Singularity Future Technology's FY2026 loss widens to $5.91M
Post-year-end refunds and equity proceeds followed a year in which operating cash outflows increased and one customer accounted for all revenue.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Singularity Future Technology Ltd. (SGLY) reported fiscal 2026 revenue of $1,693,264, versus $1,813,193 in fiscal 2025, and a net loss of $5,910,631, versus $3,314,531. Net cash used in operations was $21,628,987, compared with $2,692,682. One customer generated 100% of revenue.
At June 30, 2026, cash was $57,275 and restricted cash was $2,093,955; unsecured agricultural-commodity supplier advances were $19,248,432. The company collected approximately $19.2 million in supplier refunds during September. Four post-year-end equity financings generated approximately $38.8 million in gross proceeds; the company said it had more than sufficient resources for the 12 months following financial statement issuance.
For fiscal 2026, SGLY recorded $3.8 million in settlement expense and liability toward a $5.8 million aggregate cash settlement in a securities class action, including $2 million previously placed in escrow; the settlement remained subject to final court approval. In August 2026, it entered a non-binding framework agreement with Florence Development LLC to evaluate a potential AI-computing and data-center platform on an approximately 900-acre site in South Carolina.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Major pointPost-year-end equity financings generated approximately $38.8 million in gross proceeds. 8.6× market cap
- Major pointSeptember 2026 refunds returned approximately $19.2 million of supplier advances. 4.3× market cap
Negative
- Major pointNet loss increased to $5,910,631 from $3,314,531 in fiscal 2025.
- Major pointOperating cash use rose to $21,628,987 from $2,692,682 in fiscal 2025.
- Moderate pointFiscal 2026 revenue was $1,693,264, versus $1,813,193 in fiscal 2025.
- Moderate pointOne customer accounted for 100% of fiscal 2026 revenue.
Filing Explained
Fiscal 2026 revenue came entirely from one customer, concentrating the reported revenue base in that customer.
Singularity Future Technology reports fiscal 2026 results in this annual report and says its four post-year-end equity financings are completed.
The filing lists 520,964 shares outstanding at
Key Figures
Key Terms
restricted cash financial
advances to suppliers financial
gross proceeds financial
accrued settlement liability financial
critical audit matter technical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were SGLY's fiscal 2026 revenue and net loss?
How much gross proceeds did SGLY's post-year-end financings generate?
When did SGLY agree to the securities class action settlement, and what is its status?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the fiscal year ended
or
For the transition period from ___________ to ___________
Commission file number
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |
| incorporation or organization) | Identification No.) |
(Address of principal executive offices) (Zip Code)
(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 | ||
| The |
Securities Registered Pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is
a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐
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not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐
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
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has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☐
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12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 | ☐ |
| ☒ | 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
has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
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issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐
No
The aggregate market value of voting and non-voting
common stock held by non-affiliates of the registrant as of December 31, 2025 was approximately $
The number of shares of common stock outstanding
as of September 28, 2026 was
DOCUMENTS INCORPORATED BY REFERENCE:
SINGULARITY FUTURE TECHNOLOGY LTD.
FORM 10-K
INDEX
| Introduction | ii | |
| Cautionary Note Regarding Forward-Looking Statements | iii | |
| PART I | ||
| Item 1. | Business | 1 |
| Item 1A. | Risk Factors | 10 |
| Item 1B. | Unresolved Staff Comments | 15 |
| Item 1C. | Cybersecurity | 15 |
| Item 2. | Properties | 15 |
| Item 3. | Legal Proceedings | 15 |
| Item 4. | Mine Safety Disclosures | 17 |
| PART II | ||
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 18 |
| Item 6. | [Reserved] | 18 |
| Item 7. | Management’s Discussion and Analysis or Plan of Operation | 18 |
| Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 25 |
| Item 8. | Financial Statements and Supplementary Data | 25 |
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | 25 |
| Item 9A. | Controls and Procedures | 25 |
| Item 9B. | Other Information | 26 |
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 26 |
| PART III | ||
| Item 10. | Directors, Executive Officers and Corporate Governance | 27 |
| Item 11. | Executive Compensation | 31 |
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 32 |
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | 33 |
| Item 14. | Principal Accountant Fees and Services | 34 |
| Item 15. | Exhibits, Financial Statement Schedules | 35 |
| Item 16. | Form 10-K Summary | 35 |
i
INTRODUCTION
Unless the context otherwise requires, in this annual report on Form 10-K (this “Report”):
| ● | “We,” “us,” “our,” and “our Company” refer to Singularity Future Technology Ltd., a Virginia company incorporated in September 2007, and all of its direct and indirect consolidated subsidiaries; |
| ● | “Singularity” refers to Singularity Future Technology, Ltd; |
| ● | “Sino-China” refers to Sino-Global Shipping Agency Ltd., a Chinese legal entity; |
| ● | “PRC” refers to the People’s Republic of China, excluding Taiwan for the purpose of this Report; |
| ● | “US” or “U.S.” refers to the United States of America; |
| ● | “RMB” or “Renminbi” refers to the legal currency of China, and “$” or “U.S. dollars” refers to the legal currency of the United States. |
Names of certain PRC companies provided in this Report are translated or transliterated from their original PRC legal names. Discrepancies, if any, in any table between the amounts identified as total amounts and the sum of the amounts listed therein are due to rounding.
ii
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Report contains certain statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements, including but not limited to statements regarding our projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond our control. Forward-looking statements typically are identified by the use of terms such as “look,” “may,” “will,” “should,” “might,” “believe,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of business risks and uncertainties we face that could cause our actual results to differ materially from those projected or anticipated, including but not limited to the following:
| ● | our ability to timely and properly deliver our services; |
| ● | our dependence on a limited number of major customers and suppliers; |
| ● | current and future political and economic factors in the United States and China and the relationship between the two countries; the Chinese government exerts substantial influence over the manner in which we conduct our business activities in the PRC and may intervene or influence our operations at any time with little advance notice, which could result in a material change in our operations and the value of our common stock |
| ● | unanticipated changes in general market conditions or other factors which may result in cancellations or reductions in the need for our services; |
| ● | demand for warehouse, shipping and logistics services; |
| ● | foreign currency exchange rate fluctuations; |
| ● | possible disruptions in commercial activities caused by events such as natural disasters, health epidemics, terrorist activity and armed conflict; |
| ● | our ability to identify and successfully execute cost control initiatives; |
| ● | the impact of quotas, tariffs or safeguards on our customer’s products; |
| ● | our ability to attract, retain and motivate qualified management team members and skilled personnel; |
| ● | relevant governmental policies and regulations relating to our businesses; | |
| ● | developments in, or changes to, laws, regulations, governmental policies, incentives and taxation affecting our operations; | |
| ● | our reputation and ability to do business may be impacted by the improper conduct of our employees, agents or business partners; and | |
| ● | the outcome of litigation or investigations in which we are involved is unpredictable, and an adverse decision in any such matter could have a material adverse effect on our financial condition, results of operations, cash flows and equity. |
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update the forward-looking statements. Nonetheless, the Company may make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
iii
PART I
Item 1. Business.
Overview
Singularity Future Technology Ltd. (formerly Sino-Global Shipping America, Ltd.) is a global integrated logistics solution provider with a 25+ year operating history, strategically positioned to serve industrial and commercial clients across North America, Greater China, and key global trade corridors. Founded originally in the United States in 2001, the Company completed a corporate reorganization on September 18, 2007, merging into the Virginia-domiciled public entity Sino-Global Shipping America, Ltd. On January 3, 2022, the Company formally updated its corporate name to Singularity Future Technology Ltd. to reflect its strategic expansion beyond traditional maritime logistics into new digital asset and technology-enabled service verticals, while retaining and scaling its core freight logistics franchise that remains the foundation of its ongoing revenue base.
The Company’s primary operating focus remains the provision of end-to-end, customized freight logistics services, with deep historical specialization in supporting the global steel industry, complemented by broad coverage for cross-border trade clients across manufacturing, retail, and e-commerce sectors. Trans Pacific Logistic Shanghai Ltd. and Trans Pacific Shipping Limited, based in China, oversee all Asia-origin cargo coordination, mainland port agency operations, domestic inland transportation networks, and client relationship management for Chinese industrial partners. The full end-to-end offering combines individual service components into a single coordinated workflow for clients, covering:
| 1. | Inland cargo collection and pre-shipment consolidation at origin locations across China | |
| 2. | Full-container-load (FCL) and less-than-container-load (LCL) ocean freight booking and management | |
| 3. | Last-mile final delivery to client-designated industrial yards, retail warehouses, or end customer addresses | |
| 4. | Drop-shipping support for direct-to-consumer e-commerce brands, including label generation and shipment tracking visibility for end recipients. |
In addition, we plan to expand our service ecosystem to include agricultural bulk commodities business, including sesame seeds, soybeans and other staple grain and oilseed products that benefit directly from the Company’s pre-existing cross-border logistics network and port operation expertise.
Further, the Company also plans to evaluate and potentially pursue the development of a large-scale U.S. platform for AI computing, hyperscale data center and high-performance computing infrastructure and has entered into a non-binding development agreement relating to an approximately 900-acre industrial site in Florence, South Carolina in August 2026.
The diagram below shows our corporate structure as of the date of this report.
| * | Unless otherwise indicated in the diagram, all the subsidiaries of the Company are wholly owned. |
1
As of the date of this report, the Company’s subsidiaries are as follows:
| Name | Background | Ownership | |||
| Artificial Intelligence Regeneration Technology Co., Ltd (Cayman Islands) | ● | A Cayman Islands corporation | 100% owned by the Company | ||
| ● | Incorporated on November 18, 2024 | ||||
| ● | No material operations | ||||
| Artificial Intelligence Regeneration Technology Co., Ltd (BVI) | ● | A BVI corporation | 100% owned by the Company | ||
| ● | Incorporated on May 21, 2025 | ||||
| ● | No material operations | ||||
| Sino-Global Shipping New York Inc. (“SGS NY”) | ● | A New York corporation | 100% owned by the Company | ||
| ● | Incorporated on May 3, 2013 | ||||
| ● | No material operations | ||||
| Sino-Global Shipping HK Ltd. (“SGS HK”) | ● | A Hong Kong corporation | 100% owned by the Company | ||
| ● | Incorporated on September 22, 2008 | ||||
| ● | No material operations | ||||
| Trans Pacific Shipping Ltd. (“Trans Pacific Beijing”) | ● | A PRC limited liability company | 100% owned by the Company | ||
| ● | Incorporated on November 13, 2007. | ||||
| ● | No material operations | ||||
| Trans Pacific Logistic Shanghai Ltd. (“Trans Pacific Shanghai”) | ● | A PRC limited liability company | 90% owned by Trans Pacific Beijing | ||
| ● | Incorporated on May 31, 2009 | ||||
| ● | Primarily engaged in freight logistics services | ||||
| Gorgeous Trading Ltd (“Gorgeous Trading”) | ● | A Texas corporation | 100% owned by SGS NY | ||
| ● | Incorporated on July 1, 2021 | ||||
| ● | No material operations | ||||
| SG Shipping & Risk Solution Inc, (“SGSR”) | ● | A New York corporation | 100% owned by the Company | ||
| ● | Incorporated on September 29, 2021 | ||||
| ● | No material operations | ||||
| Singularity (Shenzhen) Technology Ltd. | ● | A Mainland China corporation | 100% owned by the Company | ||
| ● | Incorporated on September 4, 2023 | ||||
| ● | No material operations | ||||
| Singularity Future Technology Virginia Inc. | ● | A Virginia corporation | 100% owned by Artificial Intelligence Regeneration Technology Co., Ltd (BVI) | ||
| ● | Incorporated on September 11, 2025 | ||||
| ● | No material operations |
2
Our equity structure is a direct holding structure. Within our direct holding structure, the cross-border transfer of funds within our corporate entities is legal and compliant with the laws and regulations of the PRC. After the foreign investors’ funds enter Singularity, the funds can be directly transferred to the PRC operating companies through its subsidiaries. Specifically, Singularity is permitted under the Virginia laws to provide funding to our subsidiaries in the PRC and Hong Kong through loans or capital contributions without restrictions on the amount of the funds, subject to satisfaction of applicable government registration, approval and filing requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to the Company only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. As of the date hereof, there have not been any transfers, dividends or distributions made between the holding company, its subsidiaries, and to investors. Furthermore, as of the date hereof, no cash generated from one subsidiary is used to fund another subsidiary’s operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have also not installed any cash management policies that dictate the amount of such funds and how such funds are transferred. For the foreseeable future, we intend to use the earnings for our business operations and as a result, we do not intend to distribute earnings or pay any cash dividends.
To address persistent capital outflows and the RMB’s depreciation against the U.S. dollar in the fourth quarter of 2016, the People’s Bank of China and the State Administration of Foreign Exchange, or SAFE, implemented a series of targeted capital control measures in subsequent months, including stricter vetting procedures for China-based companies seeking to remit foreign currency for overseas acquisitions, dividend payments, and shareholder loan repayments. In the years following this 2016 policy cycle, Chinese regulators have continued to refine their cross-border capital flow management framework, building out a full suite of macro-prudential policy tools including offshore central bank bill issuances, adjustments to cross-border financing regulatory parameters, and strengthened monitoring of speculative cross-border arbitrage activity. As of 2026, against a market backdrop of widened Sino-U.S. yield differentials, sustained pressure from cross-border capital flow volatility, and normalized two-way RMB exchange rate fluctuations, the PBoC and SAFE continue to deploy these calibrated, market-oriented measures to prevent unidirectional, excessive capital outflows, curb disruptive one-sided currency speculation, and keep the RMB exchange rate broadly stable at a reasonable and equilibrium level. This longstanding regulatory approach maintains consistent, rigorous review protocols for foreign currency remittances related to outbound investments, shareholder loan repayments, and dividend distributions by China-domiciled entities, creating a structured compliance environment that may introduce procedural delays, additional documentation requirements, or restrictions on the timing and quantum of foreign currency conversion and remittance for our mainland operating subsidiaries. The PRC government may continue to strengthen its capital controls and our PRC subsidiaries’ dividends and other distributions may be subject to tightened scrutiny in the future. The PRC government also imposes controls on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Therefore, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. Furthermore, if our subsidiaries in the PRC incur debt on their own in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments.
In addition, the Enterprise Income Tax Law and its implementation rules provide that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless reduced under treaties or arrangements between the PRC central government and the governments of other countries or regions where the non-PRC resident enterprises are tax resident. Pursuant to the tax agreement between Mainland China and the Hong Kong Special Administrative Region, the withholding tax rate in respect to the payment of dividends by a PRC enterprise to a Hong Kong enterprise may be reduced to 5% from a standard rate of 10%. However, if the relevant tax authorities determine that our transactions or arrangements are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future. Accordingly, there is no assurance that the reduced 5% withholding rate will apply to dividends received by our Hong Kong subsidiary from our PRC subsidiaries. This withholding tax will reduce the amount of dividends we may receive from our PRC subsidiaries.
Because some of our operations are located in the PRC through our subsidiaries, we are subject to certain legal and operational risks associated with our operations in China, including changes in the legal, political and economic policies of the Chinese government, the relations between China and the U.S, or Chinese or U.S regulations may materially and adversely affect our business, financial condition and results of operations. PRC laws and regulations governing our current business operations are sometimes vague and uncertain, and therefore, these risks may result in a material change in our operations and the value of our common stock, or could significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless. Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, enhancing supervision over China-based companies listed overseas using a variable interest entity structure, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement.
3
We believe that we will not be subject to cybersecurity review with the Cyberspace Administration of China, or the “CAC,”, since we currently do not have over one million users’ personal information and do not anticipate that we will be collecting over one million users’ personal information in the foreseeable future, which we understand might otherwise subject us to the Cybersecurity Review Measures. We do not believe that our subsidiaries are directly subject to these regulatory actions or statements, as we have not implemented any monopolistic behaviour and our business does not involve the collection of user data or implicate cybersecurity. As of the date hereof, no relevant laws or regulations in the PRC explicitly require us to seek approval from the China Securities Regulatory Commission, or the CSRC, or any other PRC governmental authorities for future offerings, nor has our Virginia holding company or any of our subsidiaries received any inquiry, notice, warning or sanctions regarding previous offerings from the CSRC or any other PRC governmental authorities. However, on February 17, 2023, the CSRC promulgated Trial Administrative Measures of the Overseas Securities Offering and Listing by Domestic Companies (the “Overseas Listing Trial Measures”) and five relevant guidelines, which became effective on March 31, 2023. According to the Overseas Listing Trial Measures, PRC domestic companies that seek to offer and list securities in overseas markets, either in direct or indirect means, are required to fulfill the filing procedure with the CSRC and report relevant information. The Overseas Listing Trial Measures provides that an overseas listing or offering is explicitly prohibited, if any of the following: (1) such securities offering and listing is explicitly prohibited by provisions in laws, administrative regulations and relevant state rules; (2) the intended securities offering and listing may endanger national security as reviewed and determined by competent authorities under the State Council in accordance with law; (3) the domestic company intending to make the securities offering and listing, or its controlling shareholder(s) and the actual controller, have committed relevant crimes such as corruption, bribery, embezzlement, misappropriation of property or undermining the order of the socialist market economy during the latest three years; (4) the domestic company intending to make the securities offering and listing is currently under investigations for suspicion of criminal offenses or major violations of laws and regulations, and no conclusion has yet been made thereof; or (5) there are material ownership disputes over equity held by the domestic company’s controlling shareholder(s) or by other shareholder(s) that are controlled by the controlling shareholder(s) and/or actual controller.
The Overseas Listing Trial Measures also provide that if the issuer meets both the following criteria, the overseas securities offering and listing conducted by such issuer will be deemed as indirect overseas offering by PRC domestic companies: (1) 50% or more of any of the issuer’s operating revenue, total profit, total assets or net assets as documented in its audited consolidated financial statements for the most recent fiscal year is accounted for by domestic companies; and (2) the issuer’s main business activities are conducted in China, or its main place(s) of business are located in China, or the majority of senior management staff in charge of its business operations and management are PRC citizens or have their usual place(s) of residence located in China. Where an issuer submits an application for initial public offering to competent overseas regulators, such issuer must file with the CSRC within three business days after such application is submitted. In addition, the Overseas Listing Trial Measures provide that the direct or indirect overseas listings of the assets of domestic companies through one or more acquisitions, share swaps, transfers or other transaction arrangements shall be subject to filing procedures in accordance with the Overseas Listing Trial Measures. The Overseas Listing Trial Measures also requires subsequent reports to be filed with the CSRC on material events, such as change of control or voluntary or forced delisting of the issuer(s) who have completed overseas offerings and listings.
At a press conference held for these new regulations (“Press Conference”), officials from the CSRC clarified that the domestic companies that have already been listed overseas on or before March 31, 2023 shall be deemed as existing issuers (the “Existing Issuers”). Existing Issuers are not required to complete the filling procedures immediately, and they shall be required to file with the CSRC upon occurrences of certain subsequent matters such as follow-on offerings of securities. According to the Overseas Listing Trial Measures and the Press Conference, the existing domestic companies that have completed overseas offering and listing before March 31, 2023, such as us, will not be required to perform filing procedures for the completed overseas securities issuance and listing. However, from the effective date of the regulation, any of our subsequent securities offering in the same overseas market or subsequent securities offering and listing in other overseas markets shall be subject to the filing requirement with the CSRC within three working days after the offering is completed or after the relevant application is submitted to the relevant overseas authorities, respectively. If it is determined that any approval, filing or other administrative procedures from other PRC governmental authorities is required for any future offering or listing, we cannot assure you that we can obtain the required approval or accomplish the required filings or other regulatory procedures in a timely manner, or at all. If we fail to fulfill filing procedure as stipulated by the Trial Measures or offer and list securities in an overseas market in violation of the Trial Measures, the CSRC may order rectification, issue warnings to us, and impose a fine of between RMB1,000,000 and RMB10,000,000. Persons-in-charge and other persons that are directly liable for such failure shall be warned and each imposed a fine from RMB500,000 to RMB5,000,000. Controlling shareholders and actual controlling persons of us that organize or instruct such violations shall be imposed a fine from RMB1,000,000 and RMB10,000,000.
4
On February 24, 2023, the CSRC published the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the “Provisions on Confidentiality and Archives Administration”), which came into effect on March 31, 2023. The Provisions on Confidentiality and Archives Administration requires that, in the process of overseas issuance and listing of securities by domestic entities, the domestic entities, and securities companies and securities service institutions that provide relevant securities service shall strictly implement the provisions of relevant laws and regulations and the requirements of these provisions, establish and improve rules on confidentiality and archives administration. Where the domestic entities provide or publicly disclose documents, materials or other items related to the state secrets and government work secrets to the relevant securities companies, securities service institutions, overseas regulatory authorities, or other entities or individuals, the companies shall apply for approval of competent departments with the authority of examination and approval in accordance with law and report the matter to the secrecy administrative departments at the same level for record filing. Where there is unclear or controversial whether or not the concerned materials are related to state secrets, the materials shall be reported to the relevant secrecy administrative departments for determination. However, there remain uncertainties regarding the further interpretation and implementation of the Provisions on Confidentiality and Archives Administration.
As of the date of this report, our PRC subsidiaries have obtained the requisite licenses and permits from the PRC government authorities that are material for the business operations of our PRC subsidiaries. In addition, as of the date of this annual report, we and our PRC subsidiaries are not required to obtain approval or permission from the CSRC or the CAC or any other entity that is required to approve our PRC subsidiaries’ operations or required for us to offer securities to foreign investors under any currently effective PRC laws, regulations, and regulatory rules. If it is determined that we are subject to filing requirements imposed by the CSRC under the Overseas Listing Regulations or approvals from other PRC regulatory authorities or other procedures, including the cybersecurity review under the revised Cybersecurity Review Measures, for our future offshore offerings, it would be uncertain whether we can or how long it will take us to complete such procedures or obtain such approval and any such approval could be rescinded. Any failure to obtain or delay in completing such procedures or obtaining such approval for our offshore offerings, or a rescission of any such approval if obtained by us, would subject us to sanctions by the CSRC or other PRC regulatory authorities for failure to file with the CSRC or failure to seek approval from other government authorization for our offshore offerings. These regulatory authorities may impose fines and penalties on our operations in China, limit our ability to pay dividends outside of China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from our offshore offerings into China or take other actions that could materially and adversely affect our business, financial condition, results of operations, and prospects, as well as the trading price of our common stock. The CSRC or other PRC regulatory authorities also may take actions requiring us, or making it advisable for us, to halt our offshore offerings before settlement and delivery of the securities offered. Consequently, if investors engage in market trading or other activities in anticipation of and prior to settlement and delivery, they do so at the risk that settlement and delivery may not occur. In addition, if the CSRC or other regulatory authorities later promulgate new rules or explanations requiring that we obtain their approvals or accomplish the required filing or other regulatory procedures for our prior offshore offerings, we may be unable to obtain a waiver of such approval requirements, if and when procedures are established to obtain such a waiver. Any uncertainties or negative publicity regarding such approval requirement could materially and adversely affect our business, prospects, financial condition, reputation, and the trading price of our common stock.
Since these statements and regulatory actions by the PRC government are newly published and official guidance and related implementation rules have not been issued, it is uncertain how soon legislative or administrative regulation making bodies will respond and what existing or new laws or regulations or detailed implementations and interpretations will be modified or promulgated, if any, and the potential impact such modified or new laws and regulations will have on our daily business operation, the ability to accept foreign investments and list on an U.S. or other foreign exchange. The Standing Committee of the National People’s Congress, or the SCNPC, or other PRC regulatory authorities may in the future promulgate laws, regulations or implementing rules that requires our company or any of our subsidiaries to obtain regulatory approval from Chinese authorities before future offerings in the U.S. In other words, although the Company is currently not required to obtain permission from any of the PRC federal or local government to obtain such permission and has not received any denial to list on the U.S. exchange, our operations could be adversely affected, directly or indirectly; our ability to offer, or continue to offer, securities to investors would be potentially hindered and the value of our securities might significantly decline or be worthless, by existing or future laws and regulations relating to its business or industry or by intervene or interruption by PRC governmental authorities, if we or our subsidiaries (i) do not receive or maintain such permissions or approvals, (ii) inadvertently conclude that such permissions or approvals are not required, (iii) applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, or (iv) any intervention or interruption by PRC governmental with little advance notice.
Please see “Risk Factors” beginning on page 10 of this annual report for additional information.
