What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-20 compared with 2026-02-20 · 94 added, 86 removed, 91 unchanged (66% of the section changed)

27 unchanged sentences

In connection with the preparation of our financial statements for

the three months ended December 31, 2025, there was no accounting estimate made which was (a) subject to a high degree of uncertainty

and (b) material to our results.

the six months ended March 31, 2026, there was no accounting estimate made which was (a) subject to a high degree of uncertainty and (b)

material to our results.

Results of Operations

Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025

The following table summarizes our operating results for three months

ended December 31, 2025 and 2024.

ended March 31, 2026 and 2025.

For the Three Months Ended

5 unchanged sentences

Provision for income taxes

Net Income (Loss)

Tongzhilian’s revenue was $ 647 during the three months ended

December 31, 2025.

All of our revenue was generated by our subsidiary Tongzhilian, which engaged solely in product sales throughout the

Revenue during the three months ended December 31, 2025 was 98% less

than the operating revenue of $1,022,105 for the three months ended December 31, 2024.

March 31, 2026.

All of our revenue was generated by our subsidiary Tongzhilian, which engaged solely in product sales throughout the quarter.

Revenue during the three months ended March 31, 2026 decrease by 99%

compared to the operating revenue of $71,892 for the three months ended March 31, 2025.

Recent revenue was primarily attributable to our

sale of products, with 100% of our revenue, or $24,905, during the three months ended December 31, 2025, derived from such sales.

the three months ended December 31, 2024, 80% of our revenue was attributable to product sales.

The cost of revenue attributable to the sale of products was

$12,806, which was our procurement cost for products sold.

Therefore, For the three months ended December 31, 2025, we realized a

gross profit margin of 49%, as our gross profit amounted to $12,099.

During the three months ended December 31, 2024, our gross

profit was $379,808.

The reasons for the 98% reduction in revenue

were twofold.

First, the current domestic economic slowdown in China has significantly dampened discretionary consumer spending.

Heightened macroeconomic uncertainty—evidenced by sharp increases in gold and silver prices—and widespread pessimism regarding

near-term geopolitical and economic conditions have led potential customers to defer or cancel non-essential expenditures, particularly

in the mid-to-high-end customized travel segment, which constitutes our core business.

In response to market changes this fiscal

year, the Company has implemented the following measures:

(1) Diversify its product offerings:

While continuing to focus on

its core customized tour services, the Company plans to introduce more affordable, value-oriented travel packages and expand collaborations

across the upstream and downstream segments of the travel ecosystem.

This multi-tiered product strategy aims to provide customers with

a broader range of options and improve conversion rates.

(2) Enhance employee training:

The Company is investing in staff

development to improve service efficiency and quality, thereby strengthening customer satisfaction and goodwill.

(3) Expand cross-industry partnerships:

Building on the successful

integration of cultural and creative products—initially introduced based on observed customer needs during tours and which received

positive feedback—the Company intends to pursue additional cross-sector collaborations.

These may include experiential offerings

such as knowledge-based workshops or educational courses, enabling the development of value-added services and incremental revenue streams

through bundled or premium offerings.

Second, following a successful initial membership

launch that generated substantial prepaid deposits from early adopters, the Company made a deliberate strategic decision to prioritize

service quality and relationship-building with existing members over aggressive new customer acquisition, given limited staffing capacity.

This focus on deepening client engagement and fostering long-term loyalty is intended to lay the foundation for sustainable recurring

revenue in future periods.

As a result of these external market pressures and internal operational

priorities, the Company recorded no tour sales and virtually no product sales during the quarter.

Operating expenses for the three months ended December 31, 2025 consisted

primarily of salaries and benefits, office expenses and professional fees.

Our $132,844 in operating expenses during this period were

primarily attributable to:

sale of products, with 100% of our revenue, or $647, during the three months ended March 31, 2026, derived from such sales.

revenue attributable to the sale of products was $368, which was our procurement cost for products sold.

For the three months ended March 31, 2026, we realized a gross profit

margin of 43%, as our gross profit amounted to $279.

In the three months ended March 31, 2026, our total revenue experienced

a significant decline of 97% when compared to the operating revenue of $ 24,905 recorded in the three months ended December 31, 2025.

This disparity can primarily be attributed to the domestic economic slowdown, shrinking household consumption and complicated international

situations, which have driven pessimistic market expectations and conservative consumer spending.

As our core business, mid-to-high-end customized travel belongs to

non-essential consumption, and has been greatly impacted with weakened customer willingness and fewer intended orders.

The nearly 20-day

Spring Festival holiday also reduced effective operation time and hindered business progress.

Meanwhile, due to limited manpower, we focused on in-depth service

and loyalty improvement for existing prepaid members, and suspended new market and customer expansion.

Affected by the overlapping impacts

of external consumption weakness, long holidays and internal operational adjustments, our first-quarter performance declined notably.

Operating expenses for the three months ended March 31, 2026 consisted

primarily of salaries and benefits, office expenses and rentals and leases and professional fees.

Our $206,395 in operating expenses during

this period were primarily attributable to:

$15,357 in professional fees and related expenses incurred as a result of our status as a reporting company in the United States.

$53,154 in salaries and benefits,

$65,007 in office expenses.

$128,047 in office expenses.which included $79,920 represented by the fair value of 3,600,000 shares of the Company’s common stock that we issued to EHCLGLOBAL in exchange for investor and public relations services.

$8,393 in Rentals and leases.

