What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-09-29 compared with 2023-03-06 · 242 added, 304 removed, 137 unchanged (80% of the section changed)

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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.

We previously focused on providing customized freight logistics services,

but starting in 2017, we began exploring new opportunities to expand our business and generate more revenue.

These opportunities ranged

from complementary businesses to other new service and product initiatives.

In the fiscal years 2021 and 2022, while we continued to provide

our freight logistics business, we expanded our services to include warehousing services provided by our US subsidiary Brilliant Warehouse

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.

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.

We previously focused on providing

customized freight logistics services, but starting in 2017, we began exploring new opportunities to expand our business and generate

more revenue.

These opportunities ranged from complementary businesses to other new service and product initiatives.

In the fiscal years

2022 and 2023, while we continued to provide our freight logistics business, we expanded our services to include warehousing services

provided by our US subsidiary Brilliant Warehouse Service Inc.

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.

During 2022, we engaged in purchases and sales of cryptocurrency mining machines

through our U.S.

During 2022, we engaged in purchases

and sales of cryptocurrency mining machines through our U.S.

subsidiaries.

For the fiscal year ended June

30, 2022, we operated in two operating segments, including (1) freight logistics services, through our subsidiaries in the U.S and PRC;

and (2) purchase and sales of crypto mining machines, through our subsidiary Thor Miner.

For the year ended June 30, 2021, the Company

also engaged in shipping agency and management services, which were carried out by its subsidiary in the U.S.

The Company no longer operates

in the shipping agency segment because it did not receive any new orders for its services due to the uncertainty of the shipping management

market which was negatively impacted by the COVID-19 pandemic.

the fiscal year ended June 30, 2023 and 2022, we operated in two operating segments:

(1) freight logistics services, through our subsidiaries

in the U.S and PRC;

and (2) the purchase and sales of crypto mining machines, through our subsidiary Thor Miner.

The Company no longer

operates in the shipping agency segment because it did not receive any new orders for its services due to the uncertainty of the shipping

management market which was negatively impacted by the COVID-19 pandemic.

Recent Developments

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certain cryptocurrency mining equipment from HighSharp.

In January and April 2022, Thor Miner made a total prepayment of $35,406,649 for

Thor Miner also entered into a PSA with SOSNY for the purchase of $200,000,000 in crypto mining rigs and received deposit

form SOSNY in the amount of $48,930,000.

Due to production issue from HighSharp,

Thor Miner was not able to timely deliver the products to SOSNY according to the delivery terms of the PSA and was sued by SOSNY for breach

of contract on December 9, 2022.

On December 23, 2022, the Company entered into the Settlement Agreement with SOSNY pursuant to which

the Company paid $13.0 million to SOSNY in exchange for SOSNY dismissing the lawsuit and will transfer any additional funds it receives

from HighSharp to SOSNY in an amount not to exceed $40,560,569.

As of December 22, 2022, the balance of advance to HighSharp and deposit

from SOSNY amounted to $27,927,583 and $40,560,569, respectively.

Thor Miner paid $13.0 million on December 28, 2022 to SOSNY and wrote

off the balance of the deposit it received from SOSNY and the balance of its payment to HighSharp.

of Previously Issued Financial Statements

From March to June 2019, the

Company’s subsidiary Trans Pacific Logistic Shanghai Ltd (“Trans Pacific Shanghai”) received approximately $6.2 million

(RMB 40 million) from a related party, Shanghai Baoyin Industrial Co., Ltd.

(“Shanghai Baoyin”), to pay for accounts receivable

of six different customers totaling RMB 40 million.

Shanghai Baoyin is 30% owned by Wang Qinggang, the CEO and legal representative of

Trans Pacific Shanghai.

Trans Pacific Shanghai subsequently paid RMB 20 million and RMB 10 million to Zhangjiakou Baoyu Trading Co.

(“Baoyu”), a third party, in April 2019 and July 2019, respectively, and it made an additional payment of RMB 10 million to

Hebei Baoxie Trading Co., Ltd.

(“Hebei Baoxie”), a third party, in July 2019.

As such, for the fiscal year

ended June 30, 2019, accounts receivable was understated by RMB 40 million, advance to supplier was overstated by RMB 20 million, and

other payables from Shanghai Baoyin, a related party, were understated by RMB 20 million.

There was an overstatement of RMB 20 million

in total assets and an understatement of total liabilities of RMB 20 million.

During the fiscal year ended

June 30, 2021, Hebei Baoxie repaid a total of RMB 10 million to Trans Pacific Shanghai, and Trans Pacific Shanghai advanced the RMB 10

million to Shanghai Baoyin.