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Holding Foreign Company Accountable Act
Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act (“HFCAA”), if the PCAOB is unable to adequately inspect audit documentation located in China, or investigate our auditor. Furthermore, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which was signed into law, and amends the HFCAA and requires the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to Public Company Accounting Oversight Board (“PCAOB”) inspections for two consecutive years instead of three. Our auditor, Audit Alliance LLP, the independent registered public accounting firm that issues the audit report included elsewhere in this annual report, is headquartered in Singapore and is registered with the PCAOB, and was not included in the list of PCAOB Identified Firms in the PCAOB Determination Report issued in December 2021. On August 26, 2022, the PCAOB signed the Protocol with the CSRC and the MOF of the People’s Republic of China, governing inspections and investigations of audit firms based in mainland China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong completely in 2022. The PCAOB Board vacated its previous 2021 determinations that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in China mainland and Hong Kong. However, whether the PCAOB will continue to be able to satisfactorily conduct inspections of PCAOB-registered public accounting firms headquartered in China mainland and Hong Kong is subject to uncertainty and depends on a number of factors out of our, and our auditor’s control. The PCAOB is continuing to demand complete access in China mainland and Hong Kong moving forward and is already making plans to resume regular inspections in early 2023 and beyond, as well as to continue pursuing ongoing investigations and initiate new investigations as needed. The PCAOB has indicated that it will act immediately to consider the need to issue new determinations with the HFCAA if needed. Therefore, the PCAOB in the future may determine that it is unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong. Our auditor’s working papers related to us and our subsidiaries are located in China. If our auditor is not permitted to provide requested audit work papers located in China to the PCAOB, investors would be deprived of the benefits of PCAOB’s oversight of our auditor through such inspections which could result in limitation or restriction to our access to the U.S. capital markets and trading of our securities may be prohibited under the HFCAA, which would result in the delisting of our securities from the Nasdaq. See “Risk Factors - Our common stock may be delisted from the Nasdaq under the Holding Foreign Companies Accountable Act if the PCAOB is unable to adequately inspect audit documentation located in China. The delisting of our common stock, or the threat of their being delisted, may materially and adversely affect the value of your investment.”
Corporate History and Our Business Segments
From inception in 2001 to our fiscal year ended June 30, 2013, our sole business was providing shipping agency services. In general, we provided two types of shipping agency services: loading/discharging services and protective agency services, in which we acted as a general agent to provide value added solutions to our customers. For loading/discharging agency services, we received the total payment from our customers in U.S. dollars and paid the port charges on behalf of our customers in RMB. For protective agency services, we charged a fixed amount as agent fee while customers were responsible for the payment of port costs and expenses.
Later, we expanded our business to include freight logistics services to provide import security filing services with the U.S. Customs and Department of Homeland Security, on behalf of importers who ship goods into the U.S. and also provided inland transportation services to these importers in the U.S. We also expanded into container trucking services as new business sectors to provide related transportation logistics services to customers in the U.S. and in China. We shift our focus back to the shipping agency business around 2019.
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In 2021, the Company set up a joint venture in Texas, Brilliant Warehouse Service Inc., to support its freight logistics services in the U.S., and a new subsidiary, Gorgeous Trading Ltd., which mainly engages in smart warehouse and related business in Texas. Brilliant Warehouse Service Inc. was dissolved on August 6, 2025.
On December 31, 2021, the Company terminated its variable interest entity (“VIE”) structure and deconsolidated its formerly controlled entity Sino-Global Shipping Agency Ltd. (“Sino-China”). The Company controlled Sino-China through its wholly owned subsidiary Trans Pacific Shipping Limited. The Company dissolved the VIE structure, Sino-China and its subsidiary Sino-Global Shipping LA, Inc.
Our subsidiary, Ningbo Saimeinuo Web Technology Ltd., which primarily engaged in transportation management and freight logistics services, including overseas shipping, was dissolved on October 24, 2023. Our subsidiary, Blumargo IT Solution Ltd., was dissolved on April 17, 2024.
On September 19, 2023, the Company formed a 100% owned subsidiary, New Energy Tech Limited. (“New Energy”) in New York to engage in the commodity trading business. In August 2024, New Energy entered into a joint venture development agreement with Market One Services Corp., a Wyoming corporation, to establish a joint venture to carry out the commodity trading business. The parties also plan to expand into the sale of solar panels.On September 25, 2025, the Company entered into a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $2.7 million.
In August 2026, the Company entered into a non-binding strategic development framework agreement (the “Framework Agreement”) with Florence Development LLC relating to an approximately 900-acre industrial site in Florence, South Carolina. The Framework Agreement establishes a framework for the parties to evaluate and, if mutually acceptable, potentially pursue the development of a large-scale U.S. platform for AI computing, hyperscale data center and high-performance computing infrastructure. Except for certain binding provisions relating to exclusivity, confidentiality, publicity, representations, expenses, term, remedies and governing law, the Framework Agreement is non-binding and does not obligate either party to consummate any transaction. Any definitive transaction would be subject to the completion of satisfactory due diligence, utility confirmation, financing availability, governmental and corporate approvals, and the negotiation and execution of definitive agreements. There can be no assurance that a definitive agreement will be reached or that the contemplated project will be completed on the terms, timetable or scale currently contemplated, or at all.
The approximately 900-acre site is expected to provide substantial room for phased infrastructure development if the project proceeds. Based solely on preliminary information provided by the counterparty and subject to further verification and utility confirmation, approximately 25MW of existing or near-term grid capacity has been identified in connection with the site. The parties also intend to explore a utility expansion pathway that could potentially increase total grid capacity to as much as approximately 99MW within an anticipated 24-month period; however, no such expansion is guaranteed under the Framework Agreement, and any expansion would be subject to utility studies, interconnection approvals, construction, regulatory approvals and other conditions, any of which could result in delays, increased costs or inability to achieve the targeted capacity.
The current concept contemplates using only a portion of the property for an initial phase, preserving the majority of the acreage for potential future expansion. If the project were to be successfully developed, the broader campus could potentially support additional AI computing clusters, data center capacity, energy storage and related infrastructure over multiple phases. However, there can be no assurance that development beyond an initial phase, if any, will occur.
Our Strategy
Our strategy is to:
| ● | Provide better solutions for issues and challenges faced by the entire shipping and freight logistics chain to better serve our customers and explore additional growth avenues. |
| ● | Diversify our current service offerings organically or through acquisitions and/or strategic alliance; continue to grow our business in the U.S. market; |
| ● | Continue to streamline our business practice, optimize our cost structure and improve our operating efficiency through effective planning, budgeting, execution and cost control and strengthening our IT infrastructure; |
| ● | Continue to monetize our relationships with our strategic partners and leverage their support and our innovation to expand our business; |
| ● | Continue to explore cutting-edge technologies in new energy, such as the development of high-efficiency solar panel materials and innovative waste recycling processes, and actively acquire small new energy companies with potential to rapidly expand our business footprint; |
| ● | Use vivid cases and data to showcase the company’s outstanding achievements in the field of new energy and attract public attention, and organize new energy science activities to enhance brand reputation and social responsibility; and |
| ● | Develop customized sales plans for different customer groups and cooperate with financial institutions to launch new energy project financing services to reduce customer costs and promote sales growth. |
In addition, the launch and scaling of our commodities trading business is expected act as a high-impact lever to diversify our overall revenue base, reducing concentration risk from our traditional freight contracts with a small set of large legacy logistics clients. The new trading vertical is expected bring a large, diversified base of commodity producer, distributor, and wholesale customers, balancing our revenue mix, lowering overall customer concentration, and improving the long-term stability of our cash flows.
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Our Goals and Strategic Plan
By leveraging our extensive business relationships, technical ability and in-depth knowledge of the shipping industry, our goal is to further strengthen our position as a leading global logistics solution provider who offers innovative resolutions to better address complex issues in different aspects in the entire shipping and freight logistics chain.
Meanwhile, we plan to build a solar energy production facility in the United States. The Company actively seeks cooperation with multiple parties. It plans to jointly develop new energy technologies with scientific research institutions to enhance its strength, to cooperate with solar energy companies to establish recycling channels, to join hands with environmental protection organizations to promote concepts, and to cooperate with the government to participate in projects and obtain support.
Additionally, building on our existing freight network and end-to-end supply chain capabilities, we plan to roll out our agricultural commodities trading business that is natively connected to our logistics service ecosystem. This new business line is expected to initially focus on sourcing, distributing and facilitating the trade of high-demand agricultural commodities tied to high-conviction trade opportunities identified by management. Unlike standalone trading operators, we plan to deliver unique competitive advantages by embedding our in-house freight, customs clearance, warehousing and last-mile delivery services directly into the trading value chain, reducing cross-party friction, lowering overall transaction costs, and delivering more reliable fulfillment for both producers and end buyers of agricultural commodities
Our Customers
Our main customer for the fiscal years ended June 30, 2026 and 2025 was Chongqing Iron & Steel Ltd. For the years ended June 30, 2026 and 2025, Chongqing Iron & Steel Ltd. accounted for 100% and 94.4% of the Company’s revenues, respectively.
Our Suppliers
Our operations consist of working directly with our customers to understand in detail their needs and expectations and then managing local suppliers to ensure that our customers’ needs are met. For the year ended June 30, 2026, two suppliers accounted for approximately 28.5% and 18.2% of the total purchases. For the year ended June 30, 2025, three suppliers accounted for approximately 34.4%, 16.3%, and 10.5% of our total purchases, respectively.
Our Strengths
We believe that the following strengths differentiate us from our competitors:
| ● | Proven industry experience and problem-solving reputation. We are a non-asset based global shipping and freight logistics solution provider. We provide tailored solutions and value-added services to our customers to drive effectiveness and control in related aspects throughout the entire shipping and freight logistic chain. We believe that our years of successful track record of applying integrated solutions to complex issues in the global shipping logistics business gives us a competitive advantage in attracting large clients and helps us maintain strong long terms business relationship with them. |
| ● | A competent professional team. Most of our employees have marine business experience, and many of our managers/chief operators served in other large Chinese shipping companies prior to joining us. With these professionals and experienced staff, we believe that we provide the best services to our customers at competitive prices. |
| ● | Extensive network and positive industry recognition. Doing business in China often requires a strong business network and support of key strategic partners. The Company served as one of the executive directors of China Association of Shipping Agencies & Non-Vessel-Operating Common Carriers (CASA), the authoritative industry association in China. We are the only non-state-owned enterprise represented on the CASA board guiding the development of the industry. Our good reputation and industry recognition enables us to maintain strong relationships with our business partners and have an extensive network of contacts throughout the industry, which helps us gain necessary support to execute our business plans. |
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| ● | Lean organization and a flexible business model. Although we are a small business with limited resources, we have a cohesive and effective organizational structure with the goal of maximizing customer value while minimizing waste. Our unique flexible business model allows us to quickly respond to changing market demand and offer our customers innovative problem-solving solutions, quality customer service, and competitive prices to achieve greater market acceptance and gain additional market share. |
| ● | U.S.-registered and NASDAQ-listed public company. We believe our status as a U.S. corporation gives us more credibility among existing and potential customers, suppliers, and other business partners than a privately owned company would have in our industry. Our ability to raise capital through the capital market or use our common stock as “currency” to facility potential merger and acquisition transactions can also help us carry out or accelerate our growth strategies. |
Our Opportunities
For more than thirty years, the shipping and freight logistics industry has been operated under traditional business models without meaningful change. Many of these business practices are inefficient and problematic; therefore, maintaining an innovative mindset is critical to achieving continuous business success and growth. We are a value-added logistics solution provider with successful past performance and individuals that have been in the industry for a long time. Instead of playing the traditional logistics broker role, we focus on providing technology solutions and innovative leading-edge services to bridge the asset-based world with the digital world. We shape our industry practice and profit model by analyzing wider developments both in the global markets and the technology industry so we can address unique problems that are currently pervasive across the shipping and freight logistics industry.
We believe we can capture the business opportunity and grow our business organically or through acquisitions or strategic alliance by:
| ● | Continuing to streamline our business operations and improve our operating efficiency through innovative technology, effective planning, budgeting, execution and cost control; |
| ● | Diversifying our business to focus on providing innovative technology-based solution to our customers to promote our sustainable business growth; |
The current market of China’s shipping agency industry is mature comparing to what it was ten years ago when the shipping agency industry was fueled by the massive construction of China’s infrastructure, yet the over-supply of shipping agencies has also shrunk the profits of the industry. Many shipping agencies were constrained by the small size and the limited services. We have the professionalism and are the pioneers and leaders in the shipping agency industry in China. We maintain strong relationships with customers and market resources. The current shipping agency market is more competitive yet enables companies like us who has better resources in this market niche to expand.
Our Challenges
We face significant challenges when executing our strategy, including:
| ● | Given the complexity and length of restructuring our business, we face the challenge of generating sufficient cash from our current business activities to support our daily operations during the transition; |
| ● | We may not be able to establish a separate department to solve critical issues in today’s shipping logistics industry; |
| ● | We may not be able to manage our growth when we form more joint ventures for our shipping agency business as we need to better our standard operating and control procedures which may pose more challenges to our management. |
| ● | We may not have or not be able to get the necessary funds to continue to expand our service and market our services successfully; |
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| ● | Our ability to respond to increasing competitive pressure on our growth and margins; |
| ● | Our ability to gain further expertise and to serve new customers in new service areas; |
| ● | From time to time, we may have difficulty carrying out services effectively and in a profitable way due to the cyclical nature of the shipping industry, which could lead to a prolonged period of sluggish demand for our services; |
| ● | Our ability to respond promptly to a changing regulatory environment, macroeconomic conditions, industry trends, and competitive landscape; and |
| ● | Developing a winning business model takes time and a new business model may not be recognized by the market immediately. As a publicly traded company, management may be forced to fulfill near-term performance goals that may not be consistent with the Company’s long-term vision. |
Our Competition
The market segment that we now operate in, which is freight logistics services including warehouse services, does not have high entry barriers. In terms of our competition in China, there are many companies ranging from small to large that provide freight logistics services, and the state-owned companies in China generate a significant portion of the revenues in the industry. Our primary competitors in China are the China branches of international shipping companies or their exclusive agents in China. These companies include Evergreen Marine Corp., Orient Overseas Container Line, Ocean Network Express which includes Kawasaki Kisen Kaisha, Ltd, Mitsui O.S.K. Lines and Nippon Yusen Kabushiki Kaisha. The competition is intense due to the significant excess capacity. These companies have greater service capabilities, a larger customer base and more financial, marketing, network and human resources than we do. Most of them engage in a wide range of businesses and involve many aspects of the industry chain. However, we focus on providing tailored solutions and value-added services to customers in freight logistic services. As a boutique company with limited resources and history, we face intense competition. Our ability to grow in our industry depends on (1) our deep understanding of the complexity of industry issues and challenges and (2) our ability to develop optimal solutions to respond to the identified issues and provide effective problem-solving strategies to our targeted customers.
In terms of our competition in the United States, the freight logistics services industry is well developed, highly fragmented, and competition is fierce nationwide. Our primary competitors in the U.S. are local warehouse services providers and freight forwarding companies in Houston, for example, Bizto LLC, Golden Eagle Guns LLC, and Smart Supply Chain. Competition in the freight logistics services industry is driven by factors such as price, service quality, technology, and geographic reach. Companies that can offer a combination of these factors are often more competitive in the market. Additionally, companies that can adapt to changing customer demands and market trends, such as the shift towards e-commerce, are likely to be more successful in the long term. We aim at providing tailored and valued-added services for our international clients with needs for U.S. domestic logistics services.
Employees
As of the date of this Report, we have 10 full-time employees, eight of whom are based in China and two are based in the United States. Of the total full-time employees, four are in management, two are in operations, two are in finance and accounting related and two are in administration and technical support. We believe that our relationship with our employees is good. We have never had a work stoppage, and our employees are not subject to a collective bargaining agreement.
Intellectual Property
As of the date of this Report, we do not have any registered patents, copyrights, or trademarks. We have seven registered domain names, including our corporate website https://www.singularity.us/.
Item 1A. Risk Factors.
As a smaller reporting company, we are not required to include risk factors in this Report. However, below are a number of material risks, uncertainties and other factors that could have a material effect on the Company and its operations as a result of recent developments. You should carefully consider the risks described below before purchasing our common stock. The risks highlighted here are not the only ones that we may face. For example, additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. If any of the risks or uncertainties described below or any such additional risks and uncertainties actually occur, our business, prospects, financial condition, or results of operations could be negatively affected, and you might lose all or part of your investment.
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We are, and may continue to be, subject to litigation including individual and class action lawsuits, as well as investigations and enforcement actions by regulators and governmental authorities. These matters are often expensive and time consuming, and, if resolved adversely, could harm our business, financial condition, and operating results.
As discussed in “Item 1. Business - Recent Developments,” we are, and from time to time may become, subject to litigation and various legal proceedings, including litigation and proceedings related to stockholder derivative suits, class action lawsuits and other matters, that involve claims for substantial amounts of money or for other relief or that might necessitate changes to our business or operations. In addition to this, we have been, currently are, and may from time to time become subject to, government and regulatory investigations, inquiries, actions or requests, other proceedings and enforcement actions alleging violations of laws, rules, and regulations, both foreign and domestic. The defense of these actions may be both time consuming and expensive. We evaluate these litigation claims and legal proceedings to assess the likelihood of unfavorable outcomes and to estimate, if possible, the monetary amount of potential losses. Based on these assessments and estimates, we may establish reserves and/or disclose the relevant litigation claims or legal proceedings, as and when required or appropriate. These assessments and estimates are based on information available to management at the time of such assessment or estimation and involve a significant amount of judgment. As a result, actual outcomes or losses could differ materially from those envisioned by our current assessments and estimates. Our failure to successfully defend or settle any of these litigations or legal proceedings could result in liability that, to the extent not covered by our insurance, could have an adverse effect on our business, financial condition and results of operations.
The scope, determination, and impact of claims, lawsuits, government and regulatory investigations, enforcement actions, disputes, and proceedings to which we are subject cannot be predicted with certainty, and may result in:
| ● | substantial payments to satisfy judgments, fines, or penalties; | |
| ● | substantial outside counsel, advisor, and consultant fees and costs; | |
| ● | substantial administrative costs, including arbitration fees; | |
| ● | loss of productivity and high demands on employee time; | |
| ● | criminal sanctions or consent decrees; | |
| ● | termination of certain employees, including members of our executive team; | |
| ● | barring of certain employees from participating in our business in whole or in part; | |
| ● | orders that restrict our business or prevent us from offering certain products or services; | |
| ● | changes to our business model and practices | |
| ● | delays to planned transactions, service launches or improvements; and | |
| ● | damage to our brand and reputation. |
We are, and may continue to be, subject to securities litigation, which is expensive and could divert management attention, cause harm to our reputation and result in significant damages for which we could be responsible.
We are subject to securities class action litigation, which is expensive, could divert our management’s attention, harm our reputation, and leave us liable for substantial damages. For example, as discussed in “Item 1. Business - Recent Developments,” on December 9, 2022, Piero Crivellaro, purportedly on behalf of the persons or entities who purchased or acquired publicly traded securities of the Company between February 2021 and November 2022, filed a putative class action against the Company, certain of our officers and directors, and other defendants in the United States District Court for the Eastern District of New York, alleging violations of federal securities laws related to alleged false or misleading disclosures made by the Company in its public filings. The plaintiff seeks unspecified damages, plus interest, costs, fees, and attorneys’ fees.
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Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could adversely impact our business. Any adverse determination in litigation could also subject us to significant liabilities.
We are responsible for the indemnification of our officers and directors.
Should our officers and/or directors require us to contribute to their defense, we may be required to spend significant amounts of our capital. Our Certificate of Incorporation and bylaws also provide for the indemnification of our directors, officers, employees, and agents, under certain circumstances, against attorney’s fees and other expenses incurred by them in any litigation to which they become a party arising from their association with or activities on behalf of our company. This indemnification policy could result in substantial expenditures, which we may be unable to recoup. If these expenditures are significant or involves issues which result in significant liability for our key personnel, we may be unable to continue operating as a going concern.
We depend on a limited number of major customers who are able to exert a high degree of influence over us and the loss of a major customer could adversely impact on our business.
For the years ended June 30, 2026 and 2025, Chongqing Iron & Steel Ltd. accounted for 100% and 94.4% of the Company’s revenues, respectively. There can be no assurance that our major customer will continue to purchase our services in the same amount that it has in the past. The loss of our major customer or a material reduction in sales to a major customer could have a material adverse effect on our sales and results of operations. Additionally, given the high concentration of our customer base, a default by or a significant reduction in future transactions with our major customer could materially reduce our revenues, profitability, liquidity and growth prospects.
We depend on a limited number of suppliers who are able to exert a high degree of influence over us and the loss of our major suppliers could adversely impact on our business.
For the year ended June 30, 2026, two suppliers accounted for approximately 28.5% and 18.2% of the total purchases, respectively. For the year ended June 30, 2025, three suppliers accounted for approximately 34.4%, 16.3%, and 10.5% of our total purchases, respectively. There can be no assurance that our major suppliers will continue to supply us with the materials or services required to operate our business in the same amount that they have in the past. The loss of our major suppliers or a material reduction in the materials or services they provide to us could have a material adverse effect on our business and results of operations.
Our growth depends in part on the success of our relationships with third parties.
A key component of our growth strategy is to develop or expand our relationships with third parties. For example, we are investing resources in establishing strategic relationships with market players across a variety of industries to generate new customers. These programs may not roll out as quickly as planned or produce the results we anticipated. A significant portion of our business depends on attracting and retaining new and existing solar partners. Negotiating relationships with our solar partners, investing in due diligence efforts with potential solar partners, training such third parties and contractors, and monitoring them for compliance with our standards require significant time and resources and may present greater risks and challenges than expanding a direct sales or installation team. If we are unsuccessful in establishing or maintaining our relationships with these third parties, our ability to grow our business and address our market opportunity could be impaired. Even if we are able to establish and maintain these relationships, we may not be able to execute on our goal of leveraging these relationships to meaningfully expand our business, brand recognition and customer base. This would limit our growth potential and our opportunities to generate significant additional revenue or cash flows.
The restatement of our prior financial statements may affect investor confidence and raise reputational issues and may subject us to additional risks and uncertainties, including increased professional costs and the increased possibility of legal proceedings and regulatory inquiries.
As discussed in our Current Form on Form 8-K filed on February 28, 2023, as amended by Amendment No. 1 filed on March 6, 2023, we determined to restate our financial statements as of and for the year ended June 30, 2021, three and six months ended September 30, 2021 and three and nine months ended December 31, 2021 after we identified errors related to, incorrect accounting treatment of related party loan receivable, incorrect recognition of revenue from freight shipping services and incorrect accounting treatment of recovery (provision) for credit losses. As a result of these errors and the resulting restatements of our financial statements for the impacted periods, we have incurred, and may continue to incur, unanticipated costs for accounting and legal fees in connection with or related to the restatements, and have become subject to a number of additional risks and uncertainties, including the increased possibility of litigation and regulatory inquiries. Any of the foregoing may affect investor confidence in the accuracy of our financial disclosures and may raise reputational risks for our business, both of which could harm our business and financial results.
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We have fully remediated the material weaknesses in our internal control over financial reporting. However, if our remediation of these material weaknesses turns out to be not effective, or if we fail to develop and maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired. In addition, the presence of material weaknesses increases the risk of a material misstatement of our consolidated financial statements.
As a public company, we are required, pursuant to Section 404(a) of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our Annual Report on Form 10-K. Effective internal control over financial reporting is necessary for reliable financial reports and, together with adequate disclosure controls and procedures, such internal controls are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause our Company to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in reported financial information, which could have a negative effect on the trading price of our common stock.
Our management’s assessment must include disclosure of any material weaknesses identified by management in our internal control over financial reporting. Our management’s assessment could detect problems with internal controls. Undetected material weaknesses in internal controls could lead to financial statement restatements and require our Company to incur the expense of remediation.
A material weakness is a deficiency or combination of deficiencies in a company’s internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its consolidated financial statements would not be prevented or detected on a timely basis. This deficiency could result in additional misstatements to its consolidated financial statements that would be material and would not be prevented or detected on a timely basis.
As discussed in “Item 9.A Controls and Procedures - Disclosure Controls and Procedures,” under the supervision and with the participation of our management, we have taken measures to improve our disclosure controls and procedures.
We have fully remediated the material weaknesses in our internal control over financial reporting. However, if our remediation of these material weaknesses turns out to be ineffective, it may cause our Company to become subject to investigation or sanctions by the SEC. It may also adversely affect investor confidence in our Company and, as a result, the value of our common stock. There can be no assurance that additional material weaknesses will not be identified in the future. In addition, if we are unable to continue to meet our financial reporting obligations, we may not be able to remain listed on Nasdaq.
Our ability to maintain compliance with Nasdaq continued listing requirements, including whether we are able to maintain the closing bid price of our common stock, could result in the delisting of our common stock.
Our common stock is currently listed on The Nasdaq Capital Market (“Nasdaq”). To maintain this listing, we must satisfy minimum financial and other requirements.
On November 19, 2025, the Company received a staff determination notice from the Nasdaq, informing the Company that its Common Stock failed to comply with the $1 minimum bid price required for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) for the 30 consecutive business days prior to the date of the Notice. Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company was provided with an initial compliance period of 180 calendar days, or until May 18, 2026, to regain compliance with the minimum bid price requirement. On May 19, 2026, the Company was granted an additional 180-day compliance period, or until November 16, 2026, to regain compliance with the minimum bid price requirement.
On August 10, 2026, the Company received a written notification from Nasdaq, indicating that the Company has regained compliance with the Rule 5550(a)(2), based on the closing bid price of the Company’s Common Stock for the last 10 consecutive business days, from July 27, 2026 to August 7, 2026. Accordingly, Nasdaq has determined that this matter is now closed.
There can be also no assurance that our stock price will continue to meet the minimum bid price requirement or we will meet other requirements for continued listing on Nasdaq. If our common stock is delisted from Nasdaq and we are unable to list our common stock on another national securities exchange, we expect our common stock would be quoted on an over-the-counter market. If this were to occur, we and our stockholders could face significant material adverse consequences, including the limited availability of market quotations for our common stock; substantially decreased trading in our common stock; decreased market liquidity of our common stock as a result of the loss of market efficiencies associated with Nasdaq and the loss of federal preemption of state securities laws; an adverse effect on our ability to issue additional securities or obtain additional financing in the future on acceptable terms, if at all; potential loss of confidence by investors, suppliers, partners, and employees and fewer business development opportunities; and limited news and analyst coverage. Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment.
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Our proposed data center business is at an early stage, and we may not enter into definitive agreements or successfully develop or operate the contemplated project.
In August 2026, we entered into a non-binding strategic development framework agreement with Florence Development LLC relating to an approximately 900-acre industrial site in Florence, South Carolina, pursuant to which the parties intend to evaluate the potential development of a large-scale platform for AI computing, hyperscale data center and high-performance computing infrastructure. Except for certain provisions relating to exclusivity, confidentiality, publicity, representations, expenses, term, remedies and governing law, the Framework Agreement is non-binding and does not obligate either party to proceed with the contemplated project or enter into any definitive transaction. We have not entered into definitive agreements for the development or operation of the contemplated project.
The development of a large-scale data center project would require substantial additional planning, capital and resources and would depend on numerous factors, including satisfactory completion of due diligence, availability and adequacy of power and other utility infrastructure, access to financing, receipt of necessary governmental and corporate approvals, negotiation and execution of definitive agreements, and our ability to obtain the personnel, technology, equipment and other resources necessary to develop and operate the project. We have limited experience developing or operating large-scale data center or high-performance computing infrastructure. Accordingly, we may encounter delays, increased costs, financing difficulties or other challenges in pursuing this proposed business.
There can be no assurance that we will enter into any definitive agreement relating to the contemplated project, obtain the financing, power capacity, approvals or other resources necessary to develop it, or successfully commence or operate a data center business. If we devote significant management attention or financial resources to this opportunity but are unable to consummate or successfully develop the contemplated project, our business, financial condition and results of operations could be materially adversely affected.
The development of our proposed data center business may require substantial capital, and we may be unable to obtain sufficient financing on acceptable terms or at all.
The development, construction and operation of large-scale data center and high-performance computing infrastructure are capital intensive and may require significant expenditures for land development, construction, power and utility infrastructure, computing and networking equipment and other facilities and equipment. We have not yet determined the total capital requirements for the project contemplated by the Framework Agreement, and the actual costs of developing the project, if pursued, could be substantially greater than currently anticipated. We may need to obtain substantial additional debt or equity financing or financing from strategic or other third parties to fund the proposed project. There can be no assurance that such financing will be available when needed or on commercially acceptable terms, or at all. Any equity financing could result in substantial dilution to our existing stockholders, while debt financing could impose significant repayment obligations and restrictive covenants. If we are unable to obtain sufficient financing, we may be required to delay, reduce the scope of or abandon the proposed data center project.
Our proposed data center project will depend on the availability of sufficient power and other infrastructure and the receipt of necessary approvals, any of which may delay or prevent development of the project.
Large-scale AI computing, hyperscale data center and high-performance computing facilities require substantial and reliable supplies of electricity, as well as adequate telecommunications, water, transportation and other infrastructure. The Framework Agreement remains subject to, among other matters, confirmation of utility availability and the completion of satisfactory due diligence. We have not yet completed these conditions or established that the contemplated site will have access to the power capacity and other infrastructure necessary to support the project at the scale contemplated. Development of the project may also require zoning, land-use, environmental, construction and other governmental permits and approvals and may depend on the construction or expansion of utility and other infrastructure by third parties. We cannot assure you that sufficient power or other infrastructure will be available when required or on commercially reasonable terms, or that all necessary permits and approvals will be obtained in a timely manner or at all. Any inability to secure adequate infrastructure or required approvals could increase our costs, materially delay or reduce the scope of the contemplated project, or prevent us from developing the project altogether.
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For additional risks relating to our operations, see the section titled “Risk Factors” contained in our Registration Statement on Form S-3, filed with the SEC on September 9, 2024 and other filings we file with the SEC from time to time.
Item 1B. Unresolved Staff Comments.
The Company does not have any unresolved or outstanding staff comments.
Item 1C. Cybersecurity
Risk Management and Strategy
We have established cybersecurity risk assessment procedures to ensure effectiveness in cybersecurity management, strategy and governance and reporting cybersecurity risks. The process is in alignment with our strategic objectives and risk appetite.
We strive to manage cybersecurity risks and protect sensitive information through various means, such as technical safeguards, procedural
requirements, close monitoring on our corporate network. We may engage assessors, consultants, auditors, or other
As of the date of this annual report, we have
Governance
The Board oversees the Company’s cybersecurity risks management and reviews management reports on material cybersecurity risks and
issues on an as-needed basis.
Item 2. Properties.
We currently rent one office in Shanghai.
| Office | Address | Rental Term | Space | |||
| Shanghai, PRC |
Rm 12D & 12E, No.359 Dongdaming Road, Hongkou District, Shanghai, PRC 200080 |
Expires 12/31/2026 | 3,078 ft2 |
We also currently maintain a virtual office at 48 Wall Street, Suite 1100, New York, NY 10005, with the lease expires on October 13, 2027, renewable on a yearly basis.
Item 3. Legal Proceedings.
Litigation
Crivellaro v. Singularity Future Technology Ltd.
On December 9, 2022, a securities class action, Crivellaro v. Singularity Future Technology Ltd., et al., No. 22-cv-7499-BMC, was commenced against the Company and certain other defendants in the United States District Court for the Eastern District of New York (the “EDNY”), alleging violations of the federal securities laws (the “Class Action”).
On June 22, 2026, the Company and the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), pursuant to which and subject to approval by EDNY, the Company agreed to settle the Class Action for an aggregate cash settlement amount of $5.8 million, including $2.0 million previously deposited into escrow. The Company completed an additional payment of $1.5 million in July 2026. The Company subsequently paid the remaining $2.3 million on September 8, 2026.
The Court granted preliminary approval of the Amended Settlement Agreement and approved the settlement schedule on September 10, 2026. The Court set the Fairness Hearing for January 25, 2027. Until the conclusion of the Fairness Hearing, the ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive final approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.
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On June 22, 2026, the Company and the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), which amended and superseded the Original Settlement Agreement. Pursuant to the Amended Settlement Agreement and subject to approval by EDNY, the Company agreed to settle the Class Action for an aggregate cash settlement amount of $5.8 million, including $2.0 million previously deposited into escrow. The Company completed an additional payment of $1.5 million in July 2026. The Company subsequently paid the remaining $2.3 million on September 8, 2026.
As of the date of this Annual Report, EDNY has not yet granted final approval of the Amended Settlement Agreement, and the Class Action remains pending. The ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive EDNY approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.
Huang v. Singularity Future Technology Ltd.
In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond, Virginia, alleging that the Company failed to pay certain severance compensation, salary and incentive-based bonus. On January 31, 2025, the court entered a judgment in favor of Mr. Huang and against the Company in the amount of approximately $469,000, plus interest.
However, on June 15, 2025, Mr. Huang filed a petition in the Supreme Court of New York, County of Westchester (the “Westchester Court”) against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney’s fees.
On August 23, 2025, the Company and Mr. Huang entered into a settlement agreement to resolve the claims, pursuant to which the Company agreed to pay Mr. Huang $300,000 and issue 90,000 shares of common stock in exchange for a release of his claims, including the Virginia judgment. The Company subsequently completed the cash payment and share issuance in accordance with the settlement agreement in August and October 2026, respectively.
On September 25, 2025, the Westchester Court entered an order, awarding the additional attorney’s fees and directing the Company to pay the entire original judgment plus interest. On October 10, 2025, the Company filed a motion to vacate the September 25 order. On June 3, 2026, the September 25 order was vacated by the Westchester Court in its entirety. Mr. Huang may seek attorneys’ fees relating solely to the New York special proceeding, which remains pending, by filing a motion requesting the same. As of the date of this disclosure Mr. Huang has not filed a motion for attorney’s fees.
Jing Shan v. Singularity Future Technology Ltd.
The Company’s subsidiary, SG Shipping & Risk Solution, Inc. (“Plaintiff”), was party to a lawsuit it filed on July 13, 2023, in the United States District Court for the Eastern District of New York (Case No. 2:23-cv-05332-NJC-ARL) (the “SG Shipping Action”), wherein Plaintiff sought an award of monetary damages in connection with the conversion of Plaintiff’s corporate funds that Plaintiff alleges its former chief operations officer, Angela Shan (“Shan”), converted from Plaintiff. The Company dismissed the SG Shipping Action without prejudice on May 30, 2025, reserving the right to refile the case.
On October 25, 2023, Shan filed suit against the Company in the action captioned Shan v. Singularity Future Technology, Ltd., Case No. CL23-4916-WRM, Circuit Court of Virginia, City of Richmond for indemnification (the “Virginia Action”). On December 8, 2023, the Company filed a counterclaim in the Virginia Action against Shan (the “Counterclaim”). On February 12, 2024, Shan filed a motion to dismiss the Counterclaim (the “Motion to Dismiss”) and a motion for summary judgment in the Virginia Action (the “Motion for Summary Judgment”).
On May 3, 2024, the Circuit Court of Virginia entered an order granting the Motion to Dismiss, partially granting the Motion for Summary Judgment, and ordering Singularity to pay Shan her reasonable attorneys’ fees and costs. On January 17, 2025, the Circuit Court of Virginia entered a contempt order, ordering the Company to pay Shan $82,586.51 (the “Virginia Contempt Judgment”). On September 5, 2025, Shan moved to enforce the Virginia Judgment in New York (the “Enforcement Action”) and incurred attorneys’ fees (the “Enforcement Action Attorneys’ Fees”). Following a trial, on July 13, 2026, the Circuit Court of Virginia entered an additional Final Judgment Order against the Company in favor of Shan in the Virginia Action in the amount of $380,349.66 (the “Virginia Fee Judgment”). The parties have been negotiating a resolution of the Virginia Action and the Enforcement Action, including the Enforcement Action Attorneys’ Fees and the Virginia Fee Judgment.
Haotian Song Arbitration
Haotian Song, a former employee and director of the Company, commenced an employment-related arbitration before the American Arbitration Association against the Company and certain individual respondents, Case No. 01-26-0001-3574. The dispute concerns, among other matters, Mr. Song’s employment agreements, a reduction in his compensation, allegedly unpaid compensation, the termination of his health insurance coverage and related continuation coverage issues, and the circumstances surrounding his resignation in July 2024. On September 4, 2026, the arbitrator issued rulings concerning discovery disputes and directed the production of certain documents and information. These rulings did not determine the merits of any claim or defense. The arbitration remains pending.
Shilun Dai Litigation
On June 17, 2026, Shilun Dai, a former employee of the Company, filed a lawsuit against the Company and Jia Yang, the Company’s Chief Executive Officer, in the United States District Court for the Eastern District of New York, Case No. 1:26-cv-03653. The complaint alleges violations of the Fair Labor Standards Act and the New York Labor Law relating to unpaid overtime and wages, accrued leave compensation, unreimbursed business expenses, wage payment frequency, wage notices and statements, and alleged retaliation. Mr. Dai seeks unpaid compensation, liquidated and statutory damages, back pay, front pay, compensatory damages, interest, attorneys’ fees and costs, and other relief. The litigation remains pending.
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Government Investigations
Following the publication of the Hindenburg Report, the Company received subpoenas from the United States Attorney’s Office for the Southern District of New York and the United States Securities and Exchange Commission (the “SEC”). The Company cooperated with these governmental authorities regarding these matters. The Company is not able to estimate the outcome or duration of the government investigations. As of the date of this report, the Company has not received any updates.
On February 28, 2023, the audit committee of the Company, after discussion with the management of the Company, and in consultation with the Company’s independent registered public accounting firm, concluded that the Company’s previously issued financial statements for the fiscal year ended June 30, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on November 29, 2021 (the “2021 Form 10-K”) should no longer be relied upon as a result of incorrect accounting treatment of approximately $4.6 million of related party eloan receivable. The audit committee also concluded that the financial statements for the quarters ended September 30, 2021 and December 31, 2021 included in the Company’s Quarterly Reports on Form 10-Q (the “2021 Form 10-Qs,” collectively with the 2021 Form 10-K, the “Affected Reports”), filed with the SEC on November 12, 2021 and February 14, 2022, respectively, should no longer be relied upon as a result of incorrect recognition of revenue from freight shipping services in the amount of $980,200 for the three months ended September 30, 2021 and six months ended December 31, 2021. The Company corrected the errors referenced above in an amendment to (1) the 2021 Form 10-K (the “Amended Form 10-K”) and (2) each of the 2021 Form 10-Qs (the “Amended Form 10-Qs,” collectively with the Amended Form 10-K, the “Restatements”).
On June 17, 2024, the Company received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”). Because the Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time. The SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result in government enforcement actions and, to civil and/or criminal sanctions under relevant laws. The Company intends to cooperate with the SEC with respect to the Investigation.
On January 17, 2025, after cooperating with the Investigations, the Company reached a resolution with the SEC regarding the aforementioned matters.
The SEC approved the Company’s Offer of Settlement and issued its Cease-and-Desist Order (the “SEC Order”) dated January 17, 2025, with respect to certain violations related to the Company’s financial reporting, accounting, books and records, and internal controls. Pursuant to the terms of the SEC Order, the Company paid a civil monetary penalty of $350,000 to the SEC, complied with certain undertakings to remediate its material weaknesses in the internal control and disclosure deficiencies by June 30, 2026, and ceased and desisted any violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B), of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-13, and 13a-15 thereunder.
Item 4. Mine Safety Disclosures.
This item is not applicable to the Company.
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PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market for Our Common Stock
Our common stock is traded on the Nasdaq Capital Market under the symbol SGLY.
Holders of Our Common Stock
As of the date of this report, there were 41 holders of record of our common stock. This number does not include stockholders who hold their shares of common stock in street name.
Dividend Policy
We have never declared or paid any cash dividends on our common stock. We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our Board and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the Board may deem relevant. Payments of dividends by our PRC subsidiaries to our company are subject to restrictions including primarily the restriction that foreign invested enterprises may only buy, sell and/or remit foreign currencies at those banks authorized to conduct foreign exchange business after providing valid commercial documents.
Recent Sales of Unregistered Securities and Issuer Purchases of Equity Securities
None.
Item 6. [Reserved]
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in the Report. This discussion contains forward-looking statements that involve risks and uncertainties. Actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
Overview
On January 3, 2022, we changed our corporate name to Singularity Future Technology Ltd. to align with our entry into the digital assets business through our U.S. subsidiaries. Currently, we primarily focus on providing freight logistics services, which include shipping, and other logistical support to steel companies, through subsidiary, Trans Pacific Shipping Limited.
On August 6, 2025, we dissolved our subsidiary, Brilliant Warehouse Service Inc.
On September 25, 2025, we entered into a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $2.7 million.
We have not generated any revenues to date with respect to our entry into the solar panel production and distribution business.
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Recent Developments
Private Placement on June 19, 2025
On June 19, 2025, the Company entered into a securities purchase agreement (the “SPA”) with eighteen investors, under which the Company agreed to sell an aggregate of 32,188,841 units (the “Units”), each Unit consisting of one share of the Company’s Common Stock, and three warrants, with each Warrant initially exercisable to purchase one share of Common Stock at an exercise price of $1.165 (pre-1:14-share consolidation). The Units were offered in a private placement to certain “non-U.S. Persons” as defined in Regulation S of the Securities Act of 1933, as amended (“Regulation S”), at a price of $0.932 (pre-1:14-share consolidation) per Unit, for an aggregate purchase price of approximately $30 million.
On August 12, 2026, the Company and the Investors entered into an amendment to the SPA (the “Amendment to SPA”), pursuant to which the Company agreed to issue amended and restated warrants (the “Amended and Restated Warrants”), with each Amended and Restated Warrant exercisable to purchase one share of the Common Stock at an exercise price of $0.001. The issuance of the Amended and Restated Warrants is subject to the approval of the Company’s shareholders.
On August 12, 2026, the Company issued 2,299,212 shares of the Common Stock to the Investors in reliance on the exemption from registration provided by Regulation S. The Amended and Restated Warrants have not been issued and will not be issued unless and until the requisite shareholder approval is obtained.
Private Placement in October 2025
On October 15, 2025, the Company entered into a securities purchase agreement (the “October 2025 SPA”) with certain investors, under which the Company agreed to sell an aggregate of 3,000,000 shares of Common Stock at a price of $0.70 per share, in a private placement to certain non-U.S. Persons under Regulation S, for an aggregate purchase price of approximately $2.1 million.
On October 20, 2025, the offering under the October 2025 SPA closed upon satisfaction of the closing conditions, and the shares were issued in reliance on the exemption from registration provided by Regulation S. The Company intends to use the net proceeds for working capital and general corporate purposes.
Private Placement in July 2026
On July 6, 2026, the Company entered into a securities purchase agreement (the “July 2026 SPA”) with certain investors, under which the Company agreed to sell an aggregate of 5,263,158 Units, each consisting of one share of Common Stock and three Warrants exercisable at an initial exercise price of $0.418 per share, in a private placement to certain non-U.S. Persons under Regulation S, at a price of $0.38 per Unit, for an aggregate purchase price of approximately $2,000,000.
On July 13, 2026, the offering under the July 2026 SPA closed upon satisfaction of the closing conditions, including accuracy of the parties’ representations and warranties. The Company issued an aggregate of 5,263,158 shares of Common Stock and 15,789,474 warrants. The shares were issued in reliance on the exemption from registration provided by Regulation S.
Private Placement in August 2026
On August 12, 2026, the Company entered into a securities purchase agreement (the “August 2026 SPA”) with certain investors, under which the Company agreed to sell an aggregate of 21,520,803 shares of Common Stock at a price of $1.394 per share, in a private placement to certain non-U.S. Persons under Regulation S, for an aggregate purchase price of approximately $30 million.
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Registered Direct Offering
On August 18, 2026, the Company entered into a securities purchase agreement (the “First Purchase Agreement”) with a non-affiliated institutional investor, pursuant to which the Company agreed to sell 340,000 shares of Common Stock and pre-funded warrants (the “Pre-Funded Warrants”) to purchase 260,000 shares of Common Stock in a registered direct offering (the “First Offering”), for gross proceeds of approximately $1.8 million, before placement-agent fees and offering expenses. The purchase price was $3.00 per share of Common Stock and $2.999 per Pre-Funded Warrant, with an exercise price of $0.001 per share. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until exercised in full.
On August 20, 2026, the Company entered into a securities purchase agreement (the “Second Purchase Agreement” and, together with the First Purchase Agreement, the “Purchase Agreements”) with certain non-affiliated institutional investors, pursuant to which the Company agreed to sell 451,250 shares of Common Stock and Pre-Funded Warrants to purchase up to 1,111,250 shares of Common Stock in a registered direct offering (the “Second Offering” and, together with the First Offering, the “Offerings”), for gross proceeds of approximately $5.0 million. The purchase price was $3.20 per share of Common Stock and $3.199 per Pre-Funded Warrant, with an exercise price of $0.001 per share. The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until exercised in full.
Results of Operations
Comparison of the Years Ended June 30, 2026 and 2025
The following table sets forth the results of our operations for the periods indicated:
| For the Years Ended June 30, | Variance | |||||||||||||||
| 2026 | 2025 | Amount | % | |||||||||||||
| Revenues | $ | 1,693,264 | $ | 1,813,193 | $ | (119,929 | ) | (6.6 | )% | |||||||
| Cost of revenues | (1,639,398 | ) | (1,761,794 | ) | (122,396 | ) | (6.9 | )% | ||||||||
| Gross profit | 53,866 | 51,399 | 2,467 | 4.8 | % | |||||||||||
| Selling expenses | (194,396 | ) | (245,077 | ) | (50,681 | ) | (20.7 | )% | ||||||||
| General and administrative expenses | (1,838,007 | ) | (2,518,079 | ) | (680,072 | ) | (27.0 | )% | ||||||||
| Operating loss | (1,978,537 | ) | (2,711,757 | ) | (733,220 | ) | (27.0 | )% | ||||||||
| Gain from disposal of subsidiaries | 157,658 | - | 157,658 | 100.0 | % | |||||||||||
| Interest income | 180 | 135,176 | (134,996 | ) | (99.9 | )% | ||||||||||
| Interest expenses | (306,367 | ) | (146,370 | ) | 159,997 | 109.3 | % | |||||||||
| Judgment debt expenses | - | (638,586 | ) | (638,586 | ) | (100.0 | )% | |||||||||
| Class action settlement expenses | (3,800,000 | ) | - | 3,800,000 | 100.0 | % | ||||||||||
| Other income, net | 16,435 | 77,236 | (60,801 | ) | (78.7 | )% | ||||||||||
| Net loss before income tax expenses | (5,910,631 | ) | (3,284,301 | ) | 2,626,330 | 80.0 | % | |||||||||
| Income tax expense | - | (30,230 | ) | (30,230 | ) | (100.0 | ) | |||||||||
| Net loss | $ | (5,910,631 | ) | $ | (3,314,531 | ) | $ | 2,596,100 | 78.3 | % | ||||||
Revenues from Freight Logistics Services
Our freight logistics service portfolio, covering cargo forwarding, customs brokerage, warehousing and a full suite of ancillary freight solutions, delivered annual revenue of $1.7 million for the 12 months ended June 30, 2026, down $0.1 million, or 6.6%, from the $1.8 million posted in the prior fiscal year.
The year-over-year contraction is almost entirely driven by our PRC operating entities, where shipping revenue fell by $0.1 million amid broader macroeconomic headwinds that suppressed overall freight transaction volume throughout the period.
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Cost of Revenues
Cost of revenues for our freight logistics services mainly consisted of freight costs to various freight carriers, cost of labor, warehouse rent and other overhead and sundry costs. Cost of revenues for our freight logistics services decreased by approximately $0.1 million, or 6.9%, to approximately $1.6 million for the year ended June 30, 2026 from approximately $1.8 million in fiscal year 2025. This decrease was almost entirely driven by a $0.1 million reduction in operating costs from our PRC subsidiaries, which is directly attributable to the lower business activity level amid broader macroeconomic headwinds.
For the full fiscal year ended June 30, 2026, our PRC operating entities delivered a gross margin of 3.2%, which marked a 40 basis point improvement from the 2.8% level posted in fiscal 2025. The uptick was largely the result of modest pricing optimization across our freight service lines, which lifted average revenue per shipment and delivered a small but steady margin expansion during the year.
Selling Expenses
Our selling expense line item is largely concentrated on sales team payroll, client hospitality, and sales-related travel costs. Our selling expenses decreased by approximately $50,681, or 20.7%, to $0.19 million for the year ended June 30, 2026 from $0.25 million for the same period of last year. The year-over-year decline directly tracked the contraction in overall freight volumes, as lower transaction activity reduced the need for in-person client visits, roadshows and other go-to-market selling investments throughout the period.
General and Administrative Expenses
Our general and administrative cost base is primarily made up of corporate team compensation, administrative travel, day-to-day operating office expenses, and mandatory regulatory filing fees, along with third-party professional services for audit, legal compliance and advisory. Our general and administrative expenses decreased by approximately $0.7 million, or 27.0%, to $1.8 million for the year ended June 30, 2026 from $2.5 million for the same period of last year. This material efficiency gain stems from a comprehensive corporate cost realignment program rolled out by management following the wind-down of our U.S. operating footprint, which delivered broad-based expense reductions across every G&A line item during the period.
Gain from disposal of subsidiaries
On August 6, 2025, the Company dissolved its subsidiary, Brilliant Warehouse Service Inc. On September 25, 2025, the Company entered into a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $2.7 million. Total gain from these disposals was $157,658 for the year ended June 30, 2026. No subsidiary divestiture activities were executed in the prior fiscal period.
Interest income
For fiscal year ended June 30, 2026, our total interest income fell to $180, representing a $0.1 million year-over-year decline from the prior fiscal year’s $0.1 million balance. The variance is fully explained by the fact that in fiscal 2025, all of our interest income was generated from a time deposit held at East West Bank, and we had no outstanding placements of this type during the 2026 fiscal period.
Interest expenses
Interest expenses increased by $0.16 million, or 109.3%, to $0.3 million for the year ended June 30, 2026 from $0.15 million for the same period of last year. The steep increase lines up directly with our expanded use of third-party debt facilities over the period: as of June 30, 2026, total outstanding third-party loans stood at $3.8 million, up from the $1.5 million balance as of June 30, 2025. All of these borrowings carry a consistent 12% weighted average annual interest rate, with weighted average remaining tenors of 1.83 years and 1.0 year at the two respective period ends.
