025 and June 30, 2025, we had accounts receivable net of allowance of $3.4 million and $3.3 million, respectively. We periodically review our accounts receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional allowances if necessary. For accounts receivable as of September 30, 2025 and June 30, 2025, we provided a credit loss allowance of $171,613 and $87,728, respectively.
Current wording
As of December 31, 2025 and June 30, 2025, we had accounts receivable net of allowance of approximately $4.2 million and approximately $3.3 million, respectively. We periodically review our accounts receivable and allowance level to ensure our methodology for determining allowances is reasonable and to accrue additional allowances if necessary. For accounts receivable as of December 31, 2025 and June 30, 2025, we provided a credit loss allowance of $171,609 and $87,728, respectively.
Previous wording
Net cash used in operating activities was $4,016,518 in the three months ended September 30, 2025, which included a net loss of $1,357,216, adjusted for non-cash items of $1,037,413 and changes in working capital deficits of $3,696,715. The non-cash items primarily included $527,261 straight line lease expense of operating leases, $359,239 stock-based compensation for consulting expenses, $50,565 depreciation included in G&A and cost of revenue, $8,600 depreciation of right-of-use finance assets, $69,602 amortization of discount and bond issuance cost, $21,371 amortization of intangible assets, $$60,561 interest income from a third party loan, $83,325 from provision of allowance for expected credit loss and a decrease of $21,989 from deferred tax liabilities. The adjustments for changes in working capital mainly included an increase of $279,024 in accounts receivable from third parties due to an increase of revenues near period end, an increase of $82,118 in other receivable – related parties, an increase in inventory of $35,452,an increase of $2,935,837 in prepayment, deposit and other receivable – third parties and a payment of $897,689 for operating lease liabilities, partially offset by a decrease of $69,662 in contract assets, an increase of $121,571 in refund liabilities, an increase of $39,445 in accounts payable to related parties, an increase of $45,114 in accounts payable to third parties, a decrease of $43,435 in accounts receivable from related parties, a decrease of $51,279 in note receivable, a decrease of $61,133 in right of return assets, an increase of $18,175 in contract liabilities, an increase of $45,704 in tax payable, and an increase of $37,887 in accrued liabilities and other payables.
Current wording
Net cash used in operating activities was $4,469,978 in the six months ended December 31, 2025, which included a net loss of $2,940,897, adjusted for non-cash items of $2,504,011 and changes in working capital deficits of $4,033,092. The non-cash items primarily included $1,054,794 straight-line lease expense of operating leases, $940,860 stock-based compensation for consulting expenses, $102,975 depreciation included in G&A and cost of revenue, $17,200 depreciation of right-of-use finance assets, $98,835 amortization of discount and bond issuance cost, $42,742 amortization of intangible assets, $100,052 interest income from a third party loan, $288,000 from provision of allowance for expected credit loss on loan receivable, $82,151 from provision of allowance for expected credit loss and a decrease of $23,494 from deferred tax liabilities. The adjustments for changes in working capital mainly included an increase of $932,852 in accounts receivable from third parties due to an increase of revenues near period end, an increase of $47,610 in accounts receivable – related parties, an increase in inventory of $27,802, an increase of $3,000,087 in prepayment, deposit and other receivable and a payment of $1,341,522 for operating lease liabilities, partially offset by a decrease of $50,142 in contract assets, an increase of $71,761 in refund liabilities, an increase of $135,197 in accounts payable to related parties, an increase of $404,825 in accounts payable to third parties, a decrease of $65,152 in note receivable, a decrease of $70,169 in right of return assets, an increase of $35,428 in contract liabilities, an increase of $94,806 in tax payable, and an increase of $389,301 in accrued liabilities and other payables.
Previous wording
Net cash used in operating activities was $1,402,784 in the three months ended September 30, 2024, including net loss of $1,335,407, adjusted for non-cash items for $612,895 and changes in working capital of negative $680,272. The non-cash items primarily included $466,723 amortization of operating lease assets, $36,159 depreciation included in G&A and cost of revenue, $7,595 depreciation of right-of-use finance assets and $12,837 from provision of allowance for expected credit loss and a decrease of $89,581 from deferred tax asset due to recognition of valuation allowance. The adjustments for changes in working capital mainly included a decrease of $402,895 and $156,850 in accounts payable — third parties and related parties, respectively, an increase of $77,812 in due from related parties because of rental income recognized for the three months ended September 30, 2024, a decrease of $470,260 in operating lease liabilities and a decrease of $24,876 in accrued expense and other payable, partially offset by a decrease of $282,864 and $257,924 in accounts receivable — third parties and related parties, respectively, due to a decrease of revenues near the period end.
