Annual Report for Fiscal Year Ending 06-30, 2026 (Form 10-K)

Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements and the notes thereto included elsewhere in this Annual Report on Form 10-K, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of such financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, and expenses. On an ongoing basis, we evaluate these estimates, including those related to useful lives of real estate assets, bad debts, impairment, contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. There can be no assurance that actual results will not differ from those estimates. The analysis set forth below is provided pursuant to applicable SEC regulations and is not intended to serve as a basis for projections of future events. See "Cautionary Statement Regarding Forward Looking Statements" above.

Results of Operations for the Years Ended June 30, 2026 and 2025

The following table shows key components of the results of operations during the years ended June 30, 2026 and 2025:

		For the Years Ended June 30,								Change
		2026				2025				$				%
Total revenue		$	1,822,457			$	4,262,663			$	(2,440,206	)			(57	)%
Cost of revenue			16,958				91,099				(74,141	)			(81	)%
Gross Profit			1,805,499				4,171,564				(2,366,065	)			(57	)%
Total operating expenses			2,438,680				3,618,885				(1,180,205	)			(33	)%
(Loss) income from operations			(633,181	)			552,679				(1,185,860	)			(215	)%
Other income (expense)			57,365				161,849				(104,484	)			(65	)%
(Loss) income before income taxes			(575,816	)			714,528				(1,290,344	)			(181	)%
Income taxes			66,451				222,268				(155,817	)			(70	)%
Net (loss) income			(642,267	)			492,260				(1,134,527	)			(230	)%

During the year ended June 30, 2026, our total revenue was $1,822,457, of which $6,539 was attributable to the sale of healthcare services, primarily derived from sales of "Immunological Ozonated Autohemotherapy", "Meridian-regulating and Consciousness-restoring Iatrotechnics", "Assay", "PRP" and other healthcare services. The remaining $1,815,918 of revenue was attributable to commissions earned by the Company from its service as sales agent for Inner Mongolia Honghai Health Management Co., Ltd. ("Honghai"). In June of 2023, the Company began to engage in the sales agent business and focused on the sales of preventive healthcare solutions administered by Honghai, with whom we have a Sales Agency Agreement. As of June 30, 2026, we operate through five entities: Longduoduo Health Technology, Tianju, Qingguo, Rongbin and Chengheng, which are established in Huhhot, Ulanqab, Huhhot, Baotou and Ordos, respectively, which include four of the largest cities in Inner Mongolia, China.

Annual to annual revenue fell by 57% as compared with the operating revenue of $4,262,663 for the year ended June 30, 2025. One important factor influencing revenue in the recent years is the impact of the economic environment. The prevailing economic environment, characterized by waning confidence in economic prospects, has compelled consumers to adopt significantly more cautious spending behavior, curtailing discretionary expenditures on preventive healthcare services and physical examinations. Management believes that the government has recently introduced policies to promote economic recovery, but it may take some time for the situation to truly improve. Meanwhile, as we wait for the economy to revive, the Company is implementing plans to improve its operations by adjusting its operational policies.

Cost of revenue relates solely to our healthcare service revenue, and mainly consists of our payments to the third-party healthcare service providers who perform healthcare services for our customers. During the year ended June 30, 2026, our cost of revenue was $16,958, with the result that our gross loss from service revenue was $10,419 (a gross margin of -159%). As the total service revenue is minimal, profit turns negative due to fixed depreciation and refund adjustments. By comparison, our gross profit from service revenue for the year ended June 30, 2025 was $29,767, representing 25% of service revenue for that year.

When our net service revenue in fiscal year 2026 was combined with commission revenue (for which there is no cost of revenue), we achieved gross profit of $1,805,499. However, we realized a loss from operations of $633,181 for the year ended June 30, 2026 because the Company incurred significant marketing expense in connection with establishing its brand as a new company, coupled with high fixed costs including staff costs and office expenses. The Company will continue to invest heavily in advertising and promotion expenses in the near future as it continues to establish and expand its brand and products and services.

Our operating expenses consist primarily of advertising and promotion expenses, salaries and benefits, office expenses, professional fees and depreciation and amortization. Our operating expenses in fiscal year 2026 decreased by $1,180,205, primarily attributable to:

●

$904,310 in advertising and promotion expenses incurred in the year ended June 30, 2026, compared to $1,942,661 recorded in the year ended June 30, 2025.

●

$148,627 in professional fees in the year ended June 30, 2026, compared to $182,198 recorded in the year ended June 30, 2025. In both cases, the expense was primarily related to the costs incurred by the Company to establish and sustain its status as an SEC-reporting company in the United States.

●

$572,400 in salaries and benefits expenses in the year ended June 30, 2026, compared to $580,370 in the year ended June 30, 2025.

●

$614,389 in office expenses in the year ended June 30, 2026, compared to $722,447 in the year ended June 30, 2025. Office expenses mainly consist of entertainment expenses, business consulting fees, vehicle usage costs, social security contributions, travel expenses, and other office maintenance-related expenses. The overall decrease in office expenses was primarily driven by reductions in entertainment expenses and other office maintenance-related expenses.

Our net loss for the year ended June 30, 2026 was $642,267, compared to a net income of $492,260 in the year ended June 30, 2025.