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Judgment debt expenses
We recorded $0.6 million in judgment debt expenses for the year ended June 30, 2025, compared to nil in judgment debt expenses for the year ended June 30, 2026. Judgment debt expenses mainly related to a judgment passed in January 2025 against the Company and in favor of plaintiff. In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond. In the complaint, Zhikang Huang claimed that the Company failed to compensate him for the severance payment, his two months’ salary and the incentive-based bonus. On August 23, 2025, the Company and Huang entered a binding settlement agreement to fully resolve all claims, which required: Payment of $300,000 to Huang by August 25, 2025; Issuance of 90,000 freely tradable shares of the Company’s common stock to Huang by October 22, 2025; and Huang’s release of all claims against the Company, including the Virginia judgment. The Company completed the $300,000 cash payment on August 25, 2025, and delivered the 90,000 shares to Huang’s brokerage account on October 20, 2025, in accordance with the settlement terms. Also, there was a settlement expenses with John Levy of $150,000. As previously disclosed, on January 18, 2024, John F. Levy (“Levy”), a former member of the Board of the Company, filed a claim against the Company in the Court, Levy v. Singularity Future Technology Ltd. f/k/a Sino-Global Shipping America Ltd., 24-cv-0384-NG-JMW (the “Lawsuit”). On April 1, 2025, Levy and the Company entered into a confidential settlement and mutual release agreement to fully resolve the Lawsuit (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company paid a sum of one hundred and fifty thousand dollars ($150,000) to Blank Rome LLP, which was counsel to Levy. On April 17, 2025, the stipulation to dismiss the Lawsuit with prejudice was filed with the Court. On April 18, 2025, this Lawsuit was terminated.
No similar expenses were incurred in fiscal 2026.
Class action settlement expenses
We recorded approximately $3.8 million in class action settlement expenses for the fiscal year ended June 30, 2026, compared to nil in such expenses for the same period of last year. On June 22, 2026, the Company and the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), which amends and supersedes the Original Settlement Agreement.
Pursuant to the Amended Settlement Agreement and subject to approval by the Court, the Company agreed to settle the Class Action for an aggregate cash settlement amount of $5,800,000, which includes the $2,000,000 previously deposited into escrow. The Company agreed to deposit an additional $1,500,000 within 15 calendar days after execution of the Amended Settlement Agreement and receipt of the necessary wire transfer information, subject to a 15-calendar-day grace period for banking or wire-processing delays not caused by the Company and deposit the remaining $2,300,000 within 60 days after the initial payment. On July 10 and July 13, 2026, the Company wired $1 million and $0.5 million to PBG Concentration Account, respectively.
The Amended Settlement Agreement provides that the settlement will be subject to Court approval and, upon effectiveness, will result in the dismissal of the Class Action with prejudice and the mutual releases set forth therein, subject to customary exclusions.
If the Company fails to make any required payment when due, such failure will constitute a material breach, and the plaintiffs may terminate the settlement, declare the unpaid settlement balance immediately due and payable, and enforce the Confession of Judgment executed by the Company for the unpaid balance, together with any applicable interest, costs and attorneys’ fees.
The execution of the Amended Settlement Agreement does not constitute an admission by the Company of any wrongdoing, fault, or liability, and the Company does not admit any wrongdoing, fault, or liability.
The Company determined that resolving the Class Action now is in its best interests. Although the Company was prepared to continue defending its position, the Amended Settlement Agreement meaningfully reduces the uncertainty, distraction, and significant costs and exposure associated with protracted and complex class action litigation and further enables the Company to maintain its focus on executing its business strategy.
The ultimate outcome of the Class Action remains uncertain, with no guarantee that the Amended Settlement Agreement will receive Court approval. If the settlement is not finalized, the Company intends to continue defending itself in the pending class action and maintains that it has strong factual and legal defenses.
Pursuant to ASC 450-20-25-2, the Company reassessed the estimated settlement liability and recorded a $3.8 million accrued liability as of June 30, 2026, net of the $2.0 million previously funded into the segregated escrow account. The Company subsequently funded additional settlement payments of $1.0 million on July 10, 2026, $0.5 million on July 13, 2026 and $2.3 million on September 8, 2026.
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On June 22, 2026, the parties executed a revised binding Settlement Agreement. On September 10, 2026, the Court entered an order preliminarily approving the revised settlement, which is a standard procedural step in federal class action settlement review and does not represent final Court approval of the settlement. Under the two-stage statutory approval process under Federal Rule of Civil Procedure 23:
| 1. | At the preliminary approval stage, the Court has provisionally found the settlement terms to be fair, reasonable and adequate, preliminarily certified the settlement class, appointed lead class counsel and the claims administrator, and approved the formal notice plan for dissemination to all settlement class members. |
| 2. | Following distribution of the court-authorized notice, settlement class members will have a defined statutory period to submit valid requests for exclusion from the class or written objections to the proposed settlement. | |
| 3. | The Court has scheduled the final Fairness Hearing for January 25, 2027, at which it will consider all objections, verify the substantive fairness of the settlement and determine whether to issue a final order granting full approval of the settlement and dismissing the action with prejudice. |
The Preliminary Approval Order explicitly finds that the proposed settlement satisfies all requirements under Federal Rule of Civil Procedure 23(e)(2) and that final approval is likely to be granted following the Fairness Hearing. As a strictly legal matter, however, the settlement remains subject to satisfaction of all conditions precedent, including the entry of a final, non-appealable order of final approval. Pursuant to Paragraphs 15 and 16 of the Preliminary Approval Order, in the event the settlement does not receive final Court approval, or the settlement is otherwise terminated in accordance with its terms, the underlying class action litigation may be resumed upon motion of the lead plaintiffs. All proceedings against the Company in this action currently remain stayed in accordance with the preliminary approval order.
Other income, net
Other income, net, decreased by $60,801, or 78.7%, to other income of $16,435 for the year ended June 30, 2026 from other income of $77,236 for the year ended June 30, 2025. The decrease was mainly due to lower foreign exchange rate gains on our functional currency exposures during the reporting period, compared to the favorable FX movements we recorded in the prior fiscal year.
Net Loss
As a result of the foregoing, we had a net loss of $5.9 million and $3.3 million for the years ended June 30, 2026 and 2025, respectively.
Liquidity and Capital Resources
As of June 30, 2026, the Company held total cash of $57,275 and reported a positive working capital position of approximately $10.5 million. The majority of our $22.4 million in total current assets as of June 30, 2026 was composed of $19.2 million in advances to our agricultural commodity suppliers. Under the terms of our existing supply agreements, when these advance-funded procurement transactions are fully consummated and the corresponding inventory is delivered, monetized and collected, our operating cash position and overall near-term liquidity profile will be materially strengthened.
The Company’s near-term liquidity requirements are primarily driven by core operating activities, including payroll and operating expense disbursements, seasonal fluctuations in accounts receivable collection cycles tied to our steel logistics and agricultural commodity trading segments, routine vendor payable settlements, and other day-to-day working capital demands. The Company’s finance team actively monitors its overall liquidity profile on an ongoing basis, leveraging a structured tracking framework that includes real-time cash position visibility, rolling 12-month operating cash flow forecasts, and trend analysis of consolidated working capital levels across all U.S. and China operating subsidiaries, to ensure sufficient funding is maintained for all existing operational commitments.
Since inception, the Company has funded its ongoing operations and strategic investments through three core channels: cash generated from recurring operating activities, secured and unsecured borrowings from third-parties, and targeted capital raising transactions conducted in the public and private capital markets.
Advances to Suppliers
As described in Note 5 to the consolidated financial statements, the Company recorded advances to suppliers of approximately $19.2 million as of June 30, 2026, representing a significant portion of the Company’s total assets. The advances were unsecured and related to purchases of agricultural commodities. Subsequent to the June 30, 2026 balance sheet date, the Company executed formal refund agreements with all of the aforementioned commodity trading suppliers, and collected total refunds of approximately $19.2 million from these counterparties during September 2026. The Company is currently evaluating whether to pursue additional opportunities in the commodity trading business.
Subsequent Equity Financing Transactions Completed After Fiscal Year-End
Following the end of the fiscal period closed June 30, 2026, the Company completed four separate equity financing transactions, structured across two distinct regulatory regimes under the Securities Act of 1933, as amended, to strengthen its consolidated balance sheet and materially expand its available operating capital base:
| 1. | July 6, 2026 Regulation S Private Placement: The Company entered into a securities purchase agreement with accredited offshore non-U.S. Persons for the sale of an aggregate of 5,263,158 units. Each unit comprises one share of the Company’s no-par value common stock and three separate warrants, with each warrant carrying an initial exercise price of $0.418 per share of common stock. The offering was priced at $0.38 per unit, generating aggregate gross proceeds of approximately $2.0 million. |
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| 2. | Follow-on Regulation S Private Placement, August 12, 2026: The Company entered into a second securities purchase agreement with a distinct group of offshore investors for the sale of an aggregate of 2,299,212 shares (post-1:14-share consolidation) of the Company’s no-par value common stock, priced at $13.048 per share (post-1:14-share consolidation). This offering generated aggregate gross proceeds of approximately $30 million. |
| 3. | August 18, 2026 Registered Direct Offering (First Tranche): The Company entered into the First Purchase Agreement with non-affiliated institutional investors pursuant to which the Company agreed to sell 340,000 shares of its no-par value common stock and pre-funded warrants to purchase up to 260,000 additional shares of common stock. The offering generated aggregate gross proceeds of approximately $1.8 million before placement-agent fees and offering expenses. The purchase price for each share of common stock was $3.00, while each pre-funded warrant was priced at $2.999, with a nominal exercise price of $0.001 per share. These pre-funded warrants are immediately exercisable, and will remain exercisable at any time until the entire warrant balance is exercised in full. |
| 4. | August 20, 2026 Registered Direct Offering (Second Tranche): The Company entered into the Second Purchase Agreement with a separate cohort of non-affiliated institutional investors pursuant to which the Company agreed to sell 451,250 shares of common stock and pre-funded warrants to purchase up to 1,111,250 additional shares of common stock. The offering generated aggregate gross proceeds of approximately $5.0 million before offering-related costs. The purchase price for each share of common stock was $3.20, while each pre-funded warrant was priced at $3.199, with a nominal exercise price of $0.001 per share. These pre-funded warrants are also immediately exercisable, and will remain exercisable at any time until the entire warrant balance is settled in full. |
With the combination of its existing positive working capital base as of June 30, 2026, forecasted operating cash flows from core logistics and commodity trading operations, full recovery of the $19.2 million supplier advances in September 2026, remaining available capacity under its existing credit facilities, committed financial support from key shareholders, and the aggregate net proceeds received from these four completed post-period equity financing transactions (total gross proceeds of ~$38.8 million), the Company believes it has more than sufficient resources to meet all working capital, operating expense, and planned strategic investment obligations for the 12-month period following the consolidated financial statement issuance date. The Company will continue to evaluate selective additional debt and equity financing opportunities from time to time, as needed, to support targeted business expansion, new market entry, and high-return strategic acquisition opportunities aligned with its integrated logistics growth roadmap.
Cash Flows and Working Capital
As of June 30, 2026, we had $57,275 in cash and approximately $2.1 million in restricted cash due to the $2,000,000 settlement cash payment to the Escrow Account set forth in the Settlement Agreement in the class action lawsuit and the garnishment process initiated by Zhikang Huang, as discussed in the Recent Developments section.
The following table sets forth a summary of our cash flows for the periods as indicated:
| For the Years Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (21,628,987 | ) | $ | (2,692,682 | ) | ||
| Net cash provided by investing activities | 108,331 | - | ||||||
| Net cash provided by financing activities | 6,016,966 | 2,607,261 | ||||||
| Effect of changes of foreign exchange rate on cash and restricted cash | 3,024 | 1,258 | ||||||
| Cash and restricted cash, beginning of year | 17,651,896 | 17,736,059 | ||||||
| Cash and restricted cash, end of year | $ | 2,151,230 | $ | 17,651,896 | ||||
Operating Activities
Our net cash used in operating activities was approximately $21.6 million for the year ended June 30, 2026. The operating cash outflow for the year ended June 30, 2026 was primarily attributable to our net loss of approximately $5.9 million and $19.2 million in advances to suppliers under purchase agreements for agricultural commodities related to targeted trade opportunities identified by the Company. These outflows were partially offset by the non-cash accrual of the $3.8 million class action settlement liability recorded in accordance with ASC 450 as of June 30, 2026.
Our net cash used in operating activities was approximately $2.7 million for the year ended June 30, 2025. The operating cash outflow for the year ended June 30, 2025 was primarily attributable to our net loss of approximately $3.3 million.
Investing Activities
Net cash provided by investing activities was $0.1 million for the year ended June 30, 2026 due to proceeds from disposal of subsidiaries, net of cash.
Net cash provided by investing activities was nil for the year ended June 30, 2025.
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Financing Activities
Net cash provided by financing activities for the year ended June 30, 2026 was approximately $6.0 million due to approximately $3.3 million loans from third parties, approximately $2.1 million proceeds from issuance of common shares, and approximately $0.6 million advance from a related party.
Net cash provided by financing activities for the year ended June 30, 2025 was proceeds of $2.1 million from third parties loans and proceeds of $1.1 million from issuance of 50,000 (post-1:14-share consolidation) common shares, as partially offset by repayment of $0.6 million third parties’ loans.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with U.S. generally accepted accounting principles and the Company’s discussion and analysis of its financial condition and operating results require the Company’s management to make judgments, assumptions and estimates that affect the amounts reported. Note 2, “Summary of Significant Accounting Policies” of the notes to the financial statements included elsewhere in this Report describe the significant accounting policies and methods used in the preparation of the Company’s consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates since the date of this Report.
Off-Balance Sheet Arrangements
None.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Not applicable.
Item 8. Financial Statements and Supplementary Data.
The Company’s financial statements and the related notes, together with the report of Audit Alliance LLP, are set forth following the signature pages of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
The Company carried out an evaluation, under the supervision of and with the participation of its management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of June 30, 2026. Based on the foregoing evaluation, the Chief Executive Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms due to effective internal controls over financial reporting as more fully described below.
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Management’s Annual Report on Internal Control over Financial Reporting
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended. The Company’s 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. The Company’s internal control over financial reporting includes those policies and procedures that:
| ● | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; |
| ● | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with the authorization of its management and directors; and |
| ● | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. |
Management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria set forth in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and confirmed that the Company’s internal control over financial reporting as of June 30, 2026 is effective and that no material weakness in the Company’s internal control over financial reporting has been identified by the management as of June 30, 2026. The following material weaknesses identified for the year ended and as of June 30, 2024 were individually rectified as of September 5, 2025.
| Material weaknesses identified as of June 30, 2024 | Rectification actions taken | |||
| ● | Lack of segregation of duties for accounting personnel who prepared and reviewed the journal entries in some of the subsidiaries within the consolidation, lack of supervision, coordination and communication of financial information between different entities within the Group; | The Company has implemented segregation of incompatible duties. The preparation of journal entries is handled by the financial export, while review is conducted by the CFO. Furthermore, the CFO is responsible for overseeing, coordinating, and communicating financial information among different entities within the group. | ||
| ● | Lack of a full time U.S. GAAP personnel in the accounting department to monitor the recording of the transactions which led to error in revenue recognition in previously issued financial statements; | The Company has replaced part of its management team, and the current management is familiar with U.S. GAAP. Additionally, the Company has provided training on U.S. GAAP to the current management team. | ||
| ● | Lack of resources with technical competency to address, review and record non-routine or complex transactions under U.S. GAAP; | The Company has revised its control procedures for significant unusual transactions (“SUT”). For SUT, dedicated processes are in place to identify, document, and review the related accounting treatments. | ||
| ● | Lack of management control reviews of the budget against actual with analysis of the variance with a precision that can be explained through the analysis of the accounts; | The Company has revised its expense budgeting process and established a budget management system. Under the new system, quarterly reviews will be conducted to compare budgets against actual results. Account analysis will be used to explain the reasons for significant variances between budgeted and actual figures. | ||
| ● | Lack of proper procedures in identifying and recording related party transactions which led to restatement of previously issued financial statements (See Note 1 of the accompanying consolidated financial statement footnotes); | The Company has revised its related-party control procedures, establishing clear provisions for the identification of related parties, the formation and approval of related-party lists, the identification of related-party transactions, and the approval and disclosure of related-party transactions. | ||
| ● | Lack of proper procedures to maintain supporting documents for accounting record; and | The Company has revised its accounting bookkeeping procedures, establishing requirements for approval, and retention of supporting documents corresponding to accounting records. The CFO will be responsible for reviewing whether the supporting documents in accounting records comply with the Company’s latest regulations. | ||
| ● | Lack of proper oversight for the Company’s cash disbursement process that led to misuse of the Company funds by its former executive. | The Company dismissed the executive who misused funds and replaced the corresponding executive. Additionally, the Company revised its cash disbursement procedures, implementing strict segregation of duties for incompatible roles such as applicants, approvers, and cashiers involved in cash disbursements. |
Changes in Internal Control over Financial Reporting
None.
Item 9B. Other Information.
During the quarter ended
June 30, 2026,
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
None.
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
| Name | Age | Positions Held | ||
| Jia Yang | 32 | Chief Executive Officer, Chairlady of the Board | ||
| Chee Jiong Ng | 55 | Chief Financial Officer | ||
| Jinhao Pang | 27 | Director, Manager of the Technology Department | ||
| Xu Zhao | 40 | Director | ||
| Zhongliang Xie | 55 | Director | ||
| Yangyang Xu | 41 | Director |
Jia Yang
Ms. Jia Yang has been our Chief Executive Officer and Chairwomen of the Board since November 2024. Before that, she has served as a Vice President of the Company and a Director of the Board since August 2024. Ms. Yang was the Chief Operating Officer at Beijing Angda Yingchuang Innovative Materials Technology Co., Ltd. since January 2023. Prior to that, she was an Executive Officer at Zhongjian Tianxia Beijing Investment Management Co., Ltd. from October 2021 to December 2022. From November 2019 to November 2021, Ms. Yang was the Executive Assistant to hotel manager/marketing executive at The Ritz-Carlton Xi’an. Ms. Yang graduated from Xi’an International Studies University in 2016 with a major in English education.
Chee Jiong Ng
Mr. Chee Jiong Ng has been our Chief Financial Officer since February 2023. Mr. Ng worked as the CFO of Meta Data Limited from November 2021 to July 2024. From March 2021 to October 2021, Mr. Ng was a Financial Advisor for two Nasdaq listed companies, responsible for annual and semi-annual reporting obligations and financing activities. From December 2017 to February 2021, Mr. Ng was the CFO of Dunxin Financial Holdings Limited, now known as Eason Technology Limited (NYSE: DXF). Mr. Ng received a Bachelor’s Degree in economics from the University of Sydney, Australia in 1993, and a Master’s Degree in commerce from the University of New South Wales, Australia in 1995. Mr. Ng is also a Certified Public Accountant of Australian Society of Certified Public Accountants since 1999.
Jinhao Pang
Mr. Jinhao Pang has been our Director and Manager of the Technology Department since November 2024. He worked as a software engineer with Yisa Technology Co., Ltd. in Qingdao, China from June 2021 to August 2022, where he led the design and development of a module for a training system, which allowed companies to update training content dynamically and enables users to engage with the latest material through interactive learning and problem-solving. Mr. Pang received a M.S. in Computer Science from New York University in May 2024, and a B.S. in Information and Computing Science from Xi’an Jiaotong-Liverpool University in July 2022.
Xu Zhao
Mr. Xu Zhao has been a Director since September 2023. Mr. Zhao has worked as the President of Shijiazhuang Juminhui Technology Co., Ltd., a Chinese trading company since March 2023. He was the Regional Manager for Hebei Province of Jiangsu Hengrui Pharmaceuticals Co., Ltd., a Chinese pharmaceutical company from September 2009 to July 2022. Mr. Zhao received his Bachelor’s Degree in marketing from Nankai University Binhai College in 2009.
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Zhongliang Xie
Mr. Zhongliang Xie has been a Director since July 2023. He has served as the General Manager of Zhongxing Cai Guanghua Certified Public Accountants, Shaanxi Branch since January 2019. He has also served as the Vice President of Shanxi NEEQ Federation since January 2017, and an Internal Committee member of Shanxi Provincial Equity Exchange Center since August 2021. From April 2008 to December 2018, he worked as the General Manager of Beijing Xinghua Certified Public Accountants, Xi’an Branch. From May 2005 to April 2008, he was the Controller of Zhongyi Far East Import& Export Co., Ltd. Mr. Xie graduated from Bao Ji University majoring in Enterprise Management. He is a Certified Public Accountant, Certified Public Valuer and Registered Cost Engineer in China.
Yangyang Xu
Ms. Yangyang Xu has served as an Director of the Company since October 2023. Ms. Xu was a Senior Customer Manager at Beijing Sensetime Technology Development Co., Ltd., a leading AI software company focused on innovating for a better AI-empowered future, from May 2018. Prior to that, from February 2011 to April 2018, she served as the General Manager of Communications at Bus Online Technology Co., Ltd., a company primarily involved in the manufacture and distribution of electronic components. Before that, Ms. Xu held managerial positions with Beijing Sumavision Technology Co., Ltd, and Beijing Gallop Horse Film and Culture Development Group. Ms. Xu received a Bachelor’s Degree in management from Harbin University of Commerce in 2006.
Involvement in Certain Legal Proceedings
To the best of our knowledge, none of our current directors or executive officer has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, or has been a party to any judicial or administrative proceeding during the past ten years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities or commodities laws, any laws respecting financial institutions or insurance companies, any law or regulation prohibiting mail or wire fraud in connection with any business entity or been subject to any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization, except for matters that were dismissed without sanction or settlement.
Board Diversity Matrix
Pursuant to the Nasdaq’s Board Diversity Rules, below is the Company’s board diversity matrix outlining diversity statistics regarding our Board.
| Board Diversity Matrix as of June 30, 2026 | ||||||||||||||
| Total Number of Directors | 5 | |||||||||||||
| Female | Male | Non-Binary | Did Not Disclose Gender |
|||||||||||
| Part I: Gender Identity | ||||||||||||||
| Directors | 2 | 3 | ||||||||||||
| Part II: Demographic Background | ||||||||||||||
| Asian | 5 | |||||||||||||
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than ten percent of our common stock, file reports of ownership and changes in ownership with the SEC. Executive officers, directors and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file. Based solely on our review of the copies of the forms received by us and written representations from certain reporting persons that they have complied with the relevant filing requirements, we believe that, during the year ended June 30, 2026, all of our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements.
Code of Ethics
We have adopted a code of business conduct and ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. The code of business conduct and ethics is available at our website at www.singularity.us. We expect that any amendments to the code, or any waivers of its requirement, will be disclosed on our website.
Policy Prohibiting Insider Trading and Related Procedures
We have
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Committees of the Board of Directors
Our Board has three standing committees: an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee. The composition and function of each committee are described below.
Audit Committee
The Audit Committee consists of Zhongliang Xie, Yangyang Xu and Xu Zhao, who are each independent. Mr. Xie chairs the Audit Committee and qualifies as the audit committee financial expert. Our Audit Committee has adopted a written charter, and a copy of this charter is posted on the Company’s website, at www.singularity.us. Under such charter, our Audit Committee is authorized to:
| ● | prepare and publish an annual Committee report as required by the SEC to be included in the Company’s annual proxy statement; | |
| ● | discuss with management and the independent auditor the annual audited financial statements and quarterly financial statements, including the Company’s disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other matters required to be reviewed under applicable legal, regulatory, professional or NASDAQ requirements; | |
| ● | discuss with management and the independent auditor, as appropriate, any audit problems or difficulties and management’s response; |
| ● | discuss with management the Company’s risk assessment and risk management policies, including the Company’s major financial risk exposure and steps taken by management to monitor and mitigate such exposure; | |
| ● | review the Company’s financial reporting and accounting standards and principles, significant changes in such standards or principles or in their application and the key accounting decisions affecting the Company’s financial statements, including alternatives to, and the rationale for, the decisions made; | |
| ● | review and approve the internal corporate audit staff functions, including: (i) purpose, authority and organizational reporting lines; (ii) annual audit plans, budget and staffing; and (iii) concurrence in the appointment, termination, compensation and rotation of the audit staff; | |
| ● | review, with such members of management as the Committee deems appropriate, the Company’s internal system of audit and financial controls and the results of internal audits; | |
| ● | obtain and review at least annually a formal written report from the independent auditor delineating: the auditing firms internal quality-control procedures; any material issues raised within the preceding five years by the auditing firms internal quality-control reviews, by peer reviews of the firm, or by any governmental or other inquiry or investigation relating to any audit conducted by the firm. The Committee will also review steps taken by the auditing firm to address any findings in any of the foregoing reviews. Also, in order to assess auditor independence, the Committee will review at least annually all relationships between the independent auditor and the Company; | |
| ● | set policies for the hiring of employees or former employees of the Company’s independent auditor and, at least annually, evaluate the qualifications, performance and independence of the independent auditors, including an evaluation of the lead audit partner; and to assure the regular rotation of the lead audit partner at our independent auditors and consider regular rotation of the accounting firm serving as our independent auditors; | |
| ● | review and investigate any matters pertaining to the integrity of management, including conflicts of interest, or adherence to standards of business conduct as required in the policies of the Company. This should include regular reviews of the compliance processes in general. In connection with these reviews, the Committee will meet, as deemed appropriate, with the general counsel and other Company officers or employees; | |
| ● | retain such outside counsel, experts and other advisors as the Committee may deem appropriate in its sole discretion; | |
| ● | review at least annually the adequacy of this charter and recommend any proposed changes to the Board for approval and assume additional responsibilities and take additional actions as may be delegated to it by the Board; | |
| ● | establish procedures for the receipt, retention and treatment of complaints on accounting, internal accounting controls or auditing matters, as well as for confidential, anonymous submissions by Company employees of concerns regarding questionable accounting or auditing matters; | |
| ● | conduct any investigation appropriate to fulfilling its responsibilities contained in this charter, communicate directly with the independent audit firm and any employee of the Company, and conduct its activities in accordance with the policies and principles contained in the Company’s Corporate Governance Principles. |
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Compensation Committee
The Compensation Committee is composed of three independent directors including Zhongliang Xie, Yangyang Xu and Xu Zhao. Ms. Yangyang Xu serves as the chairwoman of the Compensation Committee. Our Compensation Committee has adopted a written charter, and a copy of this charter is posted on our website, at www.singularity.us. Our Compensation Committee is authorized to:
| ● | review and determine the compensation arrangements for management; | |
| ● | establish and review general compensation policies with the objective to attract and retain superior talent, to reward individual performance and to achieve our financial goals; | |
| ● | review and determine our stock incentive and purchase plans; | |
| ● | oversee the evaluation of the board of directors and management; and | |
| ● | review the independence of any compensation advisers. |
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee is composed of three independent directors including Zhongliang Xie, Yangyang Xu and Xu Zhao. Xu Zhao serves as the chair of the Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee has adopted a written charter, and a copy of this charter is posted on our website, at www.singularity.us. The functions of our Governance Committee, among other things, include:
| ● | identifying individuals qualified to become board members and recommending directors; | |
| ● | nominating board members for committee membership; | |
| ● | developing and recommending to our board corporate governance guidelines; | |
| ● | reviewing and determining the compensation arrangements for directors; and | |
| ● | overseeing the evaluation of our Board and its committees and management. |
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee, at any time has at any time, been one of our officers or employees, or, during the last two fiscal years, a participant in a related party transaction that is required to be disclosed. None of our executive officers currently serves, or in the past year has served, as a member of our Board or Compensation Committee of any entity that has one or more executive officers on our Board or Compensation Committee.