The RMB 10 million paid to Shanghai Baoyin was recorded as other receivable, and the RMB 30 million advance

to Baoyu was reclassified from an advance to supplier to other receivable.

The Company provided a full allowance of its receivables totaling

RMB 40 million.

The Company evaluated this transaction and determined there is no impact on its assets, liabilities, or retained earnings

as of June 30, 2020.

During the fiscal year ended

June 30, 2021, Baoyu repaid a total of RMB 30 million to Trans Pacific Shanghai.

The RMB 30 million received was recorded as recovery

Trans Pacific Shanghai then loaned the same amount to Shanghai Baoyin.

Shanghai Baoyin subsequently repaid RMB 4 million

to Trans Pacific Shanghai, and Trans Pacific Shanghai loaned the same amount to Wang Qinggang.

The RMB 30 million received was recorded

as recovery of bad debt for other receivable and the RMB 30 million paid was recorded as a related party loan receivable.

The Company analyzed the transactions

and determined the RMB 30 million was originally from Shanghai Baoyin and eventually paid back to the same related parties.

bad debt and related party loan receivable was overstated by RMB 30 million for the fiscal year 2021.

The Company restated its fiscal

year 2021 financial statements to restate related party loans receivable and bad debt recovery.

Effects of the restatement are as follows:

Consolidate balance sheet as of June 30, 2021

Loan receivable - related parties

$ (4,644,969 )

Consolidated Statement of Stockholder’s Equity as of June 30, 2021

Accumulated deficit

$ (30,244,937 )

$ (4,076,825 )

$ (34,321,762 )

Accumulated other comprehensive income (loss)

Non-controlling Interest

$ (4,644,969 )

Consolidated statement of oeprations for the year ended June 30, 2021

Recovery (provision) for doubtful accounts, net

$ (4,529,806 )

$ (4,208,638 )

$ (6,773,047 )

$ (4,529,806 )

$ (11,302,853 )

Other comprehensive loss - foreign currency

Comprehensive loss

$ (6,773,535 )

$ (4,644,969 )

$ (11,418,504 )

Consolidated statement of cash flow for the year ended June 30, 2021

Cash flows from operating activities:

$ (6,773,047 )

$ (4,529,806 )

$ (11,302,853 )

(Recovery)/ Provision for doubtful accounts

Other receivable

Cash flows from investing activities:

Loan receivable - related parties

$ (4,529,806 )

In January and April 2022, Thor Miner prepaid $35,406,649 for the order.

Miner also entered into a PSA with SOSNY for the purchase of $200,000,000 in crypto mining rigs and received a deposit form SOSNY in the

amount of $48,930,000.

Due to HighSharp’s production

issue, Thor Miner was unable to timely deliver the products to SOSNY according to the delivery terms of the PSA and was sued by SOSNY

for breach of contract on December 9, 2022.

As of December 22, 2022, the balance of the advance made to HighSharp and deposit from SOSNY

amounted to $27,927,583 and $40,560,569, respectively.

On December 23, 2022, the Company entered into the Settlement Agreement with SOSNY

pursuant to which the Company paid $13.0 million to SOSNY in exchange for SOSNY dismissing the lawsuit and agreed to transfer any additional

funds it receives from HighSharp to SOSNY in an amount not to exceed $40,560,569.

Thor Miner wrote off the balance of the deposit it received

from SOSNY and the balance of its payment to HighSharp.

Impact of COVID-19

The outbreak of the COVID-19

starting from late January 2020 in the PRC has spread rapidly to many parts of the world.

In March 2020, the World Health Organization

declared the COVID-19 as a pandemic.

Given the continually expanding of COVID-19 pandemic in China and United States, our business, results

of operations, and financial condition are still adversely affected.

In early December 2022, Chinese

government eased the strict control measure for COVID-19, which has led to surge in increased infections and disruption in our business

Any future impact of COVID-19 on the Company’s China operation results will depend on, to a large extent, future developments

and new information that may emerge regarding the duration and resurgence of COVID-19 variants and the actions taken by government authorities

to contain COVID-19 or treat its impact, almost all of which are beyond our control.

The impacts of COVID-19 on

our business, financial condition, and results of operations include, but are not limited to, the following:

starting from late January 2020 in the PRC spread rapidly to many parts of the world.

In March 2020, the World Health Organization declared

COVID-19 as a pandemic.

In early December 2022, Chinese government eased

the strict control measures for COVID-19, which led to a surge in increased infections and disruption to our business operations.

our China operation continued to suffer from the impact of COVID-19, although to a lesser extent.