Current wording
Net cash used in operating activities was $1,933,000 in the six months ended December 31, 2024, including net loss of $3,282,227, adjusted for non-cash items for $1,183,152 and changes in working capital of positive $166,075. The non-cash items primarily included $989,003 amortization and interest expense of operating lease assets, $87,132 depreciation included in G&A and cost of revenue, $15,480 depreciation of right-of-use finance assets and $1,956 from provision of allowance for expected credit loss and a decrease of $89,581 from deferred tax asset due to recognition of valuation allowance. The adjustments for changes in working capital mainly included a decrease of $424,648 and $565,766 in accounts receivable — third parties and related parties, respectively, due to a decrease of revenues near period end and an increase of $312,722 in accrued expense and other payable, partially offset by an increase in prepayment, deposit and other receivable of $112,620, a decrease of $742,649 in operating lease liabilities and a decrease of $156,165 in accounts payable — related parties.
Previous wording
The $2,613,734 increase in cash used in operating activities for the three months ended September 30, 2025, compared to the prior year, was primarily due to an increase in advance deposits of $2.8 million to a supplier partly offset by an increase of $644,304 in accounts payable — third parties and related parties due to the timing of vendor, client, and related parties payment.
Current wording
The $2,536,978 increase in cash used in operating activities for the six months ended December 31, 2025, compared to the prior year, was primarily due to an increase in advance deposits of $2,873,260 to supplier and an increase of $1,357,500 in accounts receivable — third parties, partly offset by a decrease of $341,330 in net loss and an increase of $667,902 in accounts payable — third parties and related parties due to the timing of vendor, client, and related parties payment.
Previous wording
Net cash used in investing activities was $108,800 and $38,279 for the three months ended September 30, 2025 and 2024, respectively. Net cash used in investing activities for the three months ended September 30, 2025, was primarily attributable to an additional loan of $108,800 to a third party. The cash used in same period of last year mainly attributable to was primarily attributable to our purchases of property and equipment and the prepayment for the installation of a security system which was still in progress as of the period ended.
Current wording
Net cash used in investing activities was $7,145,990 and $1,350,498 for the six months ended December 31, 2025 and 2024, respectively. Net cash used in investing activities for the six months ended December 31, 2025, was primarily attributable loans of $7,037,190 to a third party. The cash used in same period of last year was primarily attributable to loans to a third party of $686,697 and net cash payment for asset acquisition of $552,721.
Previous wording
Net cash provided by financing activities was $3,672,316 for the three months ended September 30, 2025, compared with $4,044,402 for the same period in the prior year. The decrease was primarily due to a smaller scale of financing activities compared with the prior period. During the three months ended September 30, 2025, we generated cash inflows from loan borrowings of $1.2 million, private placements of $3.0 million, advances from related parties of $0.3 million and advance from shareholders of $0.1 million, which were partially offset by $0.3 million in principal repayments of convertible debt, loan repayments of $0.2 million, advance to a third party of $0.2 million and advance to related parties of $0.2 million. During the three months ended September 30, 2024, we had net proceeds of approximately $5,351,281 from the offering, partly offset by repayment of $879,574 to shareholders, loans repayment of $265,456 and advancement to related party of $126,227 during the three months ended September 30, 2024.
Current wording
Net cash provided by financing activities was $8,095,889 and $4,295,361 for the six months ended December 31, 2025 and 2024. The increase was primarily due to proceeds from private placement of financing activities compared with the prior period. During the six months ended December 31, 2025, we generated cash inflows from loan borrowings of $1,644,523, private placements of $7,133,492, advances from related parties of $260,144 and advance from shareholders of $174,626, which were partially offset by $399,615 in principal repayments of convertible debt, loan repayments of $597,546 and advance to related parties of $62,779. During the six months ended December 31, 2024, we had due to the net proceeds of $5,351,281 from the offering and proceeds from loan borrowing of $195,000 and a loan from a third party of $276,365, partly offset by repayment of $805,345 to shareholders and loans repayment of $339,914 during the six months ended December 31, 2024.
Previous wording
Our capital expenditures are incurred primarily in connection with the purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold improvement and vehicles. Our capital expenditures amounted tonil and $38,279 for the three months ended September 30, 2025 and 2024, respectively.
Current wording
Our capital expenditures are incurred primarily in connection with the purchase of fixed assets, including machinery and equipment, furniture and fixtures, leasehold improvement and vehicles. Our capital expenditures amounted to nil and $111,080 for the six months ended December 31, 2025 and 2024, respectively.
Previous wording
Refer to Notes 2 to the consolidated financial statements included in this report for further discussion of our significant accounting policies and the effect on our consolidated financial statements.
Current wording
Refer to Notes 2 to the condensed consolidated financial statements included in this report for further discussion of our significant accounting policies and the effect on our condensed consolidated financial statements.