Our reporting currency is the U.S. dollar. Our functional currency is the local currency, which is the Renminbi (RMB) for our Chinese subsidiaries, the Hong Kong Dollar (HKD) for our Hong Kong subsidiaries, and the U.S. Dollar (USD) for our BVI subsidiary. Results of operations and cash flow for RMB and HKD are translated at average exchange rates during the period being reported upon, and assets and liabilities are translated at the unified exchange rate as quoted by OANDA on the balance sheet date. Translation adjustments resulting from this process are included in other comprehensive income (loss). For the years ended June 30, 2026 and 2025, foreign currency translation adjustments of $102,000 and $22,921, respectively, have been reported as other comprehensive income in the consolidated statement of operations and comprehensive income.

Liquidity and Capital Resources

As of June 30, 2026, the Company held $1,588,930 in cash and cash equivalents, yet working capital was only $501,414. This divergence primarily reflects our use of customer prepayments to fund operations: of the $790,429 in deferred revenue on the balance sheet at June 30, 2026, from customers as prepayment for future services and products but used the majority of the deposited sum to pay ongoing expenses and so had only $138,287 in prepayments on our June 30, 2026 balance sheet, most had been applied to ongoing expenses, leaving just $138,287 in prepayments on the balance sheet. Going forward, we will strive to achieve a better balance of customer deposits and prepayments; but we will achieve that better balance only when profits from operations and funds from financing are adequate to support the expansion effort that will be necessary for successful operations.

We anticipate that our future liquidity requirements will arise from the need to fund our growth, pay current obligations and future capital expenditures. The primary sources of funding for such requirements are expected to be cash generated from operations and raising additional funds from a public offering and/or debt financing. We expect Zhang Liang, our majority shareholder, to continue to provide support in the future, if needed. However, we can provide no assurances that we will be able to generate sufficient cash flows from operations and/or obtain additional financing on terms satisfactory to us, if at all, to remain a going concern.

Cash Flows

The following table summarizes our cash flows for the years ended June 30, 2026 and 2025.

		For the Years Ended June 30,								Change
		2026				2025				$
Net cash (used in) provided by operating activities		$	(163,109	)		$	277,365			$	(440,474	)
Net cash used in investing activities			(30,638	)			(59,375	)			28,737
Effect of exchange rate fluctuation on cash and cash equivalents			139,956				20,689				119,267
Net (decrease) increase in cash and cash equivalents			(53,791	)			238,679				(292,470	)
Cash and cash equivalents, beginning of year			1,642,721				1,404,042				238,679
Cash and cash equivalents, end of year		$	1,588,930			$	1,642,721			$	(53,791	)

Net Cash Provided by Operating Activities

For the year ended June 30, 2026, operating activities used $163,109 in cash, compared with $277,365 of cash provided by operating activities in the year ended June 30, 2025. Cash used in operations during the year ended June 30, 2026 was primarily due to recording a net loss of $642,267, which was partially offset by $423,744 of customer deposits received.

Net Cash Used in Investing Activities

Net cash used in investing activities for the year ended June 30, 2026 was $30,638, compared to $59,375 for the year ended June 30, 2025. In both periods, the cash was used for the purchase of fixed assets and office decoration.

Critical Accounting Policies

The discussion and analysis of the Company's financial condition and results of operations is based upon its consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles. The preparation of these financial statements requires us to make significant estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. These items are monitored and analyzed by management for changes in facts and circumstances, and material changes in these estimates could occur in the future. Changes in estimates are recorded in the period in which they become known. The Company bases its estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from our estimates if past experience or other assumptions do not turn out to be substantially accurate.

In our preparation of the financial statements for the year ended June 30, 2026, there was no estimate made which was (a) subject to a high degree of uncertainty and (b) material to our results.

Trends, Events and Uncertainties

The U.S. government, including the SEC, has made statements and taken actions that have led to changes in relations between the U.S. and China, and will impact companies with connections to the United States or China. Those actions by the U.S. government included imposing several rounds of tariffs affecting certain products manufactured in China and imposing sanctions and restrictions in relation to China. Actions by the SEC included issuing statements indicating that it would make enhanced review of companies with significant China-based operations. It is unknown whether and to what extent new legislation, executive orders, tariffs, laws or regulations will be adopted, or the effect that any such actions would have on U.S.-domiciled companies with significant connections to China, our industry or on us. Any unfavorable government policies on cross-border relations, including increased scrutiny on companies with significant China-based operations, capital controls or tariffs, may affect our ability to raise capital and the market price of our shares. If any new legislation, executive orders, tariffs, laws and/or regulations are implemented, if existing trade agreements are renegotiated or if the U.S. or Chinese governments take retaliatory actions due to the recent U.S.-China tensions, such changes could have an adverse effect on our business, financial condition and results of operations, our ability to raise capital and the market price of our shares. Changes in United States and China relations and/or regulations may adversely impact our business, our operating results, our ability to raise capital and the market price of our shares.

Other than the factors listed above we do not know of any trends, events or uncertainties that have had or are reasonably expected to have a material impact on our net sales or revenues or income from continuing operations.

Recent Accounting Pronouncements

There were no recent accounting pronouncements that we expect to have a material effect on the Company's financial position or results of operations. Please refer to Note 2 of our consolidated financial statements included in this annual report.