The impact of any future spread of COVID-19

on the Company’s China operation will depend, to a large extent, on the duration and resurgence of COVID-19 variants and the actions

taken by government authorities to contain COVID-19 or treat its impact, almost all of which is beyond our control.

The impact of COVID-19 on our business, financial

condition, and results of operations include, but are not limited to, the following:

Our customers have been negatively impacted by the pandemic, which reduced their demand for freight logistics services.

As a result, our revenue for the year ended June 30, 2022 was down by approximately $1.2 million, or 22.6%.

As a result, our revenue for the year ended June 30, 2022 was down by approximately $1.2 million, or 22.6% and our freight revenue declined slightly in the year ended June 30, 2023.

Due to travel restrictions between US and China, our new business development for existing segments or new ventures has been slowed down.

Our sales of crypto mining machines were materially adversely affected by COVID-19.

Specifically, Crypto mining machine manufacturers have been impacted by the constrained supply of the semiconductors used in the production of the highly specialized crypto mining machines;

COVID-related issues have exacerbated port congestion and intermittent supplier shutdowns and delays, resulting in delayed shipments and additional expenses to expedite delivery;

as a result, we were unable to fulfil our customer orders on a timely basis, resulting cancellation of orders and partial refund of purchase price, as evident from the settlement in SOSNY.

We have been, and may continue

to be, negatively impacted by the ongoing COVID-19, which may continually impact our cost of freight, or result in higher cost of revenue,

which may in turn materially adversely affect our financial condition and operating results in coming months.

Any future impact of COVID-19

on the Company’s operation results will depend on, to a large extent, future developments and new information that may emerge regarding

the duration and resurgence of COVID-19 variants and the actions taken by government authorities to contain COVID-19 or treat its impact,

almost all of which are beyond our control.

Specifically, Crypto mining machine manufacturers were impacted by the constrained supply of the semiconductors used in the production of the highly specialized crypto mining machines.

COVID-related issues exacerbated port congestion and intermittent supplier shutdowns and delays, resulted in delayed shipments and additional expenses to expedite delivery.

As a result, we were unable to fulfil our customer orders on a timely basis, resulting in the cancellation of orders and the partial refund of purchases, as evident from the SOSNY settlement.

Although the impact of COVID-19 on our operations

decreased in 2023, such impact still exists and may continue to exist for an unforeseeable period of time.

The impact of any future spread

of COVID-19 on the Company’s China operation will depend, to a large extent, on the duration and resurgence of COVID-19 variants

and the actions taken by government authorities to contain COVID-19 or treat its impact, almost all of which is beyond our control.

Results of Operations

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For the Years Ended June 30,

2021(restated)

Cost of revenues

1 unchanged sentence

General and administrative expenses

Impairment loss of investment

Impairment loss of Cryptocurrencies

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Total costs and expenses

Revenues decreased by $1,162,617, or approximately 22.6%, to $3,988,415

for the year ended June 30, 2022 from $5,151,032 for the year ended June 30, 2021.

The decrease was primarily due to decrease in shipping

agency and management services and freight logistics services.

Revenues increased by $550,308, or approximately

13.8%, to $4,538,723 for the year ended June 30, 2023 from $3,988,415 for the year ended June 30, 2022.

The increase was primarily due

to increased revenue from our sale of crypto mining equipment.

The Company ceased to sell crypto-mining equipment since January 1, 2023.

The following tables present summary information

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Total capital expenditures

* Including related party revenue of $222,963 from Zhejiang Jinbang Fuel

Energy Co., Ltd for the year ended June 30, 2022.

Including related party revenue of $222,963 from Zhejiang Jinbang Fuel Energy Co., Ltd for the year ended June 30, 2022.

For the Year Ended June 30, 2022

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Total revenues

Shipping Agency and Management Services

For the years ended June 30,

2022 and 2021, we did not generate any revenue from shipping agency and management services as we did not receive any new orders for our

services due to the uncertainty of the shipping management market which was negatively impacted by the COVID-19 pandemic.

Freight Logistics Services

Freight logistics services primarily consist of cargo forwarding, brokerage,

warehouse and other freight services.

Revenues from freight logistics services were $3,830,615 for the year ended June 30, 2022, a decrease

of $1,113,572, or approximately 22.5%, as compared to $4,944,187 for the year ended June 30, 2021.

This decrease in revenue was mainly due to a decrease of approximately

$1.9 million from the transportation services of our PRC operations where demand was impacted by various business disruptions due to the

resurgence of COVID-19 variants which caused a decrease in spending by our major customers.

The decrease was offset by approximately $0.8

million of warehouse and logistics services that we started to provide in the fiscal year 2022 through our subsidiaries, Gorgeous Trading

and Brilliant Warehouse Service, Inc.

Freight logistics services

primarily consist of cargo forwarding, brokerage, warehouse and other freight services.

Revenues from freight logistics services were

$3,806,158 for the year ended June 30, 2023, a decrease of $24,457, or approximately 0.6%, as compared to $3,830,615 for the year ended

June 30, 2022.

The decrease in shipping revenue of approximately $0.45 million from our PRC operation was due to a decrease in demand

from a major customer, offset in part to an increase of revenue from our U.S.

subsidiary, Brilliant Warehouse, of approximately $0.43

Sales of Crypto Mining Machines

On January 10, 2022, Thor Miner entered into the PSA with SOSNY, a

wholly owned subsidiary of SOS Ltd.

Pursuant to the PSA, Thor Miner agreed to sell to SOSNY certain cryptocurrency mining hardware and

other equipment.

The total purchase price was $200,000,000 and the purchase was expected to be completed under separate purchase orders.

Thor Miner made two shipments in June 2022 and we recognized net revenue of $157,800.

We recognized the sales of cryptocurrency

mining equipment based on a net basis as the manufacturer of the products is responsible for shipping and custom clearing for the products.

Gross revenue and the gross cost of revenue amounted to $1,483,320 and $1,325,520, respectively, for the year ended June 30, 2022.

On January 10, 2022, Thor Miner entered into the

PSA with SOSNY, a wholly owned subsidiary of SOS Ltd.

Pursuant to the PSA, Thor Miner agreed to sell to SOSNY certain cryptocurrency mining

hardware and other equipment.

The total purchase price was $200,000,000 and the purchase was expected to be completed under separate purchase

We recognized the sales of cryptocurrency mining equipment based on a net basis as the manufacturer of the products was

responsible for shipping and custom clearing for the products.

The net revenue amounted to $732,565 and $157,800, respectively, for the

years ended June 30, 2023 and 2022.

We ceased to sell crypto-mining equipment since January 1, 2023.

Cost of Revenues

of revenues for our freight logistics services segment 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 segment was $4,136,474 for the

year ended June 30, 2022, a decrease of $660,953, or approximately 13.8%, as compared to $4,797,427 for the year ended June 30, 2021

as a result of the decrease in freight costs of our PRC operations caused by the decrease in shipping volume due to the pandemic.

Our gross margin was (3.7%) and 3.4% for the years ended June 30, 2022

and 2021, respectively.

This decrease in gross margin in freight logistics segment was mainly due to rising costs for our PRC operations

as we are not able to negotiate better price with our freight carrier due to decrease in volume.

In addition, we started our warehouse

services this year and we have higher fixed costs including warehouse rent and salaries when we are developing the business.

Our cost of revenue for the

sale of crypto-mining equipment was nil as we recognized revenue on a net basis and hence the higher margin which increased the Company’s

margin of (8.0)% from freight logistics segment to (3.7%).

Cost of revenues for our freight

logistics services segment 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 segment was $3,990,654 for the year ended June 30, 2023, a decrease

of $145,820, or approximately 3.5%, as compared to $4,136,474 for the year ended June 30, 2022 as a result of the decrease in freight

costs of our PRC operations caused by the decrease in shipping volume due to the pandemic.

Our gross margin was 12.1%

and (3.7%) for the years ended June 30, 2023 and 2022, respectively.

This increase in gross margin in freight logistics segment was mainly

due to increased revenue from our sale of crypto mining equipment.

We recognized this revenue on a net basis, thus increasing the overall

margin of our operations.

Operating Costs and Expenses

Operating costs and expenses increased by $10,737,621

or approximately 67.4% from $26,679,459 for the year ended June 30, 2022 compared to $15,941,838 for the year ended June 30, 2021.

increase was mainly due to the increase in selling expenses, stock-based compensation, general and administrative expenses and impairment

expenses as more fully discussed below.

Operating costs and expenses

decreased by $ 7,545,942 or approximately 28.3% from $19,133,517 for the year ended June 30, 2023 compared to $26,679,459 for the year

ended June 30, 2022.

This decrease was mainly due to the decrease in stock-based compensation, impairment loss of fixed assets and right

of use assets as more fully discussed below.

Selling Expenses

Our selling expenses consisted

primarily of salaries and travel expenses for our sales representatives.

For the year ended June 30, 2022, we had $385,890 in selling

expenses, as compared to $297,906 for the year ended June 30, 2021, which represents an increase of $87,984 or approximately 29.5%.

increase was due to an increase of marketing expenses of approximately $0.2 million to promote our freight logistics business.

primarily of salaries, meals and entertainment and travel expenses for our sales representatives.

For the year ended June 30, 2023, we

had $232,569 in selling expenses, as compared to $385,890 for the year ended June 30, 2022, which represents a decrease of $153,321 or

approximately 39.7%.

The decrease was mainly due to a decrease in marketing expenses for our freight logistics segment in the PRC

compared to the year ended June 30, 2022.

General and Administrative Expenses

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filing and professional service fees for auditing, legal and IT consulting.

For the year ended June 30, 2022, we had $9,301,784 general

For the year ended June 30, 2023, we had $11,572,888 of general

and administrative expenses, as compared to $9,301,784 for the year ended June 30, 2022, representing an increase of $2,271,104, or approximately

This significant increase was mainly due to the increase in salaries, wages and office related costs of approximately $3.0 million

as we hired more employees and rented new warehouses for our subsidiaries Gorgeous Trading Ltd.

and Brilliant Warehouse Service, Inc.

This was also due to additional professional fees of approximately $0.5 million mainly fees made for the Company’s special investigation.

The increase was mainly due to the increased professional fees of approximately $4.0 million which are mainly legal fees relating

to the Company’s special committee’s investigation of claims of alleged fraud, misrepresentation, and inadequate disclosure

related to the Company and certain of its management personnel raised in the Hindenburg Report and other related matters.

Impairment Loss of Cryptocurrencies

We recorded $170,880 in impairment

loss for the year ended June 30, 2022 due to a recent price drop in bitcoin, which the Company deemed a triggering event for impairment

We recorded an impairment

loss of $18,279 for the year ended June 30, 2023 due to price drops in bitcoin, which the Company deemed a triggering event for impairment

Impairment Loss of Fixed Assets and Right of

We recorded impairment losses

of $33,469 and $1,006,305 for the year ended June 30, 2023 and 2022.

We performed our annual goodwill

impairment analysis as of June 30, 2022 and concluded we had approximately $1.0 million in impairment loss for fixed assets and right

impairment analysis as of June 30, 2023 and concluded we had approximately an $0.03 million impairment loss for fixed assets and right

of use assets, as our carrying value exceeds the fair value.

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rates and terminal values, growth rates, and the amount and timing of expected future cash flows.

We recorded impairment loss

of $855,230 for the year ended June 30, 2021 primarily for our mining equipment due to a regulation change in China that banned cryptocurrency

Impairment Loss of Investment

The Company recorded $128,369

for the year ended June 30, 2023 due to the impairment of the Company’s investment in LSM Trading Ltd.

No impairment loss was recorded

for the year ended June 30, 2022.

Provision for Doubtful Accounts, Net of Recovery

Our total bad debt expenses amounted to approximately $2.0 million,

mostly because we estimated that we cannot timely collect the advances we made to certain related parties, which includes approximately

$1.3 million to Shanghai Baoyin which is 30% owned by Wang Qinggang, and approximately $0.6

million in advances to LSM trading Ltd, of which we hold a 40% ownership interest .

The advances were non-interest bearing and due

We had net recovery of other receivable of approximately $0.4 million from other receivable as we continued collection of the

receivables that were previously reserved.

We had approximately $4.2 million of provision for the fiscal year 2021 for our accounts receivable

and long-term deposits, representing a decrease of $2,595,134, or approximately 61.7%.

Our total bad debt expenses amounted to approximately

$2.8 million, mostly due to a $3 million wire transfer made by our former COO, Jing Shan to Goalowen Inc.

on May 5, 2023 without the Board’s

authorization, as payment for the transfer by Goalowen to the Company of an operating income right to be derived from fishing activities.

The Company has demanded the return of the $3 million but has not been successful.

As of June 30, 2023, the Company reviewed the unauthorized

transfer, evaluated the collection possibility, and decided to provide 100% allowance provision with amount of USD 3 million.

Stock-based Compensation

Stock-based compensation was $10,064,622 for the year ended June

30, 2022, an increase of $10,064,622 or 100.0%, as compared to nil for the year ended June 30, 2021 due to stock grants to our directors,

employees and consultants in the fiscal year 2022.

Stock-based compensation

was $329,778 for the year ended June 30, 2023, a decrease of $9,734,844 or 96.7%, as compared to $10,064,622 for the year ended June

30, 2022, as we issued less stock compensation to employees and directors.

Loss from disposal of subsidiaries and VIE

December 31, 2021, the Company entered into a series of agreements to terminate its VIE structure and deconsolidated its formerly controlled

entity Sino-China.

On December 31, 2021, the

Company entered into a series of agreements to terminate its VIE structure and deconsolidated its formerly controlled entity Sino-China.

The Company controlled Sino-China through its wholly owned subsidiary Trans Pacific Beijing.

The Company made the decision

to dissolve the VIE structure and Sino-China because Sino-China has no active operations and the Company wanted to remove any potential

risks associated with any VIE structures.

The Company also dissolved its subsidiary Sino-Global Shipping LA, Inc., and on March 14, 2022,

the Company discontinued its subsidiary Sino-Global Shipping Canada, Inc.

The total loss of three disposals amounted to approximately

$6.1 million.

Since these entities did not have any active operations prior to their disposal, the disposal did not represent a strategic

change in the Company’s business.

The Company made the decision to dissolve

the VIE structure and Sino-China because Sino-China has no active operations and the Company wanted to remove any potential risks associated

with VIE structures.

The Company also dissolved its subsidiary Sino-Global Shipping LA, Inc., and on March 14, 2022, the Company discontinued

its subsidiary Sino-Global Shipping Canada, Inc.

The total loss related to the three disposals amounted to approximately $6.1 million

for the year ended June 30, 2022.

The Company also dissolved its subsidiary Sino-Global Shipping Australia Pty Ltd.

in November 2022.

Since these entities did not

have any active operations prior to their disposal, the disposal did not represent a strategic change in the Company’s business.

As such, the disposal was not presented as a discontinued operation.

Lawsuit settlement expenses

We recorded $8.4 million in lawsuit settlement

expenses for the year ended June 30, 2023, compared to nil in lawsuit settlement expenses for the year ended June 30, 2022.

were related to the lawsuits in connection with the Securities Purchase Agreement and the Financial Advisory Agreement described

Business – Litigation.

Other Expenses, Net

expenses, net for the year ended June 30, 2022 mainly consists of interest expenses for our convertible debts of approximately $0.1 million

and other finance charges, net of interest earned.

Total other expenses, net was approximately

$ 0.5 million for the year ended June 30, 2021

which mainly consisted of a settlement payment

loss of a dispute on cooperative profit sharing of approximately $0.8 million, offset by the PPP loan forgiveness which we recorded as

a gain of approximately $0.1 million and the income generated from cryptocurrencies mining of approximately $0.3 million.

Other expenses, net was $0.07

million for the year ended June 30, 2023, which mainly consisted of interest expense for our convertible debt of approximately $0.25

million and the gain on disposal of right of use assets and fixed assets of $0.19 million, compared to $0.1 million of interest expenses

for our convertible debt and other finance charges, net of interest earned in the year ended June 30, 2022.

Our income tax expenses amounted

to nil and $3,450 for the years ended June 30, 2022 and 2021, respectively.

to $135,855 and nil for the years ended June 30, 2023 and 2022, respectively.

We have incurred a cumulative

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taxable income.

During the year ended June 30, 2022, approximately $9,700,000 of NOL was generated and the tax benefit derived from such

NOL was approximately 2,000,000.

Our operations in China incurred a cumulative a cumulative NOL of approximately

$6,026,000 as of June 30, 2021, which was mainly from Sino-China which we disposed of during the year ended June 30, 2022.

year ended June 30, 2022, we generated an additional NOL of approximately $4,845,000.

As of June 30, 2022, our PRC subsidiaries’

cumulative NOL amounted to approximately $1,283,000 which may reduce future taxable income and will expire by 2026.

We periodically evaluate the

likelihood of the realization of deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation allowance

to the extent we believe a portion will not be realized.

Management considers new evidence, both positive and negative, that could affect

our future realization of deferred tax assets, including our recent cumulative earnings experience, expectations of future income, the

carry forward periods available for tax reporting purposes and other relevant factors.

We determined that it is more likely than not that

our deferred tax assets would not be realized due to uncertainty for future earnings due to the Company’s reorganization and venture

into new businesses.

The NOL generated for the year ended June 30, 2023 amounted to approximately $19,700,000.

The Tax benefit derived from

this NOL was approximately $8,775,000.

As of June 30, 2023, our cumulative NOL amounted to approximately $41,700,000.

Our operations in China

have incurred a cumulative NOL of approximately $1,333,000 as of June 30, 2022, which was mainly from Sino -China which was disposed of

in the year ended June 30, 2022.

During the year ended June 30, 2023, we generated an additional NOL of approximately $370,000 due to

increased third party service cots as a result of our special committee’s investigation.

Our PRC subsidiaries’ cumulative

NOL amounted to approximately $1,703,000 as of June 30, 2023, which may reduce future taxable income and will expire by 2026.