Rearranged current paragraphs (14)
Current report — wording carried from elsewhere
Starting from December 2024, we established a new revenue stream through the distribution of pharmaceutical products. We procured pharmaceuticals—primarily pharmaceutical solutions—directly from manufacturers and supplied them to distributors, hospitals, and clinics. Revenues from distribution of pharmaceutical products increased by approximately $2.2 million or 1,020.0%, from approximately $0.2 million for the three months ended December 31, 2024, to approximately $2.4 million for the three months ended December 31, 2025.* *
Current report — wording carried from elsewhere
We also assigned dedicated teams to manage high-value accounts, which led to an increase in their shipment volumes. In addition, revenue growth was supported by an expansion of value-added logistics services, reflecting higher demand for services such as repackaging, handling, and customized solutions.
Current report — wording carried from elsewhere
The following table summarizes our consolidated results of operations and percentages of certain items in relation to total revenues for the six months ended December 31, 2025 and 2024, and provides information regarding the dollar and percentage increase or (decrease) during such periods. The operating results in any historical period are not necessarily indicative of the results that may be expected for any future period.
Current report — wording carried from elsewhere
The decrease in revenue from the U.S.-based customers for the six months ended December 31, 2025, compared to the same period in 2024, was primarily driven by a decrease in shipment volumes serving e-commerce platforms and concerns over a potential economic downturn and reduced consumer spending power in the U.S., which led to lower shipment volumes.
Current report — wording carried from elsewhere
Our customers for the distribution of pharmaceutical products are located in China, as we specifically target the Chinese market.*** ***For the six months ended December 31, 2025, our total revenue from pharmaceutical product distribution amounted to approximately $3.8 million. For the six months ended December 31, 2024, our total revenue from pharmaceutical product distribution amounted to approximately $0.2 million.
Current report — wording carried from elsewhere
A breakdown of our cost of revenues for the six months ended December 31, 2025 and 2024 is as follows:
Current report — wording carried from elsewhere
Our selling expenses amounted to approximately $1.1 million for the six months ended December 31, 2025, compared to approximately $0.05 million for the same period in 2024. The increase was primarily driven by the salaries for our sales team, marketing expenses of a system and the advertising expense amounted to approximately $0.9 million, both of which were incurred in connection with the launch of our new pharmaceutical distribution service in December 2024.
Current report — wording carried from elsewhere
Our general and administrative expenses increased by approximately $0.6 million, or 15.2%, from approximately $3.7 million for the six months ended December 31, 2024, to approximately $4.3 million for the six months ended December 31, 2025. These expenses represented 32.9% and 48.8% of our total revenues for the six months ended December 31, 2025 and 2024, respectively. The increase was mainly due to increase in our professional expense and our new pharmaceutical distribution segment in the second quarter of the fiscal year ended June 30, 2025 contributed to the rise in operating costs.
Current report — wording carried from elsewhere
Our professional fees increased by approximately $0.8 million, or 140.2 %, from approximately $0.6 million for the six months ended December 31, 2024, to approximately $1.3 million for the six months ended December 31, 2025. Our professional fee represented 30.9% and 14.8% of our total general and administrative expenses for the six months ended December 31, 2025 and 2024, respectively. The increase was primarily due to advisory and consulting expenses strategic planning initiatives. These costs included external support for market assessments, financial and operational due diligence, and the development of long-term strategic plans to guide future growth.
Current report — wording carried from elsewhere
Our interest expenses increased by $310,898, or 450.6%, from $68,992 for the six months ended December 31, 2024, to $379,890 for the six months ended December 31, 2025. The increase in interest expense was mainly due to higher outstanding interest-bearing loans and interest expense in connection with the convertible note.
Current report — wording carried from elsewhere
We had a net loss before income taxes of approximately $2.9 million and approximately $3.2 million for the six months ended December 31, 2025 and 2024, respectively. We were in a loss position before income taxes for the six months ended December 31, 2025, primarily attributable to the net effects of: (i) the rise in operating expenses, which was partly offset by an increase in gross profit due to the new business segment for the six months ended December 31, 2025 as mentioned above.
Current report — wording carried from elsewhere
We had income tax expenses of $81,039 and $89,581 for the six months ended December 31, 2025 and 2024, respectively. A current income tax provision of $104,533 was recognized for a subsidiary with net assessable income while no current income tax provision was recognized for subsidiaries in net operating loss for the six months ended December 31, 2025.
Current report — wording carried from elsewhere
Based on management’s assessment of future taxable income, the Company determined that it was no longer more likely than not that sufficient future taxable income would be available to utilize the deferred tax benefits. As a result, the Company recorded a full valuation allowance against its DTAs and did not recognize any deferred tax assets. We recognized a deferred income tax credit of $23,494 due to amortization of intangible assets, resulting in a net income tax expense of $81,039 for the six months ended December 31, 2025.
Current report — wording carried from elsewhere
We did not have current income tax provision in the six months ended December 31, 2024, due to net operating loss, and we recognized a deferred income tax asset of $959,095 due to temporary differences recognized and net operating loss carried forward. We also recognized a valuation allowance of $1,048,676 to write off our deferred tax asset since we are uncertain that we will be able to utilize the deferred tax asset to offset future taxable income, resulting in a net income tax expense of $89,581 in the six months ended December 31, 2024.*** ***