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, 2024

☐ 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 7,500,000 shares of common stock outstanding.

Lakeside Holding Limited

FORM 10-Q

For the Quarterly Period Ended September 30, 2024

INDEX

		Page
	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Unaudited Condensed Consolidated Balance Sheets	1
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	2
	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity	3
	Unaudited Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	41

	PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
	Signatures	45

EXPLANATORY NOTE

As used in this Annual 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	As of September 30, 2024 (unaudited)			As of June 30, 2024 (audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalent	$	2,739,275		$	123,550
Accounts receivable – third parties, net		1,786,451			2,082,152
Accounts receivable – related party, net		505,361			763,285
Prepayment and other receivable		113,198			-
Contract assets		41,301			129,506
Due from related parties		645,318			441,279
Total current assets		5,830,904			3,539,772

NON-CURRENT ASSETS
Investment in other entity		15,741			15,741
Property and equipment at cost, net of accumulated depreciation		314,496			344,883
Right of use operating lease assets		4,320,579			3,471,172
Right of use financing lease assets		29,881			37,476
Deferred tax asset		-			89,581
Deferred offering costs		-			1,492,798
Deposit and prepayment		298,217			202,336
Total non-current assets		4,978,914			5,653,987
TOTAL ASSETS	$	10,809,818		$	9,193,759

LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payables – third parties	$	758,963		$	1,161,858
Accounts payables – related parties		70,872			227,722
Accrued liabilities and other payables		869,109			1,335,804
Current portion of obligations under operating leases		1,891,877			1,186,809
Current portion of obligations under financing leases		34,214			37,619
Loans payable, current		484,725			746,962
Dividend payable		98,850			98,850
Tax payable		79,825			79,825
Due to shareholders		138,107			1,018,281
Total current liabilities		4,426,542			5,893,730

NON-CURRENT LIABILITIES
Loans payable, non-current		105,166			136,375
Obligations under operating leases, non-current		2,646,597			2,506,402
Obligations under financing leases, non-current		13,233			17,460
Total non-current liabilities		2,764,996			2,660,237
TOTAL LIABILITIES	$	7,191,538		$	8,553,967
Commitments and Contingencies

EQUITY
Common stocks, $0.0001 par value, 200,000,000 shares authorized, 7,500,000 and 6,000,000 issued and outstanding as of September 30, 2024 and June 30, 2024, respectively		750			600
Subscription receivable		-			(600	)
Additional paid-in capital		4,942,791			642,639
Accumulated other comprehensive income		15,965			2,972
Deficits		(1,341,226	)		(5,819	)
Total equity		3,618,280			639,792

TOTAL LIABILITIES AND EQUITY	$	10,809,818		$	9,193,759

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

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

	For the Three Months Ended September 30,
	2024			2023
Revenue from third party	$	3,599,787		$	4,054,287
Revenue from related parties		481,767			94,189
Total revenue		4,081,554			4,148,476

Cost of revenue from third party		2,994,285			2,905,597
Cost of revenue from related parties		564,730			595,336
Total cost of revenue		3,559,015			3,500,933
Gross profit		522,539			647,543

Operating expenses:
General and administrative expenses		1,837,206			855,778
Loss from deconsolidation of a subsidiary		-			73,151
Provision of allowance for expected credit loss		12,837			52,122
Total operating expenses		1,850,043			981,051

Loss from operations		(1,327,504	)		(333,508	)

Other income (expense):
Other income, net		109,788			46,949
Interest expense		(28,110	)		(22,785	)
Total other income, net		81,678			24,164

Loss before income taxes		(1,245,826	)		(309,344	)

Income taxes expense (recovery)		89,581			(2,059	)

Net loss and comprehensive loss		(1,335,407	)		(307,285	)
Net loss attributable to non-controlling interest		-			(3,025	)
Net loss attributable to common stockholders		(1,335,407	)		(304,260	)

Other comprehensive loss
Foreign currency translation gain		12,993			3,122
Comprehensive loss		(1,322,414	)		(304,163	)
Less: comprehensive loss attributable to non-controlling interest		-			(3,119	)
Comprehensive loss attributable to the common shareholders	$	(1,322,414	)	$	(301,044	)

Loss per share – basic and diluted	$	(0.18	)	$	(0.05	)
Weighted average shares outstanding – basic and diluted		7,500,000			6,000,000

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

LAKESIDE HOLDING LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)

	Common Shares		Amount		Subscription Receivable			Additional Paid in Capital		Retained Earnings (Deficits)			Accumulated Other Comprehensive Income (Loss)			Non- controlling Interest			Total
Balance at June 30, 2023		6,000,000	$	600	$	(600	)	$	—	$	862,072		$	(244	)	$	(7,068	)	$	854,760
Net loss for the three months ended September 30, 2023		—		—		—			—		(304,260	)		—			(3,025	)		(307,285	)
Termination of S Corporation upon reorganization		—		—		—			642,639		(642,639	)		—			—			—
Deconsolidation of a subsidiary		—		—		—			—		—			—			10,187			10,187
Foreign currency translation adjustment		—		—		—			—		—			3,216			(94	)		3,122
Balance at September 30, 2023		6,000,000	$	600	$	(600	)	$	642,639	$	(84,827	)	$	2,972		$	—		$	560,784

