Lakeshore Acquisition III Corp.

Notes to financial statements

Lakeshore Acquisition III Corp. is a public reporting company classified under Blank Checks. All activities for the period from October 21, 2024 (inception) through June 30, 2026 relate to the formation and the IPO and the efforts for the initial business combination. On May 1, 2025, we consummated an IPO of 6,900,000 Public Units, which includes the underwriters' full exercise of the over-allotment option, at a price of $10.00 per Public Unit, generating gross proceeds of $69,000,000, and simultaneously with the closing of the IPO, we consummated the sale of 280,000 Private Units, at a price of $10.00 per Private Unit, in a private placement to our sponsor, RedOne Investment Limited, generating gross proceeds of $2,800,000. The accompanying condensed financial statements are unaudited and have been prepared from the Company's connected books and records, and the interim results for the period ended June 30, 2026 are not necessarily indicative of the results that may be expected for a full fiscal year. As of June 30, 2026, the Company held cash and cash equivalents of $252,080, investments held in the Trust Account of $72,102,981, an increase of 3.8% from $69,467,311 in the prior period, and prepaid expenses and other current assets of $42,500, a decrease of 26.1% from $57,500, while restricted cash and equivalents of $1,022,944 in the prior period was reduced to zero.

We will have no operations other than the active solicitation of one or more target businesses with which to complete a business combination, and we will not generate any operating revenue until after our initial business combination, at the earliest. The Company generated no revenue during the period, and net income was $339,107, which was attributable primarily to interest and dividends earned on the Trust Account of $626,475, partially offset by general and administrative expenses of $287,368, which increased 14.6% from $250,844 in the prior period. Interest and dividends earned on the Trust Account of $626,475 increased 34.1% from $467,311 in the prior period. Based on net income of $339,107 and weighted-average basic shares outstanding of 3,822,787, basic net income per share for the period was approximately $0.09.

Offering costs amounted to $3,934,900, consisting of $1,035,000 of underwriting commissions, $2,415,000 of deferred underwriting commissions which will be in the form of ordinary shares at $10.00 per share upon the consummation of the initial business combination, and $484,900 of other offering costs, and the $2,415,000 deferred underwriting compensation remains outstanding and represents the Company's total liabilities. The deferred underwriting compensation of $2,415,000 was unchanged from the prior period, and other liabilities of $75,000 in the prior period were reduced to zero. These obligations may constrain the resources ultimately available to the combined company following a business combination.

Shares subject to possible redemption totaled $72,102,981 as of June 30, 2026, an increase of 3.8% from $69,467,311 in the prior period. Total stockholders' equity was a deficit of $2,120,420, having deteriorated 50.4% from a deficit of $1,409,556 in the prior period. In connection with the Reincorporation Merger, at the effective time of the Reincorporation Merger, each issued and outstanding unit will be separated automatically into its constituent securities (i.e., one ordinary share and one right), each issued and outstanding ordinary share immediately prior to the effective time of the Reincorporation Merger (including the ordinary shares from the separation of the units) will be converted automatically into one Purchaser ordinary share, each issued and outstanding right (including the rights from the separation of the units) will be converted automatically into a right to receive one-sixth of one Purchaser ordinary share at the closing of the transaction, and each issued and outstanding ordinary share immediately prior to the effective time of the Reincorporation Merger will cease to be issued and will be automatically cancelled and retired and will cease to exist. At least one business day following the Reincorporation Merger, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will be merged with and into CPRO (the "Acquisition Merger").

Management's discussion and analysis

Lakeshore Acquisition III Corp. is a public reporting company classified under Blank Checks. We generated no operating revenue during the period. For the period ended June 30, 2026, we reported net income of $339,107. Our results of operations reflect the income earned on the funds held in trust, partially offset by the costs of operating as a public company. Interest and dividends earned on the Trust Account produced income of $626,475 in the current period, compared with $467,311 in the comparable prior-year period, an increase of 34.1%. General and administrative expenses were $287,368 for the current period, compared with $250,844 in the prior-year period, an increase of 14.6%, driven by the costs of operating as a public reporting company. Weighted-average basic shares outstanding for the period were 3,822,787.

As of June 30, 2026, we had cash and cash equivalents of $252,080, compared with none at the prior period end, while restricted cash and equivalents decreased to zero from $1,022,944. Investments held in the Trust Account totaled $72,102,981 as of June 30, 2026, compared with $69,467,311 at the prior period end, an increase of 3.8%, and shares subject to possible redemption increased correspondingly to $72,102,981 from $69,467,311. Prepaid expenses and other current assets were $42,500, compared with $57,500 in the prior period, a decrease of 26.1%, and other liabilities of $75,000 outstanding in the prior period were reduced to zero. Deferred underwriting compensation remained unchanged at $2,415,000. Total liabilities were $2,415,000 as of June 30, 2026. Total stockholders' equity was a deficit of $2,120,420 as of June 30, 2026, compared with a deficit of $1,409,556 at the prior period end. Management believes that [COMPLETE: management's conclusion as to whether cash and other available resources will be sufficient to fund operations for at least the next twelve months].

Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments. We do not have material foreign currency or commodity price exposure. From time to time, we are involved in legal proceedings arising in the ordinary course of business. Management does not currently believe any pending matter is material to the financial statements.

Quantitative and qualitative disclosures about market risk

We are a blank check company organized for the purpose of effecting a business combination, and our activities to date have been limited accordingly. We are a public reporting company classified under Blank Checks. Our primary market risk exposure is interest rate risk on our cash, cash equivalents, and short-term investments. As of June 30, 2026, we held $252,080 in cash and cash equivalents and $72,102,981 in investments held in the Trust Account, compared to $69,467,311 in investments held in the Trust Account at the prior period end, an increase of 3.8%. During the period, we earned $626,475 in interest and dividends on the Trust Account, compared to $467,311 in the prior period. Because the funds held in the Trust Account are invested in short-duration instruments, we believe that any fluctuations in market interest rates would primarily affect the amount of interest income we earn on these balances rather than the fair value of our holdings, and we do not believe such fluctuations would have a material adverse effect on our financial position. [COMPLETE: description of the specific instruments in which Trust Account funds are invested]

We do not have material foreign currency or commodity price exposure. We do not use derivative financial instruments or engage in hedging activities to manage market risk. On July 27, 2026, our shareholders approved an amendment to our amended and restated memorandum and articles of association to extend the date by which we must consummate a business combination for an additional twelve months from August 1, 2026 to August 1, 2027, on a month-to-month basis, and an amendment to our Investment Management Trust Agreement with Wilmington Trust, N.A., permitting us to extend on the same month-to-month basis by depositing $67,500 into the Trust Account per one-month extension. In connection with the shareholders' vote at that meeting, an aggregate of 5,082,213 ordinary shares were tendered for redemption. Changes in prevailing interest rates could affect the interest income earned on amounts remaining in the Trust Account, including amounts deposited in connection with any such extensions, until the completion of our initial business combination.

Controls and procedures

Evaluation of Disclosure Controls and Procedures. Under the supervision and with the participation of our management, including our [COMPLETE: principal executive officer title and name] and [COMPLETE: principal financial officer title and name], we evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026, the end of the period covered by this report, and, based on that evaluation, management concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of that date. Our disclosure controls and procedures are designed to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to management by others within those entities, particularly during the period in which this report is being prepared. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting that occurred during the fiscal quarter covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

[COMPLETE: Management must review and formally adopt the conclusion language above before this report is filed.]

Legal proceedings

From time to time, we may be subject to legal proceedings, claims, and litigation arising in the ordinary course of our business. We are involved in legal proceedings arising in the ordinary course of business from time to time. We do not currently believe that any pending matter is material to our financial statements.

The outcome of litigation is inherently uncertain, and regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors. Accordingly, we cannot assure you that the ultimate resolution of any pending or future matters will not have a material adverse effect on our business, financial condition, or results of operations. As of the date of this report, however, management does not believe that any legal proceedings arising in the ordinary course of business to which we are or may become a party are material to our financial statements.

Risk factors

Lakeshore Acquisition III Corp. is a public reporting company classified under Blank Checks, and as such we face risks inherent in our status as a blank check company with no operating business. For the period ended June 30, 2026, we generated no revenue and reported net income of $339,107, which was attributable to interest and dividends earned on the Trust Account of $626,475 rather than operating activities. As of the end of the period, we reported total stockholders' equity of negative $2,120,420 and total liabilities of $2,415,000, consisting of deferred underwriting compensation. In addition, shares subject to possible redemption totaled $72,102,981, corresponding to investments held in the Trust Account of $72,102,981. If we are unable to complete a business combination within the required timeframe, we may be forced to liquidate, and our public stockholders may receive only their pro rata share of the Trust Account.

Our ability to complete our initial business combination is subject to significant uncertainty. In connection with the contemplated Reincorporation Merger, at the effective time each issued and outstanding unit will be separated automatically into its constituent securities (one ordinary share and one right), each issued and outstanding ordinary share will be converted automatically into one Purchaser ordinary share, each issued and outstanding right will be converted automatically into a right to receive one-sixth of one Purchaser ordinary share at the closing of the transaction, each ordinary share outstanding immediately prior to the effective time will be cancelled and retired, and at least one business day following the Reincorporation Merger, subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into CPRO in the Acquisition Merger. The consummation of these transactions is subject to conditions that may not be satisfied, and there can be no assurance that the transactions will be completed on the contemplated terms, or at all. If holders of a substantial number of our shares subject to possible redemption exercise their redemption rights, the amount of funds available to us upon closing could be significantly reduced, which could adversely affect our ability to complete the transactions or the combined company's liquidity following the closing.

We are also exposed to market and financial risks in the ordinary course of our activities. Our primary market risk exposure is interest rate risk on cash, cash equivalents, and short-term investments, and changes in prevailing interest rates could reduce the income earned on amounts held in the Trust Account. We do not have material foreign currency or commodity price exposure. Our liquidity outside of the Trust Account is limited, with cash and cash equivalents of $252,080 and prepaid expenses and other current assets of $42,500 as of the period end, while general and administrative expenses increased to $287,368 from $250,844 in the prior period. In addition, we are involved in legal proceedings arising in the ordinary course of business from time to time, and although management does not currently believe any pending matter is material to the financial statements, an adverse outcome in any such matter could nonetheless divert management attention and resources.

Other information

During the quarter ended June 30, 2026, the following disclosure is provided pursuant to Item 408(a) of Regulation S-K regarding Rule 10b5-1 trading arrangements and non-Rule 10b5-1 trading arrangements of our directors and officers: [COMPLETE: Rule 10b5-1 trading arrangement adoptions and terminations from the D&O questionnaires]