30
Item 11. Executive Compensation.
The following table shows the annual compensation paid by us to our executives for the years ended June 30, 2026 and 2025.
| Securities | All | ||||||||||||||||||||||
| Fiscal | based | other | |||||||||||||||||||||
| Name | Year | Salary | Bonus | Compensation | compensation | Total | |||||||||||||||||
| Jia Yang | 2026 | $ | 66,000 | - | - | - | $ | 66,000 | |||||||||||||||
| Chief Executive Officer(1) | 2025 | $ | 59,613 | - | - | - | $ | 59,613 | |||||||||||||||
| Chee Jiong Ng | 2026 | $ | 84,000 | - | - | - | $ | 84,000 | |||||||||||||||
| Chief Financial Officer(2) | 2025 | $ | 30,000 | - | - | - | $ | 30,000 | |||||||||||||||
| Jianhao Pang | 2026 | $ | 60,000 | - | - | - | $ | 60,000 | |||||||||||||||
| Director, Manager of Technology Department(3) | 2025 | $ | 5,000 | - | - | - | $ | 5,000 | |||||||||||||||
| (1) | According to the Employment Agreement dated August 6, 2024, Ms. Yang’s compensation consists of an annual base salary of $66,000 in cash and a discretionary annual bonus, effective August 6, 2024. Ms. Yang was appointed as the CEO of the Company on November 18, 2024. |
| (2) | According to the Employment Agreement dated February 21, 2025, Mr. Ng’s compensation consists of an annual base salary of $84,000 in cash and a discretionary annual bonus, effective February 21, 2025. |
| (3) | According to the Employment Agreement dated November 18, 2024, Mr. Pang’s compensation consists of an annual base salary of $60,000 in cash and a discretionary annual bonus, commencing from June 1, 2025. |
Outstanding Equity Awards of Named Executive Officers at Fiscal Year-End
None.
Director Compensation
The table below sets forth the compensation received by our directors for the year ended June 30, 2026.
| Fees earned or | Stock | Option | All other | |||||||||||||||||
| paid in cash | awards | awards | compensation | Total | ||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ||||||||||||||||
| Zhongliang Xie | 50,000 | - | - | - | 50,000 | |||||||||||||||
| Xu Zhao | 50,000 | - | - | - | 50,000 | |||||||||||||||
| Yangyang Xu | 50,000 | - | - | - | 50,000 | |||||||||||||||
| (1) | This table does not include Ms Jia Yang, our Chief Executive Officer and director whose compensation is fully reflected in the Summary Compensation Table. |
31
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth certain information regarding our shares of common stock beneficially owned as of the date hereof for (i) each named executive officer and director, and (ii) all executive officers and directors as a group. As of the date hereof, there was no stockholder known to be the beneficial owner of 5% or more of our outstanding shares of common stock. A person is considered to beneficially own any shares: (i) over which such person, directly or indirectly, exercises sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within 60 days through an exercise of stock options or warrants. Unless otherwise indicated, voting and investment power relating to the shares shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the owner’s spouse or children. In the table below, percentage ownership is based on 5,403,788 shares of our common stock issued and outstanding as of the date hereof.
| Name and Address of Beneficial Owner (1) | Number of Shares Beneficially Owned |
Approximate Percentage of Outstanding Shares of Common Stock |
||||||
| Jia Yang | - | - | ||||||
| Chee Jiong Ng | - | - | ||||||
| Jianhao Pang | - | - | ||||||
| Yangyang Xu | - | - | ||||||
| Zhongliang Xie | - | - | ||||||
| Xu Zhao | - | - | ||||||
| All directors and executive officers as a group (Six individuals) | - | - | % | |||||
| (1) | The individual’s address is c/o Singularity Future Technology, Ltd., 48 Wall Street, Suite 1100, New York, NY 10005. |
Securities Authorized for Issuance to Our Officers, Directors, Employees and Consultants under Equity Compensation Plans
The table below reflects, as of the date hereof, the number of shares of common stock authorized by our stockholders to be issued (directly or by way of issuance of securities exercisable for or convertible into) as incentive compensation to our officers, directors, employees and consultants.
| Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) |
Weighted- average exercise price of outstanding options, warrants and rights (b) |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) |
|||||||||
| Equity compensation plans under the 2008 Incentive Plan approved by security holders | 143 | $ | 141 | 3,413 | (1) | |||||||
| Equity compensation plans under the 2014 Incentive Plan approved by security holders | - | - | 7,857 | (1) | ||||||||
| Equity compensation plans under the 2021 Incentive Plan approved by security holders | - | - | 700,000 | (1) | ||||||||
| Equity compensation plans not approved by security holders | - | - | - | |||||||||
| (1) |
Pursuant to our 2008 Incentive Plan, we are authorized to issue options to purchase 60,581 shares of our common stock. The 2,000 outstanding options disclosed in the above table are taken from the 2008 Incentive Plan. Pursuant to our 2014 Incentive Plan, we are authorized to issue, in the aggregate, 2,000,000 shares of common stock or other securities convertible or exercisable for common stock. We granted options to purchase an aggregate of 30,000 shares of common stock under the 2014 Incentive Plan in July 2016, among which, options to purchase 15,000 shares of common stock have been exercised. In addition, we have issued, in the aggregate, 120,000 shares of common stock to consultants to our Company in 2014, 132,000 shares of common stock to our officers and directors in 2016, 132,000 shares of common stock to our officers and directors in 2018, 26,000 to three employees in 2017 and 316,000 shares of common stock to employees in 2018. In September 2021, the board granted 1,020,000 shares of common stock to our officers and directors under the 2014 Incentive Plan.
Accordingly, we may issue options to purchase 47,781 (or 3,413 after 1 to 14 reverse share split) shares under the 2008 Incentive Plan, and we may issue 110,000 (or 7,857 after 1 to 14 reverse share split) and 9,800,000 (or 700,000 after 1 to 14 reverse share split) shares of common stock or other securities convertible or exercisable for common stock under the 2014 Incentive Plan and the 2021 Incentive plan respectively. Pursuant to certain agreements, the 600,000 shares issued to Lei Cao under the 2014 Incentive Plan, and the 300,000 and 100,000 shares issued to Yang Jie and Jing Shan, respectively, under the 2021 Incentive Plan, have been canceled. |
32
Item 13. Certain Relationships and Related Transactions, and Director Independence.
Related Transactions
Set forth below are transactions with related persons for the years ended June 30, 2026 and 2025.
Due from Related Party
As of June 30, 2026 and 2025, the outstanding amounts due from related parties consist of the following:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Shanghai Baoyin Industrial Co., Ltd (1) | $ | 1,145,307 | $ | 1,084,793 | ||||
| Zhejiang Jinbang Fuel Energy Co., Ltd (2) | 410,168 | 388,496 | ||||||
| Less: impairment for credit losses | (1,555,475 | ) | (1,473,289 | ) | ||||
| Total | - | - | ||||||
Movements of allowance for credit losses were as follows:
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Beginning balance | $ | 1,473,289 | $ | 2,122,376 | ||||
| Less: Write-off | - | (675,063 | ) | |||||
| Exchange rate effect | 82,186 | 25,976 | ||||||
| Ending balance | $ | 1,555,475 | $ | 1,473,289 | ||||
| (1) | As of June 30, 2026, and 2025, the Company advanced $1,145,307 and $1,084,793 to Shanghai Baoyin Industrial Co., Ltd. (“Shanghai Baoyin”) which is 30% owned by Qinggang Wang, CEO and legal representative of Trans Pacific Logistic Shanghai Ltd. The advance is non-interest bearing and due on demand. The Company provided full credit losses for the balance of the receivable. The amount due from Shanghai Baoyin changed was as a result of changes in exchange rates. |
| (2) | As of June 30, 2026, and 2025, the Company advanced $410,168 and $388,496 to Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. The advance is non-interest bearing. The Company provided full credit losses for the balance of the receivable. The amount due from Zhejiang Jinbang changed was as a result of changes in exchange rates. |
Due to related parties
As of June 30, 2026 and 2025, the Company owed $27,845 and $26,373 to Qinggang Wang, CEO and legal representative of Trans Pacific Shanghai, respectively. These payments were made on behalf of the Company for the daily business operational activities.
As of June 30, 2026 and 2025, the Company owed $1,146,026 and $497,858 Zhejiang Jinbang Fuel Energy Co., Ltd (“Zhejiang Jinbang”) which is 30% owned by Mr. Wang Qinggang, CEO and legal representative of Trans Pacific Shanghai. These payments were made on behalf of the Company for the daily business operational activities.
The balance of due to related parties was interest-free, unsecured, and due upon demand.
Director Independence
Our Board has determined that each of Zhongliang Xie, Yangyang Xu and Xu Zhao are an “independent director” as defined by the applicable SEC rules and Nasdaq Listing Rules.
33
Item 14. Principal Accountant Fees and Services.
Set forth below are the aggregate fees billed by Audit Alliance LLP, our independent registered accounting firm, for the fiscal years ended June 30, 2026 and 2025 for services rendered by them as our independent registered accounting firm for such years.
| Fiscal 2025 |
Fiscal 2026 |
|||||||
| Audit fees | $ | 280,000 | $ | 210,000 | ||||
| Audit-related fees | - | - | ||||||
| Total Audit & Audit-related fees | $ | 280,000 | $ | 210,000 | ||||
| Tax fees | - | - | ||||||
| All other fees | - | - | ||||||
| Total fees | $ | 280,000 | $ | 210,000 | ||||
Audit fees consist of fees billed for services rendered for the audit of our financial statements and review of our financial statements included in our quarterly reports on Form 10-Q and services provided in connection with other statutory or regulatory filings.
Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported under Audit fees. No such fees were billed in fiscal 2025 or 2026.
Tax fees consist of fees billed for professional services related to the preparation of our U.S. federal and state income tax returns and tax advice. No such fees were billed by Audit Alliance LLP in fiscal 2025 or 2026. The Audit Committee pre-approved all Audit-related fees. After considering the provision of services encompassed within the above disclosures about fees, the Audit Committee has determined that the provision of such services is compatible with maintaining Audit Alliance’s independence.
The Audit Committee’s policy is to pre-approve all audit and non-audit related services, tax services and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent registered public accounting firm and management are required to periodically report to the full Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval and the fees for the services performed to date.
34
Item 15. Exhibits, Financial Statement Schedules.
| Number | Exhibit | |
| 3.1 | Articles of Incorporation of Singularity Future Technology, Ltd., incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 27, 2014. | |
| 3.2 | Certificate of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd., incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on January 5, 2022. | |
| 3.3 | Articles of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd., incorporated herein by reference to exhibit 3.2 to the Company’s Current Report on Form 8-K filed on January 5, 2022. | |
| 3.4 | Articles of Amendment to the Amended and Restated Articles of Incorporation of Singularity Future Technology Ltd., dated July 22, 2026.* | |
| 3.5 | Bylaws of Singularity Future Technology, Ltd., incorporated by reference to the Company’s Registration Statement on Form S-1, Registration Nos. 333-150858 and 333-148611. | |
| 4.1 | Specimen Certificate for Common Stock, incorporated by reference to the Company’s Registration Statement on Form S-1, Registration Nos. 333-150858 and 333-148611. | |
| 10.1 | Employment Agreement by and between Ms. Jia Yang and the Company, dated August 6, 2024, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 20, 2024. | |
| 10.2 | Form of Employment Agreement by and between the Company and Chee Jiong Ng, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 26, 2025. | |
| 10.3 | Employment Agreement by and between the Company and Jinhao Pang dated November 18, 2024, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 20, 2024. | |
| 10.4 | Director Offer Letter to Jinhao Pang, dated November 18, 2024, incorporated by reference to exhibit 10.3 to the Company’s Current Report on Form 8-K filed on November 20, 2024. | |
| 10.5 | 2025 Stock Incentive Plan* | |
| 10.6 | 2026 Stock Incentive Plan* | |
| 10.7 | Form of Amendment to Securities Purchase Agreement, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on August 18, 2026 | |
| 10.8 | Form of the Amended and Restated Warrant, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on August 18, 2026 | |
| 10.9 | Form of the Warrant, incorporated by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on July 13, 2026 | |
| 10.10 | Form of Securities Purchase Agreement, incorporated by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on August 17, 2026 | |
| 14.1 | Code of Ethics of the Company, incorporated by reference to exhibit to the Company’s Annual Report on Form 10-KSB filed on September 29, 2008 (File No. 001-34024). | |
| 21.1 | List of subsidiaries of the Company* | |
| 23.1 | Consent of Audit Alliance LLP* | |
| 31 | Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14 under the Securities Exchange Act of 1934** | |
| 32 | Certifications of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | |
| 97.1 | Clawback Policy, incorporated by reference to exhibit 97.1 to the Company’s Annual Report on Form 10-K filed on October 15, 2024. | |
| 101.INS | Inline XBRL Instance Document* | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document* | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document* | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document* | |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document* | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document* | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)* |
| * | Filed herewith. |
| ** | Furnished herewith. |
Item 16. Form 10-K Summary.
We have elected not to include a summary pursuant to this Item 16.
35
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SINGULARITY FUTURE TECHNOLOGY, LTD. | ||
| September 29, 2026 | By: | /s/ Jia Yang |
| Jia Yang | ||
| Chief Executive Officer | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| Signatures | Title | Date | ||
| /s/ Jia Yang | Director, Chairlady of the Board and Chief Executive Officer | September 29, 2026 | ||
| Jia Yang | (Principal Executive Officer) | |||
| /s/ Yangyang Xu | Director | September 29, 2026 | ||
| Yangyang Xu | ||||
| /s/ Zhongliang Xie | Director | September 29, 2026 | ||
| Zhongliang Xie | ||||
| /s/ Jinhao Pang | Director, Manager of the Technology Department | September 29, 2026 | ||
| Jinhao Pang | ||||
| /s/ Xu Zhao | Director | September 29, 2026 | ||
| Xu Zhao | ||||
| /s/ Chee Jiong Ng | Chief Financial Officer | September 29, 2026 | ||
| Chee Jiong Ng | (Principal Financial and Accounting Officer) |
36
Index to Financial Statements
| Pages | ||
| Report of Independent Registered Public Accounting Firm (PCAOB ID: |
F-2 | |
| Consolidated balance sheets as of June 30, 2026 and 2025 | F-5 | |
| Consolidated statements of operations and comprehensive loss for the years ended June 30, 2026 and 2025 | F-6 | |
| Consolidated statements of shareholders’ equity | F-7 | |
| Consolidated statements of cash flows for the years ended June 30, 2026 and 2025 | F-8 | |
| Notes to consolidated financial statements | F-9 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Singularity Future Technology Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Singularity Future Technology Ltd. and its subsidiaries (collectively, the “Company”) as of June 30, 2026, and 2025, the related consolidated statements of operations and comprehensive loss, changes in equity, and cash flows for each of the two years in the period ended June 30, 2026, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026, and 2025, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2026, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with PCAOB standards. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, and we were not engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we do not express such an opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex auditor judgment. The critical audit matters communicated with the audit committee are:
Advances to Suppliers
As described in Note 5 to the consolidated financial statements, the Company recorded advances to suppliers of approximately $19.2 million as of June 30, 2026, representing a significant portion of the Company’s total assets. The advances were unsecured and related to purchases of agricultural commodities. Subsequent to year-end, the Company entered into refund agreements with the suppliers and recovered the advances in September 2026.
F-2
We identified the advances to suppliers as a critical audit matter because of the balance's significance and the audit effort required to evaluate the existence and recoverability of the advances.
The principal procedures we performed to address this critical audit matter included:
| ● | We examined the underlying purchase agreements and related supporting documentation for the advances; |
| ● | We sent and obtained independent confirmations to the suppliers to confirm the relevant transactions and outstanding balances; and |
| ● | We examined the refund agreements and checked to bank statements evidenced the subsequent recovery of the advances. |
Class Action Settlement
As described in Note 13 to the consolidated financial statements, the Company recorded class action settlement expenses of $3,800,000 and a corresponding class action settlement liability of $3,800,000 as of and for the year ended June 30, 2026. On June 22, 2026, the Company and the lead plaintiffs in the securities class action lawsuit pending in the United States District Court for the Eastern District of New York entered into an Amended Stipulation and Agreement of Settlement, pursuant to which the Company agreed to settle the class action for an aggregate cash settlement amount of $5,800,000, which includes $2,000,000 previously deposited into escrow, with the remaining amounts payable in installments. Pursuant to ASC 450-20, management recorded an accrued settlement liability of $3,800,000 as of June 30, 2026, measured as the aggregate settlement amount of
$5,800,000 less the $2,000,000 previously funded into the segregated escrow account, which is separately presented in restricted cash as of June 30, 2026. The $2,000,000 funded into escrow in October 2025 had not been recognized as an expense in any prior period. The settlement remains subject to final approval by the Court, and the ultimate outcome of the class action remains uncertain.
We identified the class action settlement as a critical audit matter because recognizing and measuring the settlement liability involved especially challenging, subjective, and complex management judgment. This was primarily due to the judgment required in evaluating management’s application of ASC 450, including assessing the probability of an unfavorable outcome and estimating the amount of the loss, as well as the status and terms of the settlement agreement and the ongoing court approval process.
F-3
The primary procedures we performed to address this critical audit matter included:
| ● | We examined the Amended Stipulation and Agreement of Settlement and related court orders and filings to understand the terms of the settlement, including the aggregate settlement amount, the payment schedule, and the conditions precedent to effectiveness. |
| ● | We inspected supporting documentation, including escrow agreements and bank wire transfer records, to test the amounts recorded as class action settlement expenses and the related settlement liability. |
| ● | We evaluated management’s application of ASC 450-20 in recognizing the settlement liability, including the assessment of the probability of loss and the reasonableness of the estimated settlement amount. |
| ● | We obtained a confirmation letter directly from the third-party independent legal counsel regarding the status and terms of the settlement, including the likelihood of final Court approval, and evaluated the legal advice provided. |
| ● | We performed subsequent event procedures through the date of this report, including inspecting court orders and filings and the settlement payments made after the balance sheet date, to evaluate the appropriateness of the amounts recognized as of June 30, 2026. |
| ● | We evaluated the adequacy of the Company’s disclosures related to the class action settlement in Note 13 to the consolidated financial statements. |
Revenue Recognition
As described in Note 2 to the consolidated financial statements, the Company recognized $1,693,264 in revenue for the year ended June 30, 2026, related to freight logistics services. The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, using the five-step model, and recognizes freight logistics service revenue over time as services are provided. The Company evaluates whether to recognize revenue on a gross or net basis based on whether it controls the services before transferring them to the customer. For the year ended June 30, 2026, one customer accounted for 100% of the Company’s revenue, as described in Note 15 to the consolidated financial statements.
We identified revenue recognition as a critical audit matter because auditing the timing and presentation of revenue involved especially challenging, subjective, and complex auditor judgment. This was primarily due to the judgment required in evaluating management’s assessment of when control of services transfers to the customer, the Company’s determination of gross versus net presentation of revenue under ASC 606 given that a significant portion of the services were provided by third parties, and the concentration of the Company’s revenue from a single customer.
The primary procedures we performed to address this critical audit matter included:
| ● | We obtained an understanding of and evaluated the design and implementation of the Company’s internal controls over the recording of revenue, including controls related to the timing of revenue recognition and the gross versus net presentation assessment. |
| ● | We examined significant customer contracts and inspected supporting documentation, including shipping and delivery records, to test revenue transactions on a sample basis for accuracy and proper period of recognition. |
| ● | We evaluated management’s application of ASC 606, including the identification of performance obligations, the timing of satisfaction of those obligations, and the gross versus net presentation assessment. |
| ● | We confirmed the revenue transactions directly with the Company’s sole customer, who accounted for 100% of the Company’s revenue for the year; no response was received. Our alternative procedures included testing related cash receipts against bank statements and inspecting the related contracts, invoices, delivery notes, and acceptance receipts. |
| ● | We evaluated the adequacy of the Company’s revenue-related disclosures, including disaggregated revenue and customer concentration information. |
/s/
We have served as the Company’s auditor since October 28, 2020
AUDIT ALLIANCE LLP (3487)
September 29, 2026
F-4
SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | $ | ||||||
| Restricted cash | ||||||||
| Notes receivable | ||||||||
| Accounts receivable | ||||||||
| Advances to suppliers | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Non-current assets | ||||||||
| Right-of-use asset | ||||||||
| Other long-term assets - deposits | ||||||||
| Total non-current assets | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Equity | ||||||||
| Current Liabilities | ||||||||
| Loans from third parties | ||||||||
| Accounts payable | ||||||||
| Lease liability - current | ||||||||
| Taxes payable | ||||||||
| Due to related parties | ||||||||
| Judgment debt payable | ||||||||
| Class action settlement | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Non-Current Liabilities | ||||||||
| Loans from third parties | ||||||||
| Lease liability - non-current | ||||||||
| Total non-current liabilities | ||||||||
| Total liabilities | ||||||||
| Commitments and Contingencies | ||||||||
| Shareholders’ Equity: | ||||||||
| Preferred share, |
||||||||
| Common share, |
||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( |
) | ( |
) | ||||
| Accumulated other comprehensive losses | ( |
) | ( |
) | ||||
| Total Shareholders’ Equity attributable to controlling shareholders of the Company | ||||||||
| Non-controlling Interest | ( |
) | ( |
) | ||||
| Total Equity | ||||||||
| Total Liabilities and Equity | $ | $ | ||||||
| * |
|
The accompanying notes are an integral part of these audited consolidated financial statements.
F-5
SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
| For the Years Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | $ | ||||||
| Cost of revenues | ( |
) | ( |
) | ||||
| Gross profit | ||||||||
| Selling expenses | ( |
) | ( |
) | ||||
| General and administrative expenses | ( |
) | ( |
) | ||||
| Total operating expenses | ( |
) | ( |
) | ||||
| Operating loss | ( |
) | ( |
) | ||||
| Gain from disposal of subsidiaries | ||||||||
| Interest income | ||||||||
| Interest expenses | ( |
) | ( |
) | ||||
| Judgment debt expenses | ( |
) | ||||||
| Class action settlement expenses | ( |
) | ||||||
| Other income, net | ||||||||
| Net loss before income tax expenses | ( |
) | ( |
) | ||||
| Income tax expense | ( |
) | ||||||
| Net loss | ( |
) | ( |
) | ||||
| Net loss (income) attributable to non-controlling interest | ( |
) | ||||||
| Net loss attributable to controlling shareholders of the Company. | $ | ( |
) | $ | ( |
) | ||
| Comprehensive loss | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Other comprehensive loss - foreign currency translation | ( |
) | ( |
) | ||||
| Comprehensive loss | ( |
) | ( |
) | ||||
| Comprehensive loss (income) attributable to non-controlling interest | ( |
) | ||||||
| Comprehensive loss attributable to controlling shareholders of the Company | $ | ( |
) | $ | ( |
) | ||
| Loss per share | ||||||||
| Basic and diluted | $ | ( |
) | $ | ( |
) | ||
| Weighted average number of common shares used in computation | ||||||||
| Basic and diluted | ||||||||
| * | Retrospectively restated for the effect of a 1-for-14 reverse share split on July 27, 2026. |
The accompanying notes are an integral part of these audited consolidated financial statements.
F-6
SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Accumulated | ||||||||||||||||||||||||||||||||||||||||
| Additional | other | Total | ||||||||||||||||||||||||||||||||||||||
| Preferred Share | Common Share | paid-in | Accumulated | comprehensive | Shareholders’ | Noncontrolling | Total | |||||||||||||||||||||||||||||||||
| Shares | Amount | Shares* | Amount | capital | deficits | income (loss) | Equity | interest | Equity | |||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | ( |
) | $ | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||||
| Issuance of common shares to private investors | ||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Net (loss) income | - | - | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
| Issuance of common shares | - | |||||||||||||||||||||||||||||||||||||||
| Issuance of common shares for judgment debts | - | |||||||||||||||||||||||||||||||||||||||
| Foreign currency translation | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Disposal of subsidiaries | - | - | ||||||||||||||||||||||||||||||||||||||
| Net loss | - | - | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
| Balance, June 30, 2026 | $ | $ | $ | ( |
) | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||||||||||||||||||
| * |
|
The accompanying notes are an integral part of these audited consolidated financial statements.
F-7
SINGULARITY FUTURE TECHNOLOGY, LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Years Ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| Operating Activities | ||||||||
| Net loss | $ | ( |
) | $ | ( |
) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Non-cash lease expense | ||||||||
| Property and equipment written off | ||||||||
| Gain on disposal of subsidiaries | ( |
) | ||||||
| Issuance of common shares for judgment debts | ||||||||
| Changes in assets and liabilities | ||||||||
| Notes receivable | ( |
) | ||||||
| Accounts receivable | ( |
) | ( |
) | ||||
| Other receivables | ||||||||
| Advances to suppliers | ( |
) | ( |
) | ||||
| Prepaid expenses | ( |
) | ||||||
| Other long-term assets - deposits | ||||||||
| Due from related parties | ||||||||
| Deferred revenue | ( |
) | ||||||
| Accounts payable | ||||||||
| Taxes payable | ( |
) | ||||||
| Lease liability | ( |
) | ( |
) | ||||
| Judgment debt payable | ( |
) | ||||||
| Class action settlement | ||||||||
| Accrued expenses and other current liabilities | ( |
) | ||||||
| Net cash used in operating activities | ( |
) | ( |
) | ||||
| Investing Activity | ||||||||
| Proceeds from disposal of subsidiaries, net of cash | ||||||||
| Net cash provided by investing activity | ||||||||
| Financing Activities | ||||||||
| Advance from a related party | ||||||||
| Proceeds from issuance of common shares | ||||||||
| Proceeds from third parties’ loans | ||||||||
| Repayment of third parties’ loans | ( |
) | ||||||
| Net cash provided by financing activities | ||||||||
| Net decrease in cash and restricted cash | ( |
) | ( |
) | ||||
| Cash and restricted cash, beginning of year | ||||||||
| Effect of changes of foreign exchange rate on cash and restricted cash | ||||||||
| Cash and restricted cash, end of year | $ | $ | ||||||
| Representing: | ||||||||
| Cash, end of year | $ | $ | ||||||
| Restricted cash, end of year | ||||||||
| Total cash and restricted cash, end of year | $ | $ | ||||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | |||||||
| Interest paid | $ | |||||||
| Supplemental disclosure of non-cash information: | ||||||||
| Initial recognition of right-of-use asset and lease liability | $ | |||||||
The accompanying notes are an integral part of these audited consolidated financial statements.
F-8
SINGULARITY FUTURE TECHNOLOGY, LTD. AND AFFILIATES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 1. ORGANIZATION AND NATURE OF BUSINESS
The Company is an integrated logistics solution provider that was founded in 2001. On September 18, 2007, the Company merged into Sino-Global Shipping America, Ltd., a Virginia corporation. On January 3, 2022, the Company changed its corporate name from Sino-Global Shipping America, Ltd. to Singularity Future Technology Ltd. to reflect its then expanded operations into the digital assets business. Currently, the Company primarily focus on providing freight logistics services, which include shipping, and other logistical support to steel companies, through subsidiary, Trans Pacific Shipping Limited.
To date, the Company has not generated any revenues from entry into the solar panel production and distribution business.
On August 6, 2025, the Company dissolved its subsidiary, Brilliant Warehouse Service Inc.
On September 25, 2025, the Company entered into
a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $
As of June 30, 2026, the Company’s subsidiaries included the following:
| Name | Background | Ownership | |||
| Artificial Intelligence Regeneration Technology Co., Ltd (Cayman Islands) | ● | ||||
| ● | |||||
| ● | |||||
| Artificial Intelligence Regeneration Technology Co., Ltd (BVI) | ● | ||||
| ● | |||||
| ● | |||||
| Sino-Global Shipping New York Inc. (“SGS NY”) | ● | ||||
| ● | |||||
| ● | |||||
| Sino-Global Shipping HK Ltd. (“SGS HK”) | ● | ||||
| ● | |||||
| ● | |||||
| Trans Pacific Shipping Ltd. (“Trans Pacific Beijing”) | ● | ||||
| ● | |||||
| ● | |||||
| Trans Pacific Logistic Shanghai Ltd. (“Trans Pacific Shanghai”) | ● | ||||
| ● | |||||
| ● | |||||
| Gorgeous Trading Ltd (“Gorgeous Trading”) | ● | ||||
| ● | |||||
| ● | |||||
| SG Shipping & Risk Solution Inc, (“SGSR”) | ● | ||||
| ● | |||||
| ● | |||||
| Singularity (Shenzhen) Technology Ltd. | ● | ||||
| ● | |||||
| ● | |||||
| Singularity Future Technology Virginia Inc. | ● |
F-9
Liquidity
In evaluating the Company’s liquidity position and the existence of substantial doubt about its ability to continue as a going concern, management regularly monitors and analyzes its on-hand cash balances and contractual operating expenditure commitments. The Company’s primary liquidity needs are to satisfy ongoing working capital requirements and settle all current operating expense obligations. Since inception, the Company has historically funded its operations principally through cash generated from operating activities, issuances of common equity securities, and third-party indebtedness.
The accompanying consolidated financial statements
have been prepared on the going concern basis, which contemplates the realization of assets and the discharge of liabilities in the ordinary
course of business. These financial statements do not include any adjustments or reclassifications that might become necessary should
the Company be unable to continue as a going concern. For the fiscal years ended June 30, 2026 and 2025, the Company incurred net losses
of $
Subsequent to the fiscal year ended June 30, 2026, the Company completed four separate equity financing transactions to strengthen its consolidated balance sheet and materially expand its available operating capital base:
| 1. | Regulation S Private Placement, July 6, 2026: The Company entered into a securities purchase agreement with
accredited offshore investors for the sale of an aggregate of | |
| 2. |
Follow-on
Regulation S Private Placement, August 12, 2026: The Company entered into a second securities purchase agreement with a distinct group
of offshore investors for the sale of an aggregate of | |
| 3. | Registered Direct Offering (First Tranche), August 18, 2026: The Company entered into the First Purchase
Agreement with certain non-affiliated institutional investors pursuant to which the Company agreed to sell | |
| 4. | Registered Direct Offering (Second Tranche), August 20, 2026: The Company entered into the Second Purchase
Agreement with a separate cohort of non-affiliated institutional investors pursuant to which the Company agreed to sell |
In performing its going concern assessment required under ASC 205-40, management has developed and is implementing formal mitigation plans designed to alleviate the substantial doubt previously identified as of June 30, 2026. These plans principally consist of:
| 1. | Pursuing targeted additional equity or debt financing transactions on an as-needed basis to support ongoing operations | |
| 2. | Implementing operational efficiency initiatives to reduce the net cash consumed by operating activities, with the explicit objective of covering the Company’s projected working capital and operating expense requirements for at least the full twelve-month period following the financial statement issuance date. |
Nevertheless, the Company may require incremental capital in future periods to fund its planned business expansion. If the Company determines that its projected cash requirements will exceed its then-current cash and cash equivalent balances, it may elect to raise additional capital through the issuance of equity or debt securities, or by securing new credit facilities. Any issuance of additional equity securities would result in incremental dilution to the existing shareholders of the Company.
Based on management’s comprehensive evaluation,
which incorporates the aggregate ~$
F-10
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Presentation
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of the Company and include the assets, liabilities, revenues and expenses of its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
(b) Fair Value of Financial Instruments
The Company follows the provisions of ASC 820, Fair Value Measurements and Disclosures, which clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:
| Level 1 | — | Observable inputs such as unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. | |
| Level 2 | — | Inputs other than quoted prices that are observable for the asset or liability in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | |
| Level 3 | — | Unobservable inputs that reflect management’s assumptions based on the best available information. |
The carrying value of notes receivable, accounts receivable, and advances to suppliers, approximate their fair values because of the short-term nature of these instruments.
(c) Use of Estimates and Assumptions
The preparation of the Company’s consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include revenue recognition, cost of revenues, allowance for credit losses, impairment loss, valuation allowance for deferred tax assets, and income tax expense. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates.
(d) Translation of Foreign Currency
The accounts of the Company and its subsidiaries are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Company’s functional currency is the U.S. dollar (“USD”) while its subsidiaries in the PRC, including Trans Pacific Beijing and Trans Pacific Logistic Shanghai Ltd. report their financial positions and results of operations in Renminbi (“RMB”). The accompanying consolidated financial statements are presented in USD. Foreign currency transactions are translated into USD using the exchange rates in effect at the time of the transaction. Generally, foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated statements of operations. The Company translates the foreign currency financial statements in accordance with ASC 830-10, “Foreign Currency Matters”. Assets and liabilities are translated at current exchange rates quoted by the Federal Reserve at the balance sheets’ dates and revenues and expenses are translated at average exchange rates in effect during the year. The resulting translation adjustments are recorded as other comprehensive loss and accumulated other comprehensive loss as a separate component of equity of the Company and also included in non-controlling interests.
The exchange rates in effect as of June 30,
2026, and 2025 were US$
F-11
(e) Cash
Cash consists of cash on hand and cash in bank
which are unrestricted as to withdrawal or use. The Company maintains cash with various financial institutions mainly in the PRC, the
U.S., and Djibouti. As of June 30, 2026 and 2025, cash balances of $
Restricted Cash
As of June 30, 2026 and 2025, the Company’s
total restricted cash was approximately $
| 1. | Class action lawsuit settlement escrow: Approximately $ | |
| 2. | Letter of credit collateral: As of June 30, 2025, approximately $ | |
| 3. | Judgment debt restriction: The remaining restricted cash balances
of $ |
All restricted cash balances are excluded from cash and cash equivalents on the consolidated balance sheets, as their withdrawal or use is contractually or legally restricted from immediate general operating use by the Company.
(f) Receivables and Allowance for Credit Losses
The carrying amounts of notes, accounts and other receivable are reduced by an allowance for credit losses that reflects the Company’s best estimate of the amounts that will not be collected. The Company makes estimations of the collectability of notes, accounts and other receivable. Many factors are considered in estimating the general allowance, including reviewing delinquent notes and accounts receivable, performing a customer credit analysis, and analyzing historical bad debt records and current and future economic trends. Notes, accounts and other receivable represent historical balances recorded with less related cash applications, less allowance for credit losses and any write-offs of any receivables not previously provided for.
(g) Credit losses
In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326). The ASU introduced a new credit loss methodology, the current expected credit losses (“CECL”) methodology, which requires earlier recognition of credit losses while also providing additional disclosure about credit risk. The Company adopted the ASU as of January 1, 2023.
The CECL methodology utilizes a lifetime “expected credit loss” measurement objective for the recognition of credit losses for loans, receivables, contract assets and other financial assets measured at amortized cost at the time the financial asset is originated or acquired. The CECL is adjusted each period for changes in expected lifetime credit losses. The CECL methodology represents a significant change from prior U.S. GAAP and replaced the prior multiple existing impairment methods, which generally required that a loss be incurred before it was recognized. Within the life cycle of a loan or other financial asset, the methodology generally results in the earlier recognition of the provision for credit losses and the related ACL than prior U.S. GAAP.
F-12
The CECL methodology’s impact on expected credit losses, among other things, reflects the Company’s view of the current state of the economy, forecasted macroeconomic conditions.
Under the CECL methodology, the allowance for credit losses is model based and utilizes a forward-looking macroeconomic forecast in estimating expected credit losses. The model of the allowance for credit losses would be considered the uncertainty of forward-looking scenarios based on the likelihood and severity of a possible recession as another possible scenario.
The following table presents the aging analysis of accounts receivable and allowance for credit losses as of June 30, 2026 and 2025.
| Accounts | ||||||||||||
| receivable | ||||||||||||
| balance as of | ||||||||||||
| June 30, | Allowance | |||||||||||
| 2026 | CECL | for credit | ||||||||||
| Aging group | (USD) | Rate | losses | |||||||||
| <1 year | $ | % | ||||||||||
| 1-2 years | % | |||||||||||
| 2-3 years | % | |||||||||||
| >3 years | % | |||||||||||
| Total | $ | |||||||||||
| Accounts | ||||||||||||
| receivable | ||||||||||||
| balance as of | ||||||||||||
| June 30, | Allowance | |||||||||||
| 2025 | CECL | for credit | ||||||||||
| Aging group | (USD) | Rate | losses | |||||||||
| <1 year | $ | % | ||||||||||
| 1-2 years | % | |||||||||||
| 2-3 years | % | |||||||||||
| >3 years | % | |||||||||||
| Total | $ | |||||||||||
Other receivables represent mainly customer advances, prepaid employee insurance and welfare benefits, which will be subsequently deducted from the employee payroll, project advances as well as office lease deposits. Management reviews its receivables on a regular basis to determine if the credit loss allowance is adequate and adjusts the allowance when necessary. Delinquent account balances are written off against allowance for credit losses after management has determined that the likelihood of collection is not probable. Other receivables are written off against the allowances only after exhaustive collection efforts.
(h) Revenue Recognition
The Company recognizes revenue which represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company identifies contractual performance obligations and determines whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.
The Company uses a five-step model to recognize revenue from customer contracts. The five-step model requires the Company to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
For the Company’s freight logistic and
shipping agency services revenue, the Company enters into contracts with customers to provide scheduled Yangtze River segment waterway
transportation services for iron ore and coal, with a fixed monthly contracted volume of
Revenue for each individual shipment is fully recognized at the point in time when the vessel arrives at the designated unloading port, reports to the customer’s dispatch team, and formal acknowledgment of cargo delivery is completed. At this point, the customer obtains full physical possession, legal control, and the significant risks and rewards of ownership of the delivered cargo, and the Company has satisfied all performance obligations under the contract, with the unconditional right to invoice and collect the corresponding consideration for the completed voyage service, per the metered arrival quantity confirmed through the customer’s water gauge or belt scale measurement system. The Company concludes that each transportation service contract contains one single distinct performance obligation: the full completion of the contracted cargo delivery from the agreed loading port to the customer’s specified destination terminal. There are no separate distinct promises for port agency, cargo handling, or insurance services, as these activities are integrated components required to fulfill the end-to-end delivery commitment to the customer.
F-13
Under ASC 606, the Company recognizes transportation service revenue at a point in time, rather than over time. This determination is supported by the following assessment:
| ● | The customer does not simultaneously receive and consume economic benefits as the voyage progresses, since no alternate third party could complete the remaining leg of the in-transit cargo voyage without re-performing a substantial portion of the already completed transportation work |
| ● | The Company does not create or enhance an asset controlled by the customer during the voyage period |
| ● | No enforceable right to payment for partial completed performance exists for work in transit prior to final cargo delivery |
| ● | Revenue for each individual shipment is fully recognized only when the vessel arrives at the designated unloading port, checks in with the customer’s dispatch team, and formal written acknowledgment of cargo delivery is completed. At this exact point, the customer obtains full physical possession of the cargo, takes over the significant risks and rewards of cargo ownership, and the Company has fully satisfied all contractual performance obligations. The recognized revenue amount is based on the verified arrival quantity measured via the customer’s official water gauge or belt scale metering system. |
The transaction price for each contract is fixed
and contractually defined, with rates set per designated port-to-port routes. An additional fixed premium of RMB 5 per metric ton is added
to the base tariff only when the customer issues a formal written confirmation to use the Three Gorges Navigation Administration priority
passage slot for urgent material deliveries. All tariff rates include
Contract terms contain standardized short-shipment (over-loss) adjustment provisions that create variable consideration:
| ● | For iron ore shipments, the quarterly weighted average over-loss rate exceeding 0.3% results in a corresponding reduction of transaction price, calculated based on the customer’s actual unit purchase cost of the lost cargo. |
| ● | For coal shipments, the annual weighted average over-loss rate exceeding 0.8% results in a corresponding transaction price reduction. The Company estimates this variable consideration at the end of each reporting period, and strictly constrains the amount of recognized revenue to the extent that it is probable no significant reversal of cumulative recognized revenue will occur in future periods when final over-loss measurements are confirmed. No variable consideration reduction is applied for cargo loss caused by qualifying force majeure events. |
Since all transportation contracts contain only one single distinct performance obligation, the entire transaction price is allocated directly to this delivery performance obligation. No relative standalone selling price allocation across multiple promised goods or services is required.
The Company elects the ASC 606 permitted practical expedient to expense all incremental costs of obtaining a contract immediately when incurred, as the expected amortization period for these costs is 12 months or less. Vessel operating expenses, port dues, mandatory cargo insurance premiums, and crew related costs are recognized in transportation operating expense as incurred, in alignment with the point-in-time revenue recognition for the corresponding completed shipments.
A trade receivable is recorded in the statement of financial position on the date of successful cargo delivery, as this is the date the Company obtains an unconditional legal right to invoice and collect the full contracted consideration from the customer. Standard contractual payment terms require the customer to settle the valid submitted invoice within 30 days of receipt, with 50% of consideration paid via bank acceptance draft and 50% via commercial note or irrevocable letter of credit. No significant financing component exists within these standard contract payment terms.
The Company’s disaggregated revenue streams are described as follows:
| For the Years Ended | ||||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Freight logistic services | $ | $ | ||||||
Disaggregated information of revenues by geographic location is as follows:
| For the Years Ended | ||||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| PRC | $ | $ | ||||||
(i) Cost of revenues
Cost of revenues consist of costs directly attributable to the performance of freight logistic services which are mainly services provided by third parties.
F-14
(j) Leases
The Company adopted FASB ASU 2016-02, “Leases”
(Topic 842) for the year ended June 30, 2020, and elected the practical expedients that does not require us to reassess: (1) whether any
expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct
costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy
election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat
the lease and non-lease components of a lease as a single lease component. Upon adoption, the Company recognized right of use (“ROU”)
assets and same amount of lease liabilities based on the present value of the future minimum rental payments of leases, using an incremental
borrowing rate of
Operating lease ROU assets and lease liabilities are recognized at the adoption date or the commencement date, whichever is earlier, based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.
Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term.
The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows.
(k) Taxation
Because the Company and its subsidiaries and Sino-China were incorporated in different jurisdictions, they file separate income tax returns. The Company uses the asset and liability method of accounting for income taxes in accordance with U.S. GAAP. Deferred taxes, if any, are recognized for the future tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements. A valuation allowance is provided against deferred tax assets if it is more likely than not that the asset will not be utilized in the future.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense. The Company had uncertain tax positions as of June 30, 2026 and 2025.
Income tax returns for the years prior to 2020 are no longer subject to examination by U.S. tax authorities.
PRC Enterprise Income Tax
PRC enterprise income tax is calculated based
on taxable income determined under the PRC Generally Accepted Accounting Principles (“PRC GAAP”) at
PRC Value Added Taxes and Surcharges
The Company is subject to value added tax (“VAT”).
Revenue from services provided by the Company’s PRC subsidiaries are subject to VAT at rates ranging from
F-15
In addition, under the PRC regulations, the
Company’s PRC subsidiaries are required to pay city construction tax (
(l) Earnings (loss) per Share
Basic earnings (loss) per share are computed by dividing net income (loss) attributable to holders of common stock of the Company by the weighted average number of shares of common stock of the Company outstanding during the applicable period. Diluted earnings (loss) per share reflect the potential dilution that could occur if securities or other contracts to issue common stock of the Company were exercised or converted into common stock of the Company. Common stock equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive.
For the years ended June 30, 2026 and 2025, there was no dilutive effect of potential shares of common stock of the Company because the Company generated net loss.
(m) Comprehensive Income (Loss)
The Company reports comprehensive income (loss) in accordance with the authoritative guidance issued by Financial Accounting Standards Board (the “FASB”) which establishes standards for reporting comprehensive income (loss) and its component in financial statements. Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under US GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies.
(n) Segment reporting
An operating segment is defined as a distinct component of the Company that engages in business activities from which it may earn revenue and incur expenses, for which discrete internal financial information is regularly produced. Internal segment financial information must be routinely measured by the Company’s management and presented to the chief operating decision maker as part of formal, recurring performance review and resource allocation cycles to qualify as a reportable unit under U.S. GAAP.
In accordance with ASC 280, Segment Reporting, as updated by ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, the Company strictly applies the management approach to identify and evaluate its reportable operating segments. Under this framework, all reportable segments are fully aligned with the Company’s formal organizational structure and the standardized internal financial reporting packages that are regularly compiled, distributed, and reviewed by the chief operating decision maker (“CODM”) for the explicit, primary purposes of allocating capital and operating resources to business activities, and assessing the ongoing financial performance of the Company’s operations.
For the fiscal years ended June 30, 2026 and
2025,
(o) Risks and Uncertainties
The Company’s business, financial position and results of operations may be influenced by the political, economic, health and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s operations in the PRC are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic, health and legal environments and foreign currency exchange. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC, and by changes in governmental policies or interpretations with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
(p) Related parties
Parties, which can be a corporation or individuals, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.
F-16
(q) Commitments and contingencies
The Company follows ASC 440 & ASC 450, subtopic 450-20 of the FASB Accounting Standards Codification to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur.
The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.
If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be 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 contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.
Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time, that these matters will have a material adverse effect on the Company’s audited consolidated financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.
(r) Recent Accounting Pronouncements
Recent accounting pronouncements
The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued.
In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU may be applied either on a prospective or retrospective basis. We are currently evaluating the impact of this standard on our disclosures.
In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40),which clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted.
In May 2025, the FASB issued ASU 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606), Clarifications to Share-Based Consideration Payable to a Customer, which revised the Master Glossary definition of the term performance condition for share-based consideration payable to a customer. The revised definition incorporates conditions (such as vesting conditions) that are based on the volume or monetary amount of a customer’s purchases (or potential purchases) of goods or services from the grantor (including over a specified period of time). The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor’s goods or services from the grantor’s customers. The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations. Although it is expected that entities will conclude that fewer awards contain service conditions, for those that are determined to have service conditions, the amendments in this Update eliminate the policy election permitting a grantor to account for forfeitures as they occur. Therefore, when measuring share-based consideration payable to a customer that has a service condition, the grantor is required to estimate the number of forfeitures expected to occur. Separate policy elections for forfeitures remain available for share-based payment awards with service conditions granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations. The amendments in this Update clarify that share-based consideration encompasses the same instruments as share-based payment arrangements, but the grantee does not need to be a supplier of goods or services to the grantor. Finally, the amendments in this Update clarify that a grantor should not apply the guidance in Topic 606 on constraining estimates of variable consideration to share-based consideration payable to a customer. Therefore, a grantor is required to assess the probability that an award will vest using only the guidance in Topic 718. Collectively, these changes improve the decision usefulness of a grantor’s financial statements, improve the operability of the guidance, and reduce diversity in practice for accounting for share-based consideration payable to a customer. Under the amendments in this Update, revenue recognition will no longer be delayed when an entity grants awards that are not expected to vest. This is expected to result in estimates of the transaction price that better reflect the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer and, therefore, more decision-useful financial reporting.
F-17
The amendments in this Update are effective for all entities for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026. Early adoption is permitted for all entities. The amendments in this Update permit a grantor to apply the new guidance on either a modified retrospective or a retrospective basis. When applying the amendments in this Update on a modified retrospective basis, a grantor should recognize a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of 4 equity or net assets in the statement of financial position) as of the beginning of the period of adoption and should not recast any financial statement information before the period of adoption. A grantor should apply the amendments as of the date of initial application to all share-based consideration payable to a customer. When applying the amendments in this Update on a retrospective basis, a grantor should recast comparative periods and recognize a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest period presented. Additionally, an entity that elects to apply the guidance retrospectively should use the actual outcome, if known, of a performance condition or service condition as of the beginning of the annual reporting period of adoption for all prior-period estimates. If actual outcomes are unknown as of the beginning of the annual reporting period of adoption, an entity should use its estimate of the probability of achieving a service condition or performance condition as of the beginning of the annual reporting period of adoption for all prior-period estimates.
In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40) - Targeted Improvements to the Accounting for Internal-Use Software”, the amendments in this Update remove all references to prescriptive and sequential software development stages (referred to as “project stages”) throughout Subtopic 350-40. Therefore, an entity is required to start capitalizing software costs when both of the following occur: 1. Management has authorized and committed to funding the software project. 2. It is probable that the project will be completed and the software will be used to perform the function intended (referred to as the “probable-to-complete recognition threshold”). In evaluating the probable-to-complete recognition threshold, an entity is required to consider whether there is significant uncertainty associated with the development activities of the software (referred to as “significant development uncertainty”). The two factors to consider in determining whether there is significant development uncertainty are whether: 1. The software being developed has technological innovations or novel, unique, or unproven functions or features, and the uncertainty related to those technological innovations, functions, or features, if identified, has not been resolved through coding and testing. 2. The entity has determined what it needs the software to do (for example, functions or features), including whether the entity has identified or continues to substantially revise the software’s significant performance requirements. The amendments in this Update specify that the disclosures in Subtopic 360- 10, Property, Plant, and Equipment—Overall, are required for all capitalized internal-use software costs, regardless of how those costs are presented in the financial statements. Additionally, the amendments clarify that the intangibles disclosures in paragraphs 350-30-50-1 through 50-3 are not required for capitalized internal-use software costs. Furthermore, the amendments in this Update supersede the website development costs guidance and incorporate the recognition requirements for website-specific development costs from Subtopic 350-50 into Subtopic 350-40. 4 within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The amendments in this Update permit an entity to apply the new guidance using any of the following transition approaches: 1. A prospective transition approach 2. A modified transition approach that is based on the status of the project and whether software costs were capitalized before the date of adoption 3. A retrospective transition approach. Under a prospective transition approach, an entity should apply the amendments in this Update to new software costs incurred as of the beginning of the period of adoption for all projects, including in-process projects. Under a modified transition approach, an entity should apply the amendments in this Update on a prospective basis to new software costs incurred (for all projects, including costs incurred for in-process projects), except for in-process projects that, as of the date of adoption, the entity determines do not meet the capitalization requirements under the amendments but meet the capitalization requirements under current guidance. For those in-process projects, an entity should derecognize any capitalized costs through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the date of adoption. Under a retrospective transition approach, an entity should recast comparative periods and recognize a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the first period presented.
In September 2025, the FASB issued ASU 2025-07, “Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606) - Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract”, the amendments in this Update exclude from derivative accounting nonexchange-traded contracts with underlyings that are based on operations or activities specific to one of the parties to the contract. However, this scope exception does not apply to (1) variables based on a market rate, market price, or market index, (2) variables based on the price or performance of a financial asset or financial liability of one of the parties to the contract, (3) contracts (or features) involving the issuer’s own equity that are evaluated under the guidance in Subtopic 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity, and (4) call options and put options on debt instruments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. An entity is permitted to apply the amendments in this Update either (1) prospectively to new contracts entered into on or after the date of adoption or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption. If an entity applies the modified retrospective transition method described in the preceding paragraph, upon adoption the entity may elect on an instrument-by-instrument basis to (1) measure contracts previously accounted for as derivatives that are no longer accounted for as derivatives in their entirety under the amendments in this Update at fair value with changes in fair value recognized in earnings and (2) stop applying the fair value option for contracts that contained embedded features that otherwise would have been bifurcated but are no longer accounted for as derivatives under the amendments in this Update.
F-18
The amendments in this Update clarify that an entity should apply the guidance in Topic 606, including the guidance on noncash consideration in paragraphs 606-10-32-21 through 32-24, to a contract with share-based noncash consideration (for example, shares, share options, or other equity instruments) from a customer for the transfer of goods or services. The guidance in other Topics (including Topic 815 on derivatives and hedging and Topic 321 on equity securities) does not apply to share-based noncash consideration from a customer for the transfer of goods or services unless and until the entity’s right to receive or retain the share-based noncash consideration is unconditional under Topic 606. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. An entity is permitted to apply the amendments in this Update either (1) prospectively to new contracts entered into on or after the date of adoption, including modified contracts accounted for as separate contracts in accordance with paragraph 606-10-25-12, or (2) on a modified retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption for contracts existing as of the beginning of the annual reporting period of adoption.
In November 2025, the FASB issued ASU 2025-08, “Financial Instruments—Credit Losses (Topic 326) Purchased Loans”, the amendments in this update expand the population of acquired financial assets subject to the gross-up approach in Topic 326. In accordance with the amendments in this Update, loans (excluding credit cards) acquired without credit deterioration and deemed “seasoned” (defined below) are purchased seasoned loans and accounted for using the gross-up approach at acquisition. Specifically, after an entity determines that a loan is a non-PCD asset based on its assessment of credit deterioration experienced since origination, the entity should apply the guidance described in the amendments to determine whether the loan is seasoned and, therefore, should be accounted for using the gross-up approach. All non-PCD loans (excluding credit cards) that are acquired in a business combination are deemed seasoned. Other non-PCD loans (excluding credit cards) are seasoned if they were purchased at least 90 days after origination and the acquirer was not involved in the origination of the loans. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this Update should be applied prospectively to loans that are acquired on or after the initial application date. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in an interim reporting period, it should apply the amendments as of the beginning of that interim reporting period or the beginning of the annual reporting period that includes that interim reporting period.
In November 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815) Hedge Accounting Improvements”, Issue 1: Similar Risk Assessment for Cash Flow Hedges - the amendments in this Update expand the hedged risks permitted to be aggregated in a group of individual forecasted transactions in a cash flow hedge by changing the requirement to designate a group of individual forecasted transactions from having a shared risk exposure to having a similar risk exposure. Entities are required to assess risk similarity both at hedge inception and on an ongoing basis. The amendments also clarify that a group of individual forecasted transactions can be considered to have a similar risk exposure if the derivative used as the hedging instrument is highly effective against each hedged risk in the group. In addition, in some cases, entities are permitted to perform an ongoing qualitative assessment of whether a group of individual forecasted transactions has a similar risk exposure. The amendments in this Update improve GAAP by expanding the hedged risks permitted to be aggregated in a group of individual forecasted transactions, thereby enabling entities to apply hedge accounting to potentially broader portfolios of forecasted transactions. Entities that aggregate larger groups of individual forecasted transactions in accordance with the amendments can achieve hedge accounting in a more efficient, cost-effective manner while reducing the risk of missed forecasts for highly effective economic hedges. Furthermore, the amendments improve operability and foster consistent application of the similar risk assessment. Therefore, an entity’s financial statements can provide more relevant information to investors about the entity’s risk management activities related to cash flow hedges of groups of forecasted transactions. 4 The amendments in this Update improve GAAP because the application of hedge accounting will not be limited by whether the execution of the nonfinancial purchase or sale transaction is in the spot or forward market. Relative to current GAAP, which limits designation of nonfinancial components to those that are contractually specified, a model based on the clearly-and-closely-related criteria permits hedge accounting for eligible components of forecasted spot-market transactions, forward-market transactions, and subcomponents of explicitly referenced components in an agreement’s pricing formula. Furthermore, the amendments also may enable entities to reduce missed forecasts for highly effective economic hedges, more closely aligning hedge accounting with the economics of entities’ risk management activities. The amendments in this Update also clarify that entities may designate a variable price component in a contract that is accounted for as a derivative as the hedged risk if all other hedge criteria are satisfied. That clarification improves GAAP because it resolves diversity in practice about whether hedge accounting may be applied in those situations and allows hedge accounting to be applied to highly effective economic hedges. Issue 4: Net Written Options as Hedging Instruments The amendments in this Update on the use of net written options as hedging instruments improve GAAP by updating the hedge accounting guidance to accommodate differences in the loan and swap markets that developed after the cessation of the London Interbank Offered Rate. Specifically, the amendments in this Update eliminate the requirement to apply the net written option test to a compound derivative comprising a swap and a written option designated as the hedging instrument in a cash flow hedge or a fair value hedge of interest rate risk. Issue 5: Foreign-Currency-Denominated Debt Instrument as Hedging Instrument and Hedged Item (Dual Hedge) The amendments in this Update eliminate the recognition and presentation mismatch related to a dual hedge strategy (that is, a hedge for which a foreign currency-denominated debt instrument is both designated as the hedging instrument in a net investment hedge and designated as the hedged item in a fair value hedge of interest rate risk). The amendments require that an entity exclude the debt instrument’s fair value hedge basis adjustment from the net 5 investment hedge effectiveness assessment. As a result, an entity immediately recognizes in earnings the gains and losses from the remeasurement of the debt instrument’s fair value hedge basis adjustment at the spot exchange rate. Entities are prohibited from applying this guidance by analogy to other circumstances. The amendments in this Update improve GAAP by enabling entities that utilize dual hedging strategies to reflect the economic offset of changes attributable to both interest rate risk and foreign exchange risk. For public business entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim periods within those annual reporting periods. For entities other than public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted on any date on or after the issuance of this Update. Entities should apply the amendments in this Update on a prospective basis for all hedging relationships. An entity may elect to adopt the amendments in this Update for hedging relationships that exist as of the date of adoption. Upon adoption of the amendments in this Update, entities are permitted to modify certain critical terms of certain existing hedging relationships without dedesignating the hedge.
F-19
In December 2025, the FASB issued ASU 2025-10, “Government Grants (Topic 832) Accounting for Government Grants Received by Business Entities”, The amendments in this Update establish the accounting for a government grant received by a business entity, including guidance for (1) a grant related to an asset and (2) a grant related to income. A grant related to an asset is a government grant, or part of a government grant, that is conditioned on the purchase, construction, or acquisition of an asset (for example, a long-lived asset or inventory). A grant related to income is a government grant, or part of a government grant, other than a grant related to an asset (for example, a grant that reimburses a business entity for operating expenses). The amendments in this Update require that a government grant received by a business entity should not be recognized until: 1. It is probable that (a) a business entity will comply with the conditions attached to the grant and (b) the grant will be received. 2. A business entity meets the recognition guidance for a grant related to an asset or a grant related to income. 3 The amendments in this Update require that a grant related to an asset be recognized on the balance sheet as a business entity incurs the related costs for which the grant is intended to compensate, either as: 1. Deferred income (the deferred income approach) 2. An adjustment to the cost basis in determining the carrying amount of the asset (the cost accumulation approach). A grant related to income and a grant related to an asset for which the deferred income approach is elected should be recognized in earnings on a systematic and rational basis over the periods in which a business entity recognizes as expenses the costs for which the grant is intended to compensate. When a business entity elects the cost accumulation approach for a grant related to an asset, there is no separate subsequent recognition of the government grant proceeds in earnings. The carrying amount of the asset that reflects the government grant proceeds would be used to determine depreciation or other subsequent accounting for that asset. The amendments in this Update require that a business entity present a grant related to income and a grant related to an asset for which the deferred income approach is elected as part of earnings either (1) separately under a general heading such as other income or (2) deducted from the related expense. In addition, the amendments in this Update require, consistent with current disclosure requirements, that a business entity provide disclosures, including the nature of the government grant received, the accounting policies used to account for the grant, and significant terms and conditions of the grant. 5 Under a modified prospective approach, prior-period results should not be restated and there is no cumulative-effect adjustment. 2. A modified retrospective approach to both: a. Government grants that are entered into on or after the beginning of the earliest period presented b. Government grants that are not complete as of the beginning of the earliest period presented. A government grant is complete when substantially all of the government grant proceeds have been recognized before the beginning of the earliest period presented. Under a modified retrospective approach, all prior period results should be restated for government grants that are not complete as of the beginning of the earliest period presented through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the earliest period presented. 3. A retrospective approach to all government grants through a cumulative effect adjustment to the opening balance of retained earnings as of the beginning of the earliest period presented.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270) Narrow-Scope Improvements”, the amendments in this Update clarify interim disclosure requirements and the applicability of Topic 270. The amendments in this Update result in a comprehensive list of interim disclosures that are required by GAAP. In developing the list of disclosures required by other Topics, the Board focused on identifying the interim disclosures that are currently required under GAAP. The objective of the amendments is to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in this Update also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The intent of the disclosure principle, which is modeled after a previous SEC disclosure requirement, is to help entities determine whether disclosures not specified in Topic 270 should be provided in interim reporting periods. The amendments in this Update also clarify the applicability of Topic 270, the types of interim reporting, and the form and content of interim financial statements in accordance with GAAP. The Board expects that these clarifications will enhance consistency in interim reporting for all entities. The Board considers the amendments in this Update to be necessary to reflect the development of interim reporting over time. The amendments in this Update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting 3 periods beginning after December 15, 2028, for entities other than public business entities. Early adoption is permitted for all entities. The amendments in this Update can be applied either (1) prospectively or (2) retrospectively to any or all prior periods presented in the financial statements.
In December 2025, the FASB issued ASU 2025-12, “Codification Improvements”, thirty-three issues are addressed in this Update. Generally, the amendments in this Update are not intended to result in significant changes for most entities. However, the Board recognizes that changes to guidance may result in accounting changes for some entities. Therefore, the Board is providing transition guidance for the amendments. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. 12 Early adoption is permitted in both interim and annual reporting periods in which financial statements have not yet been issued or made available for issuance. If an entity adopts the amendments in this Update in an interim period, it must adopt them as of the beginning of the annual reporting period that includes that interim reporting period. An entity may elect to early adopt the amendments on an issue-by-issue basis. For example, an entity may decide to early adopt certain amendments and adopt the remaining amendments at the effective date. An entity should apply the amendments in this Update (except for the amendments to Topic 260, Earnings Per Share, related to Issue 4) using one of the following transition methods: 1. Prospectively to all transactions recognized on or after the date that the entity first applies the amendments 2. Retrospectively to the beginning of the earliest comparative period presented. An entity should adjust the opening balance of retained earnings (or other appropriate components of equity or net assets in the statement of financial position) as of the beginning of the earliest comparative period presented. An entity may elect the transition method on an issue-by-issue basis. For example, it may apply certain amendments prospectively while applying others retrospectively. For the amendments in this Update to Topic 260 (that is, Issue 4), an entity should apply the amendments retrospectively to each prior reporting period presented in the period of adoption.
F-20
In April, the FASB issued ASU 2026-01, Equity (Topic 505) Initial Measurement of Paid-in-Kind Dividends on Equity-Classified Preferred Stock. The amendments in this Update require that PIK dividends on equity-classified preferred stock be initially measured on the basis of the PIK dividend rate stated in the preferred stock agreement. For example, if the preferred stock agreement specifies that PIK dividends are calculated by multiplying the PIK dividend rate by the liquidation value of the preferred stock outstanding, an entity should initially measure the PIK dividend at that amount. The liquidation value (or liquidation preference) of the preferred stock is typically defined by the preferred stock agreement and specifies the value of the preferred stock upon the occurrence of a liquidation event (such as the entity becoming insolvent). When preferred stock is not issued at a discount or premium, the liquidation value upon initial issuance is typically the same as the original issuance price of the preferred stock. The amendments in this Update improve GAAP by providing authoritative guidance for the initial measurement of PIK dividends on equity-classified preferred stock. Specifically, the amendments improve the decision usefulness of the financial reporting information provided to investors by (1) enhancing the comparability of financial information reported among entities that issue PIK dividends on equity-classified preferred stock and (2) providing additional information about the liquidation value of the preferred stock, which helps investors to understand the amount and preference of relative claims on an entity. The amendments also provide clear, cost-effective guidance that will reduce complexity. The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted in an interim or annual reporting period in which financial statements have not yet been issued or made available for issuance. An entity adopting the amendments in an interim reporting period should apply them as of the beginning of the annual reporting period that includes that interim reporting period. An entity is permitted to apply the amendments in this Update either (1) on a prospective basis or (2) on a modified retrospective basis for equity-classified preferred stock instruments that are outstanding as of the initial application date. Under the prospective transition approach, an issuer should apply the amendments in this Update to PIK dividends recognized on equity-classified preferred stock instruments on or after the initial application date. Under the modified retrospective transition approach, an issuer should recast prior reporting periods presented and recognize a cumulative-effect adjustment to equity as of the beginning of the earliest period presented related to previously issued PIK dividends recognized on equity-classified preferred stock that is outstanding as of the initial application date.
In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). The amendments in this Update apply to all entities and affect entities that: 1. Buy or receive transferable environmental credits and use those credits: a. To settle environmental credit obligations arising from regulatory compliance programs b. To transfer in an exchange transaction c. In a nonreciprocal transfer (for example, to distribute to an investor) d. To meet voluntary environmental initiatives, such as carbon neutral or net zero initiatives. 2. Generate environmental credits. 3. Have enforceable obligations resulting from regulatory compliance programs represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. The amendments in this Update improve GAAP by providing specific authoritative guidance for environmental credits and environmental credit obligations. Environmental Credits Broadly, environmental credits as defined by the amendments in this Update are enforceable rights represented to prevent, control, reduce, or remove emissions or other pollution that are separately transferable in an exchange transaction. Entities can acquire environmental credits in an exchange transaction, receive environmental credits through a grant from a regulator or its designee(s) as part of a regulatory compliance program, internally generate environmental credits, or receive environmental credits in a nonreciprocal transfer that is not a grant from a regulator or its designee(s). Recognition and Measurement An entity is required to recognize an environmental credit as an asset when it is probable that the environmental credit will be (1) used to settle an environmental credit obligation, (2) transferred in an exchange transaction, or (3) used in a nonreciprocal transfer. An entity is required to recognize costs to obtain all other environmental credits as an expense when incurred (for example, environmental credits acquired to satisfy a voluntary net zero emission initiative). Environmental credits received through a grant from a regulator or internally generated by an entity initially should be measured at the amount of transaction costs incurred to obtain those environmental credits, if any. Environmental credits that are obtained in a transaction initially measured in accordance with a Topic other than Topic 818 should follow the requirements of that Topic. All other environmental credits should be initially measured at cost in accordance with the guidance on asset acquisitions in Subtopic 805-50, Business Combinations—Related Issues. At each reporting date, an entity is required to subsequently measure its environmental credits recognized as assets considering its intended use of those environmental credits. Specifically: 1. Compliance environmental credits. Environmental credits that an entity is probable of using to settle an environmental credit obligation should be subsequently measured at cost and not tested for impairment at each reporting date. 2. Noncompliance environmental credits. All other environmental credits owned by an entity should be subsequently measured at cost, less impairment losses, if any. Noncompliance environmental credits should be tested for impairment at each reporting date. Impairment expense should be recognized when the carrying value of a noncompliance environmental credit exceeds its fair value, measured as the excess of the carrying value over fair value. Subsequent reversal of a previously recognized impairment loss is prohibited. Additionally, an entity is permitted to elect an accounting policy to measure eligible classes of noncompliance environmental credits at fair value, with subsequent changes recognized in earnings. Presentation An entity is required to present its compliance environmental credit assets separately from its environmental credit obligation liabilities on the balance sheet. Disclosure An entity is required to disclose in annual reporting periods qualitative information about how it obtained and intends to use its environmental credits, the accounting policies used to account for environmental credits, and significant estimates and judgments used in applying the guidance. An entity also is required to disclose in annual reporting periods the current and noncurrent amounts of compliance environmental credits and noncompliance environmental credits (if not separately presented on a classified balance sheet), the total expense for voluntary environmental credits, and the total impairment expense.
F-21
If an entity changes its use, or intended use, of its environmental credits, it is required for annual reporting periods to disclose the nature of that change as of the date that it occurs and the related effect on earnings on that date, if any. Environmental Credit Obligations Environmental credit obligations as defined by the amendments in this Update are enforceable obligations resulting from regulatory compliance programs represented to prevent, control, reduce, or remove emissions or other pollution that may be settled with environmental credits. As a result, voluntary initiatives and similar statements of intent do not constitute an environmental credit obligation. Recognition and Measurement An entity is required to recognize an environmental credit obligation liability when events (for example, emissions) occurring on or before the reporting date result in an environmental credit obligation. In determining whether a liability should be recognized, the amendments in this Update require that an entity assume that the reporting date is the end of the compliance period regardless of whether the compliance period ends on that date. An entity is required to initially and subsequently measure an environmental credit obligation liability at each reporting date using the carrying amount of the compliance environmental credits that the entity holds and expects to use to settle that obligation at the reporting date (referred to as the funded portion of the liability). If an entity has insufficient compliance environmental credits at the reporting date to satisfy the liability, that unfunded portion should be initially and subsequently measured at the fair value of the environmental credits necessary to settle the unfunded portion at the reporting date, with certain exceptions. An environmental credit obligation liability should be derecognized when an entity remits the necessary environmental credits to a regulator. Disclosure An entity is required to disclose in annual reporting periods all of the following about regulatory compliance programs that result in the entity’s environmental credit obligation liabilities: 1. The activities or events that result in environmental credit obligation liabilities under those programs, including the nature and timing of settlement provisions 2. The accounting policies used to account for the environmental credit obligations 3. How the unfunded portion of an environmental credit obligation liability is measured 4. Significant estimates and judgments used in applying the guidance. An entity also is required to disclose in annual reporting periods: 1. The current and noncurrent amounts of the funded and unfunded portions of environmental credit obligation liabilities (if not separately presented on a classified balance sheet) 2. Total expense related to environmental credit obligation liabilities 3. Total costs associated with environmental credit obligation liabilities that are capitalized in the carrying amount of another asset during the reporting period in accordance with another Topic. For public business entities, the amendments in this Update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. For entities other than public business entities, the amendments are effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. An entity should apply the amendments in this Update on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings (or other appropriate components of equity or net assets on the balance sheet) as of the beginning of the annual reporting period of adoption. An entity should not recast any financial statement information before the period of adoption. At the date of initial application, the entity should: 1. Recognize an environmental credit asset if it is probable that the entity will use the environmental credit to settle an environmental credit obligation, transfer the credit in an exchange transaction, or use the credit in a nonreciprocal transfer. For all other environmental credits (voluntary environmental credits), the entity should derecognize the carrying amount of those environmental credits unless that amount was capitalized as part of another asset (for example, inventory) before the date of initial application. An entity also should derecognize the carrying amount of an asset recognized for a nonrefundable deposit made to obtain voluntary environmental credits. 2. Measure environmental credits recognized as assets as follows: a. Compliance environmental credits. Using the entity’s carrying amount existing at the date of initial application. b. Noncompliance environmental credits. At the lower of the entity’s carrying amount of the environmental credits existing at the date of initial application and the fair value of the environmental credits at the date of initial application. c. Notwithstanding (a) and (b) above, an entity may elect to measure all of its environmental credits that were internally generated or received through a grant from a regulator or its designee(s) at their transaction costs, if any. d. Any class of eligible noncompliance environmental credits that an entity elects to measure at fair value. Using the fair value of those environmental credits at the date of initial application. 3. Continue to include the cost of environmental credits capitalized as part of another asset (for example, manufactured inventory) before the date of initial application as part of the carrying amount of that other asset. 4. Recognize and measure environmental credit obligation liabilities by applying the amendments at the date of initial application. 5. Apply the amendments to Topic 805, Business Combinations, prospectively to transactions occurring after the date of initial application.
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 consolidated financial position, statements of operations, cash flows, and disclosures.
Note 3. NOTES RECEIVABLE
Notes receivable related to bank acceptance notes issued by third party companies and backed by financial institutions which can be encashed upon maturity, encashed by discounting, or reassigned to suppliers. As of June 30, 2026, the maturity date of these notes ranging from July 5, 2026 to September 24, 2026.
Note 4. ACCOUNTS RECEIVABLE
The Company’s accounts receivable are as follows:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Trade accounts receivable | $ | $ | ||||||
F-22
Note 5. ADVANCES TO SUPPLIERS
Advances to suppliers related to prepayment for
various shipping costs associated with shipments and commodity trading activities.
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Commodity trading (1) | $ | |||||||
| Freight fees | ||||||||
| Advances to suppliers | $ | $ | ||||||
| (1) |
|
|
Subsequent to the June 30, 2026 balance sheet date, the Company executed
formal refund agreements with all of the aforementioned commodity trading suppliers, and collected total refunds of approximately $ |
Note 6. LOANS FROM THIRD PARTIES
The Company’s loans from third parties are as follows:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Loans from third parties - current | $ | $ | ||||||
| Loans from third parties - non-current | ||||||||
| Total loans from third parties | $ | $ | ||||||
As of June 30, 2026 and 2025, loans from third
parties amounted to approximately $
For the years ended June 30, 2026 and 2025, interest expenses were
$
The aggregate scheduled principal repayments due on the third-party loans for each of the next two fiscal years ending June 30 are as follows:
| As of | ||||
| June 30, | ||||
| Twelve months ended June 30, | 2026 | |||
| Fiscal year 2027 | $ | |||
| Fiscal year 2028 | ||||
| Total | $ | |||
Note 7. LEASES
The Company leases its office in Shanghai City from a third party for its operations.
As of June 30, 2026 and 2025, the remaining
average lease term was an average of
Supplemental balance sheet information related to operating leases was as follows:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Right-of-use asset | $ | $ | ||||||
| Lease liability, current | ||||||||
| Lease liability, non-current | ||||||||
| Total lease liability | $ | $ | ||||||
F-23
As of June 30, 2026, maturities of lease liability were as follows:
| As of | ||||
| June 30, | ||||
| Twelve months ended June 30, | 2026 | |||
| Fiscal year 2027 | $ | |||
| Less: Imputed interest | ( |
) | ||
| Total lease liability | $ | |||
Note 8. JUDGMENT DEBT PAYABLE
As of June 30, 2025, judgment debt payable related
to a judgment passed in January 2025 against the Company and in favor of plaintiff. In February 2024, Zhikang Huang, a former officer
and director of the Company, filed a lawsuit against the Company in the Circuit Court for the City of Richmond, Virginia, alleging that
the Company failed to pay certain severance compensation, salary and incentive-based bonus. On January 31, 2025, the court entered a judgment
in favor of Mr. Huang and against the Company in the amount of approximately $
However, on June 15, 2025, Mr. Huang filed a petition in the Supreme Court of New York, County of Westchester (the “Westchester Court”) against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney’s fees.
On August 23, 2025, the Company and Mr. Huang
entered into a settlement agreement to resolve the claims, pursuant to which the Company agreed to pay Mr. Huang $
On September 25, 2025, the Westchester Court entered an order, awarding the additional attorney’s fees and directing the Company to pay the entire original judgment plus interest. On October 10, 2025, the Company filed a motion to vacate the September 25 order. On June 3, 2026, the September 25 order was vacated by the Westchester Court in its entirety. Mr. Huang may seek attorneys’ fees relating solely to the New York special proceeding, which remains pending, by filing a motion requesting the same. As of the date of this disclosure Mr. Huang has not filed a motion for attorney’s fees.
As of June 30, 2026, pursuant to ASC 450-20-25-2,
the Company reassessed Jing Shan legal matter and determined that a probable settlement liability should be around $
On October 25, 2023, Shan filed suit against the Company in the action captioned Shan v. Singularity Future Technology, Ltd., Case No. CL23-4916-WRM, Circuit Court of Virginia, City of Richmond for indemnification (the “Virginia Action”). On December 8, 2023, the Company filed a counterclaim in the Virginia Action against Shan (the “Counterclaim”). On February 12, 2024, Shan filed a motion to dismiss the Counterclaim (the “Motion to Dismiss”) and a motion for summary judgment in the Virginia Action (the “Motion for Summary Judgment”).
On May 3, 2024, the Circuit Court of Virginia
entered an order granting the Motion to Dismiss, partially granting the Motion for Summary Judgment, and ordering Singularity to pay Shan
her reasonable attorneys’ fees and costs. On January 17, 2025, the Circuit Court of Virginia entered a contempt order, ordering
the Company to pay Shan $
Note 9. CLASS ACTION SETTLEMENT
On December 9, 2022, a securities class action, Crivellaro v. Singularity Future Technology Ltd., et al., No. 22-cv-7499-BMC, was commenced against the Company and certain other defendants in the United States District Court for the Eastern District of New York (the “EDNY”), alleging violations of the federal securities laws (the “Class Action”).
On June 22, 2026, the Company and the lead plaintiffs
entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), pursuant to which and
subject to approval by EDNY, the Company agreed to settle the Class Action for an aggregate cash settlement amount of $
The Court granted preliminary approval of the Amended Settlement Agreement and approved the settlement schedule on September 10, 2026. The Court set the Fairness Hearing for January 25, 2027. Until the conclusion of the Fairness Hearing, the ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive final approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.
F-24
On June 22, 2026, the Company and the lead plaintiffs
entered into an Amended Stipulation and Agreement of Settlement (the “Amended Settlement Agreement”), which amended and superseded
the Original Settlement Agreement. Pursuant to the Amended Settlement Agreement and subject to approval by EDNY, the Company agreed to
settle the Class Action for an aggregate cash settlement amount of $
As of the date of this Annual Report, EDNY has not yet granted final approval of the Amended Settlement Agreement, and the Class Action remains pending. The ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive EDNY approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.
Note 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
The details of accrued expenses and other current liabilities are as follows:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Salary and reimbursement payable | $ | $ | ||||||
| Interest payable | ||||||||
| Professional fees and other expense payable | ||||||||
| Accrued expenses | ||||||||
| Total | $ | $ | ||||||
F-25
Note 11. EQUITY
Share issuances:
2021 warrants
On February 6, 2021, the Company entered into
a securities purchase agreement with certain investors pursuant to which the Company sold to the investors, and the investors purchased
from the Company, in a registered direct offering, an aggregate of
On February 9, 2021, the Company entered into
a securities purchase agreement with certain investors pursuant to which the Company sold to the investors, and the investors purchased
from the Company, in a registered direct offering, an aggregate of
On December 14, 2021, the Company entered into
a Securities Purchase Agreement (the “Purchase Agreement”) with non-U.S. investors and accredited investors pursuant to which
the Company sold to the investors, and the investors agreed to purchase from the Company, an aggregate of
2025 warrants
On November 15, 2023, the Company entered into
a subscription agreement with ten individual investors, under which the Company agreed to sell an aggregate of
The Company’s outstanding warrants are classified as equity since they qualify for exception from derivative accounting as they are considered to be indexed to the Company’s own stock and require net share settlement. The fair value of the warrants was recorded as additional paid-in capital from common stock.
Following is a summary of the status of warrants outstanding and exercisable as of June 30, 2026
| Weighted | ||||||||
| Average | ||||||||
| Exercise | ||||||||
| Warrants | Price | |||||||
| Warrants outstanding, as of June 30, 2025 and 2024 | $ | |||||||
| Issued | $ | |||||||
| Exercised | ||||||||
| Expired | ( |
) | $ | |||||
| Warrants outstanding, as of June 30, 2026 | $ | |||||||
| Warrants exercisable, as of June 30, 2026 | $ | |||||||
F-26
| Weighted | ||||||||
| Average | ||||||||
| Warrants | Exercise | |||||||
| Exercisable | Price | |||||||
| 2021 warrants - |
$ | |||||||
| 2025 warrants – |
$ | |||||||
On January 24, 2025 the Company entered into
securities purchase agreements with several institutional investors to sell an aggregate of
On October 15, 2025, the Company entered into
a securities purchase agreement (the “SPA”) with certain investors, under which the Company agrees to sell to the investors
an aggregate of
The parties to the SPA have each made customary representations, warranties and covenants, including, among other things, (a) the Purchasers are “non-U.S. Persons” as defined in Regulation S and are acquiring the Shares for the purpose of investment, (d) the absence of any undisclosed material adverse effects, and (e) the absence of legal proceedings that affect the completion of the transaction contemplated by the Securities Purchase Agreement, except as disclosed in the Company’s filings with the SEC.
On October 20, 2025, upon satisfaction of the closing conditions, the Offering was consummated, and the shares were issued in reliance on the exemption from registration provided by Regulation S. The Company currently intends to use the net proceeds from the Offering for working capital and general corporate purposes.
On August 23, 2025, a settlement agreement was
signed between the Company and Zhikang Huang to fully settled all claims by paying $
Reverse stock split and amended and restated authorized shares
Note 12. NON-CONTROLLING INTEREST
The Company’s non-controlling interest consists of the following:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Trans Pacific Shanghai | $ | ( |
) | $ | ( |
) | ||
| Brilliant Warehouse | ( |
) | ||||||
| Total | $ | ( |
) | $ | ( |
) | ||
On August 6, 2025, the Company dissolved its subsidiary, Brilliant Warehouse Service Inc.
F-27
Note 13. COMMITMENTS AND CONTINGENCIES
Contingencies
Crivellaro v. Singularity Future Technology Ltd.
On December 9, 2022, a securities class action, Crivellaro v. Singularity Future Technology Ltd., et al., No. 22-cv-7499-BMC, was commenced against the Company and certain other defendants in the United States District Court for the Eastern District of New York (the “EDNY”), alleging violations of the federal securities laws (the “Class Action”).
On June 22, 2026, the Company and the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended
Settlement Agreement”), pursuant to which and subject to approval by EDNY, the Company agreed to settle the Class Action for an
aggregate cash settlement amount of $
The Court granted preliminary approval of the Amended Settlement Agreement and approved the settlement schedule on September 10, 2026. The Court set the Fairness Hearing for January 25, 2027. Until the conclusion of the Fairness Hearing, the ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive final approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.
On June 22, 2026, the Company and the lead plaintiffs entered into an Amended Stipulation and Agreement of Settlement (the “Amended
Settlement Agreement”), which amended and superseded the Original Settlement Agreement. Pursuant to the Amended Settlement Agreement
and subject to approval by EDNY, the Company agreed to settle the Class Action for an aggregate cash settlement amount of $
As of the date of this Annual Report, EDNY has not yet granted final approval of the Amended Settlement Agreement, and the Class Action remains pending. The ultimate outcome of the Class Action remains uncertain, and there can be no assurance that the Amended Settlement Agreement will receive EDNY approval. If the settlement is not finalized, the Company intends to continue defending itself in the Class Action.
F-28
Huang v. Singularity Future Technology Ltd.
As previously disclosed, In February 2024, Zhikang Huang, a former officer and director of the Company, filed a lawsuit against the Company
in the Circuit Court for the City of Richmond, Virginia, alleging that the Company failed to pay certain severance compensation, salary
and incentive-based bonus. On January 31, 2025, the court entered a judgment in favor of Mr. Huang and against the Company in the amount
of approximately $
However, on June 15, 2025, Mr. Huang filed a petition in the Supreme Court of New York, County of Westchester (the “Westchester Court”) against the Company and certain Company individuals seeking payment of the Virginia judgment and attorney’s fees.
On August 23, 2025, the Company and Mr. Huang entered into a settlement agreement to resolve the claims, pursuant to which the Company
agreed to pay Mr. Huang $
On September 25, 2025, the Westchester Court entered an order, awarding the additional attorney’s fees and directing the Company to pay the entire original judgment plus interest. On October 10, 2025, the Company filed a motion to vacate the September 25 order. On June 3, 2026, the September 25 order was vacated by the Westchester Court in its entirety. Mr. Huang may seek attorneys’ fees relating solely to the New York special proceeding, which remains pending, by filing a motion requesting the same. As of the date of this disclosure Mr. Huang has not filed a motion for attorney’s fees.
Jing Shan v. Singularity Future Technology Ltd.
The Company’s subsidiary, SG Shipping & Risk Solution, Inc. (“Plaintiff”), was party to a lawsuit it filed on July 13, 2023, in the United States District Court for the Eastern District of New York (Case No. 2:23-cv-05332-NJC-ARL) (the “SG Shipping Action”), wherein Plaintiff sought an award of monetary damages in connection with the conversion of Plaintiff’s corporate funds that Plaintiff alleges its former chief operations officer, Angela Shan (“Shan”), converted from Plaintiff. The Company dismissed the SG Shipping Action without prejudice on May 30, 2025, reserving the right to refile the case.
On October 25, 2023, Shan filed suit against the Company in the action captioned Shan v. Singularity Future Technology, Ltd., Case No. CL23-4916-WRM, Circuit Court of Virginia, City of Richmond for indemnification (the “Virginia Action”). On December 8, 2023, the Company filed a counterclaim in the Virginia Action against Shan (the “Counterclaim”). On February 12, 2024, Shan filed a motion to dismiss the Counterclaim (the “Motion to Dismiss”) and a motion for summary judgment in the Virginia Action (the “Motion for Summary Judgment”).
On May 3, 2024, the Circuit
Court of Virginia entered an order granting the Motion to Dismiss, partially granting the Motion for Summary Judgment, and ordering Singularity
to pay Shan her reasonable attorneys’ fees and costs. On January 17, 2025, the Circuit Court of Virginia entered a contempt order,
ordering the Company to pay Shan $
Haotian Song Arbitration
Haotian Song, a former employee and director of the Company, commenced an employment-related arbitration before the American Arbitration Association against the Company and certain individual respondents, Case No. 01-26-0001-3574. The dispute concerns, among other matters, Mr. Song’s employment agreements, a reduction in his compensation, allegedly unpaid compensation, the termination of his health insurance coverage and related continuation coverage issues, and the circumstances surrounding his resignation in July 2024. On September 4, 2026, the arbitrator issued rulings concerning discovery disputes and directed the production of certain documents and information. These rulings did not determine the merits of any claim or defense. The arbitration remains pending.
F-29
Shilun Dai Litigation
On June 17, 2026, Shilun Dai, a former employee of the Company, filed a lawsuit against the Company and Jia Yang, the Company’s Chief Executive Officer, in the United States District Court for the Eastern District of New York, Case No. 1:26-cv-03653. The complaint alleges violations of the Fair Labor Standards Act and the New York Labor Law relating to unpaid overtime and wages, accrued leave compensation, unreimbursed business expenses, wage payment frequency, wage notices and statements, and alleged retaliation. Mr. Dai seeks unpaid compensation, liquidated and statutory damages, back pay, front pay, compensatory damages, interest, attorneys’ fees and costs, and other relief. The litigation remains pending.
Except as set forth above, there has been no other material development in the legal proceedings that the Company is a party. For a discussion of all of our legal proceedings, see the information in Part I, “Item 1. Business - Recent Developments” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Civil Monetary Penalty
Following the publication of the Hindenburg Report, the Company received subpoenas from the United States Attorney’s Office for the Southern District of New York and the United States Securities and Exchange Commission (the “SEC”). The Company cooperated with these governmental authorities regarding these matters. The Company is not able to estimate the outcome or duration of the government investigations. As of the date of this report, the Company has not received any updates.
On February 28, 2023, the
audit committee of the Company, after discussion with the management of the Company, and in consultation with the Company’s independent
registered public accounting firm, concluded that the Company’s previously issued financial statements for the fiscal year ended
June 30, 2021 included in the Company’s Annual Report on Form 10-K filed with the SEC on November 29, 2021 (the “2021 Form
10-K”) should no longer be relied upon as a result of incorrect accounting treatment of approximately $
On June 17, 2024, the Company received a subpoena from the SEC requesting the production of certain documents related to an investigation by the SEC regarding the Restatements (the “Investigation”). Because the Investigation is at an early stage, the Company cannot predict its outcome, duration, or any potential consequences at this time. The SEC has not advised the Company that it has concluded any legal violation has occurred, but any Investigation potentially could result in government enforcement actions and, to civil and/or criminal sanctions under relevant laws. The Company intends to cooperate with the SEC with respect to the Investigation.
On January 17, 2025, after cooperating with the Investigations, the Company reached a resolution with the SEC regarding the aforementioned matters.
The SEC approved the Company’s Offer of Settlement and issued its Cease-and-Desist Order (the “SEC Order”) dated January
17, 2025, with respect to certain violations related to the Company’s financial reporting, accounting, books and records, and internal
controls. Pursuant to the terms of the SEC Order, the Company paid a civil monetary penalty of $
Note 14. INCOME TAXES
On March 27, 2020, the CARES Act was enacted and signed into law and includes, among other things, refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods and alternative minimum tax credit refunds. The Company does not at present expect the provisions of the CARES Act to have a material impact on its tax provision given the amount of net operating losses currently available.
For the years ended June 30, 2026 and 2025, total pre-tax income, disaggregated by U.S. and foreign sources, is presented below:
| For the Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Pre-tax loss from U.S, operations | $ | ( |
) | $ | ( |
) | ||
| Pre-tax loss from PRC operations | ( |
) | ( |
) | ||||
| Net loss before income tax expenses | $ | ( |
) | $ | ( |
) | ||
The Company’s income tax expenses for years ended June 30, 2026 and 2025 are as follows:
| For the Years Ended June 30, | ||||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Current | ||||||||
| U.S. | $ | |||||||
| PRC | ||||||||
| Total income tax expenses | $ | |||||||
F-30
Total cash payments for income taxes, disaggregated by taxing jurisdiction for the respective fiscal years, are as follows:
| For the Years Ended June 30, | ||||||||
| 2026 | 2025 | |||||||
| Federal income tax paid (U.S.) | $ | |||||||
| State income tax paid (U.S.) | ||||||||
| Foreign (PRC) income tax paid | ||||||||
| Total cash income tax paid | $ | |||||||
No U.S. federal or state income tax payments were made for the year ended June 30, 2026, as the U.S. entities recorded operating losses with no taxable U.S.-source income generated. No PRC income tax payments were made for both fiscal years, as the PRC entities recorded operating losses with no taxable PRC-source income generated.
The following table reconciles the expected
income tax expense calculated by applying the U.S. federal statutory corporate tax rate of
| For the Years Ended June 30, | ||||||||||||||||
| 2026 | 2026 | 2025 | 2025 | |||||||||||||
| Dollar | Effective | Dollar | Effective | |||||||||||||
| Amount | tax rate | Amount | tax rate | |||||||||||||
| US Statutory tax rate | $ | ( |
) | % | $ | ( |
) | % | ||||||||
| Change in valuation allowance | ( |
%) | ( |
%) | ||||||||||||
| Rate differential in foreign jurisdiction | ( |
) | % | ( |
%) | |||||||||||
| Total | $ | % | ||||||||||||||
The Company’s deferred tax assets are comprised of the following:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Allowance for credit losses | ||||||||
| PRC | $ | $ | ||||||
| Net operating loss | ||||||||
| U.S. | ||||||||
| PRC | ||||||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( |
) | ( |
) | ||||
| Deferred tax assets, net - long-term | ||||||||
As of June 30, 2026 and 2025, the Company incurred
a cumulative U.S. federal net operating loss (“NOL”) of approximately $
As of June 30, 2026 and 2025, the Company’s
operations in China incurred a cumulative NOL of approximately $
The Company periodically evaluates the likelihood
of the realization of deferred tax assets (“DTA”) and reduces the carrying amount of the deferred tax assets by a valuation
allowance to the extent it believes a portion will not be realized. Management considers new evidence, both positive and negative, that
could affect the Company’s future realization of deferred tax assets including its recent cumulative earnings experience, expectation
of future income, the carry forward periods available for tax reporting purposes and other relevant factors. The Company determined that
it is more likely than not that its deferred tax assets could not be realized due to uncertainty on future earnings as a result of the
company’s reorganization and venture into new businesses. The Company provided a
The Company’s taxes payable consists of the following:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Corporate income tax payable | $ | $ | ||||||
| VAT tax payable | ||||||||
| Other taxes payable | ||||||||
| Total | $ | $ | ||||||
F-31
Note 15. CONCENTRATIONS
Major Customers
For the year ended June 30, 2026, one customer
accounted for
For the year ended June 30, 2025, one customer
accounted for
Major Suppliers
For the year ended June 30, 2026, two suppliers
accounted for approximately
For the year ended June 30, 2025, three suppliers
accounted for approximately
Note 16. RELATED PARTY BALANCES AND TRANSACTIONS
Set forth below are transactions with related persons for the years ended June 30, 2026 and 2025.
Due from Related Party
As of June 30, 2026 and 2025, the outstanding amounts due from related parties consist of the following:
| As of | As of | |||||||
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Shanghai Baoyin Industrial Co., Ltd (1) | $ | $ | ||||||
| Zhejiang Jinbang Fuel Energy Co., Ltd (2) | ||||||||
| Less: impairment for credit losses | ( |
) | ( |
) | ||||
| Total | ||||||||
Movements of allowance for credit losses were as follows:
| June 30, | June 30, | |||||||
| 2026 | 2025 | |||||||
| Beginning balance | $ | $ | ||||||
| Less: Write-off | ( |
) | ||||||
| Exchange rate effect | ||||||||
| Ending balance | $ | $ | ||||||
| (1) |
|
| (2) |
|
F-32
Due to related parties
As of
June 30, 2026 and 2025, the Company owed $
As of
June 30, 2026 and 2025, the Company owed $
The balance of due to related parties was interest-free, unsecured, and due upon demand.
Note 17. Disposition of subsidiaries
On August 6, 2025, the Company dissolved its subsidiary, Brilliant Warehouse Service Inc.
On September 25, 2025, the Company entered into
a share transfer agreement with a third party and disposed its subsidiary, New Energy Tech Limited, for a consideration of $
The following is a reconciliation of the carrying amounts of major classes of assets and liabilities in the consolidated balance sheets as of the date of disposition of subsidiaries:
| As of | ||||
| date of | ||||
| disposition | ||||
| Carrying amount of major classes of assets | ||||
| Cash | ||||
| Restricted cash | ||||
| Due from intercompanies | ||||
| Prepaid expenses | ||||
| Total assets of disposed entity | $ | |||
| Carrying amount of major classes of liabilities | ||||
| Loans from third parties | ||||
| Accrued expenses and other current liabilities | ||||
| Total liabilities of disposed entity | $ | |||
| Net assets disposed of | $ | |||
| Cash outflow arising from disposal: | ||||
| Net assets disposed of (as above) | ($ | ) | ||
| Less: Consideration | ||||
| Gain from disposal of subsidiaries | $ | |||
| Cash proceeds on disposal | $ | |||
| Less: Cash and bank balances in subsidiary disposed of | ( |
) | ||
| Net cash inflow on disposal | $ | |||
The following is a reconciliation of the amounts of major classes of operations of disposed entities in the condensed consolidated statements of income (loss) and comprehensive income (loss) for the period from July 1, 2025 to the date of disposition.
| From July 1, 2025 |
||||
| to the date | ||||
| of disposition | ||||
| Operating expenses | $ | |||
| Net loss | $ | |||
F-33
Note 18. SUBSEQUENT EVENTS
| 1. | On July 6, 2026, Singularity Future Technology Ltd. (the “Company”) entered into a securities
purchase agreement (the “SPA”) with certain investors, under which the Company agreed to sell to the investors an aggregate
of |
The Warrants are exercisable immediately
upon the date of issuance at an initial exercise price of $
The parties to the SPA have each made customary representations, warranties and covenants, including, among other things, (a) the Purchasers are “non-U.S. Persons” as defined in Regulation S and are acquiring the Shares for the purpose of investment, (b) the absence of any undisclosed material adverse effects, and (c) the absence of legal proceedings that affect the completion of the transaction contemplated by the Securities Purchase Agreement, except as disclosed in the Company’s filings with the SEC.
On July 13, 2026, the Offering consummated
upon satisfying the closing conditions as set forth in the SPA, including, among other things, accuracy of the parties’ representations
and warranties. The Company issued an aggregate of
| 2. | The shareholders of the Company approved at its annual meeting of shareholders an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock by one of the following ratios: 1-for-5, 1-for-10, or 1-for-14, with such ratio to be determined in the discretion of the board of directors of the Company (the “Board”) and with such action to be effected at such time and date, if at all, as determined by the Board within one year after the conclusion of the annual meeting (the “Reverse Stock Split”). On July 7, 2026, the Board fixed the Reverse Stock Split ratio at . |
On July 22, 2026, the Company filed Articles of Amendment to our Amended and Restated Articles of Incorporation with the Virginia State Corporation Commission (the “Articles of Amendment”), which effect the Reverse Stock Split at a ratio of , and such Articles of Amendment will become effective as of 12:01 a.m. ET on July 27, 2026 (the “Effective Time”).
| 3. | As previously disclosed, on November 19, 2025, Singularity Future Technology Ltd. (the “Company”)
received a staff determination notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market
LLC (“Nasdaq”), informing the Company that its common stock, no par value (the “Common Stock”), failed to comply
with the $ |
On May 19,
2026, the Company was granted an additional
On August
10, 2026, the Company received a written notification from Nasdaq, indicating that the Company has regained compliance with the Rule 5550(a)(2),
based on the closing bid price of the Company’s Common Stock for the last
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| 4. | On August 12, 2026, Singularity Future Technology Ltd. (the “Company”) entered into a securities
purchase agreement (the “SPA”) with certain investors, under which the Company agrees to sell to the investors an aggregate
of |
The parties to the SPA have each made customary representations, warranties and covenants, including, among other things, (a) the Purchasers are “non-U.S. Persons” as defined in Regulation S and are acquiring the Shares for the purpose of investment, (b) the absence of any undisclosed material adverse effects, and (c) the absence of legal proceedings that affect the completion of the transaction contemplated by the Securities Purchase Agreement, except as disclosed in the Company’s filings with the SEC.
As previously disclosed, on June
19, 2025, Singularity Future Technology Ltd. (the “Company”) entered into a securities purchase agreement (the “SPA”)
with eighteen investors (the “Investors”), under which the Company agreed to sell to the investors an aggregate of
On August 12, 2026, the Company and
the Investors entered into an amendment to the SPA (the “Amendment to SPA”), pursuant to which the Company agreed to issue
amended and restated warrants (the “Amended and Restated Warrants”), with each Amended and Restated Warrant exercisable to
purchase one share of the Common Stock at an exercise price of $
On August 12, 2026, the Company issued
| 5. | On August 18, 2026, the Company entered into certain securities purchase agreement (the “First
Purchase Agreement”) with certain non-affiliated institutional investor (the “Purchaser”)
pursuant to which the Company agreed to sell |
| 6. | On August 20, 2026, the Company entered into certain securities purchase agreements (the “Second
Purchase Agreement” and, together with the First Purchase Agreement, the “Purchase
Agreements”) with certain non-affiliated institutional investors (the “Second Purchasers”)
pursuant to which the Company agreed to sell |
| 7. | On September 21, 2026, the Company dissolved its subsidiary, Gorgeous Trading Ltd. |
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