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

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

LAKESIDE HOLDING LIMITED
CONDENSSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	For the Three Months Ended September 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(1,335,407	)	$	(307,285	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation – G&A		17,995			17,995
Depreciation – cost of revenue		18,164			18,165
Amortization of operating lease assets		466,723			219,571
Depreciation of right-of-use finance assets		7,595			7,332
Provision of allowance for expected credit loss		12,837			52,122
Deferred tax expense (benefit)		89,581			(2,059	)
Loss from derecognition of shares in subsidiary		-			73,151
Changes in operating assets and liabilities:
Accounts receivable – third parties		282,864			(138,491	)
Accounts receivable – related parties		257,924			(65,995	)
Contract assets		88,205			26,213
Due from related parties		(77,812	)		49,182
Prepayment, other deposit		(176,572	)		2,623
Accounts payables – third parties		(402,895	)		133,904
Accounts payables – related parties		(156,850	)		141,213
Accrued expense and other payables		(24,876	)		37,739
Operating lease liabilities		(470,260	)		(225,023	)
Net cash (used in) provided by operating activities		(1,402,784	)		40,357

Cash flows from investing activities:
Payment made for investment in other entity		-			(29,906	)
Net cash outflow from deconsolidation of a subsidiary (Appendix A)		-			(48,893	)
Prepayment for system installation		(32,507	)		-
Acquisition of property and equipment		(5,772	)		-
Net cash used in investing activities		(38,279	)		(78,799	)

Cash flows from financing activities:
Proceeds from loans		-			225,000
Repayment of loans		(265,456	)		(122,137	)
Repayment of equipment and vehicle loans		(27,990	)		(29,678	)
Principal payment of finance lease liabilities		(7,632	)		(6,425	)
Proceeds from initial public offering, net of share issuance costs		5,351,281			-
Advanced to related parties		(126,227	)		-
Repayment to shareholders		(879,574	)		-
Net cash provided by financing activities		4,044,402			66,760

Effect of exchange rate changes on cash and cash equivalents		12,386			3,216
Net decrease in cash and cash equivalent		2,615,725			31,534
Cash and cash equivalent, beginning of the period		123,550			174,018
Cash and cash equivalent, end of the period	$	2,739,275		$	205,552

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for income tax	$	—		$	—
Cash paid for interest	$	6,274		$	6,462

SUPPLEMENTAL SCHEDULE OF NON-CASH IN FINANCING ACTIVITIES
Deferred offering costs within due to shareholders	$	—		$	230,000

NON-CASH ACTIVITIES
Right of use assets obtained in exchange for operating lease obligations	$	1,244,140		$	—
Right of use assets obtained in exchange for finance lease obligation	$	—		$	—

APPENDIX A – Net cash outflow from deconsolidation of a subsidiary
Working capital, net				$	29,812
Investment in other entity recognized					(15,741	)
Elimination of NCl at deconsolidation of a subsidiary					10,187
Loss from deconsolidation of a subsidiary					(73,151	)
Cash				$	(48,893	)

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

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 11). 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, 2024, the Company’s subsidiaries are as follows:

Name	Date of Incorporation	Jurisdiction of Formation	Percentage of direct/indirect Economic Ownership		Principal Activities
Parent Company
Lakeside Holding Limited	August 28, 2023	Nevada		100%	Holding company
Subsidiary
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

On July 10, 2024, the Company incorporated a wholly-owned subsidiary, Sichuan Hupan Jincheng Enterprise Management Co., Ltd, in China. The Company is actively exploring the potential business opportunities in mainland China.

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 Chairman of the Board and Chief Executive Officer (“CEO”), and Mr. Shuai Li, the President and Chief Operating Officer (“COO”), 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.

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 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, and expenses, were approximately $5.79 million (Note 11). As at July 1, 2024, 7,500,000 shares of common stock are issued and outstanding. As of the date of this report, the Controlling Group collectively holds 76.0% equity interest of the Company through H&L Logistics International LLC which holds 36.0% equity interest of the Company, and Jiushen Transport LLC, which holds 40.0% equity interest of the Company.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation and principles of consolidation

The condensed consolidated financial statements include the accounts of Lakeside Holding Limited and its wholly owned subsidiaries (collectively the “Company”). In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles (“GAAP”) requires the use of management estimates. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended June 30, 2024.

Use of estimates and assumptions

In preparing the 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 condensed consolidated financial statements. Significant accounting estimates required to be made by management include allowance for credit losses, the percentage of performance obligation completed at the reporting period. 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 and cash equivalents

Cash and cash equivalents consist 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 most of its bank accounts in the United States, which are insured by Federal Deposit Insurance Corporation (“FDIC”). The Company has one bank account in the PRC. Cash balances in bank accounts in PRC are not insured.

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 the allowance for credit losses. For those past due balances over one year and other higher risk receivables identified by the Company are reviewed individually for collectability. 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. Loss-rate approach is based on the historical loss rates and expectations of future conditions. 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, 2024 and June 30, 2024, the Company recorded the allowance of credit loss of $66,903 and $54,066, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

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 using the cost method of accounting. Under the cost method of accounting, the investment is measured at cost, adjusted for observable price changes and 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, 2024 and June 30, 2024, the Company’s investment in ABL Wuhan amounted to $15,741 and no impairment charges was recorded.

Property and equipment

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

		Useful life
Furniture and fixtures		7 years
Machinery equipment		5 years
Vehicles		5 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 condensed consolidated statements of income (loss) and other comprehensive income (loss).

Impairment of long-lived asset

Long-lived assets, including plant, property and equipment, 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 consistent with the approach applied for its other long-lived assets. No impairment charge was recognized for the three months ended September 30, 2024 and 2023, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Accounts payable

The account payables are derived from logistic services and forwarding service providers. The balances arise from logistics services provider are usually settled within 7 to 30 days.

Deferred offering costs

Pursuant to ASC 340-10-S99-1, incremental offering costs directly attributable to an offering of equity securities are deferred and would be charged against the gross proceeds of the offering as a reduction of additional paid-in capital. These costs include legal fees related to the registration drafting and counsel, consulting fees related to the registration preparation, audit fees, SEC filing and print related costs and exchange listing costs. The deferred offering costs are offset against additional paid-in capital upon receipts of the capital raised at IPO closing date.

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 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 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 consolidated statements of operations and cash flows.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Finance leases

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

Related parties

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

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 and cash equivalent, accounts receivable from third parties and related parties, amount due from related parties, due to shareholders, other receivables, contract assets, accounts payable, other payables, dividend payable and accrued expenses and other current liabilities approximate fair value due to their short-term nature. For lease liabilities 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, 2024 and June 30, 2024.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Revenue recognition

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

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

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

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

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

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

Revenue from cross-border freights solutions

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

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

For goods entering the United States, the Company determines that the performance period for revenue recognition is between the pickup date and the date of completing delivery. For customers shipping goods overseas with cargo space booking service, the Company determines that the performance period for revenue recognition is between the container or cargo space confirmed date and the date of arrival at destination. For customers shipping goods overseas without cargo space booking service, the Company determines that the performance period for revenue recognition is between pickup date and the date when the goods are departed from airport or port. The performance period may be estimated if the date of completing delivery or the departure date or arrival date has not occurred by the reporting date. Determining the performance period and the progress of the transportation as of the reporting date requires management’s estimation and judgement, which may impact the timing of revenue recognition.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Revenue recognition (cont.)

Principal and agent considerations

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

Disaggregation of revenues

The Company disaggregates its revenue from types of services providing and the customer geographic of its customers, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors.

The Company’s disaggregation of revenues for three months ended September 30, 2024 and 2023 is disclosed as below:

By service type

	For the three months ended September 30,
	2024		2023
Cross-border ocean freights solutions	$	1,836,591	$	1,703,657
Cross-border airfreights solutions		2,244,963		2,444,819
Total revenue	$	4,081,554	$	4,148,476

By customer geographic location

	For the three months ended September 30,
	2024		2023
Asia-based customers	$	2,809,636	$	1,694,223
U.S.-based customers		1,271,918		2,454,253
Total revenue	$	4,081,554	$	4,148,476

Contract assets

Contract assets represent estimated amounts for which the Company has the right to consideration for the services provided while a delivery is still in-transit and has not yet invoiced the customer. Upon completion of the performance obligations, which can vary in duration based upon the method of transport and billing the customer, these amounts become classified within accounts receivable.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Cost of revenues

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

General and administrative expenses

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

401(k) benefit plan

401(k) benefit plan covers substantially all employees and allows voluntary employee contributions up to the annually adjusted Inland Revenue Service (“IRS”) dollar limit. These voluntary contributions are matched equal to 100% of the first 3% of the employee’s compensation contributed and 50% of contributions exceeding 3% of eligible compensation, not to exceed 5% of the total eligible compensation. The employees’ voluntary contributions and the Company’s matching contributions are 100% vested immediately. The Company adopted the 401(k) benefit plan from April 2022. The expense related to matching employees’ contributions was $8,982 and $6,596 for the three months ended September 30, 2024 and 2023, respectively.

Rental income

The Company subleased portion of its offices area, warehouse and parking lots to third parties and related parties. The Company recognizes rental income over the sublease period. For the three months ended September 30, 2024 and 2023, the Company recognized rental income amounted to $101,067 and $50,383, respectively.

Income taxes

Before the Reorganization, the Company has elected to be taxed as an S Corporation for federal and state income tax purposes. As an S Corporation, the Company is not subject to federal income tax and state tax in Illinois. However, Illinois allows subchapter S corporations to elect to pay the Pass-through Entity (PTE) tax at entity level for tax years ending on or after December 31, 2021 and beginning prior to January 1, 2026. The PTE tax rate is equal to 4.95% of the taxpayer’s net income for the taxation year. The S corporation making the election is liable for paying the PTE tax, and the shareholders will receive credit for the amount of PTE tax credit paid but shall be liable to pay any remaining tax based on their share of the pass-through entity’s income and credits. Illinois also taxes 1.5% replacement tax on S corporation’s net taxable income and franchise tax based on the corporation’s paid-in-capital for the 12 months prior to the annual report filing date. The franchise tax is not applicable for the Company. After the Reorganization, the Company is subjected to U.S. federal income tax at 21% and the 7.0% state tax and the 2.5% replacement tax in the state of Illinois.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Income taxes (cont.)

The Company’s PRC subsidiary is governed by the income tax laws of the PRC and the income tax provision in respect to operations in the PRC is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), domestic enterprises and Foreign Investment Enterprises (the “FIE”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis.

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

The Company accounts for uncertain tax positions in accordance with FASB ASC Topic No. 740, Accounting for Uncertainty in Income Taxes. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. As of September 30, 2024 and June 30, 2024, the Company did not have a liability for unrecognized tax benefits. It is the Company’s policy to includes penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. The Company’s historical tax years will remain open for examination by the local authorities until the statute of limitations has passed.

Basic and diluted earnings (loss) per share

The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average common shares outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Foreign currency transactions

Our reporting currency is the U.S. dollar. The functional currency of our operations, except for Lakeside Sichuan, is the U.S. dollar. The functional currency of Lakeside Sichuan is the RMB. The assets, liabilities, revenues, and expenses of Lakeside Sichuan are remeasured in accordance with ASC 830. For the period ended September 30, 2024, assets and liabilities of Lakeside Sichuan are translated into U.S. dollars based upon exchange rates prevailing at the end of each period. Revenues and expenses of Lakeside Sichuan are translated at average exchange rates during the reporting period. The resulting translation adjustment is included in accumulated other comprehensive loss.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Foreign currency transactions (cont.)

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

			September 30, 2024
Balance sheet items, except for equity accounts			US$1=RMB 7.0176
Items in the statements of income and cash flows			US$1=RMB 7.1641

Commitments and contingencies

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

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

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

Segment reporting

The Company follows ASC 280, “Segment Reporting.” The Company’s Chief Executive Officer or chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and hence, the Company has only one reportable segment. The Company operates and manages its business as a single segment. As the Company’s long-lived assets are substantially all located in the United States and substantially all the Company’s revenues are derived from within the United States.

Concentrations and risks

a. Concentration of credit risk

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

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Concentrations and risks (cont.)

a. Concentration of credit risk (cont.)

The maximum exposure of such assets to credit risk is their carrying amounts at the balance sheet dates. The Company maintains majority of the bank accounts at financial institutions in the United States, where there is $250,000 standard deposit insurance coverage limit per depositor, per FDIC-insured bank and per ownership category. As of September 30, 2024 and June 30, 2024, one bank balance exceeded the insured limited by $750,024 and $nil, respectively. To limit the exposure to credit risk relating to deposits, the Company primarily places cash deposits with large financial institutions in the United States.

The Company has adopted a credit policy of dealing with creditworthy counterparties to mitigate the credit risk from defaults. The management team conducts credit evaluations of its customers, and generally does not require collateral or other security from them. The Company establishes an accounting policy to provide for allowance for credit loss based on the individual customer’s financial condition, credit history, and the future economic conditions. Due from related parties’ balances are monitored on an ongoing basis with the result that the Company’s exposure to impairment is not significant. As of September 30, 2024 and June 30, 2024, none of the Company’s due from related parties are impaired.

b. Foreign exchange risk

Our subsidiary in PRC has functional currency in RMB. The value of the Chinese Yuan against the U.S. dollar is affected by the changes in China and United States economic conditions. We do not believe that we currently have any significant direct foreign exchange risk and have not used any derivative financial instruments to hedge exposure to such risk. Also, by considering the volume of its business, the impact of foreign exchange risk is limited.

c. Interest rate risk

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

d. Liquidity risk

Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. Our objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet our liquidity requirements at any point in time. The Company monitors and analyze its cash flow position, its ability to generate sufficient revenue sources in the future and its operating and capital expenditure commitments. The Company is historically funded the working capital needs primarily from operations, loans, as well as shareholder advances to the Company. The Company will use the capital from its offering closed in July 2024 to fund the further working capital needs.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

Recent accounting pronouncements

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

In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures” (Topic 280). This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment’s profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. This ASU will likely result in us including the additional required disclosures when adopted. Management is currently evaluating the provisions of this ASU and expect to adopt them for the year ending June 30, 2025.

In December 2023, the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures” (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income tax paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. This ASU will likely result in the required additional disclosures being included in the Company’s consolidated financial statements, once adopted.

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

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 3 — ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consists of the following:

	September 30, 2024			June 30, 2024
Accounts receivable – third-party customers	$	1,839,243		$	2,122,107
Less: allowance for credit loss – third-party customers		(52,792	)		(39,955	)
Accounts receivable from third-party customers, net	$	1,786,451		$	2,082,152

Add: accounts receivable – related party customers	$	519,472		$	777,396
Less: allowance for credit loss – related party customers		(14,111	)		(14,111	)
Total accounts receivable, net	$	505,361		$	763,285

Approximately $1.5 million or 65.3% of the accounts receivable balance has been collected as of the report date.

The movement of allowance for credit loss for the three months ended September 30, 2024 and the year ended June 30, 2024 is as follows:

	September 30, 2024		June 30, 2024
Beginning balance	$	54,066	$	25,909
Addition of provision		12,837		28,157
Ending balance	$	66,903	$	54,066

The Company recorded addition of allowance for credit loss of $12,837 and $ 52,122 for the three months ended September 30, 2024 and 2023, respectively.

NOTE 4 — PROPERTY AND EQUIPMENT, NET

Property, plant and equipment, net consists of the following:

	September 30, 2024			June 30, 2024
Furniture and Fixtures	$	49,887		$	49,887
Machinery equipment		287,002			281,230
Vehicles		324,267			324,267
Leasehold improvement		82,050			82,050
Subtotal		743,206			737,434
Less: accumulated depreciation		(428,710	)		(392,551	)
Property and equipment, net	$	314,496		$	344,883

Depreciation expense recorded in general and administrative expense was $17,995 and $17,995 for the three months ended September 30, 2024 and 2023, respectively. Depreciation expense recorded in cost of revenue was $18,164 and $18,165 for the three months ended September 30, 2024 and 2023, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 5 — LEASES

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

As of September 30, 2024 and June 30, 2024, balance of lease liabilities was $4,538,474 and $3,693,211, respectively. The Company recognized additional operating lease liabilities of $845,263 as result of entering into two new operating lease agreements for the three months ended September 30, 2024. The ROU asset was recognized at the discount rate of 10.25% for one lease with a lease term of 1.6 years in the U.S. and 4.42% for another lease with a lease term of 2 years in China, resulting in a total of $1,244,140 on the commencement date.

As of September 30, 2024, the Company did not recognize any additional finance lease liabilities.

Total operating lease expenses on offices, warehouses, and warehouse equipment for the three months ended September 30, 2024 and 2023 were $466,723 and $ 219,571, respectively.

Total finance lease expenses on warehouse machinery and equipment for the three months ended September 30, 2024 and 2023 were $8,016 and $7,663, respectively. Depreciation of finance lease right-of-use assets were $7,595 and $7,332 for the three months ended September 30, 2024 and 2023, respectively.

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

	For the three months ended September 30,
	2024		2023
Cash paid of amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	470,260	$	222,053
Operating cash flows from finance leases	$	422	$	331
Financing cash flows from finance leases	$	7,632	$	6,425
Right-of-use assets obtained in exchange for lease obligations:
Operating lease liabilities	$	1,244,140	$	-

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

	September 30, 2024			June 30, 2024
Weighted-average remaining lease term (years):
Operating lease		2.94 years			3.05 years
Finance lease		1.17 years			1.31 years

Weighted average discount rate:
Operating lease		7.21	%		6.30	%
Finance lease		6.78	%		6.51	%

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 5 — LEASES (cont.)

The following is a schedule of maturities of operating and finance lease liabilities as of September 30, 2024:

Operating leases

Twelve months ending September 30,	Repayment
2025	$	2,149,231
2026		1,486,618
2027		533,724
2028		554,061
2029		380,383
Total future minimum lease payments		5,104,017
Less: imputed interest		(565,543	)
Total operating lease liabilities	$	4,538,474

Financing leases

Twelve months ending September 30,	Repayment
2025	$	35,354
2026		12,439
2027		1,262
Total future minimum lease payments		49,055
Less: imputed interest		(1,608	)
Total finance lease liabilities	$	47,447

NOTE 6 — ACCRUED LIABILITIES AND OTHER PAYABLES

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

	September 30, 2024		June 30, 2024
Credit card payables	$	319,694	$	235,673
Payroll liabilities		122,289		120,379
Accrued expense (a)		324,212		435,019
Other payables (b)		102,914		544,733
Total	$	869,109	$	1,335,804

Note (a): The balance mainly consists of accrued interest of $186,630 and $175,019 and accrued professional fee of $130,000 and $260,000 as of September 30, 2024 and June 30, 2024, respectively.

(b): The balance mainly consists of payable related to initial offering cost of $100,000 and $541,819 as of September 30, 2024 and June 30, 2024, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 — LOANS PAYABLE

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

The loan balance consists of the following:

	September 30, 2024			June 30, 2024
Equipment loans	$	70,602		$	84,357
Vehicle loans		132,048			146,283
Other loans		387,241			652,697
Total		589,891			883,337
Less: loan payable, current		(484,725	)		(746,962	)
Loan payable, non-current	$	105,166		$	136,375

Equipment loans

On December 7, 2020, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $48,033 at a fixed interest rate of 3.99% per annum with a maturity date of December 1, 2025. The loan balance was $12,920 and $15,427 as of September 30, 2024 and June 30, 2024, respectively.

On March 9, 2021, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $12,700 at a fixed interest rate of 3.99% per annum with a maturity date of July 6, 2025. The loan balance was $2,815 and $3,642 as of September 30, 2024 and June 30, 2024, respectively.

On April 7, 2021, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $12,700 at a fixed interest rate of 3.99% per annum with a maturity date of July 6, 2025. The loan was guaranteed by Mr. Henry Liu, the Chairman of the Board and CEO. The loan balance was $2,815 and $3,642 as of September 30, 2024 and June 30, 2024, respectively.

On June 4, 2021, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $26,800 at a fixed interest rate of 3.79% per annum with a maturity date of June 3, 2025. The loan balance was $5,339 and $7,085 as of September 30, 2024 and June 30, 2024, respectively.

On June 14, 2021, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $20,724 at a fixed interest rate of 6% per annum with a maturity date of August 06, 2024. The loan balance was $nil and $1,252 as of September 30, 2024 and June 30, 2024, respectively.

On July 13, 2021, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $8,465 at a fixed interest rate of 6% per annum with a maturity date of June 30, 2024. The loan balance was $nil and $256 as of September 30, 2024 and June 30, 2024, respectively.

On September 28, 2021, the Company entered into another equipment loan with Toyota Commercial Finance for a principal amount of $23,600 at a fixed interest rate of 3.54% per annum with a maturity date of June 30, 2024. The loan balance was $nil and $690 as of September 30, 2024 and June 30, 2024, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 — LOANS PAYABLE (cont.)

On February 21, 2023, the Company entered into an equipment loan with Toyota Commercial Finance for a principal amount of $29,705 at a fixed interest rate of 7.90% per annum with a maturity date of February 20, 2027. The loan balance was $19,051 and $20,823 as of September 30, 2024 and June 30, 2024, respectively.

On June 10, 2021, the Company entered into an equipment loan with Amur Equipment Finance for a principal amount of $41,239 at a fixed interest rate of 13.92% per annum with a maturity date of June 9, 2026. The loan is personally guaranteed by Henry Liu, the Chairman of the Board and CEO. The loan term was 5 years. The loan balance was $16,764 and $18,972 as of September 30, 2024 and June 30, 2024, respectively.

On September 9, 2021, the Company entered into an equipment loan with Hatachi Capital America Corp. for a principal amount of $28,450 at a fixed interest rate of 9.49% per annum with a maturity date of March 15, 2026. The loan balance was $10,898 and $12,569 as of September 30, 2024 and June 30, 2024, respectively.

The Company made the total principal repayments of $13,755 and $15,824 in connection with the above equipment loans during the three months ended September 30, 2024 and 2023, respectively. Interest expenses for the above-mentioned equipment loans amounted to $1,640 and $2,681 during the three months ended September 30, 2024 and June 30, 2024, respectively.

Vehicle loans

On May 20, 2020, the Company entered into a vehicle loan with BMW Financial Services for a principal amount of $77,844 at a fixed interest rate of 0.9% per annum with a maturity date of June 4, 2025. The loan balance was $11,902 and $15,853 as of September 30, 2024 and June 30, 2024, respectively.

On July 29, 2021, the Company entered into a vehicle loan with AutoNation Honda O’Hare for a principal amount of $41,851 at a fixed interest rate of 1.90% per annum with a maturity date of August 10, 2025. The loan was guaranteed by Mr. Henry Liu, the Chairman of the Board and CEO. The loan balance was $9,875 and $12,540 as of September 30, 2024 and June 30, 2024, respectively.

On June 3, 2022, the Company entered into a vehicle loan with Tesla, Inc. for a principal amount of $101,050 at a fixed interest rate of 3.24% per annum with a maturity date of June 18, 2027. The loan balance was $57,637 and $62,630 as of September 30, 2024 and June 30, 2024, respectively.

On January 23, 2023, the Company entered into a vehicle loan with Tesla, Inc. for a principal amount of $68,540 at a fixed interest rate of 5.34% per annum with a maturity date of February 9, 2029. The loan balance was $52,634 and $55,259 as of September 30, 2024 and June 30, 2024, respectively.

The Company made the total principal repayments of $14,235 and $13,854 in connection with the above vehicle loans during the three months ended September 30, 2024 and 2023, respectively. Interest expenses for the above-mentioned above vehicle loans amounted to $1,308 and $1,689 during the three months ended September 30, 2024 and June 30, 2024, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 — LOANS PAYABLE (cont.)

Other loans

	September 30, 2024		June 30, 2024
Loan A	$	150,000	$	150,000
Loan B		—		200,000
Loan C		50,000		50,000
Loan D		125,000		175,000
Loan E		62,241		77,697
Total	$	387,241	$	652,697

(a)

The Company entered a loan of $300,000 with an unrelated party on March 1, 2022. The loan is unsecured, with a fixed interest of 15% per annum and payable on monthly basis, for 6 months period and matured on September 1, 2022. On September 1, 2022, both parties agreed to extend the loan’s principal payment term to on demand.

(b)

The Company entered a loan of $200,000 with an unrelated party on July 26, 2021. The loan is unsecured, with no interest bearing for 6 months period and matured on January 25, 2022. The Company paid a principal of $100,000 during the year ended June 30, 2021 and both parties agreed to extend the remaining principal balance of $100,000 payment term to on demand. On April 8, 2024, the Company entered another loan of $100,000 with the same party. The loan is unsecured, with no interest bearing for a 6-month period and matured on September 7, 2024. The Company has made repayment of $200,000 during the three months ended September 30, 2024.

(c)	The Company entered a loan agreement of 50,000 with an employee on October 27, 2021. The loan is non-interest bearing, for a 12-month period, and matured on October 26, 2022.

On October 26, 2022, both parties agreed to extend the loan term to on demand.

(d)	The Company entered a loan agreement of $100,000 with an unrelated party on July 3, 2023. The loan is non-interest bearing, for a 6-month period.

On April 10, 2024, the Company entered another loan agreement of $75,000 with same party. The loan is non-interest bearing, for a 6-month period, and matured on September 9, 2024.

The Company made repayment of $50,000 during the three months ended September 30, 2024. Both parties agreed to extend the remaining principal balance of $125,000 payment term to on demand

(e)

The Company entered a loan of $125,000 with an unrelated party on August 17, 2023. The loan is personally guaranteed by Henry Liu, the Chairman of the Board and CEO, with a fixed interest of 16.00% per annum for 24 months period and matured on August 16, 2025. The monthly payment is $6,120 blending of interest and principal.

The Company made the total principal repayments of $265,456 and $122,137 in connection with the above other loans during the three months ended September 30, 2024 and 2023, respectively. Interest expenses for the above-mentioned other loans amounted to $16,515 and $18,084 during the three months ended September 30, 2024 and 2023, respectively.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 7 — LOANS PAYABLE (cont.)

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

Twelve months ending September 30,	Vehicle loans			Equipment loans			Others			Total
2025	$	57,279		$	48,823		$	392,320		$	498,422
2026		35,353			23,878			-			59,231
2027		29,866			3,619			-			33,485
2028		13,406			-			-			13,406
2029		5,586			-			-			5,586
Total undiscounted borrowings		141,490			76,320			392,320			610,130
Less: imputed interest		(9,442	)		(5,718	)		(5,079	)		(20,239	)
Total	$	132,048		$	70,602		$	387,241		$	589,891

NOTE 8 — GENERAL AND ADMINISTRATIVE EXPENSES

	September 30, 2024		September 30, 2023
Payroll expense	$	759,142	$	464,012
Staff benefit expense		164,416		107,243
Office expense		165,481		70,199
Professional expense		340,114		17,535
Travelling and entertainment		126,108		72,093
Repair and maintenance		39,957		42,941
Lease expense		64,125		19,097
Depreciation expense		17,995		17,995
Insurance		73,683		4,746
Advertising		11,686		18,183
Other expense		68,094		16,188
Motor expense		5,791		5,289
Bank charges		614		257
Total	$	1,837,206	$	855,778

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 9 — RELATED PARTY TRANSACTIONS

The relationship of related parties is summarized as follow:

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

a) Summary of balances with related parties

Due from related parties consist of mainly rent receivables from the following:

	September 30, 2024		June 30, 2024
Due from Weship	$	626,781	$	422,742
Due from Intermodal		18,537		18,537
Total	$	645,318	$	441,279

The Company has collected approximately $36,215 from Weship as of the report date, and is planning to collect the remaining receivable balance from two related parties by the end of June 2025.

b) Summary of balances payable to related parties

	September 30, 2024		June 30, 2024
Account payable to Weship	$	34,622	$	175,172
Account payable to ABL Wuhan		36,250		52,000
Account payable to Intermodal		-		550
Total	$	70,872	$	227,722

c) Summary of balances receivable from related parties

	September 30, 2024		June 30, 2024
Account receivable from Weship	$	33,867	$	32,435
Account receivable from ABL Shenzhen		55,508		-
Account receivable from ABL Wuhan		430,097		744,961
Total	$	519,472	$	777,396

The Company has collected approximately $0.3 million from the related parties as of the report date.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 9 — RELATED PARTY TRANSACTIONS (cont.)

d) Summary of related parties’ transactions

	For the three months ended September 30,
	2024		2023
Revenue from Weship	$	1,432	$	3,141
Revenue from ABL Wuhan	$	424,827	$	91,048
Revenue from ABL Shenzhen	$	55,508	$	-
Cost of revenue charged by Weship	$	346,015	$	459,435
Rental income from Weship	$	97,312	$	36,883
Cost of revenue charged by Intermodal	$	172,465	$	124,176
Cost of revenue charged by ABL Wuhan	$	46,250	$	11,725

During the three months ended September 30, 2024 and 2023, the Company had the following transactions with its related parties — Weship, ABL Wuhan, ABL Shenzhen and Intermodal

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

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

(c)	The Company subleased portion of its warehouse space to Weship for rental income. The Company subleased its warehouse in Chicago to Weship in July 2023 and again for the period from January 2024 to September 2024. The Company also subleased another warehouse in Los Angeles beginning in August 2023.

(d)	Intermodal is one of the Company’s vendors for truck delivery service.

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

e) Due to shareholders

		September 30, 2024				June 30, 2024
Due to shareholders, end		$	(138,107	)		$	(1,018,281	)

The balance with the shareholders is unsecured, interest free, and due on demand. The Company had balance of due to shareholder Henry Liu of $134,370 and $986,923 and Shuai Li of $3,737 and $31,358 as of September 30, 2024 and June 30, 2024, respectively.

f) Dividend payable to shareholders

	September 30, 2024			June 30, 2024
Dividend payable to Mr. Henry Liu	$	(27,056	)	$	(27,056	)
Dividend payable to Mr. Shuai Li		(71,794	)		(71,794	)
Total	$	(98,850	)	$	(98,850	)

No non-taxable dividend was declared to shareholders for the three months ended September 30, 2024. During the year ended June 30, 2023, ABL Chicago declared non-taxable dividend of total $200,000 to its two shareholders from its accumulated retained earnings, of which $101,150 of dividends declared was offset against balances due from shareholders.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 9 — RELATED PARTY TRANSACTIONS (cont.)

g) Salaries and employee benefits paid to major shareholders

	For the three months ended September 30,
	2024		2023
Mr. Henry Liu	$	22,523	$	29,822
Mr. Shuai Li		25,810		30,503
Total	$	48,333	$	60,325

NOTE 10 — TAXES

Corporate Income Taxes

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

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

The Company’s PRC subsidiary, is governed by the income tax laws of the PRC and is subjected to 25% of the preferential tax rate.

In conjunction with the termination of the Subchapter S corporation status, the C Corporation deferred tax assets and liabilities were estimated for future tax consequences attributable to difference between the financial statement carrying amounts of the Company’s existing assets and liabilities and their respective tax bases. The deferred tax assets and liabilities were measured using tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of the change in tax rates resulting from becoming a C Corporation was recognized as a $17,894 increase to the net deferred tax assets to $22,693 and an increase to the provision for income taxes of $17,894 during the three months ended September 30, 2023.

As of September 30, 2024 and June 30, 2024, the Company did not have an accrued liability for uncertain tax positions and does not anticipate recognition of any significant liabilities for uncertain tax positions during the next 12 months. For the period ended September 30, 2024 and 2023, no amounts were incurred for income tax uncertainties or interest and penalties. The Company is currently not aware of any issues under review that could result in significant payments, accruals, or material deviation from its position. The Company’s tax years since its formation remain subject to possible income tax examination by its major taxing authorities for all periods.

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 10 — TAXES (cont.)

The provision for income tax for the three months ended September 30, 2024 and 2023 consists of the following:

	For the three months ended September 30,
	2024		2023
Current income tax expense	$	-	$	-
Deferred income tax expense (recovery)		89,581		(19,953	)
Deferred state tax adjustment – change of tax rates		-		17,894
Total income tax expense (recovery)	$	89,581	$	(2,059	)

The following table reconciles the statutory tax rate to the Company’s effective tax the three months ended September 30, 2024 and 2023:

	For the three months ended September 30,
	2024			2023
Loss before tax	$	(1,245,826	)	$	(309,344	)
Statutory state tax rate		21	%		21	%
Income tax recovery at the federal statutory rate	$	(261,623	)	$	(64,962	)
Illinois state tax/PET tax recovery		(79,470	)		(21,654	)
Illinois replacement tax recovery		(28,382	)		(7,734	)
Tax effect on change in tax rate		-			92,291
Change in valuation allowance		463,478			-
Tax effect on other tax jurisdiction		(4,422	)		-
Total income tax expense (recovery)		89,581			(2,059	)

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

	September 30, 2024			June 30, 2024
Deferred tax assets:
Allowance for credit loss	$	20,405		$	16,490
Lease liability – operating		1,352,707			1,126,429
Lease liability – financing		14,471			16,799
Non-capital loss carried forward		362,204			-
Valuation allowance		(463,478	)		-
Total deferred tax assets		1,286,309			1,159,718
Deferred tax liabilities:
Right of use assets – operating		(1,277,195	)		(1,058,707	)
Right of use assets – financing		(9,114	)		(11,430	)
Total deferred tax liabilities		(1,286,309	)		(1,070,137	)
Deferred tax assets, net	$	-		$	89,581

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 11 — STOCKHOLDERS’ EQUITY

Common Stocks

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

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

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

As of September 30, 2024 and June 30, 2024, 7,500,000 and 6,000,000 common shares were issued and outstanding, respectively, with par value of $0.0001.

Additional Paid-in Capital

The Company transferred its accumulated retained earnings as of September 23, 2023 from retained earnings to additional paid-in capital as the original owners’ contribution to the capital of the Company upon the Reorganization and the termination of S corporation for ABL Chicago. For the period ended September 30, 2024, the Company closed its IPO and net proceed from offering, deducted by the IPO deferring cost and par value was transferred to additional paid-in capital.

Representative’s Warrants

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

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

As of September 30, 2024, 75,000 warrants in connection with IPO funding was outstanding, with an exercise price of $4.5 and remaining life of 4.75 years.

NOTE 12 — EARNINGS PER SHARE

For the three months ended September 30, 2024, the Company has no stock option issued and its warrants are considered to be antidilutive. Thus, no impact on diluted earnings per share. For the three months ended September 30, 2023, the Company has no stock options and warrants issued and no impact on diluted earnings per share.

	For the three months ended September 30,
	2024			2023
Net loss attributable to the Company	$	(1,335,407	)	$	(304,260	)
Weighted average number of common shares outstanding – Basic and Diluted		7,500,000			6,000,000
Loss per share – Basic and Diluted	$	(0.18	)	$	(0.05	)

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 13 — CONCENTRATIONS AND CREDIT RISK

The Company had two and two third-party customers and one and no related-party customer individually generated over 10% of the Company’s total revenue for the three months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and June 30, 2024, the Company had two and one third-party customers and one and no related-party customer individually represented over 10% of account receivables, respectively.

The Company had no and no third-party suppliers and no and one related-party suppliers individually represented over 10% of the Company’s cost of revenue for three months ended September 30, 2024 and 2023, respectively. The Company had no and one third-party supplier and no and one related-party supplier represented over 10% of the Company’s accounts payable as of September 30, 2024 and June 30, 2024, respectively.

NOTE 14 — SEGMENT REPORTING

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.

Management of the Company concludes that it has only one reporting segment. The Company is primarily engaged in the business of providing customized cross-border ocean freights solutions and airfreight solutions.

The Company’s CEO reviews consolidated results when making decisions about allocating resources and assessing performance of the Company, rather than by service types or customer geographic location; hence the Company concluded it has only one reporting segment.

The following table presents sales by service type for the three months ended September 30, 2024 and 2023, respectively:

By service type

	For the three months ended September 30,
	2024		2023
Cross-border ocean freights solutions	$	1,836,591	$	1,703,657
Cross-border airfreights solutions		2,244,963		2,444,819
Total revenue	$	4,081,554	$	4,148,476

The following table presents sales by customer geographic location for the three months ended September 30, 2024 and 2023, respectively:

By customer geographic location

	For the three months ended September 30,
	2024		2023
Asia-based customers	$	2,809,636	$	1,694,223
U.S.-based customers		1,271,918		2,454,253
Total revenue	$	4,081,554	$	4,148,476

LAKESIDE HOLDING LIMITED
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 15 — COMMITMENTS AND CONTINGENCIES

Contractual Commitments

As of September 30, 2024, the Company’s contractual obligations consist of the following:

Contractual Obligations	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Operating lease obligations	$	5,104,017	$	2,149,231	$	2,020,342	$	934,444	$	—
Finance lease obligations		49,055		35,354		13,701		—		—
Vehicle loans		141,490		57,279		65,219		18,992		—
Equipment loans		76,320		48,823		27,497		—		—
Other loans		392,320		392,320		—		—		—
Total	$	5,763,202	$	2,683,007	$	2,126,759	$	953,436	$	—

Contingencies

The Company may be involved in certain legal proceedings, claims and disputes arising from the commercial operations, which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or cove

SEC Form 10-Q filed by Lakeside Holding Limited