For the reasons described above, our net loss for the three months

ended December 31, 2025 was $(120,601).

ended March 31, 2026 was $206,116.

Ended March 31, 2026 Compared to Six Months Ended March 31, 2025.

The following table summarizes our operating results for six months

ended March 31, 2026 and 2025.

For the Six Months Ended

$ (1,068,495 )

Cost of revenue

Selling, general and administrative expenses

Income (lo ss) from operations

Other income(expense)

Income before provision for income taxes

Provision for income taxes

Net Income (Loss)

Tongzhilian’s revenue was $25,552 during the six months ended

March 31, 2026.

All our revenue was generated by our subsidiary Tongzhilian, which was solely derived from product sales throughout the

During the six-month period ending on March 31, 2026, the revenue decreased

by 98% compared to the $1,094,047 in the six-month period ending on March 31, 2025.

During the six-month period ending on March 31, 2026,

all of our revenue (totaling $25,552) came from product sales.

The sales cost related to these product sales was $13,174, which is the

cost of purchasing the sold products.

For the six months ended March 31, 2026, we realized a gross profit

margin of 48%, as our gross profit amounted to $12,378.

Operating expenses for the six months ended March 31, 2026 consisted

primarily of salaries and benefits, office expenses and rentals and leases and professional fees.

Our $339,239 in operating expenses during

this period were primarily attributable to:

$22,187 in professional fees and related expenses incurred as a result of our status as a reporting company in the United States.

$105,429 in salaries and benefits,

$193,974 in office expenses, including the $79,920 of stock compensation described above.

$16,737 in Rentals and leases.

Based on the above reasons, for the six-month period ending on March

31, 2026, our net loss was $326,289.00.

Liquidity and Capital Resources

On December 31, 2025, the Company had $32,914 in cash and cash equivalents,

an increase of $28,482 during the three months then ended.

The primary factors contributing to this increase in cash balance were a rise

of 15,238 in receivables from payment collection service institutions and an increase of $7,200 in customer deposits.

The Company had a working capital deficit of $(142,668) at December

Included in the liabilities is $313,539 owed to our Chief Executive Officer or to entities she controls.

If that debt is disregarded

for this purpose, our working capital at December 31, 2025 was $170,871, consisting primarily of prepayments.

We will, therefore, be able

to fund near-term operations, but will require a capital infusion to achieve growth.

On March 31, 2026, the Company had $1,710 in cash and cash equivalents,

a decrease of $2,722 during the six months then ended.

The main reason for the decrease in our cash balance was an increase of $1,036

in the balance of other receivables.

The Company had a working capital deficit of $(287,288) as of March

Included in total liabilities is $382,088 payable to our Chief Executive Officer and entities under her control.

Excluding this

related-party liability, the Company’s working capital as of March 31, 2026 would have been $94,800, consisting primarily of prepayments.

Accordingly, the Company is able to finance its near-term operating activities, but will need additional capital infusion to support future

We anticipate that our future liquidity requirements will arise from

9 unchanged sentences

The following unaudited table summarizes our cash

flows for the three months ended December 31, 2025 and 2024.

For the Years Ended

flows for the six months ended March 31, 2026 and 2025.

For the Six Months Ended

Net cash provided by (used in) operating activities

1 unchanged sentence

Net cash provided by financing activities

Effect of exchange rate fluctuation on cash, cash equivalents and restricted

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of

During the three months ended December 31, 2025, our operations used

net cash of $22,425.

The primary factor contributing to this decrease in cash was our net loss for the quarter.

Our use of cash was less

than our the $120,601 net loss we realized in the quarter primarily because we reduced our prepayments balance by $108,641 during the

Our financing activities during the three months ended December 31,

2025 generated $50,725.

This represented additional interest-free loans made by our CEO, Huang Fang, and her affiliate entity.

Our financing activities during the three months ended December 31,

Effect of exchange rate fluctuation on cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

Cash and cash equivalents, end of period

During the six months ended March 31, 2026, our operations used net

cash of $121,816.

The main reason for the net cash outflow in the operations is that prepayments increased by $208,541, partially offset

by share-based compensation expenses of $79,920, resulting in a net cash outflow from operating activities.

Our financing activities during the six months ended March 31, 2026

generated $119,083.

This represented additional interest-free loans made by our CEO, Huang Fang, and her affiliate entity.

This reflects an additional $119,083 in interest-free loans provided to the Company by our CEO, Huang Fang, and her

affiliate entities.

Our financing activities during the six months ended March 31, 2025 generated $189,300.

This reflects an additional

$189,300 in interest-free loans provided to the Company by our CEO, Huang Fang, and her affiliate entity.

Trends, Events and Uncertainties

The 98% decline in revenue during the quarter was primarily driven

by two factors.

First, weakening macroeconomic conditions in China and heightened consumer pessimism—exacerbated by rising gold

and silver prices and geopolitical uncertainty—significantly reduced demand for discretionary spending, particularly in the mid-to-high-end

customized travel segment.

Second, the Company intentionally prioritized service delivery and relationship-building with existing prepaid

members over new customer acquisition due to limited staffing capacity, resulting in minimal sales activity during the period.

The Company is expanding its product offerings to include more products.

In addition, our marketing personnel are developing new customers with the intention of building a stable base of customers.

manner, the Company hopes to increase sales to support the future operations and development of the Company.

There is no guarantee that

the Company’s new strategy will be successful.

government, including the SEC, has made statements and taken

31 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis