Annual Report for Fiscal Year Ending June 30, 2025 (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, 2025 and 2024

The following table shows key components of the results of operations during the years ended June 30, 2025 and 2024:

		For the Years Ended June 30,								Change
		2025				2024				$				%
Total revenue		$	4,262,663			$	7,389,842			$	(3,127,179	)			(42	)%
Cost of revenue			91,099				173,349				(82,250	)			(47	)%
Gross Profit			4,171,564				7,216,493				(3,044,929	)			(42	)%
Total operating expenses			3,618,885				5,190,352				(1,571,467	)			(30	)%
Income from operations			552,679				2,026,141				(1,473,462	)			(73	)%
Other income (expense)			161,849				(139,656	)			301,505				(216	)%
Income before income taxes			714,528				1,886,485				(1,171,957	)			(62	)%
Income taxes			222,268				523,207				(300,939	)			(58	)%
Net income			492,260				1,363,278				(871,018	)			(64	)%

During the year ended June 30, 2025, our total revenue was $4,262,663, of which $120,866 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 $4,141,797 of revenue was attributable to commissions earned by the Company from its service as sales agent for 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, 2025, 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 42% as compared with the operating revenue of $7,389,842 for the year ended June 30, 2024. The decrease was primarily attributable to the fact that Inner Mongolia was emerging from the pandemic during the year ended June 30, 2024. A large number of customers received services during that period that they had earlier paid for but could not receive. This resulted in a surge in revenue during the year ended June 30, 2024. One other important factor influencing revenue in the recent year is the impact of the economic environment, which has led to a decrease in customer health expenditures. 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, 2025, our cost of revenue was $91,099, with the result that our gross profit from service revenue was $29,767 (a gross margin of 25%). By comparison, our gross profit from healthcare service revenue for the year ended June 30, 2024 was $154,250, representing 47% of service revenue for that year.

When our net service revenue in fiscal year 2025 was combined with commission revenue (for which there is no cost of revenue), we achieved gross profit of $4,171,564. However, we realized only $552,679 in income from operations for the year ended June 30, 2025 because the Company incurred significant marketing expense in connection with establishing its brand as a new company. 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 2025 decreased by $1,571,467, primarily attributable to:

●

$1,942,661 in advertising and promotion expenses incurred in the year ended June 30, 2025, compared to $3,338,737 recorded in the year ended June 30, 2024. The decrease was primarily attributable to the decline in revenue, which we intend to roll over into expanded advertising and promotion expense for the purpose of achieving a broader market.

●

$182,198 in professional fees in the year ended June 30, 2025, compared to $172,337 in recorded in the year ended June 30, 2024. 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.

●

$580,370 in salaries and benefits expenses in the year ended June 30, 2025, compared to $642,094 in the year ended June 30, 2024. The decrease in our labor costs was primarily caused by the Company decreasing the number of employees due to adjustments in its operational policies.

●

$722,447 in office expenses in the year ended June 30, 2025, compared to $878,968 in the year ended June 30, 2024. The decrease was mainly attributable to the decline in revenue, which reduced additional administrative services.

Our net income for the year ended June 30, 2025 was $492,260, compared to a net income of $1,363,278 in the year ended June 30, 2024.

Each of the four subsidiaries of Longduoduo Health Technology has a minority shareholder holding from 10% of its equity (Qingguo) to 49% of its equity (Tianju). For that reason, we allocate to non-controlling interests the portion of net income corresponding to the minority interest. After that allocation of $31,825, the net income attributable to common stockholders for the year ended June 30, 2025 was $460,435 (i.e. $0.015 per share). By comparison, for the year ended June 30, 2024 we recorded a net income attributable to common stockholders of $1,255,448.

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, 2025 and 2024, foreign currency translation adjustments of $22,921 and $(11,722), 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, 2025, the Company had $1,642,721 in cash and cash equivalents. On the same date, we had a working capital of only $983,123, primarily because we received $335,484 of deferred revenue 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 $133,610 in prepayments on our June 30, 2025 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, 2025 and 2024.

		For the Years Ended June 30,								Change
		2025				2024				$
Net cash provided by operating activities		$	277,365			$	582,282			$	(304,917	)
Net cash used in investing activities			(59,375	)			(305,495	)			246,120
Net cash provided by (used in) financing activities			-				-				-
Effect of exchange rate fluctuation on cash and cash equivalents			20,689				(9,307	)			29,996
Net increase in cash and cash equivalents			238,679				267,480				(28,801	)
Cash and cash equivalents, beginning of year			1,404,042				1,136,562				267,480
Cash and cash equivalents, end of year		$	1,642,721			$	1,404,042			$	238,679

Net Cash Provided by Operating Activities

For the year ended June 30, 2025, we had cash provided by operating activities of $277,365, compared to $582,282 for the year ended June 30, 2024. Cash provided by operations during the year ended June 30, 2025 was primarily due to recording net income of $492,260, which was partially offset by deferred revenue.

Net Cash Used in Investing Activities

Net cash used in investing activities for the year ended June 30, 2025 was $59,375, compared to $305,495 for the year ended June 30, 2024. In both periods, the cash was used for the purchase of fixed assets and office decoration.

Net Cash Provided by Financing Activities

Net cash used in financing activities for the years ended June 30, 2025 and 2024 was $0.

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, 2025, 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.