We periodically evaluate

the likelihood of the realization of our deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation

allowance to the extent we believe a portion will not be realized.

Management considers new evidence, both positive and negative, that

could affect our future realization of deferred tax assets including our recent cumulative earnings experience, expectation of future

income, the carry forward periods available for tax reporting purposes and other relevant factors.

We determined that it is more likely

than not our deferred tax assets would not be realized due to uncertainty on future earnings as a result of the Company’s reorganization

and venture into new businesses.

We provided a 100% allowance for deferred tax assets as of June 30, 2023.

The net decrease in valuation for the year

ended June 30, 2022 amounted to approximately $1.0 million based on management’s reassessment of the amount of our deferred tax assets

that are more likely than not to be realized.

As a result of the foregoing,

we had a net loss of $28,928,369 for the year ended June 30, 2022, compared to $11,302,853 for the year ended June 30, 2021.

deduction of non-controlling interest, net loss attributable to us was $28,257,830 for the year ended June 30, 2022, compared to $10,900,168

for the same period in 2021.

Comprehensive loss attributable to us was $27,482,995 for the year ended June 30, 2022, as compared to $10,545,234

for the year ended June 30, 2021.

The net decrease in valuation

for the year ended June 30, 2023 amounted to approximately $4,696,000 based on management’s reassessment of the amount of our deferred

tax assets that are more likely than not to be realized.

As a result of the

foregoing, we had a net loss of $23,098,342 for the year ended June 30, 2023, compared to a net loss of $28,928,369 for the year

ended June 30, 2022.

After the deduction of non-controlling interest, net loss attributable to us was $22,996,846 for the year ended

June 30, 2023, compared to $28,257,830 for the same period in 2022.

Comprehensive loss attributable to us was $22,952,349 for the

year ended June 30, 2023, as compared to $27,482,995 for the year ended June 30, 2022.

Liquidity and Capital Resources

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Convertible Notes”).

December 2021 Convertible Notes bear interest at 5% annually and may be converted into shares of the Company’s common stock at a

conversion price of $3.76 per share.

At the investors’ request, we prepaid $5,000,000 in the aggregate principal amount, without

interest, of the December 2021 Convertible Notes on March 8, 2022.

Interest for the principal of $5,000,000 repaid was waived.

The December 2021 Convertible Notes bear interest at 5% annually and may be converted into shares of the Company’s

common stock at a conversion price of $3.76 per share.

At the investors’ request, we prepaid $5,000,000 in the aggregate principal

amount, without interest, of the December 2021 Convertible Notes on March 8, 2022.

Interest for the $5,000,000 principal that was repaid

As of June 30, 2023, we had

the following loans outstanding:

the following loan outstanding:

Convertible Notes

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a summary of our cash flows for the periods as indicated:

For the Years

Ended June 30,

Net cash provided by (used in) operating activities

For the Years Ended

Net cash (used in) provided by operating activities

$ (33,643,405 )

2 unchanged sentences

$ (3,581,676 )

Net cash provided by financing activities

Net cash (used in) provided by financing activities

$ (2,125,420 )

Effect of exchange rate fluctuations on cash

Net increase in cash

Net (decrease) increase in cash

$ (38,443,126 )

Cash at the beginning of period

Cash at the end of period

The following table sets forth a summary

of our working capital:

The following table sets forth a summary of our

working capital:

Total Current Assets

$ (44,972,746 )

Total Current Liabilities

$ (20,181,190 )

Working Capital

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Current Ratio

In assessing the liquidity, we monitor and analyze our cash on-hand

and our operating and capital expenditure commitments.

Our liquidity needs are to meet our working capital requirements, operating expenses

and capital expenditure obligations.

As of June 30, 2022, our working capital was approximately $38.0 million and we had cash of approximately

$55.8 million.

We believe our current working capital is sufficient to support our operations and debt obligations as they become due

within one year from the date of this Report.

In assessing the liquidity,

we monitor and analyze our cash on-hand and our operating and capital expenditure commitments.

Our liquidity needs are to meet our working

capital requirements, operating expenses and capital expenditure obligations.

As of June 30, 2023, our working capital was approximately

$13.2 million and we had cash of approximately $17.4 million.

We believe our current working capital is sufficient to support our operations

and debt obligations as they become due within one year from the date of this Report.

Operating Activities

net cash used in operating activities was approximately $33.6 million for the year ended June 30, 2023.

The operating cash outflow

for the year ended June 30, 2023 was primarily attributable to our net loss of approximately $23.1 million which included a $8.4

million lawsuit settlement.

Our cash outflow also included deferred revenue of approximately $6.9 million where we realized revenue

from the sale of crypto mining equipment and a decrease in refund payable of $13.0 million as a result of the settlement payment to

SOSNY, offset by cash inflow consisting of advance to a related party supplier of approximately $6.2 million which we realized as

the cost for the sale of cryptocurrency equipment.

Our net cash provided by operating

activities was approximately $5.9 million for the year ended June 30, 2022.

The operating cash outflow for the year ended June 30, 2022

The operating cash inflow for the year ended June 30, 2022

was primarily attributable to our net loss of approximately $28.9 million, adjusted by non-cash stock-based compensation of approximately

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We had an increase in cash inflow of other receivables of approximately $1.4 million and we received a total of $47.0 million

from SOSNY, approximately $34.1 million was advanced payment for the sale of cryptocurrency mining machines while we are to refund SOSNY

$13.0 million in December 2022.

Our cash inflow was decreased by an advance to a related party supplier of approximately $34.1 million

which was for the purchase of cryptocurrency mining machines.

Our net cash used in operating activities was approximately $8.7 million

for the year ended June 30, 2021.

The operating cash outflow for the year ended June 30, 2021 was primarily attributable to our net loss

of approximately $11.3 million, consisting of non-cash items including approximately $0.4 million in depreciation and amortization, approximately

$0.9 million in impairment and approximately $4.2 million in allowance for deposit.

We had an increase in advances to suppliers - third

parties as we made deposits to our freight carriers of approximately $0.8 million, and a decrease in accrued expenses and other current

liabilities of approximately $1.1 million offset by a decrease in other receivables of approximately $0.3 million as we collected our

outstanding balances.

from SOSNY, approximately $34.1 million was an advanced payment we received for the sale of cryptocurrency mining machines, while we refunded

$13.0 million to SOSNY in December 2022.

Our cash inflow was decreased by an advance to a related party supplier of approximately $34.1

million which was for the purchase of cryptocurrency mining machines.

Investing Activities

Net cash used in investing activities was approximately $3.5 million

for the year ended June 30, 2022 due to the acquisition of property and equipment of approximately $0.9 million and an investment of approximately

$0.2 million to a 40% owned joint venture.

We made an additional loan of $0.5 million to Wang Qinggang, a related party to the Company,

and CEO and legal representative of Trans Pacific Shanghai which is due in June 2024.

related party advances of approximately $1.9 million, which includes $1.3 million to Shanghai

Baoyin which is 30% owned by Wang Qinggang, and approximately $0.6 million in advances to LSM Trading Ltd, of which we hold a 40%

ownership interest.

cash used in investing activities was approximately $2.2 million for the year ended June 30, 2023.

This is mainly due to an amount of

$3.0 million paid to Goalowen Inc.

with an operating income right transfer contract.

We also had cash inflows from repayment of a loan

receivable of approximately $0.5 million from Qinggang Wang and Lei Cao, who are related parties, and $0.09 million from the sale of property

and equipment, and repayments from related parties of approximately $0.3 million,

Net cash used in investing

activities was approximately $1.5 million for the year ended June 30, 2021 due to the acquisition of property and equipment.

activities was approximately $3.5 million for the year ended June 30, 2022 due to the acquisition of property and equipment of approximately

$0.9 million and an investment of approximately $0.2 million to a 40% owned joint venture.

We made an additional loan of $0.5 million

to Wang Qinggang, a related party to the Company, and CEO and legal representative of Trans Pacific Shanghai which is due in June 2024.

We also made related party advances of approximately $1.9 million, which includes $1.3 million

to Shanghai Baoyin which is 30% owned by Wang Qinggang, and approximately $0.6 million in advances

to LSM Trading Ltd, of which we hold a 40% ownership interest.

The outstanding personal loan owed by Wang Qinggang was fully repaid in December 2022.

The Company is taking actions in order to pursue

all available legal remedies including lawsuits to recover the $0.6 million advanced to LSM Trading Ltd.

Financing Activities

Financing activities for

the year ended June 30, 2023 was mainly payment of $2.1 million for fair value of shares to be cancelled in our legal settlement.

Net cash provided by financing

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Disaster Loan.

Net cash provided by financing

activities was approximately $54.2 million for the year ended June 30, 2021 due to cash proceeds received from issuances of common stock

to private investors of approximately $52.8 million and cash proceeds received from issuances of preferred stock to a private investor

of approximately $1.4 million.

Critical Accounting Estimates

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Off-Balance Sheet Arrangements

Quantitative and Qualitative

Disclosures about Market Risk.

Quantitative and Qualitative Disclosures

about Market Risk.

Not applicable.

5 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis